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. and youre on the phone

are not watching video or e-mailing, if you are not doing is more it effective and cost-efficient. we are talking about the old voice network. how do we move from the cost benefits of the service benefits by thinking about how things have to change? another thing going on that we have not talked about. we talked about the supply side and how people provide it. in the wayhanges users aren't using the network. not the services but what people want. place inte is taking europe. they have a set of universal service obligations that still includes phonebooks. a lot of us today say we cannot remember the last time we looked at a phone book. that information is obsolete. online is more efficient.

another thing that is part of their universal service obligation as payphones. in the world of ubiquitous cell phones you cannot find a pay phone on most streetcorners anymore. they are not useful because of the way people are using the network. one of the pivotal questions is we used to think about voice as the key application that connects everybody. way mylook at the children use communication, the only thing that use the voice phone to call his me. are taxing people. i am not saying that that moment has arrived but we should have a mechanism for thinking about the service side and the user side to figure out how they are doing it and to change with the times. the hard part of the transition, we have done this before, we have retired the telegraph network even though it was once the basic form of connectivity. we retired the analog television network. i am not saying it is easy or there are problems.

the trials going on are in an isolated number of cities. we are saying what are all the details we have to work out? there are a lot more than we thought. there is alls, central database where we verify the connection. call hank or david or jodi, is this number actually the line that connects to them. that transition has not fully happened to internet-based communications. air handling, how you do international settlements. these are things we have not worked out. what happens if we turn off the old network and what do we have to work out? i would add one dimension to in terms ofaid values. it falls into public safety. it is not just 911, it is law enforcement and home security. there are issues in terms of

communications assistant, law enforcement, wiretaps and things that remain very important and are difficult to transport from a traditional voice switch world to internet-based world. back to the question about the ip transition files later. -- ip transition trials later. we lay out some of the issues. before we get into the mess the fcc is facing in trying to deal with this, let's take a step back and ask you all. if you were starting from scratch and you are trying to craft a new communications act to regulate a world where telephone networks are just part of the internet, how would you do it? how would it look different from the world we live in today? hank, do you want to start us off? >> sure. think start by saying i that that is a daunting question for someone who has been, as i have, doing basically telephony

regulation for 18 years or so. the biggest change in the policy environment. the way you should think about the question is what is the policy environment that you want to create? act made a sea change. a lot of this debate is dealing with the repercussions of this. that is the move from we will rely on monopoly as the basic way of delivering basic communication services to me will rely primarily on the market as the basic way of delivering communication services. that really changed the communications world from a world where the carriers, the monopolists and the regulators worked out the details of service. they figure out here is how long you going to have to repair something. here is your reliability requirement.

here is 911. all the details were never done not driven bye consumer demand. they were driven by this regulatory process. the 1990 six act changed that fundamentally and said going forward we are going to rely on the market process. put consumers in a totally different position. it has led to something that christopher was talking about. the world of today is a world where different people have different sets of priorities for communication. it is a much more, wicked world for regulators. -- it is a much more complicated world for regulators. let's say 20% of users are primarily text users. 20% are social networking users for communication. others will i on video. some still rely on voice. if you are a regular, how do you respond? it is very difficult when you look at it from the old lens we

had prior to 1996. going back to your question. if i were to start a new -- leaving aside things like .pectrum and things like that focusing on what kind of basic policy framework what i put in .lace for regulation i would do a public knowledge did. what are the goals that the market might not adequately handle. there are a lot of goals we think the market will. what are the ones we think the market will not deal with. universal service is one. the reason for universal service is we realize that the market will not bring service -- let's focus on rural. it will not bring service to this places because it costs too much and you cannot make an adequate return. universal service. there is probably a public safety component. we had this big issue back in with voice over

ip and 911. consumers were buying a service that regulators decided they were not happy with 911 capabilities of that service will stop the market was driving to something that policymakers were not happy with. so they created obligations for the service providers. i think that is what you would do. identify the areas we want to address. specifically, what are the problems we want to solve? how do we do it in an environment where we do not have a monopoly provider who can kind of just whisk the costs under the rug and recover them through implicit subsidies on different sets of customers. david.me call on that point you made is incredibly important. i do not think most people understand what you just said. when you say implicit subsidies, you are talking about some users who are paying more to subsidize other users. nobody sees that as a tax on their bill.

that is not part of the universal service charges. it was essentially a tax that was paid by some users in the old network. >> a lot of taxes. the right design that was created is kind of crazy anyway. were lowertes that in numeral areas than urban areas based on something called value of service pricing. the idea was since the world community, there were only 100 or so people who live there but in urban communities there were tens of thousands or hundreds of thousands, the value to the rural customer is lower. they cannot call as many people. we will make their rate seven dollars a month. the us is in the same state. someone in the urban community will have a rate of $15 a month. even though the cost equations are flipped the other way. all kinds of distortions in pricing. we are still working goes out today, frankly, in the marketplace. >> what happens when you make a

transition from a monopoly era from a world of competition question mark >> all of those problems. anywhere you have put in place costs that do not reflect the service costs, the market will expose that. you will find out that the cost -- let's say you had business subsidizing residential users. in entrants come underpriced to business, that subsidy is no longer sustainable. in market after market. whatever they goals are, if they are not goals the market will adequately served within the understanding of policymakers. this is not for carriers to decide. if they are not goals the market will adequately serve you have to figure out how we want to do it and how we want to pay for it. you cannot rely on the system of implicit subsidies when you moved to competition.

>> if i could add something to that. looking at the monopoly provider and the difference between that and the competitive environment that we have today is an important piece. another important consideration that has to be kept in mind is that in the old world the service provider controls everything from end to end and basically made things happen. when the regulator wanted something, the service provider built it into the network. all the intelligence was in the network itself in the switches. that gave the service provider complete control. today, that is no longer the case. increasingly, the computers that we are walking around with her -- theycall smartphones have operating systems and applications, all of which the customer is using to meet communications needs. in many keys is, the service provider has no visibility or control into those things.

when a verizon wireless customer calls and at&t customer at using skype on their smartphone we just route packets and we do not know anything about that call. whatever the new framework is has to take into account that is is is a much more dynamic and complicated environment where there are a number of new players from the application developers to the operating system guys to handset makers. all of which are part of delivering the services to customers. i am going to make this point very clearly. i agree with hank that we should start with values. it is always exciting when pk gets to say we agree with at&t. even if later in this panel we will disagree again. i think that starting with values is the right way to go. once you start trying to operationalize that, they

can start to get tricky. one thing i will add -- i think it was hank that mentioned this earlier. when you are talking about this network now with different types of services that can run over the network you will have a lot of different people with different priorities. i think that one goal, which is not missing early easy want to one,ve but it is a worthy is to make sure the transition is a step forward for everyone. that includes seizing the opportunities and efficiencies, new services available on ip networks. seizing the opportunities of mobile networks and the advantages does bring. at the same time, making sure that no one is getting left behind. and that the attributes of the current network in terms of reliability, pricing, the features that run over the copper network like medical alerts, life alerts, security

systems, faxes -- those kind of things. making sure that the people who are relying on those now are made whole. and ideally even left better off after the transition. you be moren concrete? what exactly are you afraid of in terms of people left behind? you mention certain technologies that might not work over the network. do you want to elaborate on that or on your concerns about reliability question mark >> first, in terms of the on whatgies, depending kind of transition we are looking at whether our technologies and features that operate on the traditional copper network that might not operate on the new services. faxes, security systems, medical alert systems. these were designed to operate over the copper network. as david mentioned, for some networks they might be able to offer the same services.

