Transcripts For CSPAN Key Capitol Hill Hearings 20240622

Watch at 6 00 p. M. Eastern on cspan. And the senate gavels in sunday at 2 00 p. M. They will consider amendments to the current highway bill. Funding is set to expire at the end of the month without congressional action. We spoke earlier with a capitol hill reporter. With current funding set to run out at the end of the month, the senate is set to formally begin debate on its bill. Manu raju of politico, youre right that ted cruz came to the floor and accused Mitch Mcconnell of telling a flatout lie. Tell us what that was all about. Mr. Raju it was really a remarkable moment. Rarely do you see a senator going and singling out another senator in stark terms, accusing them of lying, someone within their own arty. And stashed their own party. And certainly a party leader. It just does not happen in a chamber like the senate. It is usually a very collegial place. Youre not supposed to address senators directly. But Mitch Mcconnell assured him and other republicans that the xm bank, which is the nations chief credit agency, that mcconnell did not cut a deal to allow the xm bank to move forward as part of the negotiation. Ted cruz went to the floor and he gave mcconnell the eye. Mcconnell said very clearly, i did not cut any sort of deal on the xm bank. He said the only promise was the members could bring it as an amendment. But mcconnell took the procedural steps to bring the xm bank measured directly to the floor, assuming he can pass the 60 votes on sunday. Ted cruz says that was backtracking, calling it a lie repeatedly using the l word, and he believes that this is an issue that plays well for him and his president ial campaign. Remember, he is running as the guy battling the Party Leadership, and this is an issue where he perfectly illustrates that. What was mcconnells reaction . Mr. Raju it was a big smile actually. My colleague saw him shortly afterward. He asked for a comment and he smiled and walked away. We reached out to his office. Clearly, they are trying to avoid the controversy. They believe if they engage with ted cruz, they will elevate him in a way that he wants. I think their strategy is just to not pay attention, to ignore the controversy. The senate comes back for a rare sunday afternoon session. And our two amendments. One on the xm bank, but one that would repeal the Affordable Care act. How to those get mixed up with the highway bill . Mr. Raju the Obamacare Repeal very clearly was an effort by mcconnell, knowing you is going to get attacked by the right for allowing the xm bank measured to move forward to give those republicans, give himself some political cover. These are the things that we said we were going to try to do. So, mcconnell decided he would move forward on the procedural motion and the cost of doing that would be a vote on the Obamacare Repeal. The thing is, we know that the Obamacare Repeal will not pass the 60 votes and even if it did, the president would veto it. And the republicans do not have the votes. It is mostly a symbolic gesture, if that. And he knew that he needed to get that trade bill through. And now, the highway is the last build to move the xm bank forward and if it is supported by bipartisan majorities in both chambers, mcconnell is under pressure, and as a result, he agreed to move forward and he is getting whacked by the right and ted cruz. You tweeted about this. This tries to overturn the ruling of chair. Its the same way reid invoked the nuclear option. Mr. Raju is a curiosity of senate procedure. Essentially ted cruz offered an amendment about iran, iran deal, saying that iran should recognize israels right to exist. Of course that has nothing to do with the highway bill. They said that it was not germane and the chair who oversees the floor upheld the ruling of the parliamentarian. Now any senator can seek to overturn the ruling of the parliamentarian. To do so, you need a simple majority. Typically senators avoid doing that, because if you tried to overall every ruling of the chair, there would be actual chaos in the senate to rid their needs to be some order. It is rarely done. The last congress, Senate Majority leader harry reid did that when he wanted to change the filibuster rules under the president ial nominees. And that was referred to as the nuclear option. Of course, at that time he had enough democratic votes to push that through and the filibuster as a result was gutted. In this case, ted cruz does not have the votes. Im sure the Party Leaders will vote against him. Democrats will not vote with them. As a result, his effort will fail. But he can show this as an effort to stifle his voice. The house has passed a short, temporary extension to highway funding. Where does this end up at the end of the month . Mr. Raju that is a great question. The house and the senate are a complete different ends on this. They have much different strategies. We will see how it plays out. Right now House Republicans say they will not take up the senate bill. Even going through all of this they will probably push it through. The expectation is there probably will be some shortterm extension, another shortterm extension. Perhaps they will have a conference agreement after they come back from the august recess, but it does not look like any sort of resolution before the august recess. Manu raju is the senior congressional reporter for politico. You can read his reporting a politico. Com. Thanks for joining us today. Mr. Raju any time. Cspan gives you the best access to congress. Live coverage of the house congressional hearings and news conferences, bringing you hearings that shape policy. Every morning, washington journal is live with your comments by phone, facebook, and twitter. Cspan created by americas Cable Companies and brought to you as a Public Service by your local cable or satellite provider. It is almost as if they were considered underrated, choose the first president general of the daughters of the American Revolution until she died in the white house from tuberculosis. Caroline harrison, the sunday note on night on cspans first lady ies. From more for washington to michelle obama. Sundays at 8 p. M. Eastern on american tv on cspan3. Next this energy and commerce , subcommittee hearing on communications and technology. This is an hour and 10 minutes. If we should go ahead and get started, with apologies for the classified briefing that was scheduled at the same time this was supposed to start her to so we moved this up so we could hear from the Statement Panel of witnesses. I have asked my colleagues because we have votes scheduled prior to that, we are going to dispense with the Opening Statements. Anyone who watches knows this is unprecedented in congress, but they will all be official record. Unless there is objection from either side of the aisle, i would like to proceed straight or panel of witnesses for their expert testimony. This is an important hearing on broadband infrastructure investments. You are all on the frontlines of that and we look to you for suggestions as we go forward. We start with jonathan edelstein. Were delighted to have you here. Please go ahead with your testimony. Thank you. Thank you for your leadership on this issue and appreciate the opportunity to testify. We represent the companies that design, own, build command , and managed firms around. This plays an essential role in meeting the data segment that people are asking for so much of. Infrastructure makes wireless work mr. Sharon, you have done so much to eliminate barriers to infrastructure and employment. This has had an impact on the ground of 4g infrastructure, and elevated regulatory barriers and limited regulatory barriers. The question is, how we are going to meet the exploding demand for data. Again, this committee has done rate work on that front. This is expensive, scarce, and takes itself to get this time to get to get to consumers. The networks themselves are getting smarter, drafting capacity word is needed rate these advances take time to develop and implement. A third way to meet the demand for data is through the rapidly growing infrastructure. This covers small cells that fill gaps in capacity. Deploying more antennas to users while carriers squeeze more out of the existing spectrum. There is listed to putting this equipment where is necessary and congress can remove these barriers. One is streamlining the process of infrastructure on land. An executive order by the president , significant challenges remain on federal property. This would improve in rural areas. We can look forward to working with his committee. Some state and local energies require proof of need before putting through the bills. Our