the united states. statutes are way out of date. the second is addressing the national security authorities in the united states, u.s. freedom act is one vehicle that does a nice job of addressing concerns. particularly issues of bulk surveillance by u.s. natural security. those are two very important vehicles that are there ready to be passed and can help reduce the concerns about aggressive u.s. surveillance. i think there's also a great need for the united nations to be better at being able to process requests from other jurisdictions for user data from u.s. companies that hold it. if we can provide a good working avenue for foreign jurisdictions, non-u.s. jurisdictions to get data through a good process with good standards, we'll reduce the

perceived need by jurisdictions to enact extraterritorial surveillance laws or put in place data localization. even simple changes to make it so we are the united states better at honoring our treaty obligations under assistance treaties and other vehicles. it can go a long way to reducing ome of the pressure. >> there's a couple things i want to say. one, i think that we should put this in context and perspective. in the first instance, yes, there have been a lot of moves in the press and discussion about data localization. the biggest threat, most real was in brazil. it was passed earlier this year. there was at one point provisions mandating data localization. those provisions were remove ed from the bill in part because of the recognition within brazil that doing so had negative repercussions for brazilians themselves. we're seeing that kind of

educational process taking place around the world. people see it's not in their self-interest to invest in these data a processes. as it relates to steps we can take to restore some degree of trust or some degree of collaboration and comradery on these issue, eu and u.s. under the direction of department of commerce here and counter parts in the eu are working on updates to safe harbor for eu u.s. tran missions of digital data. it's as much their opinion as it is ours of distribution of information because of how important this is to the entire economy in both sectors. another step that we're taking is ntia announcement earlier this year to transfer the contract functions subject to

conditions to multistakeholder community to insure we're alking about a truly inclusive global system of government of the administration. then the third thing that i would talk about is capacity building in those part of the world where introduction to internet communications and network is coming on at a slower place. you're seeing what are around 20 -- 16 to 22% penetration rates for internet growing at expediential rates. those countries and governments are asking us and others to help them with building up incidents response teams and putting into place the right legal and regulatory infrastructure to make sure sharing is possible and know you can mitigate against threats and attacks. separately the president announced a series of reforms relative to our intelligence

practices. among those, within that package of proposal, there is proposals to improve the process which is the mutual legal assistance process by which governments ask us and access information necessary to enforcement of laws at home relative to information housed here. i would go back to the point that i think what we saw maybe in the immediate wake of this note of disclosures hasn't really manifested itself in a closing or fracturing of the internet. at the end of the day, you see a proposals from some authoritarian states to either wall off aspects of interthet or impose international regular la story standards of what people can do, see and say across the interthet. you don't see that adopted by a significant portion of the world. the brazil's migration in particular, at a conference they

held earlier this year, it really manifested itself in the vast majority of participants in the world at that conference. agreeing to the multistakeholder system and govern answer and agreeing to free flowing information across the boundaries. there's a story of half glass full. we're making progress with our colleagues a broad. >> i'm going to join in on that and absolutely agree with what danny said about brazil. i think that it was a good example of how hearing from companies and stakeholders in brazil about the real problem with localization requirements that brazil had proposed had a positive impact in that instance. i think there are plenty of challenges that remain.

i think for example indonesia, we're seeing a trend in the opposite direction which is of great concern and localization area. india remains a huge problem in that regard. so i think we have plenty of work to be done. i would say you know from our perspective, what we're trying to do and will continue to do is through our active negotiations, the most prominent one being our negotiations in services e-commerce tell come and investment chapters. here are series of five core pro-visions. the first is that we negotiate prohibition on tariffs districted so they will not be custom to service duties. that's something that started in the wto but we extended are through fta.

we think is core and important rule to reinforce. secondly, we negotiate non discriminatory treatment of digital products which again can be a kind of barrier to entry into a market. establishing the more we can make progress through our regional fta's, the better. thirdly, cross border information flows. we have a mandatory binding provision we're negotiating for the first time in tpp that countries are signing up to that requires they allow free transfer of data flows on a cross border basis which again goes directly to what we've been discussing today. fourthly we're negotiating a rule which would prohibit requirement that countries require servers be located in their own territory.