say, wireless networks -- some of them cannot currently operate the services. there are two parts to it. one is making sure that people with medical alerts should still be able to use medical alerts. that is a really valuable thing. for everyone. networkeven if a new can support that type of feature there is the question of whether the equipment the customer has willy still work with the new network or if they have to go out and buy a new fax machine. i can sound like a small thing but when you added up that can be million dollars of customer equipment. for that is it to pay change? whose responsibility is it to make sure that the customers are told ahead of time. either way, your fax machine is going to stop working. or your credit card machine at a

small business is going to stop working when you moved to a new service. >> the fax machine you keep talking about -- [laughter] what is that? >> it is great. i know that -- do we have a question? ok. [indiscernible] so, the fax machine point. it is kind of the typical oh, that is so old down in my basement with my finals. records. my a lot of people still rely on it. terms of getting the same functionality from the new network, that is a big point. in the small-business community there are people still relying on older technology.

tot is a reality we have face. >> christopher, do you want to jump in? >> the question about the fax machine points out a very important change is going on. we used to think of data as an application on a voice network. it is now upside down. it is now voice as an application on a data network. what we think of as the network has changed. we still have this lingering idea from the voice network that that is the baseline. any new technology has to replicate all that functionality perfectly. there is a problem with that. it is expensive. there is new capabilities that we can do with the new network which were not possible in bold. there are capabilities in the old network that do not come as easily with the new. one example that is given is 911. the cousin was physically wired in -- because it was physically wired in and the phone did not move. you could program information

that said this phone is at this address on this floor in this room. the cell phones moved, we do not know where you're located. we build a gps so we can figure out where on the grid you are. it does not tell you what floor altitude you are on. you use to get that information for free because of a technical flaw to the old network. the cell phone is the most brilliant emergency response device invented in a long time. we might need to look at the values and adapt them to a new world. i would say fax is another example. not work welldoes on ip, fax is sensitive to delay. the internet is not completely as consistent as the phone network. ways toa lot of new send pages of information that do not involve a fax machine. going back to values would be thinking creatively about that. maybe we provide bridge technologies like we did in the digital television transition. instead of insisting that the

new network doesn't fax the way the old network did, we risk losing benefits of that technology as we move forward. we need to think more creatively about this and maybe there is a way we can reverse engineer the internet network to try to make that not such a stark transition. at the end, whenever you retire an old technology, there will be some people who do not want to get off. you see this in cell phone networks. the phone companies say here is a new phone, i will give it to you for free, get off my old network. and they will finally say but i do not want a new phone. at some point you say i am sorry . that first generation phone will stop working on this date. just as software stops. there will be a turnoff date for every new technology, that is inevitable. >> in the digital tv transition,

the government went out and bought -- subsidize the converter boxes for americans. that work nearly as well as the obamacare website. [laughter] what are you suggesting exactly? obama-fax machines. >> is the art of the possible. it is fun to think about a clean slate network as if we never had the voice network commitments. and designing it from scratch. most people who work in washington, d.c. understand we slate, we arelean coming from someplace. there is political support for different positions and different issues. a big part of what d.c. policymakers attempt to do is to find ways to get a consensus for a big change. sometimes it is smoothing over problems by creating subsidies. sometimes it is by creating new value and bringing support people. losing something by putting

something on the table. gaining more capabilities from the network. there is no magic formula. politics would, be easy. it will be a net and -- it will game on and tuck disability access and emergency response. all the issues jodie talked about. we will have to take them on one at a time. wechristopher talks about should be able to figure out a deal. the numbers i have seen in terms of what it is costing to maintain the second network that is used by 6% of the population and a dwindling number at that. what? $14 billion a year. there is a lot of money being spent here that could be spent better. "let's make a deal." do you see a way to make everybody better off? maintaining spent

the old network is money that is not being spent in the new recognizehich we wrec the value of. there is a path forward. as christopher sews, there is a way to address their legitimate concerns that are out there in a way that works for everyone. i think that is all of our jobs. to find those solutions will stop what i wanted to add, i think there is an uber value that was part of the old network that radically changes in the new network. change. the old network was designed to not change. it was designed to be stable. not over years but over decades. the service did not change. the way that it was provided did not change. switches were changed out over decades, not the cycles that we

have now. today, the networks are dynamic and constantly changing because the demands of the consumers are constantly changing. equipment is replaced more quickly. i talked about our first os had a topi speed of 30 megabits per second. over a 10 year period we're up to 500 megabits per second. we are on our third generation of optical electronic equipment we're using in the network to provide the higher services. away from thee changeue of preventing at all costs or delaying changes as long as possible to the new in where change has to be an important part of the equation. that means constant investment and innovation. everybody add that knows what what the cost is of

maintaining the old network. from a real perspective a lot of the costs are not even recognize. we're talking about a network where the systems that support 40 years old sometimes. you often hear of people who are frustrated with repair times and provisioning, scheduling, these kinds of things. part of the cause of that is the old systems. until we can sunset those systems, some of those frustrations will continue. the costs of those things are very hard to estimate. getting too can we make a deal? i think in a way, that is the point of the trials that we have undertaken in florida and alabama. instead of talking about this abstractly, our hope is that by making it concrete in a few places we can bring out the , find that matter

solutions that work in these places, and then say if we do it this well this can become a template for this transition on a broader basis. that is kind of the main reason that we sought the trials. >> i'm glad you brought up the trials. can you elaborate on what exactly you are doing? what we should expect to see happen in the next however long that is going to take. then i will ask david the same question. >> when we looked out across a wenning period for us, realized we could not sustain forever the traditional network and the ip network. then we thought about how are we going to sunset this? what we callodd wire centers spread across 22 states in which we are the local phone company. trying to imagine how you would all 4700, was

daunting. we did what we do when we have a large-scale project we are trying to figure out. what if we did a trial in a small number of wire centers? we would take things we learned from that and apply them broadly. we looked across our network and we determined that while there were no places that would certainly tee up every issue we were likely to see as part of the transition, we identified a wire center in florida and a as placesr in alabama where we thought if we undertook a test of the transition we would learn a lot and that would be helpful to us as we try to complete the transition throughout the rest of our network. with those trials -- those trials are under way today in that we have engaged very strongly with the local community. talking to them about what we are doing and when we will be doing it. to ave also been listening

lot of the public policy debate. we are currently working on figuring out how do we handle things like, let's say, medical monitoring devices or faxes across a wireless only service. able fory, the time t the trial is until the enhancement to the service are ready, the trial will be voluntary. going to consumers and trying to convince them. here are the merits of our new services, you should make this transition. we're not going to force anyone to do this until we feel like every legitimate question we have gotten an answer to. that this is how we will handle this issue. something like medical monitoring, 911. christopher raises a discussion about 911. wireless has gone from not having location information to having location information. now there is a discussion about should we make that location

information more accurate? we at at&t are engaged on are there ways we can make it a lot more accurate? we are thinking about that, too. ultimately i think we will solve all these problems. it would be absurd to think that we would get to the end of this process and say we have got to keep the pots network for the next 25 years. these are solvable. >> this is not a medical marijuana issue. plain old telephony service. [laughter] to explainou want what verizon is doing question ? >> we are not currently participating in ip transition trials. we had a child forced on us a couple years ago -- we had a coupleorced on us a

years ago when hurricane sandy came through. we had two offices in central manhattan that were inundated with seawater, as were our customers. the copper cables were completely saturated with salt water. salt, copper, and electricity are not a good accommodation. our cable was ruined. we were forced by necessity to do something different. what we did was replace all that copper with fiber to all customers there. we have worked closely with the customers that were affected and came up with solutions to most of the problems that could be found. we're now at the point where we have got central offices with systems thatmers were meant to support thousands of customers. responsibility to help them make the transition in a way that is accessible to them. making sure they do not pay more

and other needs are met. they get all the services they want and have adequate backup power to the abilities -- power capabilities. how at&tas described is running the trials that have been sanctioned by the fcc. there is a process, not clear what is going to happen next. the fcc is involved. you are taking a different path and doing this on your own. what has the fcc said to you questio? >> we are doing is following the well tested process that has been in place for these sorts of things. if you are discontinuing a service, you file what is called get permission to discontinue the service. in low manhattan we had to file 214's for telegraph service. we were no longer able to the fiberlegraph over or metallic services.