members invest our capital where it is needed to serve consumers, and then is not in a position to be secondguessing these technical questions. The sec has taken an important step to provide greater access timing and fair rates. The should follow the secs lead. Promoting economic growth, job creation and Global Competitive this. Challenges remain in reaching full potential. House makers from congress to invest capital. Our Member Companies are very grateful for the bipartisan wrecking vision of the centrality of Wireless Infrastructure by we thank you for joining us at holding this hearing to address these urgent issues. We appreciate your testimony. We are glad to be here to share your thoughts on the challenges you face. Thank you, chairman, and members of the committee. Thank you for the opportunity to testify on behalf of the community. I want to thank the chairman first visiting community to see the obstacles we face a deploying broadband. Our broadband providers, which we refer to as grt are was founded in 1988 and is whollyowned by our community. We have more than 20,000 members , and almost 12,000 20 members living on our reservation. Only 10 of our residents had access to basic phone service. Today, we offer phone service to win hundred percent of our residents the a4 presents. Along with the Telecommunications Association Work Together to raise awareness about the unique challenges of raising awareness of progress on private land. Trouble land in the lower 48 x speeds of 10. , one up, and 68 percent last 10. , one of the five said. With more detail in my testimony. I went to talk about healing river. They have forward 14 persons per square mile. This is also difficult trouble land. Low Median Income, and high rates of poverty prevent a severe challenge for the delivery of broadband. The Median Income on our reservation is 24,000 to 59,000 in arizona. Approximately 40 of the persons living on the reservation live below the Poverty Level convert 50 for arizona. These economic circumstances are not unique to our community. This continues to negatively impact many tribes. Our community in many like us continue to struggle a failed policy of allotment because of policy obtaining rights to deploy broadband is complex and reasons costs substantially. Access to capital is a barrier. This cannot be look leveraged as collateral. The, private capital is often not available, meaning the only lender available the federal government, specifically the rural utilities service. Our u. S. Loans are critical when it took over seriousness area and these are over 2000 hundred 72 rate 2872. Too often, we were not preferably resulted in the beginning. This is a critical employment source of funding that can make it possible to clay rogers broadband to our reservations. We offer a proposal that would conclusion would advance the policy objective, ensuring broadband available to all americans, including those living on trouble land. The native American Affairs and policies has been a welcome addition to the commissions Development New proposals for broadband. Sometimes we forget about tribes. That is why we appreciate the letter sent to the fcc for by a white partisan Group Members of this committee writing commission that tribal commuters communities need a seat at the table. Thank you. Thank you verse of the subcommittee for your kind invitation to participate in todays hearing. Thank you for your kind by way of introduction, i have been a financial analyst focusing on the cable and Telecommunications Industries for the past fourteen years. Before that i spent eleven years at the Boston Consulting Group advising telecommunications companies, so this is now my twentyfifth year in the sector. I have spent much of that career focused on the issues of broadband deployment and microeconomics. With that in mind, i thought i would share some general observations today about the economics of broadband. First, i would start by stating the obvious. Infrastructure deployment requires the expectation of a healthy return on capital. That should be taken as a given, but all too often, in my experience, the issue of return on capital is either ignored or misunderstood in policy forums. It is not a matter of whether a business is or isnt profitable, it is instead a matter of whether it is sufficiently profitable to warrant the high levels of Capital Investment required for the deployment of infrastructure. In 2014, the Largest Companies in the cable industry earned a very healthy return. The physical assets of comcast time warner cable, charter and cablevision, the four publicly traded u. S. Cable operators during 2014, all earned returns comfortably in excess of their cost of capital, with returns ranging from 13 to 33 . Those returns are unusually high for capital intensive industries. On the other hand, it should be noted that the cable industry earned returns below the cost of capital for decades; any long Term Investment in Network Infrastructure has to earn returns well in excess of the cost of capital during the maturity of that network to offset what are typically years, or even decades, of losses. By contrast, the large incumbent Telephone Companies do not earn attractive returns in their wireline businesses. For example, a decade after first undertaking their fios fibertothehome buildout to eighteen million homes, verizon has not yet come close to earning a return in excess of their cost of capital. In 2014 their aggregate wired Telecommunications Business earned a paltry 1. 2 return, against a cost of capital of roughly 5 . For the nonfinancial types in the room, thats the equivalent of borrowing money at 5 interest in order to earn interest of 1 . Thats a good way to go bankrupt. No one would undertake to replicate those disastrous financial returns. At t, which at around the same time began building a much less robust and therefore less costly broadband fibertothenode network, has also earned poor returns. Their roic, or return on invested capital, has been declining for a decade and is, like verizons, well below the cost of capital. At t has committed to the fcc to make fiber available to a total of 11. 7 million locations in their footprint in order to make their acquisition of directv more palatable to policymakers, but it is hard to be optimistic that they will do much better this time around. That said, there have been some changes in the market that make deployment of competitive Broadband Networks less unattractive than it has been in the past. Corning has developed bendable fiber that has helped to lower the labor cost of and google has popularized the deployment. And google has popularized the concept of demand aggregation, whereby communities pledge to subscribe to advanced Network Services before the service is built so that google can target areas where the company has the best chance of earning an acceptable return. Some critics would call that redlining, as it typically means that broadband wont be built to lower income communities, but it has been successful in boosting overall project returns. Think of it as a way to ensure that all the children in the class really are above average. Still, the broader takeaway here is that the returns to be had from overbuilding that is, being the second or third broadband provider in a given market are generally poor. , let that sink in for a moment. Stated simply, it means that Market Forces are unlikely to yield a competitive broadband market. Neither, by the way, does wireless appear to offer the promise of imminent competition for incumbent broadband providers. Wireless networks simply arent engineered for the kind of sustained throughput required for a wiredbroadbandreplacement service. And Wireless Networks, by the way, also generally earn relatively poor returns on capital. Returns for verizon and at t are middling, and for sprint and tmobile are poor, as a consequence of aggressive price competition in the wireless market. Neither is satellite broadband a compelling replacement for wired broadband in any but the most rural areas. Costs are high, and it is the nature of a satellite connection that has to travel 22k miles and back that latency is going to be a problem. So the simple economic reality is that overbuilding is necessarily going to be limited given the relatively poor financial returns that can be expected, and that alternatives are few and far between. This naturally gives rise to the impulse among some to regulate the incumbent networks that are already there. That is, there is a not unreasonable assumption that any attempts to foster competition will ultimately be unsuccessful, and that regulation of incumbents, in this case, the Cable Operators, is therefore required. The