we think it cuts to the heart of the core concerns that have raised with regard to localization. then finally, what we do in our services chapter on a cross border basis, we negotiate on the basis of a negative list. the reason we think that's so relevant to what we're talking about today is you want to be able to cover virtually anything. i think as we all know in the digital area, innovation is ever present increasing something we want to encourage. so the more you have trade commitments that are based on a negative list, then you are able to cover new services as they are created and as they grow. we think these elements combined, more we're able to pursue them, if we're able to create agreement among the tpp countries, we're pursuing similar kinds of requirements in the negotiations with the europeans. we're also pursuing similar requirements in the tsa, pleural lateral services negotiations

which we have roughly 24 countries. 48 if you count all the individual eu member countries together. what's important about that is those core rules i've just described. if we can propagate them among that large a group of countries, i think we'll go a long way toward addressing or giving ourselves a tool in the tool box to take on what again seems to be the problems of particularly localization. finally on the investment front which again i've been talking about the cross border piece. through our bilateral investment treaties and chapter, we also believe the removal of market access barriers when a company decides it wants to invest and makes economic sense fits with their business model that there are not barriers to foreign direct investment and as in the

case of the china exampl there are not discriminatory requirements that require you to use local technology or local standards. so i think it seems to us that having those tools is not the complete answer. much of what danny alluded to is also an important part of whole piece of address it can issue in terms of multistake a holder organizations that we need to develop in terms of internet govern answer. bilateral dialogues which are also important. all this working together, we think, can make significant end roads. >> what do you think we should do to rebuild trust in trade and the digital economy? >> this really brings significant improvement of productivity and also the global trade. i think it's obvious. recently now people start

concern about cyber security and the privacy. that is really coming from certain requirement from different comments. i agree that the government really have to jointly sit together, agree with a standard and code of conduct as i mentioned early. also don't judge the technology origination or product origination or service origination from other geography areas. we have to make sure that's frame work is established. also, today's openness of internet and also economy is really because of the contribution from all the technology companies. the technology companies also need to work together across the international border to make sure that we can react and contribute to such kinds of frame work.

then we can give up a viable commercial system and technology to enable such kind of openness to internet. today, again any success of a global company is depending on trust. if we use the user's trust and i think we lose fundamental of our business. the prosperity of the world economy. that's very important for us in mindkeeping. no matter which comment for what kind of purpose. make sure the prosperity of the economy and the development of the industry is there. i want to say today, you know, the fragmentation of internet is really coming from the concerns of our cyber security and privacy.

i have to say that fragmented internet would not bring security, privacy, protection to the cyber world. cyber security enhancement and protecting privacy should not jeopardize the openness of the internet. so we have to see that you know. the wto to get a global trade. i think also we create a chance there is a missing piece how we're going to insure the free flow of data in today's connected world. that's also something that needs o be done by different governments. >> thank you. so james, what are the steps that you think we need to undertake here? >> when i think about trust in this context, it's difficult in a world i can't trust my new refrigerator which i discovered in my home network logs last

night was trying to go through my home network to communicate back to the manufacture to download the latest firmware. i didn't realize there was a wireless antenna in the] refrigerator. fortunately i had the firewall configured. sad refrigerator, happy james. >> that's what i'm about to get to. you'll be surprised to hear this from me given what i do in the intelligence business. for me, the basis of trust in my daily life is robust transparent encryption. hen i get messages from people the way i trust those messages is because of digital signatures. i've been an avid user of inscription over 15 years.

it's been a user of it. everyone has discovered encryption. ournalists have discovered how o to spell encryption. at the end of the day, it has to be robust, transparent as to how it's being used. engineering when it needs to has to fade into the background. sometimes it needs to be front and center. it has to be easy enough for my mother to use. it can't be that you can only be a crypto paranoid if you can run on the command line. it has to be baked in at a basic level of what we're doing. i will say as an apple fan boy for many years, the recent moves by apple for instance ios 8 where they took the burden of the robust encryption away from the user and configuration and baked it into the way the system

is built is going to be the trend of the time. that's to the benefit of everyone who doesn't want to have to expend intellectual capital to figure it out. father of two teenage doctors, big fan of pictures in a cloud. we've moved to that in our corporate networks. all of these measures are coming along. you'll see the industry now growing up that understands there's this desire for it. that will naturally lead. we need to be prepared for another clipper chip debate. it's going to lead to another reaction that says okay, the world needs robust encryption. now what is the legal and privacy and governmental oversight regime that allows key escrow and everything else. we have to understand that that is coming. we're going to have that discussion. there's a balance that can be struck there. we also have to deal with the use of standards as trade