lane old telephone service is still provided over the fiber without any change. if we want to retire the copper, in lower manhattan that was done for us by nature. go in for there is a process in place that basically requires us to notify anybody who might be affected that we plan to retire the copper. and then there is a process for making that happen. >> did you miss speak or did you have to tell the fcc you are not going to provide telegraph service anymore? >> that is not a joke. [laughter] >> my telegraphs are no longer going to go through? >> you can no longer get telegraph service in lower manhattan. >> what does that say, verizon had to tell the fcc was not going to keep running a telegraph network? i thought that was dead long ago. >> it was. at the regulation lives on pass the business.

the common carriage requirement means you need permission before you start a service. you need permission before you and a service. what you will discover is there is always a constituency for people who did not want a service to end. with the last three or four years there was a new york times article talking about how con edison was going to stop sending d.c. power to a small portion of manhattan. back in the days in the wars between addison, in the 1920's, power adopted d.c. devices. that got smaller and smaller until one day the company said it does not make any sense to maintain this idiosyncratic network for a small number of customers. yes, they imposed costs on people who are used to having their homes provisioned in a certain way. hard problem of policy making. for the greater good to make a move for the whole network to move forward. at some point you are going to

strain someone on the old network to change off. think about creative ways to do that. i know you made fun of the digital television transition. whatever you say, it did work. spectrum isthat being redeployed. we can get into a discussion about whether that was the right way to do it. at the end of the day there is no more analog television in the u.s. rule number one is it has got to work. i am willing to open up this conversation completely to try to find solutions. i think the kind of values talkingon jodie is about is a good way to do that as long as we remember that each new technology will do certain things better answer things worse. ofneed to take you vantage technological change and not always revert back to the old. look to new solutions that do not present themselves before. about the digital television transition, for all its messiness and waste, the that it waslarge

worth any amount of incompetence and poor execution because it was done. my point was that similarly here there is a huge deadweight loss. that is a term economists like to use. what it means is we are throwing away lots of money on running an old network, or in the case of nsition, we were thrown away spectrum. we had to put a stake through its heart and move on. i am teasing when i asked russians about the fax machine in the telegraph -- i am teasing when i asked questions about the fax machine and the telegraph. jodie, what do you think about these trials? what i think when i see the trials, specifically about the trials at&t has proposed.

i think this is the opportunity for the fcc to figure out what the checklist is when a carrier files a 214 a and says we want to switch from tdm-based copper over copper or wireless. the trials by at&t and other carriers as well is the opportunity to collect as much data as possible about what this transition does from a carrier perspective. and what the reaction is from consumers. and to try to use that data, to come by the values, up with a list of what a carrier would have to show in order to that service is not impaired or is otherwise serving the public convenience and necessity to switch to a new network.

right now, it is not very well established. what that means and what a carrier has to show to the fcc. my hope is that if these trials are done well and consumers are protected throughout the trials but we also get information about new services. we can come out with an understanding on all sides of what the standard is on various aspects of the new network in order to allow a carrier to switch over to a new technology. you mentioned the telegraph and the 214 a, i kind of see that -- >> vinyl records. >> yes, we will see how many old technologies we can name. i kind of see that as an and lightning comparison -- i kind of see that as an enlightening comparison to when verizon was switching to fixed wireless for a temporary amount of time after

superstorm sandy in fire island. fourerizon filed a 214 a telegraph service, not a big deal. it eventually probably gets approved by default under fcc procedure. in contrast, we look at what happened when verizon filed a 214 a to switch to a fixed wireless service voice link instead of copper in fire island after superstorm sandy. it was exactly the opposite. a lot of people were upset. a lot of people were relying on copper for dsl access because they would not have gotten internet through voice link. a lot of people were worried about the features we talked reliability and medical alerts and security systems and faxes. i think that that kind of shows the usefulness of 214 a as a check.

a way for the carrier, policy maker, and customers to say are we ok with this or is somebody going to get left behind? everybody isnces, going to be fine and no one is upset they are losing the telegraph capability. in other instances people are going to say my grandmother needs to have the connection to the hospital on the copper network. how are we going to make sure she has some sort of service that provides the same feature? >> i want to switch gears to we loseabout law before everybody's attention. we talked about old technology and new technology. we have not really talked about one issue that really is first and foremost in many people's mind -- power. christopher mentioned the ac-d.c. battle. not the band, but compet ing electrical systems. there is another electrical break, the copper network that

kept phones running. not only was their power along the copper network, the hardware along the network would keep working by that power. if you are one of those people with a really simple phone that only plugs into the network and require a plug to run fancier features, that phone would keep working, even if the electrical grid went out. david, hang, do you want to elaborate on what your companies to address concerns about your networks going out during emergencies? >> sure. i showed this in my slides. the power situation you described with power distributed from the central office has not been the general standard for quite a while as we have deployed fiber deeper and deeper into the network. intermediary points where the copper networks terminate and power has to be supplied have become quite commonplace. necessary isat is

in order to deliver the broadband speeds that people objective,ir primary we need to keep pushing that fiber closer and closer to the home. those nodes, whether a remote optical or a node or an network terminal at the customers home, rely on commercial power in the first instance and then sort of battery back up in the second. that is been the case for quite some time. we have, from the beginning, provided fios with a 12 fold battery back up that provided approximately eight hours of backup time. a rechargeable backup battery that looks like a motorcycle battery or a car battery. recently we have developed a power alternative that uses commercial d cell batteries. these are the batteries you can buy for flashlights or lanterns or whatever. the powerpack with the d cell

batteries will last for 24 hours to 30 hours in an emergency and can be replaced by the consumer as often as necessary to keep phone service working almost indefinitely. the reality is that for many if not most of our customers, they do not care. they have cordless phones in the house that go out when the power goes out. they just default to using their cell phones. for customers who do care and phone to work, we are addressing their needs. >> the only thing i would add is that this is a great example of how the market has moved past policymakers. something like 70% or more of theomers have already moved on the service that had the capability of copper-based power. they are either wireless only or on some voice over ip platform. cable company or

over-the-top provider or a phone company. none of these customers have this capability. they have made this migration and are continuing to make this migration. in some states, fewer than 15% of homes are connected via copper at any point into the traditional phone network. notven some that are may have a phone that works only with -- >> they may have a cordless phone. customers are waiting for an of policymakers want to make some decisions about power issues theyed to power loss, should approach that from a federal industry perspective. at this point it would be absurd to say we have got all these other services out there and we are not going to put any obligation on them. you, you are basically losing your customers and we will have obligation on you. we'll have a conversation about

general backup power requirements, but it has got to apply to everyone. >> the storms have pointed out how we need to rethink emergency response. i was in neighborhoods where the entire neighborhood lost commercial power and the phone system was down. able to work on their cell phones. our in a small number of cell number- powering a small of cell phones was more feasible than putting up utility poles. needed recharge stations. we open up schools and fire departments and let people recharge devices. it was not great but even a world -- i do not care how well we engineer the copper network. when the phone lines are down, we were down. we were able to keep activity but we needed a different approach to infrastructure. that was recharging stations on a charitable basis.