counter argument, that title ii regulation will only stifle investment even among incumbents, and will thereby make the problem worse, and will in the process generate unwelcome unintended consequences, is equally wellintentioned, and unfortunately, is equally well supported by the historical evidence. There are no easy answers. I would submit only that the Net Neutrality debate and the controversy surrounding title ii reclassification is really a standin for what is, in my view, simply a question of microeconomics rather than morality, and we would all be well served to engage these questions as questions of economics rather than morality plays about good and evil. I will conclude here by adding a few additional observations about the cable industry. As everyone understands, the cable video business is facing unprecedented pressure. Cord cutting has been talked about for years but is finally starting to show up in a meaningful way in the numbers. And soaring programming costs are eating away at video profit margins. From a Cable Operators perspective, the video business and the broadband business are opposite sides of the same coin. It is, after all, all one infrastructure. Pressure on the video profit pool will therefore naturally trigger a pricing response in broadband, where Cable Operators will have greater pricing leverage. This may sound nefarious, but it is not intended to be so. It is simply an observation that Cable Operators have historically benefitted from the fact that their infrastructure can support two separate businesses, and each can be delivered at lower cost than if that were not the case. The aca has made this case eloquently in arguing that absent reforms to restrain the runaway growth in programming costs, video will become unprofitable and broadband will be left to carry the entire burden of incremental deployment. All else being equal, that will mean that even new builds of broadband will become increasingly economically challenged and therefore will become less and less likely. And i am quick to add this is my own editorial rather than the acas they will simply have to point, sharply raise broadband prices. As an analyst, i would simply observe that the pressures on the video business are relatively broad based, and are attributable to more than just programming cost inflation, and that this may therefore be an unavoidable scenario. I will leave my remarks there. If my remarks sound excessively gloomy, they are not meant to. The u. S. Broadband infrastructure is the envy of the world, notwithstanding politicized and cherrypicked statistics that would suggest otherwise. It is simply the case that broadband is an infrastructure that is very difficult to support two of, and in some case, even one of. And i would submit that a cleareyed acknowledgement of the microeconomics of the broadband business deserves, or even demands, a seat at the policy table. Thank you, mr. Chairman and subcommittee members, for your time and for the opportunity to testify today. Thank you very much mr. Moffat. We will go to Michael Slinger , director of google fiber cities. Thank you for the invitation to testify about investment in in broadband infrastructure. We have long believed the next chapter of the internet will be built on gigabit speeds. This brings it up for everyone in the home for all devices. We know fast connections on these innovation and entrepreneurship. If today, we are riding a bike, we could be driving a race car it is that much faster. That is why we are promoting google fiber, uploads and downloads of 1000 megabits per second. This makes it faster, more useful, world relevant for everyone. Launched the service five years ago and it is in kansas city, kansas city missouri, and austin. We are exploring bringing it to another for on top of that. We build a service from scratch, one street, one house, one wool at a time. This means working together with cities. This has given us insight into barriers to employment. Well the fcc has improved rules our own experience demonstrates that more work needs to be done to reduce delays and barriers. Second policymakers can ease the web. The books the of obtaining access may increase the cost and slow the pace of fraud were so the place of Broadband Network investment and employment. To help lower these costs, cities could help facilitate partnerships between different entities and companies that are doing local construction. Third, high rates for access to video programming. Offering Video Services increases the volume of broadband services, offering which is for the user and bruce economics for new broadband infrastructure entrance. Finally, although we often focus on fiber when discussing broadband abundance, i would be remiss if i failed to mention the importance of balanced spectrum policies that promote innovation in the wireless sector. Wireless service plays a Critical Role in bringing broadband to rural areas where low population densities and challenging terrain make traditional deployments prohibitively expensive, and to underserved areas that lack robust infrastructure. Whether a consumer uses a dsl, cable or fiber connection, she likely is using wifi as the last link for connectivity. About 30 of americans to deny use internet and home, leaving them at a disadvantage when you it comes to education, and opportunities and social and civic engagement. Thank you again for the petition to speak at this area, give more choices, and higher broadband. Thank you mr. Slinger. We appreciate your testimony. No good our final witness deb socia, associate director next next century cities. Good afternoon. Thank you for opening this hearing on such an important topic. Name is deb socia and im the executive director of next century cities. Highspeed access is essential to our future. It is as simple as that. What is genuinely complicated is making it happen at the jot down level. To the lack of robust to competition in this space. What is genuinely complicated is making it happen at the ground level. Due to the lack of robust competition in this space, local governments around the country are taking proactive steps to ensure their communities have universal, fast, affordable, and reliable internet access. Providing this critical need has emerged as a core responsibility of local governments, transcending traditional partisan divisions and requiring cooperation across the community. When it comes to providing access to highquality internet, everybody has a role to play. Communities across the country have taken divergent approaches to bring a Broadband Internet access to residents, from invisible networks to partnerships to private providers these approaches and other such is open Access Networks in which is provided fiber infrastructure and lisa access to computers and printed providers, show that there are nearly as may successful models for communities to deflect as there are committed to the country. Our organization is committed to helping all community succeed in ensuring access to highquality units, which is why we recently developed a conference of policy agenda that divides gadgets to different stakeholder groups on how to contribute to making a communities broadband streams reality. Several of the inattentive and Interesting Solutions have emerged in unexpected places. What unites these mayors is a commitment to the part of rock band access for continued growth, and understanding that local governments are best situated to provide for the needs of the residents. It is an exciting time, a time for creative local solutions to usher in a new innovation. They recently developed a policy agenda showing all multiple stakeholders can develop the crucial of the structure needed today. This provides guidance that will be useful to communities regardless of how they choose to peruse through the broadband goals. Part of the access, they can rise disruption as well as take other steps to ensure cities are 54 readies. Modernizing state regulation in making investments in the middle mile infrastructure. I wanted to talk about legislation. Necessary infrastructure hearing such as this health to elevate this discussion and attract attention to this issue. Bader available introduction, including areas of operation for service providers. As is clear from everything we heard today, the need for fast and affordable, and reliable access is undeniable. Leaders across the country recognized this urgent need and are developing the critical broadband structure that will allow cities to thrive. It is evident by the over 100 cities i speaking on behalf of today, communities that represent over 50 million americans. Thank you for providing this platform to share our experiences and