weapons. in china right now the rise of their natural smx standard and the insistence of using the market leverage, the fact so many i.t. products are manufactured in china, to use that as leverage to force vendors to makeproducts compatible. the phone in my pocket has a dual wi-fi chip in it. when you talk to apple, they an't attempt you what the chip does. that's the chinese standard. there could be a wapi note in this room i wouldn't know. that's not transparency and egime. while arguing for robust encryption, we have a lot of work to do in the engineering of making that possible. >> why don't we open the floor to questions from the audience. i'm used to being worried about the government. now i guess i need to worry more about my refrigerator.

>> yep. and your toaster. >> questions from the audience. >> gentleman right here on the aisle. >> thank you. >> if you could give your name and organization. >> i'm roberto from professor of law at the university of chile. i wonder what the actual size of localization. we hear about initial china. the issue still we have a localization in place in several democratic countries. i understand to voice for local and avoid localization is because of localization requirements in canada. there are also localization requirements in australia law. and taiwan law. it's not bills to our law in place. not to to talk about their

requirements of localization, but the upn union. it's a little more open because it requires the service processed data in safe countries and data what is safe the difference between the localization requirements that you are talking act, china, russia, or brazil, and the requirements of localization of those democratic countries i ust mentioned? >> anybody want to jump in? christine? >> well, just briefly, i could start by saying that i would certainly agree with you that localization is still a widespread problem. i don't agree, though, that i think that tpp and the core elements that i mentioned were designed particularly for canada. we had a much broader concern when we developed those elements, which certainly preceded tpp and exist more roadly across the globe.

and i think, you know, we make the same argument with each trading partner that we meet and it's very much along the lines of the arguments that you've heard from the panel this morning, that there really is an conomic case to be made that having localization requirements, local data storage, local server equirements can be self-defeating and can ultimately not have the high quality of services and competition that you want to see in your own economy. ened i think, you know, we've made a fair amount of progress certainly for that notion. we're not quite there yet, but we have. imilarly, we're making similar negotiations with other countries and we've just begun with the european.

so i agree with you that localization is not confined to nondemocratic societies. it exists in democratic societies as well. but i think the economics and the argument that we make is quite similar, though, in terms of efficiencies and can we find ways around those equirements. >> the gentleman right here with us with his hand up. there's a microphone coming from ehind you. >> hi. my name is joe hall. i'm the chief technologist at the center for democracy antec nothing. you talked about sort of the move to have more ubiquitous encryption and the ore usable forms of consumer security tools. and he talked a little bit about through the shift, as the professor talks about in terms

of moving standard capability from being more law enforcement friendly to protecting the user more. and professor gene camp yesterday put it starkly in the sense that she said, you know, we could mandate that cars should be able to explode on command or the engines explode when being chased by the cops but we don't do that because exploding cars are dangerous. i'm wondering if the panel -- if other people have thoughts about sort of the international mplications of this stuff. does that put more pressure on the desire to make the process ork a little better?

the problem is given the level of insecurity, given the fact that this network -- i used to work at rand ooned you talk to all these guys in the basement. they said look, we never intnded this network for any malicious behavior at all. all of a sudden we built this global economy on top of it. comes along and says let's rearchitect the whole thing, you know, let's repair the damaged airplane at 30,000 feet with the giant hole in the side. right? you know, difficult, you know, not impossible, kind of a nasa-level problem. and, you know, at the end of the day, i have circles, right? there's my company, then the country, so i'm trying to secure the boundary lines that i can secure.

and if that has the ancillary effect of allowing people to use ommercially available tools to be able to do things that i don't like, for me that's just a cost. i mean, good policies are not cost-free policies. good policies always have costs. and for me it's a good policy to have widespread distribution of commercial-level, easy to use security products and then we have the engineering problem that comes along with, well, what do we do about the fact that the people we might not like are going to be using them as well. but that's not a reason to then say, well, we're just going to continue to live in this very insecure world in which every ime we swipe a card or put our pin into something we're impearling our entire financial entire financial existence.