that is a great example of how technology gives you opportunities. another reality -- my guess is during the worst of this you are not going to use all the apps on couldireless network you when everything was working great. unless you want to over engineer the wireless network and support everybody jumping on all at once a 100 highest level, for year storm that is not a smart idea. it is a very expensive idea. you can do it but it costs a lot. we might have to think about this on an industrywide basis. do we need to harden every single cell tower which we have a great density for the huge amount of service people use. maybe in emergencies we need people to pair back what they are doing. figure out a process going for that we can meet people's normal people's minimal needs through a disaster. and then get onto the future. that is a different conversation. >> i would just add.

christopher was saying was very true. in some instances, you will have examples where the power is out and or the phone lines are down but cell towers are working. you will have the opposite, cell towers might be down and the payphone on the corner is the only thing that is working. we did see that after sandy in new york, they had lines around the block for a payphone because it was the only way people could make a call. how do we move everything forward? how do we use the opportunities for recharging stations, portable phone sells. how do we use opportunities to make technology as robust as possible while not leaving behind the people who are relying on their phone to work? i which i mean their landline phone. i am not saying that we cannot move forward until we have power over fiber.

david laughs at the mention of that. we do need to think over how do we meet the same consumer expectations that will be out there for reliability accent that -- for reliability absent that. do we have reliable carrier provided batteries, commercial batteries, both? there are advantages and disadvantages to each. one other thing is that, hank mentioned a lot of people have moved on to networks that do not have the power of of the copper like voice networks over cable service providers. one thing is that we have seen instances where ip networks software glitch or a natural disaster. you see reports in the news where reporters would be talking to people who would say i had no

idea my phone was not going to work when the power was out. when not think to ask that i switched over. that is concerning to me. we are not just talking about people having different or less capability on a new network. we are talking about them having less reliability and they do not even know that so they are not preparing for it. >> there's an old saying about foreign policy that politics stops at the water's edge. you might say something similar about the disaster preparedness and emergency resilience. we do need to be prepared for situations like that. people underestimate risks of an entire community losing connectivity. but thewith you, jodie, question christopher identifies is how do you deal with those risks in the most rational way? you need a multifaceted approach. on the one hand, you need to have that capability to drop in small cells to recharging station in schools and

libraries, fire stations and so on. we might also need a conversation about the resilience of the electrical grid. underground and the networks. 1.i often make is there i -- one make is thatn ke i every telecom lawyer looks for telecom solutions. if all you have is a hammer, all you see is nails. there is more than telecom policy. trees fall on power lines and knock out the telephone system. that is not going to change. we can have a conversation about undergrounding them. put a conduit under the road and let anybody lease access from the municipality. that could increase the resilience of the communications

network and the power network. the conversation is worth having. i want to switch gears from this --versation and talk about we talked about values. we have not talk about what the fcc should do. let's rewind to last week when there were people at the fcc who know who we said, i don't if this happened, they said they were going to be banging pots and pans outside in homage to pots, plain old telephony network. they want the fcc to reclassify broadband services under title ii of the communications act. they want the internet to be regulated, at least by default, the same way raver ligula -- the same way we regulated monopoly telco networks. we are having the same debate about the ip transition. my question to the panel is what should the fcc do?

i will give you a few options, give me your thoughts. the title tone is door. let's say the fcc reclassified broadband as a title ii public utility. and they promised they are going to forbear from some of the requirements to strike a balance. they can do the same thing for telephony. d.c. circuithe when they struck down the s earlier thise year accepted the fcc's interpretation of a previously obscure position of the house thistions act, 760 -- year accepted the fcc's interpretation of a previously obscure part of the telik telecommunications act. that could be a basis for the fcc to regulate net neutrality

or a lot of other things. we'rey and all the things talking about today. is that a potential basis for regulating the ip transition in the future? door three, there's a lot of other things in the communications act. broadband networks are currently under title i, information services like youtube, netflix, and hulu. the fcc has been able to use its ancillary jurisdiction in the past to regulate a lot of title i information services. especially when it comes to public safety. havemany of the things we been talking about that are more economic in nature. plus ancillary jurisdiction. 251 e, accesstion to numbers. jodie mentioned that as

something she is concerned about. the fcc regulates the north american numbering plan. it can impose conditions on accessing that bank of numbers for carriers to get numbers. can they use that as a basis for regulating some of these concerns? five, i'm about to stop. [laughter] five, there's another agency here, the federal trade commission regulates companies that are not common carriers. both competition concerns and consumer protection. it can deal with, for example, billing, cramming and slamming and concerns of billing are jointly dealt with by the ftc and the fcc. has the authority to enforce multi-stakeholder

agreements. if the industry sits down with public knowledge and work something out, that can be enforced by the ftc. number six. congress, a new communications act. so, what do you think? grab a mic and tommy what you think. >> ok, i will start. i do not know if i will get to all six. >> please don't. i'm trying to get a range of options for the audience. what options does the fcc have and what do you think it should do? >> public knowledge thinks the clear answer is classifying or reclassifying, depending on what service we are talking about, to title ii. we think that one reason that andion 706, title i ancillary authority, is not when the net

neutrality rules were challenged previously. pk'se d.c. circuit case, point of view was we are skeptical of the ability to use these other sources of authority but we will let the fcc make its case. we will see what happens. basically what we saw in the d.c. circuit case was that 706 does indeed have even more broad authority than we anticipated. what it does not include is no blocking and non-determination. -- non discrimination. there was a net neutrality-shaped hole in the 706 assertive. when applied to the phone network, that is even more concerning. no blocking and nondiscrimination, that goes to the heart of reasonable terms and prices and the heart of interconnection. >> can you explain, we have not

talked about interconnection. for theconnection -- phone network or all these other ip services. in order to get my information from me to somebody who is a customer of another service, another isp, the networks have to physically connect at some point. i can happen in a variety of different ways, but it does have to happen. one policy we had in the traditional phone network side was the idea that you have to be open to interconnecting with other carriers. that way, a larger carrier would not have an unjustified advantage because they could say well, you have to be on our network. our competitor's network we will not let you call our customers. there were universal service aspects of that policy as well. today, a lot of it is a

competition issue. i don't, under the d.c. circuit's ruling, i do not see how you can further those policies without going to title ii. that is what we have been saying to the fcc, this is your clear choice. we waited to see if there was a way you could figure this out under title i or 706, it did not happen and you must do to title ii. under title ii there is a section called forbearance authority. regulatory flexibility or something like that. it allows the fcc to forbear from certain title ii thatsions that -- if provision is not necessary to ensure reasonable rates and does not harm competition and serves the public interest. if it meets a general competitive-public interest

test, the fcc can say we are not going to enforce that provision as applied to a particular carrier of service. the fcc -- it is a powerful tool in the fcc should use it carefully to forbear from certain provisions in title ii that would not apply to an ip-based network, ip-based v oip in particular. >> she is standing strong with door number one. >> maybe we can get into the net neutrality discussion but let's focus on the ip transition envoys initially-- and voice, initially. the fcc cannot willy-nilly decide i will go this way or that. erin agency -- they are an agency of law. they have to be consistent -- >> ish, right?

fcc,t's look at voice, the if it generally determined voice over ip was a telecom service, the ramifications would be immense. from a technology perspective there is no difference between skype and vonage. they are using different addressing systems. you cannot just éclair i am going to say voice over ip is a telecom service without hitting a bunch of services you did not attend to hit. the fcc isink planning to classify skype as a telecom service. services they care about our services that use telephone numbers. services like skype that do not use telephone numbers they are not interested in regulating. thethat case, 251 e and title i ancillary authority is

the only way they can go. i do not see how they can go down the title ii route without dragging in facebook chat and face time. if you say it is a telecom , you willen it is ip have a very broad impact on the ip ecosystem. >> hank, just so we understand how you are engaging with jodie. are there specific things you think the fcc cannot do that jodie would want them to do under the proposed you are proposing. 251 e plus title i. >> i have not heard anything they cannot do. i think the fcc could continue -- they have been upheld by the d.c. circuit under an ancillary theory for 911. for customer privacy. for discontinuance is. there is a host of things they have applied to voice over ip

that they have been upheld on a title i. goals publicto the knowledge has expressed, i do not see how they could not pursue those rationally under, four for services, under a theory of 251 e combined with title i. the debate about whether we should regulate the internet under the regime for the traditional telephone network. andoes not comply with law, that is the big question. and that even if you can, should you? as a matter of law, there are people who think it is very flexible and the fcc has leeway. couplely -- there are a decisions pushing against them. decisions by the supreme court and the fcc itself.