to collaborate with Public Policy creators. How much of a they have accessory should access at all americans need and deserve. Thank you for your testimony and your insight. I will start off with questions. As you know, the middle class tax relief act created the Service Agency to develop a master contract to simplify the placement of wireless antennas on an public property. The master contract was complete and available for use, and agencies, in your pdg believes that the administration has done every thing in its power to give life to this directive, and embody the section 6409 you recommended in your testimony . Have they done everything i can . I do not believe they have. Im a former administrator myself. If i had the limited something so poorly i would be embarrassed. It is worse than that, because there is an executive order for the president of the United States corrected them to try to move faster to get these contracts together and to date nothing has been done. Three years after congress enacted this and legislation they have been slow, nonproactive, i think our members and our having to negotiate for each and every site individually, just as they have in the past. They have not implemented the intent of congress, and we cannot wait more years for what is needed. There is a lack of coverage on federal lands. Gsa has been dragging its heels. There might be a need for further legislation. Or a hearing. I appreciate that. For the rest of the panel, if there are issues youre running in 24 this, let us know. This is one we race because it is important and we concur with what commissioner adelson has said i do not think they have it right yet. Traditionally, Network Operators were given a monopoly for the ability to serve anyone with reasonable request. Areas to deploy were theres only a an economic case for this. How do we balance this . As i heard about the incredible buildup that google is doing which i applaud, representing a area that is bigger than any state east of the mississippi that remains a big problem. I wonder how we can address that better. The interesting thing when you think about profit, i think that is a problem across the board with building out to these more rural locations. Therefore inquires an influx of capital. The ways that are cities looking at what is a profit is the different ways of what a profit is. Is about education, public safety, Economic Development and transportation and all of these opportunities that are presented when you have access. What is that worth, and how do we ensure that are tribal lands and our Rural Communities can benefit in the same way that are other communities are able. This is also an issue in getting Wireless Phone coverage areas of montana, or upstate new york. I can remember that just getting access and connectivity remains a real issue. The job is not done. From your perspective, what do we do . I would agree with her comments that it is not realistic to think that those are going to be theyre going to be carefully directed to new green Silke Rottenberg that are bringing new broadband to places in the past there is controversy about whether an area is partially served or sufficiently served. Secondarily, it is important that those connect america funds be made available to all manner of companies so that there can be more competition of potential providers. Does google have plans to try and model in rural and remote areas of the country to see if you could make that work . As you know, fiber may not read the right solution technologically for rural areas. We want to make sure that there is sufficient spectrum available for Wireless Technologies as well as experiment in with balloon had allergies. As well as fixed wing aircraft out of new mexico. We think and rural areas there will be new technologies that bring internet. I know we are tight for time so i will charge my colleague. Thank you for having this very important hearing and for the high level of cooperation relatively to witnesses and invitation. We appreciate it. It is great to say you. See you. First of all, thank you for your important advocacy for the policy. I wish that the congress had passed it because i think that we would have more of that policy actually embedded in our federal roadways. How do you think the executive order is working . I will give my questions at first, because time is very brief. If you think there are any additional steps that congress should take to incentivize set deployment of conduit as part of the federal highway projects. The system which right now does not seem like the highway projects system is going anywhere. It is being driven off the road in congress. Here, maybe we can concentrate on that. Mr. Moffat i listened very carefully to what you said i think it is highly pessimistic. It is depressing to listen to your description of every last sector of the telecommunications marketplace. My question to you would be where do you see a bright spot . To governor lois, thank you for being here. There was error worth it just came out in terms of broadband penetration in this country were 24th in the world. A good part of that number is a representation native americans and reservations in our country. It is a shameful record. I think if theres going to be something that moves up to the top of the list here in a bipartisan way, to see that we bring to the the country were there are reservations, that you get firstclass service for firstclass citizenship. You really do. For students to have to be driven by their parents defiant and 75 miles away to sit in the car in order to get some kind of connection to do their homework i do not think it even as congress who is a parent here would ever put up with that. We should not have that in our country. I hope that mr. Slinger, and governor luis will form a partnership. And then come back and report to us. I would really like to have you meet and see what you can come up with. You both need each other, and we need both of you. To ms. Social equity you support ne local municipal systems . We support whatever it is our local communities need to do in order to get where they are going. That does not answer my question. It is too broad. I understand. Many of our mayors signed on to a letter was sent to the preemption. The two cities that filed petitions, chattanooga and wilson, were two of our cities. We believe deeply in the idea that competition is important. We believe deeply in the idea that local people should be able to solve their local problems in a way that makes sense. I come from local government, so i agree with you. I think they should have the opportunity to do that as well. Jonathan, i regularly hear from constituents who are frustrated with the tower siting process. Here is one for you. Everyone wants Great Service the best service in the whole wide world. But no one wants a wireless tower in their backyard or where they can see it. Anywhere near where they live. How you respond to this . The people who say that reforms need to be made to take away local jurisdiction over the placement of cell towers . It is really like trying to get socks on an octopus. They wanted, but they do not want it. And yet there are some half dues in this. Those are my questions community of 13th those are my questions. You can respond in writing. That way i can get more meat on the bone. Thank you for being here. And please, mr. Slinger, and governor luis come together. And if other offices can help facilitate, let me know. Thank you mr. Chairman and for the panel today. It is always a great discussion we have an subcommittee. I would like to go back to the questions that the chairman was posing, and also about the gsa dragging its feet in getting some of these things done. Especially when we are talking about the streamlined process to get approval to build on federal lands. On average how long does it take for a negotiation process compared to private industry . It takes about four years with the federal government, less than half of that with private sector. Generally private companies will avoid federal lands because it takes so long. They do not see the return on investment that craig was talking about. The federal government is losing part of that revenue because they see it go to nonfederal lands nearby and. Youre saying it is four, but can go even longer . Yes. I have heard it takes 10 years and longer. Sometimes it never gets done. There is no finality, or decisionmaking process in place. The gsa was supposed to take steps to standardize the process but it has not been done. Because of that, what additional costs are incurred when the federal government is unable to streamline its process in the broadband if researchers build up . Loss of revenue from huge cost to try to go through that process for the individuals trying to get the site acquisition done. 30 of the landmass in the United States is federal property. They could use a facility to go with the capacity demands. Not only do we lose revenue that we for deficit reduction Companies Lose valuable places and customers lose access to services they need. Youre talking about a percentage of the population they do not have access to the broadband, what percentage with that. . . Some of the citys we are working, 25 to 3 have never had it working connection at home. A followup on that. I represent a very rural area. What percentage of that would be a very rural percentage in that 60 million . How many people would that include that would not want to have access to broadband . I do not have a breakdown of urban versus rural and the numbers. In urban areas i can say in many cities that 25 , 30 of the cities, residents do not have anything at home with all no internet connection. If i could turn to you, and thank you for being here and for your testimony rate you said you have. Are there other areas that you could see that would be a benefit to you and your community . Thank you for the question. First fall on electric and as that ive too late Council Members here. Also, from our jci telecommunication. I would say that one critical issue is rights away. It is a challenge where it is a complex issue, the nature of tribal lands. It goes back to the allotment policy. It is headed to forget that had a devastating effect on tribal land of the rightofway, if they do not get it, we have to build around it. It is very capital intensive. We either have to move to another route, or we can in some cases build a wireless link to go over the rightofway. This is pretty costly, as opposed to going through established. We really need to look at this issue. The other is a designation process which is overly complicated rate this would be welcome for many tribes. Thank you. We now are nested generally from new jersey. Thank you. I want to have a question about infrastructure during disasters like her assailant sandy. Im trying to split this up. Three years ago hurricane standing devastated my district. The force of the storm knocked out medication for days. He testified on the wireless and researcher that is being updated across the country. My constituents are worried about whether the equipment works in a disaster. What is your industry to be sure that people can call for help and reached out once and in emergency . What is the fccs work to improve resiliency . Reliable access is a top priority. We want to make sure that all of the customers have access when the needed most, which is in a disaster. In her organization and Hurricane Sandy we saw tmobile at t agreed to share each Others Network and share the operation centers. Not one of them went down during the storm. The issue was things that were the on our control. What makes it difficult is that sometimes we cannot get generators cited on these things. Going back to the issue of this committee, we have those who say you cannot hide generator there because violates any statute. It is only used in a time of emergency, and i do not think they would complain, but localities will not allow us to put them there in the blame on the system does not work. One more point to that, the best thing you can do this redundancy. The more things you have a place to move the war likely what will work in a time of emergency. We promote redundant see in ensuring that there will be adequate facilities in case of emergency, and more likely that they will survive the disaster. Do you want to comment on the fccs work . They would act by the end of the year and lead rulemaking on improving Wireless Networks . We have worked very closely with chairman wheeler and others with the commission at looking at a corporate arrangement where we can try to provide incentives for the industry to deploy this kind of equipment. I think industry is doing a lot of major investment, and places like backup power. We are working with them in a cooperative fashion. We believe that the goals are shared in making these Networks Resilient and redundant. To our. Let me go to governor luis and i love the gila river rubber summation. Im not been there in a long time, it is about time i go back. Relative to many tribes, you might have more ability than even some of the room more more remote tribes to do some of the goals you mentioned. I want to ask about funding. You mentioned the universal service fund. The gentleman from google talked about this connect Home Initiative the president was actually at the choctaw reservation last week talking about that. What are the sources of funding . Is the universal service useful to you now . What would we have to do to improve it . What would the government have to do in terms of tribal infrastructure particularly for those tribes that might even be have even more difficulty . The portal was in new mexico, or the tribes of the grand canyon . Less funding available . How are these funds helpful to you, programs that we do have, or are they . You are always welcome at the river. State funding mechanisms are critical to businesses like your ti and those in indian country. They to develop deployment plans and rely on federal Funding Sources to be there to begin with. Areas funding is critical as well for providing funding for infrastructure buildout. That is critical to the longterm sustainability of these Telecommunications Providers in indian country. Are you using the funds from universal service now . We are. How is that working . That is critical to the overall Business Plan of a revert Gila River Telecommunications they reliable source of income moving forward. It is critical to the longterm business outlook. Also in regards to longterm capital that as well. To work. We recognize that would from illinois. Thank you. I want to go to the commissioner underr and the governor. The Environmental Review process, especially on federal lands, is a burden. Have you thought through how local municipalities, they do their zoning outside of federal land, and how they could marry that in with what goes on there . Some counties are great we heard from google that those communities that remote broadband make it easier to get access. That is where the investment goes. Those that throughout the roadblocks, but are not seeing the investment they would get a were not throwing up roadblocks they will not have service in their backyard. We work with local communities and we try and every Single Community to put up 4g on a tower that is already there. The smart communities are moving ahead. 10 states have enacted laws the last several years since 2013 to streamline deployment in their states. Those states are seeing more investment and were working with our local partners and the National Association of cities to get our word out about the way the fccs implementing the laws of the past commissioner cliburn let me get to federal properties and governor luis the question is, can we force a zoning issue, get you guys the zoning ability likely to miss disabilities like municipalities . There is a routine should the state agency to keep the money. There would be common forms and contracts that you have already enacted. There is an expectancy of lease renewals. The make it governor luis to respond. Federal lands and in a country has been a long issue in regards to our unique situation as Indian Tribes and the nature of indian lands in regards to highly fractured land interest. They are so critical and sometimes one of the major obstacles to build outs in getting right of ways. If we can somehow streamline the process through the bureau of indian affairs, through the department of interior, that would greatly help out tribal infrastructure buildout in the future. Thank you. My largest community, my Congressional District has 30,000 people. When do you think google would hit that community on your timeline . Is you want to be in that community . Im not the chairman of the committees i do not have as much power. [laughter] we published this fiber checklist so that we can get cities to get ready by themselves for Fiber Deployment by making sure that they have smooth remitting processes that allow for the purpose to go through, to make it easy for people to go to telephone. Through streamline ready engineering and construction. So it is the same debate with the role and federal land deployment. Time and response. It is all about return on investment. If you believe in the capitalist model. If a rural area cannot make a goal based on the formula, then you have to be able to dip into our u. S. Or other forms