michael? >> mike nelson with georgetown university. i'm really glad to hear a discussion op encryption and data localization, but i thought it would be useful to look at a specific case study of the internet of things. we're moving forward here to a world where there's going to be hundreds of billions of devices connected to the cloud, reporting data in. they're going to arrange from the fit bit on my wrist to the sensors in a ge aircraft. how is that going to affect both our ability to implement encryption -- because some of these devices are going to be ten-cent devices that might not be able to support robust encryption -- and how will it change the debate over update to localization? will countries want to have more control over the data inside their country or give up and realize my fit bit is will go across border, the airplane is going to fly over 40 countries in a day? >> good question. who wants to address it? >> i'm not sure, mike, if i can answer all of that.

i would say that i think the trend you're seeing towards encryption in the obvious products for encryption, which are really communication-type products, i don't see that stopping and it shouldn't. it's something google had been working on long before the nsa worked on getting as much as we could get encorrupted between data centers and user, trying to make it easier for users to encrypt our phones. you encrypt those for a long time now. so i think we are heed towards an understanding, a societal understanding that encryption is good. i don't see why that would not apply to the internet of things. there may be practical issues and may also be differences where the information depending on the thing is not particularly sensitive. how much milk is in the refrigerator, james? probably a subjective judgment. but i think there may be -- the trend towards encryption i think is one that is strong and we're going to see a lot more of it.

i have the same concerns that james has talked about, which is are we going to relive the cryptobattles that we've had in the '90s. nd i certainly hope not. -st hoping we can avoid that having learned lessons. >> because we have to acknowledge the fact that the trend line, if you will, i mean, i'm not a marxist determinist, but the trend line right now is that over time we will increasingly live in a world in which, largely for convenience reasons -- let's be clear why we've allowed all of these technologies to come into our life is because of the -- i think patrick henry said give me convenience or give me death. right? you know, that's -- that's why, you know, i mean i'm a slave to my smartphone. right? ut we are living in a world,

increasingly living in a world in which the mesh of surveillance and wireless interconnectivity is just going to get denser and denser and denser. i thought it was fascinating that dick clark a couple months ago was asked what the future of privacy looks like in 20 years and he says we're going to live in this, you know, ubiquitous sort of dystopia of cctv cameras and facial recognition and all this stuff, then the affluent are going to take vacations in place where is there are no cameras. in other words, they're going on privacy vacations. i don't believe that because the people hosting those resorts are going to want to know all about their preferences so they'll be secretly surveilling them in privacy resort to better offer services to them, you know, what kind of chocolate do they want and all that stuff. but in that world, i'm more comfortable in that -- you know, knowing that that is a dynamism that is being pushed by social interaction and the economy and the benefits and the economies of scale and all these things, if within that environment we can set up, you know, our own definitions of multilevel security. i don't care if the toaster's unencrypted.

i just want it to toast the dam bread. but, you know, i do want my e-mail to be encrypted. i do want my online banking to e encrypted. so, you know, having these kinds of -- i think that, you know, the market will sort out -- and now you have to give the consumer more tools to be able to empower them to sort out how they want that multilevel security to work. so, yeah, the ten-cent thing -- but, you know, at the end of the day, you know, as much as i love dystopia, you know, we're not necessarily moving to sky net, you know. we still have to control the machines. right? because they will decide we're a virus. but i want to encrypt my information so the machines don't know where i am all the time. >> if i could add something. the underlying question of what is what is happening with data, the size and scope of the data sets and how they're being used is something this administration has taken very seriously. most recently john podesta, the

counselor to the president, it's about as high as you can go to ask the question, produce the big data report, and it presented a very balanced view of, well, look, there are serious benefits that are derived from encrypting things. so, for example, whether it's the internet of things and rising energy efficiency, how the grid is allocating energy across sectors, incredibly important. you're able to detect and respond to an epidemic more quickly than you would otherwise or for law enforcement, mechanisms by which you can use data in order to produce something that produces a public good and makes us all better and happier. you have to balance that with the fact that data can be used for good things and bad things. what are those bad things and what can we do about the use of that bad thing? the fact that someone doesn't are the information is

distributed about their toaster but they care about their e-mail or finances is directly related to harm. distribution of information act how i toast bread leads to very little harm over any extended period of time. distribution of information on how i use my finances, the degree to which i make financial or family or health decisions, those are very serious, very private, very sensitive aspects of information. that can be used to harm you. i would commend the big data report, not just the big data report but the fact that this administration, the department of commerce and the green paper, the ftc and the white paper did this. when this administration came back into office after many years of not having produced documents like this, not calling for -- reengage that onversation. so, again, at the end of the