given those, the fcc can change its mind. the court was deferring to what the agency decided. the statue.is the statute says you are subject to traditional telephone regulation if you are a telecommunication service. which is defined in cultural terms -- which is defined in colloquial terms. if a company provides pure transport from and point to the end-user's choosing without processing storage. the supreme court focused on the words processing and storage. a lot of these systems do not just send traffic intend to end. what has flown under the radar is an point of the user's choosing. when you put a web address in, www.google.com. try that in japan or germany.

name system.he domain matches the word to the numbers. there is a distribution network that maintain tens of thousands of servers and determines which is posted to your. it is a pure statutory basis. probably takes the internet outside. there are articles in the harvard law review. that is one side. should we do it? the interesting question is people look at the traditional television network, and if you look at the literature 20 years back, we did not think it look that great to begin with. there are all these criticisms. they have announced all the

price changes and advanced. great means for coordinating across firms. do if qualityd to berries. are you discriminating? you can charge different prices. what is the same product? this becomes very difficult to do. the big problem to me is one-size-fits-all is the approach should embodied by the old regime. one product and everyone gets the regime. you werecustomers say going to get it to me for this price. what i really need is x, y, z in addition. priceyou needed cheaper and do not have the flexibility to do that. that flexibility was a tremendous advantage for competitive access providers. they did a lot of great things. if you want a great example,

talking to a person involved in managing, i did a conference. the xbox live microsoft. he had to go to the fcc regularly and say just because we have a track feature does not make us a telephone. --t because the xbox should can display video does not make it a cable service. what this means is we start playing her game. -- this game. alternately the cost for exceed the benefits. >> you mentioned the brand x decision. a medical decision about parsing these complicated definitions. what i hear you say is at the end of the day it matters less.

>> i do not see it as metaphysical at all. i see it as a statue with words. concrete technology. we could analyze the specific firms -- terms whether it fits the definition. these definitions were written 20 years ago. at best when they did not refer to the internet because they did not see it coming. some go back to 1934. they reply to the current technology. i am reminded of the cable act. for 30 years we try to figure out where cable fit into the old statute. eventually we made a new statue designed for cable. people quibble about the good and bad in that.

someone will have to go back to the statue with this technology and mind. i am sure there will be battles won and lost in different ways. >> door number six, communications act. is that your vote? >> in the long route this is the agency that determines what all of the agencies do. eventually there will be a rewrite. it may take 60 years, maybe less. congress is ultimately in charge. cannot change by appropriations, hearing commitments, all the different tools. ultimately they do hold the biggest decision. >> final word on the decision. certainly not going to contradict the law professor. i think the argument clearly

illustrates the statute is outdated and we do need a new act. door number six as well. have a few other questions i want to ask. i want to open this up to the audience. on those of us now watching the live stream, tweet your questions or use the transition #. my colleague here will come around with the microphone. if you could identify yourself with any questions you might have. a anyone is thinking about question, i will ask the first one. let's connect this to a different debate or net neutrality, a different set of issues. there is overlap. the connectionnk is too broadband deployment? if we're trying to promote a larger set of values like

encouraging companies to deploy or at&t rolling out a megabit per second service too much of its footprint and can do faster want the, don't we transition to happen as soon as possible? how do we reconcile the trade-off between delay and wasting billions of dollars every year and getting it right? to -- i can always find a way to bring it back to the fundamentals. for me, this would be universal service. question is what is the basic service? what is the service we are trying to get out to everybody? for decades, that was basic ways. now i think we're getting to the point that we think maybe that needs to be upgraded. maybe rod band is basic service and policies need to be geared

to getting that out to people. i think that starts to lead into the same set of questions of how do we get the new technologies out to people and still make sure people who are relying on still get the same reliability and features they had before. -- i'm not sure i answered your question. >> we are doing trials, trying to get this right. a lot of concerns here. and every monthly wave. a lot of money is being wasted on maintaining an old network. new services are being delayed. how do we know when it is time to hold the plug on the old network? bringing up the transition idea, that took years to do. all of the spectrum could have

been available to americans to provide rod band service and what have helped certain people a lot more than others. a lot of people rely solely on wireless phones for service. and in the interest of avoiding harm to a very small number of all who are afraid of the human transition, other people suffered because they did not get new technologies. how do we know? a it is not as if there is magic point where we say now is the point. the interesting thing about the phone network and internet is they are networks of networks. verizon --ust at&t, these networks are all federated into what the consumer and user experience as a single network, even though it goes across multiple networks. we havesituation what recommended at at&t is you take

a realistic look at how much work is involved in making the transition and pick a date. you say as of this date in the future, the default system is going to be an ip system that will no longer be any obligations associated with the network of the past. will be purely in the new system. once they have the date industry can work to it. what do we need to do to get there and maybe in some places additional policy work will be needed. that is the key role regulators can play. jody's point, this is another area where the regulator is way behind the marketplace. consumers, the vast majority standalone is not there

communication service. whatever it is, and may vary by consumer. not standalone. this is an area with the fcc is bound by a statute. the statute says the service ofll be an evolving level service. and must be something that is subscribed to by a substantial majority of americans. so i think there is an argument that the fcc continuing to have asix standalone voice as universal service requirement is actually not consistent with the statute even today. >> let me ask you about that. we mention 706. there is another court case pending right now where that -- where the fcc has cited a basis for using the money we all pay as a essentially a tax, even though the fcc will not -- we'll say it is not a tax. the fcc wants to use the money

toward promoting rod bayern deployment. do you think they will win on that basis? what does that mean for the ip transition? are certain issues in telecom that i think of as the angels dancing on the head of the pen debate. the statutory definitions are very arcane. i do not know the answer. the fcc, we argued they had the authority to support rod band. i think the thing about that question is from the fcc perspective the worst case is they lose. it is hard for me to believe there is not a substantial majority in congress that would agree that that should be what we do with universal service nowadays is a poor broadband. lossld view that kind of as temporary only. i think there would be substantial bipartisan support if it turns out the fcc was prevented supporting universal

service. that is an issue congress could do something about. >> i want to focus on something hank said. there is a difference people overlook about the internet. it is a network of networks. those networks do not have to be part of the internet. they have powerful incentives because you can generate a lot of value being part of this enormous network. are private networks. financial services need millisecond latencies. perfect records. they cannot tolerate the best efforts rule of the internet because that is not good enough service for them. they cannot get what they need so they go elsewhere. offices of a company or law phone -- law firm used to buy leased line services dedicated to them between different locations. calledow doing what are

virtual private lines because the private line is not being used by the person 24-7. you can allow the line to be shared. if it is going to be a virtual private line am it has to be there when the person wanted it. they have to get priority. if you do not give them that, they will buy a private line service which will be more expensive. and two, when they are not using it it will not be available to be shared by other people. that is how the internet works. that capacity is now available for other people. that is the sharing aspect that works so well. if we do not have the ability to share and allow people to get things like private line services and a bunch of other things that used to be considered terrible -- you talk about old services with dedicated resources, developing something called ion.