of lowinterest loans to make the business sense. Is that correct . That is correct. And time is money. So any delay affects the ability for someone to go to the Capital Markets to make a pitch that they are going to get the return on investment that they propose. That is correct as well. \ the chair now recognizes the general from pennsylvania. Thank you for this excellent hearing of this excellent panel broadband infrastructure has become a critical component of every facet of our daily lives are from students using black for school, or watching netflix and amazon too screwed dream movies and tv shows, and all levels of government to communicate with citizens and increasingly leverage the network to improve the efficiency of services. Pittsburgh is deploying a connected platform that will integrate road sensors, traffic cameras, and information kiosks create a Living Laboratory at a city scale for the next generation technologies. This platform will be used to improve traffic patterns in real time, allowing city departments to efficiently protect road where and schedule maintenance and allow people to explore and interact with the city more effectively. Fast, available, and ubiquitous infrastructure provides nextgeneration solutions. Im a big fan of making every tool in the toolbox available to local governments to make sure that they have access to the best networks and the best platforms in order to improve the lives of the People Living there. Mr. Chairman, i would love to work with you on putting together some legislation to address some of these challenges. Let me start with associate. How can localities leverage shared infrastructure to expand access and increase the deployment of broadband . Cities like to build this infrastructure to our own municipal needs. How can we use what we are building to expand access more broadly, and what stands in the way of business apologies leveraging the infrastructure . A really interesting work has been done all over the country and many of our cities are using smart infrastructure to do really interesting work, determine particulates in the air, checking asthma rates using streetlights that also have cameras in them for public safety. We are seeing a lot more of that happened. There are barriers for cities to doing this work as well. Some of them are the state regulations that prevent it by building out their own infrastructure, and in some cases is an issue of how densely populated the circumstances of their current financial situation, all of these impact a city to build out their own. What dividends is google fiber found in communities where you deployed your gigabit broadband . Hasnt infected jobs, the local economy, education . We are seeing a great economic impact. We are seeing reports in kansas city and an impact analysis. There are certain categories of employees. When you build up a big network there is a lot of demand for labor. I think last week the home council release research that shows that gdp growth in cities with a gate of network rises. The average cost per home, only for home goes up 3. 1 in those cities. That is new data from about a week ago. We have heard from their holiday and mary jane in kansas city that they have seen it as a draw to regional Economic Development. Other companies, when deciding where to locate in the midwest when i look at kansas city and say they have that gave network. Im curious about the discrepancies that exists between price and speed. In pittsburgh i can get 500 megabits or second that i will cost me 400 a month. When we look at things like chattanooga and kansas the at austin and other cities residents can get a gig for less than 100 right i am curious you could comment why you think these discrepancies exist . Thank you for the question. My survey should would be youre right, there is a very wide range of economic models. It is a challenge because there is no nearterm variable cost the dictates the cost model. You see a lot of companies experiment with different prices because they are trying to figure out what the quantity demand will be a different prices. Obviously, you have lower prices where you have multiple competing networks, and that it raises the question of whether the providers are earning a sufficient return at the market share in the prices they are charging. In many cases they are not. This is a very difficult area for Economic Research because you will find that there are a lot of companies that have different different motives. I know our time is of the essence. If you look at the cities in which we are already operating or announce, you have seen incumbent crisis drop immediately and speeds,. There is more room there. The chairman from louisiana. I appreciate you having this hearing. You said in your Opening Statement a lot of the work has been done to expand spectrum. We have come together to make more spectrum available. The chairman has been a great leader in the effort. One part of the equation is expanding more spectrum. The other part of the is your members, where you all commit to build it out. To build the infrastructure to take advantage of the new spectrum. If you could share with this some of the challenges or hurdles that your members race to make the investment that they need to make to take advantage of that spectrum as we make it available in the marketplace. Spectrum has been quite the hurdle. We saw 41 billion spent for a limited amount. It was better than the estimate, which was zero. We see the valley that everyone else knows about. The fact is that was for a 12 increase in the available commercial mobile spectrum. You got a 12 increase in throughput, and you have 700 in next five years. We are down to 688 . A long way to go to build out the needs of people. Local communities often are saying no to these facilities. We have the Business Case that has to be made in rural areas as was discussed today. The overall return on investment is difficult with those prices. Revenues are under a lot of pressure right now. We cannot afford to have revelatory drag on these investments slowing them down and making it more expensive when theres not enough buildout to make these needs already. As low as it is, it is immediately available when we take that same spectrum and reuse it. All of these birds on federal land, in urban areas, they have done a great job of trying to address that. But we need to work with our partners and state and local governments as well. We have been grappling with that here, trying to remove some of those burdens, notched in the spectrum space. A whole lot of issues as relates to Energy Production on federal land and local areas, where those restrictions make it very hard to experience a load of the Economic Opportunity we can. In some of your analysis, if you could share with us the similar challenges, where actions may be that congress or the fcc can take to further expand the opportunities for wifi broadband . As i said earlier, i think there are opportunities in connect American Funds in making those available to a wider range of companies for bringing broadband to rural areas there is an overarching question here. It relates to the question that the Ranking Member asked earlier about where are the right spot . If you think of this is a larger value chain of microeconomics, to everything from the content companies to the internet providers to the if a church providers, where the bright spots are is very coolly clearly outside infrastructure. The content companies are earning extraordinary returns. There is a very kneejerk and familiar regulatory impulse to say lets try to protect the companies that are making high returns from the ones that are making low returns. That is a very odd structure. Final question, i am running out of time, when google fiber was being deployed, it is reported that you were able to work with local governments that gave some exemptions, maybe expedited approval processes so that not just your, but other new entrants were able to move a lot occur. If you could talk in general about the ability for more local governments to take more of the team regulatory approach and how deregulation, and the sense of helping expedite the expansion of technology has helped you and could help others to develop even more broadband . Im going to go back to the fiber checklist which we publish in 2014. Some of our major areas are getting access to polls and making it easy to do the makeready construction. One thing that has been suggested by the fiber in the home counsel was if municipalities to be proactive step in doing paul minas, while they are doing only miss them if they could get rid of the old wires that are not needed and make slots that would allow new