--so, again, at the end of the day, these are issues we're aware of as an administration. we're taking them extremely seriously and at the highest levels working towards asking the right questions and ensuring we don't inject unnecessary friction or do harm to what are very serious potential benefits while at the same time balancing --the front row. >> any of you see the nova show last night? it was on data encryption nd

whatever. it was pretty amazing. i wasn't sure i wanted to go through it. but i, too, am anxious about giving my credit card -- i mean, and i don't have a lot of money, the idea that this can make us so eneasy. they can stop the electric system going. we all have an enormous challenge.

so it's actually quite depressing to me to travel to other countries that were later modernizers this-in these areas because they've been able to leapfrog stages of development. so, for instance, the fact i have credit cards in my wallet now that are not chip and pinned is ridiculous, absolutely ridiculous. given the amount of losses that the credit card companies have to write off every year, it would be worth it for them to update the infrastructure so that we didn't have to, you know, have magnetic strip credit cards. but it's a legacy infrastructure. during the six-year sentence i did in los angeles, i remember pac bell coming out at one point and saying we're going rip all the copper out of the walls and go to fiber. some actuary down in b-5 ran the numbers and you never heard about it again because we had to replace so much legacy infrastructure. when i've traveled to countries that have had the fortunate advantage of basically going from dirt to wireless, you know, it really highlights a lot of the issues we have in terms of structural investments, spending

stimulus money on bridges but should have been spent on ipp-6 and things along these lines we're really playing catch up in the trends o some of that we see in places where they didn't have those legacy problems. >> in the very back in the corner the gentleman with the question. >> i'm jim marks with politico. mr. mull vain, i hope you can expand on something you said earlier about the concerns about national encryption and chinese encryption standards being put into technology that's produced in china from other companies. what's wrong with that if the encryption itself is good? >> you can address that. >> sure. that's the issue. a good example -- let's go back just briefly over the history of latvia, the chinese counterpart to the wireless security standard. when it was proposed by the

industrials in beijing, they said if you want to produce equipment and have a single global production chain, you don't want to bill a china iphone tan rest of the world iphone and the rest of the world couldn't be built in china unless certified by the resident authority, you need to make your product compatible with this information technology standard in addition to wi-fi, okay, and here are the list of 30 companies we want you to partner with and in order to have that partnership you have to turn over your crypto source code so they can build the apis into the product. well, turning over your crypto source code to companies associated with an authoritarian government is not a global model that i advocate. when i talked about encryption, i talked about the transparency of it. well, you know, there's a great, you know, encryption philosophy that says, you know, the algorithm shouldn't be

secret. that's why i love photography. when the algorithm is secret it's insecure so, all you have to do is figure out the algorithm. if we're going to have a robust encryption system, it can't be when i call somebody and i say what's the wacky algorithm and i'm told by the state encryption manager commissioner in beijing that algorithms in that sequence can state secrets and cannot be disclosed, i don't regard that as any of the part of product i want in my belongings. >> do you want to jump in? >> i'm not -- >> he's looking to defend beijing. >> i'm not the expert on encryption or the legal, but from what i understand about the conversation, actually, i believe this particular case for iphone is not really because iphone is manufactured in china but actually iphone want get into china because, you know, if

you sell that phone in china you need comply with the local laws and regulations. the chinese government require that you have to support such kind of encryption or wi-fi standard. i think that's the key. as we're speaking, i have 56 divided groups in the united states. so what we need to do, we need to make sure every single phone we sell into the united states comply with the laws of the u.s. overnment. partners and make sure you know that the privacy of the customers and -- from the carrier partners is implemented. so, for example, most -- i think all wi-fi chips particularly for the united states, we always have, you know, either broadcom or qualcomm and any other u.s. companies.