you dedicate an entire network for high data uses. and more now more different ways we're using the networks. i am really worried if we take to narrow a view about what the core services are and make sure we flatten everything into that thebig pot, we will lose really differentiated services starting to emerge today because it is not just e-mail and web browsing anymore. you want a variety of services. >> the way people used it was uniform. lane old network model made a lot of sense. powere want from electric does not vary that much in terms of distribution. gas, there old natural product is a very new rogue range. the networks are built out. those sorts of traditional approaches work dairy well. ,here the product varies a lot

huge investments in it and no one knows what the business model in the future is, that sort of vision of i know what this is supposed to look like is harder to justify more often than not. a questionf you have in the audience, raise your hand. i know katie wanted to answer something earlier. may have been addressed already. a few final questions. we keep dancing around the idea of maybe congress should act. maybe they have the tools they need today but i think everyone seems to agree that a new communications would be a good idea. what would it take to actually get it done? what kind of impetus does congress need? might it help if the fcc finally said help? we need you to update the statute. a new congress.

when you have split government, major reform legislation is very difficult to pull off. second is time. every major reform has taken minimum 5-10 years. actually you often need a big decision or something that changes the environment. they were fighting and double for 12 years. different plans in the market, it is easier to stop them from happening then to make them happen. what happened was finally the supreme court decided on copyright decisions which strengthened the hand of cable companies, which all of a sudden changed the deal where legislation gets done where the bill offers everyone something that is worth more to have the bill go through the not go through. it can be in different dimensions. one part would like x. they would rather have i as well

but willing to give it up. the other part wants why and they feel the same way. a lot of people will say the risk technological changes. -- aereogest verio decision may serve the same role. wouldy need an event that change the relative value that different people would place into getting a deal versus not getting a deal. >> i agree. you need basically something to happen where having legislation is important enough for enough people that it cannot be blocked any longer. it could be a court case. it could be technology. it could be any number of angst that that has to happen to get legislation passed. agree, anything this big would take a long time.

we really just at the beginning of the white paper process we have seen in the house. thinking about the big issues. i think one thing you said that is right is that -- not just one the fcc and what they do going forward we'll make a big difference. look at net neutrality. goes forward on 706 and then people are upset because allowing paper prioritization on the internet estimates what people are expecting in terms of an open internet. that could be a big issue. if they reclassify to title ii and people are happy with that, maybe there is less interest in

moving in congress although there may be others less interested and push harder. that is one issue. you could look at spectrum video. does inwhat the fcc terms of taking action on your own or perhaps saying we cannot do anything, our hands are tied on a particular version -- provision would have a big impact. >> i think to the point about making time, what it means is we really need to be starting now and laying the groundwork. he did not know what the triggering event will be but we have to make sure people understand the world as it exists today or how it will exist the next year for year after rather than when they left just looked at this 18 years ago or something they have remembered from the past. so really understanding looking at the world as it is and laying the groundwork and coming at it from a clean sheet of paper and

do not take the old structures that were designed for a market structure and really look at what is necessary to achieve the desired objectives in the world as it exists. will sharenote, i with you something my grandfather said to me when i was born. he said if i would be young eventi would make this the stakes. i think about that a lot here. we will get a wrong number at or what we do. the current path is not necessarily the best one or sustainable. question here from the audience. if you could identify yourself. this will follow what we talked about, going through door six. should health communication

be defined? should we make a distinction between monopoly and incumbent carriers something like skype and facebook or xbox and to get to what i mean on oft, to get to the value and going intos that more with universal service fund. should skype a into u.s. assets? how will we defined the telecoms going forward? re thinka basic matter, i the way the regulations currently and statue currently look at telecommunication services having to do with trans for and the networks moving things as opposed to the services that crunch the data and do processing for you is the right distinction. although there are obviously disagreements for what qualifies

now. i think there are a couple of ways. talking about voice services there are couple of ways you could look at it differently. either definitionally or in terms of recognizing a separate service but going to treat it in a particular way to kiss people are depending on it in a particular way. one option is interconnected. anyway, this kind of gets to what hank was talking about earlier. ancillary plan and authority. i am a little worried about that because if we get to a point or there is no traditional telecom network [everything has gone to then i worry that structure falls apart because you have to be ancillary to something. but that is a different point. you can look at the interconnected voip. tied to theoip,

facility. those are couple of ways you can distinguish between the different services and try to use those distinctions to reflect the different ways that versusrely on skype traditional landline phone versus bondage. -- vongage. -- vonage. x >> there is a lot of very difficult definitional questions when we got on the road. i got networks on my blu-ray player long before my set top box. is a big fight over whether apple face time is essentially voice. that into it, it is a

wonderful problem. you also have to look at the technology. open internet advisory committee is led by an engineer at princeton. a single apple face time use or uses one third to one half of the up with the and with on the note. the network was not engineered for that. it is a very difficult technical problem where there is a real issue. thing that is interesting to me is you said something else that i think is important, which is look at the competitive environment. wasof the first complaints against metro pcs. they are hero. they are using one point for megahertz of spectrum. that is about a 30th of what the standard spec is. they're making it and diversifying the market. the problem is they do it by a

regular platform for which they did not write media players. they can only support a handful of media players, including what was supporting you to. people complain. playery write a media for the platform and we will do it. the reality is they have three percent market share. anything they did to make themselves more effective as a competitor was a boom to competitor. a fancy engineering that allows them to provide lt services. it is not like it is impossible. you should let them do whatever it wants. this would be a tremendous boon to unleashing a lot of activity. is a reallyhis interesting question. in the context of a new statute, my immediate reaction is to say why would we want to have a definition of television

surface. this serves a particular service and particular framework that i think has proven incredibly difficult to administer. would be if people are going to draft a new law, they should throw away the idea we will have the definition of telecommunication service. they should identify services they think should be subject to regulation. identify the kinds of regulation that should apply. whether they are voice over ip, video, chat. whatever the services are for which they want to allow regulation. identify them rather than having an abstract definition likely have today that has to be applied to individual services. we wantut the services regulation four. the second part of your service to me point out how absurd the current status quo is. aytime you get into

discussion and our business about how we fund it universal service, you beat your head against the wall for 20 minutes. then you come to the conclusion we should fund it out of general revenues and then you say that is impossible here yet you walk away with no answer to this conundrum of how we fund universal service. i think as long as we have a basem from an economic perspective is a tax system that applies to a particular set of industry we have an abstract definition. we do not think these are the services to which the should apply. we have an abstract definition and try to then figure out if it falls into the abstract definition, it would be much idea, to have this clear here are the things. broadbands decides should contribute, mobile --

whatever it is, let's have a decision and apply that decision . the current approach is not amenable to good solutions. i will give jodie in david's the last word here. i want to mention is does take a long time to think these things through. eight years ago they did exactly this. was mostly comprised of left of center academics and brought them together with free-market type academics and policy experts. a fat down to wrestle with the question, which is, how do you apply economic regulation in the world where you cannot parse the definitions? it has to apply to everything. so the model they proposed was instead of focusing on defining which service you apply to, let's focus on defining harm. when should the government regulate? the system they came up with was

the idea -- there was a general presumption that said economic regulation of communication should be presumed unnecessary, absent circumstances that demonstrates the significant threat of the abuse of market power that threaten to harm consumers in a substantial and non-transitory way. in other words, if there is a problem that the fcc can show will not be fixed by market forces, the fcc can do economic a chelation. that model was building on the antitrust laws which are grappled over decades. they apply to almost everybody. rather the question of consumer welfare. there that gotl a buy-in from people across the spectrum to deal with the economic problems we talked about today.