entrants, google fiber or any other to getting quickly and attach to all, that is one thing that would really help. Again, the digg once policy and axis to write a flick of a we can do with local communities and more we could do with federal highways to make sure that if someone is ripping up the road to do construction or repaving, that we put in conduit that anyone can use those are just smart things that allow new market entrants, and more competition and choice. Unfortunately were going to have to pull this to a close because we are down to about four minutes left. This is not the last hearing. We expect to continue this work going forward. Her testimony has got us to a good starting place. We have a lot more to do, some followup to do. There are members who did not get a chance to ask western we do have information to submit for the record, including from tia, come to the cia and i believe you had a document you wanted to submit the articles on broadband limit deployment. With that, i am afraid, we are going to have to do you want a minute . Just a minute or two. I was curious, i wanted to ask mr. Slinger some questions. I find what you were talking about your interesting. I look at this, and what you say is very important about deploying advantage for structure. I am from sacramento, so we have wonderful areas that are doing great things. But im looking it up to her area in our city that is economically deprived. We have a light rail station that is going to be completed their with fiber. But yet, we have schools and libraries that are deprived. Business people there who have no access. If we were to do something there, and i know whether we can have a special project to have but im looking at this being very special for Economic Development. Is that something, if we can provide the access, as you say that you need, is that something that you or somebody else can take on as a project working with us . Im trying. Much to hope this area that feels very deprived, looking at the rest of my district that feels like they are on the move, and they are not on the move. I want to get them on the move. Is there something we can do . Theres a lot we do early stage with all of the cities that we look at to make sure that they have the right kind of Digital Inclusion plans, to make sure that the cities have a focus on it. There is no Silver Bullet with anyone company. But we want to make sure that all providers and local Community Groups take this on. And have technologies built in the areas to ensure that people understand the relevancy of the web, and have more people online. Thank you. We are to call it to a conclusion here. We do have votes on the house for followed by the rainy everything. Thank you all for your testimony, your counsel, we look forward to being back in touch with you as we move forward in and to others who have ideas for the congress on how we can expand access to affordable broadband across the country wherever it is not. We have some tribal letters or the record as well mr. Lujan, which were happy to accept rate with that, we will adjourn. On the next washington journal, Norbert Michelle from the and julie gordon will talk about the frank Financial Regulation. In the ongoing house and Senate Efforts to move the first compress of Energy Legislation and eight years as always we will take your calls and he will join the conversation on facebook and twitter. We are live at 7 00 p. M. Eastern on cspan. It is almost as if they were matter and antimatter. He is always to the right and almost always to the right and anything complicated confuses him. Filmmakers Robert Gordon and Morgan Neville talk about their documentary the best of enemies about the debates between william f. Buckley and gore vidal. There is not someone in their ear, very unlike today. Today there is someone saying the numbers are dwindling, talk about hot topics, hot, salacious topic number two. Whereas then, i dont think that was the norm on tv at the time and i dont think these guys needed as morgan said, these guys did not need howard was the moderator and he was a distinguished news man and i think he was embarrassed by this. He disappears for sometimes five or more minutes at a time. Today, you would not have the moderator not jumping in every 30 seconds. Really, i think everybody at abc just stood back and let the fire burn. Sunday night at 8 p. M. Eastern and pacific on cspans q a. Democratic president ial candidate Hillary Clinton was in new york city on friday, talking about her economic agenda. Some of the proposals included changes to Capital Gains and executive compensation. At the start of this event, she spoke about her use of a private email server well serving as secretary of state and allegations of classified information being mishandled in the process. This is just over an hour. Hillary rodham clinton. [cheers and applause] mrs. Clinton thank you. Thank you. Hi. Hi. Thank you all very much. Thank you. Thank you. [laughter] thank you very, very much. I i want to tell you it is wonderful being back here at nyu and i thank you all for joining me today, and especially my good friend and former colleague congresswoman carolyn maloney. Thank you so much for coming. I am grateful for this opportunity to share some of my further thoughts about the economy and the work that our country needs to do in the years ahead. First, i want to say a word about what is in the news today. And it is because there have been a lot of inaccuracies, as congressman cummings made clear this morning. Maybe the heat is getting to everybody. We all have a responsibility to get this right. I have released 55,000 pages of emails. I have said repeatedly that i will answer questions before the house committee. We are all accountable to the American People to get the facts right, and i will do my part. But i am also going to stay focused on the issues, particularly the big issues that really matter to american families. You know, over the past few months, i have had the pleasure of meeting young people all over our country. Many came of age in the wake of the 2008 financial crisis and the deep recession a cause. The fallout from that crash has tempered their expectations for the future and left them clear eyed about the challenges ahead. The challenges they face and that america faces. Yet like generations of americans before them, there is also undimmed optimism. Todays young people are preparing to enter an economy they know will be competitive. Not just at home, but globally. They are thinking about how to find a good job after graduation that can help them get ahead and stay ahead. The risk of a setback, or potentially another crisis, is never far from their minds. But what inspires me is they are undaunted by these challenges. They are seeking real opportunities and real rewards for the work they put in and they are hopeful that tomorrow will indeed be better than today. So, i hear the stories everywhere i go. The hard work and grit and sacrifice of people across our country that have brought us that and driven our recovery. So, yes, now we are standing again, but we are not yet running the way america should. No country is better positioned to thrive in todays Global Economy that we are. We have the most innovative, enterprising private sector and the most talented workers anywhere in the world. Corporate profits are at near record highs, but paychecks for normal people have barely budged. And out of pocket costs for everything, from health care to childcare to college to caring for aging parents, are rising a lot faster than wages. That is putting a lot of pressure, and norman us pressure on families and their budgets. My mission, from my first day as president to the last will be to raise the incomes of hardworking americans so they can once again afford a middleclass life. We need to [applause] we need to end the wage stagnation that is holding back our families and holding back our country. This is the defining economic challenge not only of this election, but our time. It gets to the core of who we are as a nation. The basic bargain of america. If you work hard, you should be able to get ahead and stay ahead. And when you get ahead, our country gets ahead, too. I laid out a broad economic agenda to raise incomes and build an economy that works for everyone, not just those already at the top. It is an agenda for fair growth and longterm growth and i will continue outlining plans and all of these areas, from setting Ambitious Goals for new infrastructure and clean energy investments, to reining in excessive risk on wall street. Today, i want to focus in particular on longterm growth. Consider this fact. A survey of Corporate Executives found that more than