o i think that's very clear. so -- because, again, back to the original question about the challenges we are facing i think those are challenges we're facing as global technology companies, is no matter u.s. company or chinese company we're all facing the same challenges. that's why, you know, all the government need to come together together. i think the key things for us short term for us is we lose the economy of scale so we have to have different products for china or for u.s. we have to separate it. but ideal world we should have one size fits all but unfortunately we cannot do that today. >> i just want to address the general concept there, which is not specific to that particular chip and having two chips doing the same thing in a given product. it's the idea that it's the chinese government making this determination and mandating the specific purchase from specific providers is a problem. because you can't have every market in the world e imposing

that kind of nonvoluntary purchasing and production standard. it ruins opportunities for innovation and it doesn't comply with the idea that voluntary standards should be exposed to the market and the market actors should adopt them. no one forces you to buy anything from qualcomm or broadcom. that kind of forced purchasing is a problem and it's not fair. >> and you shouldn't have to include chips with standards that have already been rejected by the international standards organization, by ieee, by itf and are nonetheless forced upon you because of market access requirements and the way that this certification process takes place in the country in terms of getting your products certified for the domestic market. even though the standard itself has been rejected as technically inferior and we see this across dozens of different i.t. standards in this particular case. >> the only reason china can do this is because of the size of the market. >> right. >> bahama couldn't.

>> but it has other charms. >> this gentleman here has a question. >> i'm a fellow at the german marshall fund. i want to touch on something i think richard said about artificial rules about the infrastructure. i think that's part of the disconnect. a lot of these aren't artificial. these are the social norms, the social contract broken into all these different pieces. so the internet is designed at odds with the way human society is design. that's why you're seeing it fractureing into pieces. i wonder until you have a global social contract i don't see how you're going to fix -- these issues are going to keep coming up. differing norms on the freedom of speech and just the way you do things, the way you enforce law, all these things. this is what the internet is confronting. it's much bigger than just these little pieces. hat are tech companies do this

to figure this out, understand it, and to engage and encourage these global debates so people do talk about how to converge norms, how to converge ways of doing things so we can all basically get along? >> i'll go against my irish heritage. the good news is these technologies are changing social norms. they've changed the way i interact with my children, my wife, with my friends, with my co-workers, literally changing the way our entire society is working with one another. the bad news is a lot of the prophesy hopes at the beginning that barlow, declaration of independence in cyberspace idealism has foundered on the fact that, in fact, these technologies provide just as much interesting power to people seeking to control as they do to people seeking to liberate them. i remember 15 years ago people

talking act how the internet or cyberspace was just going to wash over all these authoritarian regimes, that they were going -- they were so atavistic, so backward looking, they would never be able to deal with it, and yet we've been amazed as they've responded nimbly to wave after wave after wave of disruptive technologies, some with more success than others. you can compare arab spring to china or russia, but, you know, at the end of the day there is more of a push slr pull/pull, and so -- and, you know, what's also embedded in your comment, though, is the unintended consequences. i mean, we're not on some linear trajectory towards absolutely good and peace and happiness. and so embedded within some of these technologies are unexpected things, again, as the father of teenage daughters i discover this every day when i go through all the logs of all of their computer use and social media use and spend probably an hour of my day doing that now.

and, you know, so you realize that these liberating technologies also have these sort of pernicious and unintended consequences. >> i want to address the basic underlying question, the internet is not breaking. at the end of the day, there is literally not a country that has chosen not to connect to the global internet. there is discussion by some politicians and some countries about constructing internet within their country and disassociating themselves from the global internet. but that is actually not happening. i think iran had taken some steps at creating an iran ran internet that their people would be able to use only in iran and would not be connected to the global internet. i don't think that actually ever took off. there was some discussion about it in russia but that, again, didn't take off. what i think we're talking about here really is the worldwide web, which is an application that rides over the internet and then services delivered over the

worldwide web that at times allow people to engage in behavior as human beings that is offensive to people in other jurisdictions. so take, for example -- i mean the most recent case was turkey, right, during the last election. there was a twitter situation in which people were tweeting out things about a candidate running for office and turkey shut down the entire service of twitter. now, that has since been worked out. twitter is back up and running in turkey. i think youtube and facebook and others have faced similar situations in different markets. so, for example, there are parts of the world where it's against the law to say something bad about the prophet muhammad. and people do it on facebook or twitter or whatever all the time. it's up to those service providers that are, again, simply a service on the larger internet, to work with those governments and where they can, if within the concerts of their ethics and terms of service, work something out to ensure that there's a mutual respect of service delivery. but, again, i don't want to