so in closing, david and jodi that sort of model, perhaps a place to go back and begin a conversation about writing a new communications act. >> i think there is a lot of merit to that. provide framework to the flexibility needed for such a constantly changing dynamic environment. when the 34 act was written, the telephone network had not changed a lot in decades. it was very stable for what it did and how it worked. that was easy to do. the log did not change for another 60 years. we are in a completely different environment now where things are happening very rapidly. what theo not know services, technologies will be 10 years from now i'm even five years from now. i think the framework that

focuses on the potential harms and really puts the consumer in the center and focusing on the protections they need is probably the right way to think about it. i think there is a place for protecting against harm, but i think our policy should be what is the best we can achieve in addition to protecting against the worst that can happen. one concern i have about looking problems thatr is could happen in absence of market power. an informational problem or if that all ofractice the carriers have that can cause harms that will not necessarily be answered if there is a market power threshold analysis.

i think it ultimately has to go back to the goals. you have to think about what is the world we want to see. then design policies that bring us there as opposed to stopping the worst that can happen. i think one more point i would add is from congress perspective, i think the allegations should not be a dirty word. there is a purpose to having an expert agency that can be given principles even more specific than serving the public interest that tell the agency what the goals are it is trying to get to but gives it the flexibility to change the regulations as new technologies appear. you think the communications act does that effectively today? >> i think it could. as it exists now, i think it could. i think there are a lyrical

problems that could stop the fcc from classifying title ii when it needs to. >> i think it does today. i think where it has is where it has an address. it is in title one. it is in the internet that has been shielded from regulations where we have seen innovation, cametment, the things that out of the blue unexpectedly. that is really where it has happened. it has happened as a result of policies. protect the space from the legacy regulations. that does not say they cannot take action to make things better. as hank has described, we have seen that happen with voice over ip services where they have not had to classify as title ii but have been able to address 911 and other issues and shouldn't. i think there is a path forward but right now the discretion of

the agency, the past they have taken. i think we should look at where it has been successful and how we embody that in the next act. ani will clarify there is estimate of dealing with unfair perception action practices. let me refer all of you again to public knowledge. five value for the ip transition. the fcc has put out a similar document. i encourage you to check out both of those as well as at&t response to that. we did do an event on the kings very commitment, a lot of of the framework underlying the discussion. these join me in thanking panelists today and look forward to seeing you at the next tech freedom event. [applause]

>> some people in the movement decided to take the cause of marriage equality to the supreme court. that is really what i chose to write about. . am really gratified it was called a stunningly intimate story. that is historic. i wanted to know what would it feel like to be a plaintiff in a major overwrites case? incredibly high profile and controversial. what did that feel like? what was the judge tanking as he was considering the evidence? what does it feel like? i really wanted to convey, what does it feel like to want

everything that someone else has and be told you cannot have it? >> from the first attempt to stop operate to the supreme court decision to strike down the defense of marriage act, jill becker on what some call the new civil rights movement saturday night at 10:00 eastern and sunday night at 9:00 on afterwords, part of three days of both tv this holiday weekend. online, the book selection is it calls you back by a community activists and josé rodriguez. >> 40 veterans died while on of waiting list at a veterans affairs hospital in phoenix have caused hospitals to be scrutinized around the country. the secretary met with the white house. after the meeting the president talked to the press about

management problems at the the i. -- at the va. >> i just met with the secretary and rob neighbors. we are focused on two issues. that allegations of misconduct and veterans affairs facilities and the broader measure of caring for our veterans and their families. as commander-in-chief i have the honor of standing with men and women at every step of their service. from the moment they take their oath to when our troops prepare whereloy, to afghanistan they put their lives on the line for security, to their bedside as our wounded warriors fight to recover from terrible injuries.

the most searing moments of my presidency have been going to walter reed or bethesda and meeting troops who have departed themselves on the battlefield. their spirit and determination to recover and often to serve an inspiration. these men and women and their families are the best that our country has to offer. they have done their duty, and they asked nothing more that this country does hours. that we uphold our sacred trust to all who have served. so when i hear allegations of ,isconduct, any misconduct whether it is allegations of the a staff covering up long wait times or cooking the books, i will not stand for it. not as commander in chief but also not as an american. none of us should. so, if these allegations prove

to be true, it is dishonorable, it is disgraceful, and i will not tolerate it, period. here's what i discussed with secretary shinseki this morning. first, anybody found to have manipulated or falsified records at v.a. facilities has to be held accountable. the inspector general at the v.a. has launched investigations into the phoenix v.a. and other facilities. some individuals have already been put on administrative leave. i know that people are angry and want swift reckoning. i sympathize with that. but we have to let the investigators do their job and get to the bottom of what happened. our veterans deserve to know the facts. their families deserve to know the facts. once we know the facts, i assure you if there's misconduct it will be punished. second, i want to know the full scope of this problem.

that's why i ordered secretary shinseki to investigate. today he updated me on his review which is looking not just at the phoenix facility but also v.a. facilities across the nation. and i expect preliminary results from that review next week. third, i've directed rob nabors to conduct a broader review of the veterans' health administration, the part of the v.a. that delivers health care to our veterans. and rob's going to phoenix today. keep in mind, though, even if we had not heard reports out of this phoenix facility or other facilities, we all know that it often takes too long for veterans to get the care that they need.

that's not a new development. it's been a problem for decades. and it's been compounded by more than a decade of war. that's why when i came into office i said we would systematically work to fix these problems and we have been working really hard to address them. my attitude is, for folks who have been fighting on the battlefield, they should not have to fight a bureaucracy at home to get the care that they have earned. so the presumption has always been we've got to do better. rob's review will be a comprehensive look at the veterans' health administration's approach currently to access to care. i want to know what's working, i want to know what is not working, and i want specific recommendations on how v.a. can up their game. i expect that full report from rob next month. number four, i said that i expect everyone involved to work with congress, which has an born oversight role to play. i welcome congress as a partner in our efforts, not just to address the current controversies but to make sure we are doing right by our veterans across the board.

i have served on the veterans' affairs committee when i was in the senate, and it was one of the proudest piece of business that i did in the legislature. i know the folks over there care deeply about our veterans. it is important that our veterans don't become another political football. especially when so many of them are receiving care right now. this is an area where democrats and republicans should always be working together. which brings me to my final point. even as we get to the bottom of what happened at phoenix and other facilities, all of us, whether here in washington or all across the country, have to stay focused on the larger mission, which is upholding our sacred trust to all of our veterans.

bringing the v.a. system into the 21st century, which is not an easy task. we have made progress over the last five years. we have made historic investments in our veterans. we boosted v.a. funding to record levels. and we created consistency through advanced appropriations so that veterans organizations knew their money would be there regardless of political wrangling in washington. we made v.a. benefits available to more than two million veterans who did not have it before, delivering disability pay to more vietnam vets exposed to agent orange, making it easier for veterans with posttraumatic stress and mental health issues and traumatic brain injury to get treatment. and improving care for women's veterans. because of these steps and the influx of new veterans requiring services added in many cases to wait times, we launched an all-out war on the disability claims backlog. and in just the past year alone we have slashed that backlog by half.

of course we are not going to let up because it's still too high. we are going to keep at it until we eliminate the backlog once and for all. meanwhile, we are also reducing homelessness among our veterans. we are helping veterans and their families, more than a million so far, pursue their education under the post-9/11 g.i. bill. 678 we are stepping up our efforts to help our newest veterans get the skills and training to find jobs when they come home. along with michelle and joe and jill biden joining forces we have helped thousands of veterans find a job. more veterans are finding work and veterans' unemployment, although still way too high, is coming down. the point is caring for our veterans is not an issue that popped up in recent weeks. some of the problems with respect to how veterans are able to access the benefits that they have earned, that's not a new issue.