conflate that with the idea that there are islands of nonconnectedness in the world. technologically that's simply not happening. there is no armageddon in that sense. but that underlying question of how do you ensure that human behavior in your country, that you think is outside the scope of your particular laws and jurisdictions is addressed, that is one of the most challenging questions that we have. but those are questions that service providers work out with those specific countries. so, for example, like pandora is not accessible or netflix in poorts of the -- parts of the world. but our goal and our underlying work is to retain the single global network which each individual device can connect to any other individual device anywhere in the world. ow, what people do with that

connectivity is a separate uestion of law and behavior. manage that. there's been a lot of talk about which some countries trust the international telecommunications union, which is a specialized agency of the united nations, versus how much they trust i cam, which is a nonprofit corporation incorporated in los angeles. icam is 15 years old. icu is 150 years old. so to some degree it's an evolution and a back and forth about what's necessary to make sure that you keep the underlying things that work extremely well about the internet and provide extreme public benefits, such as innovation and jobs and freedom of expression and freedom of access to information, while at the same time ensuring that you're respecting everyone and their governments who are involved in this connectivity of global communication. >> not just a technology problem anymore. it's a lot bigger.

>> there is an interesting countvailing problem that came up recently which is when you have a company that provides a social media service that has become a virtual monopoly in many markets like twitter who then unilaterally decides to shield its users from discussing videos of isis savages beheading people, which i didn't want to see and i didn't want my children to see either, but it is an interesting thing whether there is a role for government in the sense that yo who's to say that twitter got to decide that they were going to run software to go out and find those pictures and make sure the users couldn't get them? you can say the market will decide. switch to a different outlet. twitter has a monopoly on economies of scale. do i want them deciding the social norm or standard in other areas. are they going to block the j-law pictures? what other things will they do not for legal or copyright

reasons but because of the sense of what think think the social standard should be? >> i would disagree that twitter has a virtual economic monopoly. it simply does not. the barriers to entry into this particular market are nothing reflective of a monopoly situation and the fact you can access anything twitter puts on on facebook or any number of other if not social meet yaw sites,coincidental information on the internet. there's ban lot of talk in europe and other places of the idea that google and facebook and other companies constitute virtual monopoly, it's just not accurate. >> in the same way you could say my space for a time had that monopoly. clearly, i won't use the word monopoly -- it had a preponderance in the market that went away very quickly. twitter tomorrow could vanish off the face of the earth as have many other social media

services because they became passe. my children will never put a facebook account up because they're like me. they have no interest in it whatsoever. facebook will recede into history. but the community that's been created on twitter has, you know, a quantity and quality all its own. so to defect from twitter and say because i disagree with their enforcement of a particular social standard means i'm not going to use twitter means i've now voluntarily cut myself off from an economy of scale that actually was beneficial to me. because i could use the crowd source and everything else. yes, i have the market option of not using twitter. but there are costs to not doing that, because i disagree, and there were not alternatives of a similar social scale. so, yes, the illegal term monopoly may not be correct, but in terms of the actual performance and use of that service i think that the same idea is still in effect. >> it's debatable concept. >> okay. i think we have time for one more question.

entleman with his hand up. thank you. i'm anthony and i'm with a cyber security firm. i have a question mainly particularly for the ambassador and christine bliss. you had mentioned sort of that everyone, all these -- that everyone is an equal participant in the web, in the internet, mentioned the education taking place sort of to realize that the localization laws are actually not beneficial as well as mentioning the different aspects of negotiations that are being put in place to improve information data flow and trade. ut i'm wondering what the u.s.

is actually doing to improve trust, because i think trust takes longer to build than it does to be lost. and in the wake of the snow den revelations, i think a lot of trust in the u.s. as a quote, unquote, equal participant in the internet has been lost. i'd be curious if either of you could speak to that. >> that's a great closing question. professor, christine? >> sure. i think in terms of the question what are we doing to restore trust, you have to break that down into trust between whom, trust between users of the internet around the world and the american government, trust between governments themselves, or trust between users and commercial entities. right? the idea -- when we talk about equal participants on the network, what we're talking about is a network that's open. we have as much capacity as anyone else to access that network and create and innovate