that's an issue i was working on when i was running for the united states senate. taking care of our veterans and their families has been one of the causes of my presidency, and it is something that all of us have to be involved with and had to be paying attention . to we ended the war in iraq, and as our war in afghanistan ends and as our newest veterans are coming home, the demands on the newest veterans are coming home, the demands on the v.a. are going to grow. so we are going to have to redouble our efforts to get it right as a nation. and we have to be honest that there are and will continue to be areas where we've got to do a lot better. so today i want every veteran to know we are going to fix whatever is wrong and so long as i have the privilege of serving as commander in chief i'm going to keep on fighting to deliver the care and the benefits and the opportunities that your families deserve. now and for decades to come. that is a commitment to which i feel a sacred duty to maintain.

so with that i'm going to take two questions, i'm going to take jim first. >> thank you, mr. president. as you say, this is a cause of your presidency, you ran on this issue, you mentioned. why was it allowed to get to this stage where you actually had potentially 40 veterans who died while waiting for treatment? that's an extreme circumstance. >> we have to find out first of all what exactly happened. i don't want to get ahead of the i.g. report or the other investigations that are being done. i think it is important to recognize that the wait times generally what the i.g. indicated so far at least is the wait times were for folks who may have had chronic conditions, were seeking their next appointment, but may have already received service.

it was not necessarily a situation where they were calling for emergency services. and the i.g. indicated that he did not see a link between the wait and them actually dying. that does not excuse the fact that the wait times in general are too long in some facilities. so what we have to do is find out what exactly happened. we have to find out how can we realistically cut some of these wait times. there has been a large influx of we have a population of veterans that is also aging as part of the baby boom population. and we've got to make sure that the scheduling system, the access to the system that all those things are in sync. there are parts of the v.a. health care system that have performed well. and what we have seen is, for example, satisfaction rates in many facilities and with respect

to many providers has been high. but what we are seeing is that in terms of how folks get scheduled, how they get in the system, there are still too many problems. i'm going to get a complete property. it is not, as a consequence, people not caring about the problem, but there are 85 million appointments scheduled among veterans during the course of a year. that's a lot of appointments. and that means that we've got to have a system that is built in order to be able to take those folks in in a smooth fashion, that they know what to expect, that they -- it's reliable and it means the v.a. has to set standards it meets. if it can't do it right now, it has to set realistic goals how they improve the system overall. the responsibility for things always rests ultimately with me

as the president and commander in chief. eric shinseki has been a great soldier. he himself is a disabled veteran. and nobody cares more about our veterans than eric shinseki. if you ask me how do i think eric shinseki has performed overall? i would say that on homelessness, on 9/11 g.i. bill, on working with us to reduce the backlog across the board he has put his heart and soul into this thing and taken it very seriously. i said to eric and said it to him today, i want to see what the results of these reports are, and there is going to be

want to see what the results of these reports are, and there is going to be accountability. and i'm going to expect even before the reports are done that we are seeing significant improvement in terms of how the admissions process takes place in all of our v.a. health care facilities. so i know he cares about it deeply. and he has been a great public servant and a great warrior on behalf of the united states of america. we are going to work with him to solve the problem. but i am going to make sure that there is accountability throughout the system after i get the full report. steve from reuters. >> thank you, sir. has secretary shinseki offered to resign? if hasegawa he's not to blame who is? were you caught by surprise by these allegations? >> eric shinseki i think serves this country because he cares deeply about veterans and he cares deeply about the mission. and i know that eric's attitude is if he does not think he can do a good job on this, and if he

thinks he's let our veterans down, then i'm sure that he is not going to be interested in continuing to serve. at this stage eric is committed to solving the problem, and working with us to do it. and i am going to do everything in my power using the resources of the white house to help that process of getting to the bottom of what happened and fixing it. but i'm also going to be waiting to see what the results of all this review process yields. i don't yet know how systemic this is. i don't yet know are there a lot of other facilities that have been cooked in the books? or is this just an episodic problem? we know that essentially wait we know that essentially wait times have been a problem for decades in all kinds of circumstances with respect to the v.a. getting benefits, getting health

care, etc. some facilities do better than others. a couple years ago the veteran'' affairs set a goal of 14 days for wait times. what's not yet clear to me is whether enough tools were given to make sure those goals were actually met. i won't know until the full report is put forward as to whether there was enough management follow-up to ensure that those folks on the frontlines who are doing scheduling had the capacity to meet those goals, if they were being evaluated for meeting goals that were unrealistic and couldn't meet because either there weren't enough doctors or the systems weren't in place or what have you. we need to find out who is responsible for setting up those guidelines. there are going to be a lot of

questions that we have to answer. in the meantime, what i said to eric today, is let's not wait for the report retrospectively to reach out immediately to veterans who are currently waiting for appointments to make sure that they are getting better service. that's something that we can initiate right now. we don't have to wait to find out if there was misconduct to dig in and make sure that we are upping our game in all of our various facilities. i do think it is important not just with respect to eric shinseki but with respect to the v.a. generally, to say that every single day there are people working in the v.a. who do outstanding work and put everything they've got into making sure that our veterans get the care, benefits, and services that they need. and so i do want to close by sending a message out there that there are millions of veterans who are getting really good

service from the v.a. who are getting really good treatment from the v.a. i know because i get letters from veterans sometimes asking me to write letters of commendation or praise to a doctor or a nurse or a facility that couldn't have given them better treatment. so this is a big system with a lot of really good people in it who care about our veterans deeply. we have seen the improvements on a whole range of issues like homelessness, like starting to clear the backlog up, like making sure folks who previously weren't even eligible for disability because it was a mental health issue or because it was an agent orange issue are finally able to get those services. i don't want us to lose sight of

the fact there are a lot of folks in the v.a. doing a really good job and working really hard at it. that does not, on the other hand, excuse the possibility that, number one, we weren't just -- we were not doing a good enough job in terms of providing access to folks who need an appointment for chronic conditions. number two, it never excuses the possibility that somebody was trying to manipulate the data in order to look better or make their facility look better. it is critical to make sure that we have good information in order to make good decisions. i want people on the frontline if there's a problem to tell me or tell eric shinseki or tell whoever's their superior this is a problem. don't cover up a problem. do not pretend the problem doesn't exist. if you can't get wait times down to 14 days right now, i want you to let folks up the chain know so we can solve the problem. do we need more doctors?

do we need a new system in order to make sure that scheduling and coordination is more effective and more smooth? is there more follow-up? and that's the thing that right now most disturbs me about the report. the possibility that folks intentionally withheld information that would have helped us fix a problem. there's not a problem out there that's not fixable. it can't always be fixed as quickly as everybody would like, but typically we can chip away at these problems. the we have seen this with the backlog. we have seen it with veterans' homelessness. we have seen it with the post 9/11 g.i. bill. initially there were problems with t they got fixed, and now it's operating fairly smoothly. problems can be fixed, but folks have to let the people that did the reporting to know that there is a problem in order for us to fix it.

listen, if somebody's mismanaged or engaged in misconduct, not only do i not want them getting bonuses, i want them punished. that's what we are going to hopefully find out from the i.g. report as well as the audits taking place. all right. \[captioning performed by national captioning institute] \[captions copyright national cable satellite corp. 2014] "washingtonc-span, next.l" is then, live from the u.s. house. a bill changing the national security agency.

and in about 45 minutes, congressman phil roe on mismanagement at the veterans administration, and then peter defazio on federal transportation and infrastructure spending. >> when i hear allegations of ,isconduct, any misconduct whether staff covering up long wait times or changing the books, i will not stand for it. as commander-in-chief and not as an american. none of us should. if these allegations prove to be true, it is dishonorable, it is disgraceful and i will not tolerate it, period. host: president obama promising take place will concerning wait times andth