on it. the fact we do so disproportionately well is true. but that does not mean our access is greater than others. we have made significant investments in net work, and europeans have produced robust networks. we're trying to encourage the development and deployment of much more robust networks around the world, particularly in latin america and asia. just due to the economies of scale, the addition of every additional user adds value for everyone else, and there's great social and economic returns to having greater connectivity. so in terms of how with do we restore in the first instance individual user trust relative to what the american government is doing in the wake of the snow den revelations, the president of the united states has spoken on this on multiple occasions. the president of the united states is committed to civil liberties. that's where he comes from. he used to teach constitutional law at harvard university. he has exposed and had our

intelligence practices submitted to the review of five independent expert, and that was subject to -- with hands off, they did their report, made their recommendations. the president accepted a significant number of those recommendations and is in the process of implementing them. what he has said is these programs and processes will respect the privacy of individuals. how do you implement that and ensure other people accept that as true? it's going to be a long process, but it's one we're engaged in. in terms of trust between governments, there are a number of governments that express extremely significant concerns and on which we have been working on a bilateral manner to address concerns to the best of our ability between intelligence experts, in between their operators, their intelligence practices and ours. germany and brazil are two obviously -- an we continue to do that work on a bilateral basis on a regular basis. the other thing we do is go out to the world, to the freedom online coalition, to the freedom of rights council, any number of

different venues in which people are welcome, they're welcome to challenge the practices of the united states. again, this is an evolutionary process. last year there was a human ights council proposal adopted une -- unanimously proposed by germany and brazil. i'm sure they will be coming back with additional proposals. we're going to continue work ought what is appropriate. >> and i would just add to that that, you know, as trade negotiators, being able to build and maintain credibility is one of the most basic things we have to be able to do to do our jobs nap's a continual challenge we face and considered to be very, very important. so i think, you know, across the board an the negotiations we're engaged in we're trying to do that and continue to build on the relationships that we've created.

the other thing i want to say is that i think part of our job is also education and i just wanted to say as we wrap up here, too, a lot of what certainly has informed the work that we do is i think in the last i would say two, three years in particular, there's been some excellent studies that have really i think helped explicate just exactly how digital trade is really transforming our economy and the degree to which our gdp, our employment, our wages are being impacted by the growth in digital trade. it's really quite amazing when you work at the figures. if you look at the two ipc studies that have been done just in the last year on digital trade, u.s. gdp has grown from 3.5 to 4.8% based on 2011 figures. u.s. wages have increased by as much as 5%.

so there are real concrete benefits. again, that's u.s. centric. but there are other studies like the mckenzie study on digital trade that created what we found to be very interesting, that connectivity index. and if you look at that, what they found was that the more connected a country was, the greater the benefit it enjoyed from increases to gdp to employment across the board by 40%. and so again, i think that's part of what we're trying to do and communicate, a sense that we're in this together, that, yes, we as the u.s. enjoy benefit bus so does the rest of the world. >> okay. we will make that the final word, but i do want to thank daniel, christine, lexon, richard, and james for sharing their thoughts with us. and thank you very much for oming out. [applause]

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] c-span campaign 2014 debate coverage continues today at 2:00, the oregon governors debate. sunday, the iowa u.s. senate debate. c-span campaign 2014 -- more than 100 debates for the control of congress. events coming up this morning -- a look at the common core state education standards initiative. we will hear from congressman

george miller, the ranking member on the house education committee we will have that live at 10:30 a.m. eastern here on c-span. on c-span2, senators ted cruz, rand paul, and congresswoman michele bachmann will be the speakers at the value voters summit. live coverage begins at 8:50 a.m. eastern. c-span3, attorney general eric holder will be speaking at a congressional black caucus meeting. yesterday, he announced he would be stepping down as the head of the justice department. we will have live coverage at 9:00 a.m. eastern. coming up this hour, we will get an update on the u.s. led military campaign against the militant group isis in syria. then a look at a census report on poverty which found that 45 million americans live below the powerline -- live below the poverty line.

will also talk to a reporter about the resignation of eric holder. you can join the conversation on facebook, twitter, or by phone. "washington journal" is next. >> i come to this moment with mixed emotions. it i am proud of what we have accomplished over the last six years and at the same time that i will not be a formal part of the great things of this department and this president. host: we want to get your reaction to eric holder resigning as attorney general. it even see the screen.