half would hold off making a successful longTerm Investment if it meant missing a target in the next Quarterly Earnings report. In another recent survey, more than 60 said the pressure to provide shortterm returns had increased over the previous five years. We also know publicly Held Companies facing pressure from shareholders are less likely to invest in growth the con Growth Opportunities than their privately held counterparts. Large Public Companies now return eight or nine out of every 10 they earn directly back to shareholders. Either in the form of dividends or scott stock buybacks that can temporarily boost share prices. Last year, the total reached a record 900 billion dollars. That does not leave much money to build a new factory or build a research lab or train workers or give them a raise. In fact, according to the wall street journal while Typical Companies in the s p 500 doubled the share of cash flow they spent on dividends and stock buybacks, they actually cut Capital Expenditures on things like new plants and equipment. As a founder of the Investment Management Company Vanguard put it, a culture of shortterm speculation has run rampant. One other concerned Business Leader calls it quarterly capitalism. I understand that most ceos are simply responding to very real pressures from shareholders and the markets to turn in good quarterly numbers. And investors are always looking for a strong, reliable returns. But it is clear the system is out of balance. The deck is stacked into many ways, and powerful pressures and incentives are pushing it even further out of balance. Quarterly capitalism is neither legally required nor economically sound. It is bad for business, bad for wages, and bad for our economy. And fixing it will be good for everyone. An increasing number of Business Leaders, investors, and academics are mobilizing to change the culture of boardrooms, classrooms, and trading floors and to better align incentives for longterm growth. For the sake of our economy and our country, we need to stand with them. Innovators like google and spacex are investing in research that does little for todays bottom line, but may yield transformational benefits down the line. Venture capitalists are patiently nurturing the next disruptive innovators. The big three automakers gm ford, and chrysler a putting the memory of the crisis behind them and putting new investments in factories and technologies of the future, including advanced batteries. Companies like trader joes and quick trip that invest in workers and improve wages and training are becoming industry models. And large employers like target and starbucks have recently raised wages for entrylevel workers. The trend has extended to mcdonald and walmart. You may have heard that i am a fan of chipotle. [laughter] that is not just because of their burrito bowls. Last month, the Company Announced it would have paid sick days, paid vacation time, and Tuition Reimbursement to its parttime employees. [applause] these are all smart, longTerm Investments that will and do pay off for companies, workers, and our society. They point to an important question for the future of our economy. How do we define shareholder value in the 21st century . Is it maximizing immediate returns, or delivering longterm growth . Of course, we want to do both. But today, too often, the former comes at the expense of the latter. Real value is lasting value. We all know that in our own lives. I learned it watching my father swept over the printing table in his small fabric shop in chicago. Hes there and he saved to provide for our families future. It wasnt good enough to be secure for today. What mattered was tomorrow. What is true in life is also true in business. Real value comes from longterm growth, not shortterm profits. It comes from building companies, not stripping them. From creating good jobs, not eliminating them. From seeing workers as assets to cultivate, not costs to be cut. American Business Needs to break free from the tyranny of todays earnings reports so they can do what they do best. Innovate, invest, and built tomorrows prosperity. Its time to start measuring value in terms of years for the next decade, not just the next quarter. That is one of the ways we can raise income, help families get ahead, and deliver real value for shareholders. Now theres no single cause of quarterly capitalism, therefore no single solution. But there are parts, specific reforms that can be made by both the private and Public Sector that would better align market incentives for longterm growth. Reforms that many forward thinking Business Leaders themselves have been calling for. I will mention five areas of focus today. But this list should be the beginning of the discussion, not the end. First, im proposing a reform of taxes on Capital Gains. The profits earned by the sale of stock and other assets. To promote and reward investment. The current definition of a longterm holding period, just one year, is woefully inadequate. That may count as longterm for my baby granddaughter, but not for the american economy. Its no way to run a tax system. As president , i would move to a sixyear sliding scale that provides real incentives for longTerm Investment. For taxpayers in the top bracket, families earning more than 465,000 a year, any gains from selling stock in the first two years would be taxed just like ordinary income. Then the rate would decrease each year until it returns to the current rate. This means that from the moment investors buy into a company they will be more focused on its future Growth Strategy than its immediate profit. So will some executives who are paid in part with stock or stock options. I will also be looking at ways to address very short term trading. Whether it is conducted over days, hours, or even milliseconds. We should offer the chance to eliminate Capital Gains taxes altogether for certain longTerm Investments in small businesses, including innovative startups and hardhit communities, from inner cities, to indian country, to coal country. This should go handinhand with a real expanded tax code which encourages investment import or remote communities and helps prevent downward spirals after economic disruption, like plant closings or layoffs. I want to see more investors helping unlock the potential of the Family Business that is struggling to get back on its feet. Or the startup that is on the verge of making it big. Or the community that lost the factory where generations of families worked, but now is eager to build a new future. That is longterm growth at its best. Now of course, i understand these changes to the tax code alone will not shift investors focus from shortterm to longterm overnight. But i believe this reform is an important first step to removing some of the incentives that push us towards quarterly capitalism. This would be part of a broader reform of both individual and corporate taxes that i will be discussing later in the campaign. Last week, i called for closing the loophole and incrementing the buffet rule, which major cleaners dont plate roller makes vendor secretary. Which makes sure they dont pay lower rates than in their secretaries. The second area where action is needed is to address the influence of increasingly assertive shareholders determined to extract maximum profit in the minimum amount of time, even at the expense of the future growth. Socalled activist shareholders cant have a positive influence on companies. Its a good thing when investors put pressure on management to stay nimble and accountable, or press for social and environmental progress. But that is very different from these hitandrun activist whose goal is to force in immediate payout, no matter how much it discourages and distracts management from pursuing strategies that would add the most longterm value for the company. Even iconic businesses like apple or proctor and gamble have felt this pressure. We need a new generation of committed, longterm investors to provide a counterweight to the hit and run activists. Some Institutional Investors already are beginning to push back. We need more Pension Funds and proxy Advisory Firms to do so as well. Institutional investors control 70 of the shares in the largest 1000 u. S. Companies. They have unmatched influence, and therefore, and unmatched obligation to guide Companies Towards strategies and metrics focused on longterm value. There are things government should do as well. As president , i would order a full review of regulations on shareholder activism, some of which havent been reexamined in decades. Let alone modernized to reflect changing realities in our economy. We also have to take a hard look at stock buybacks. Investors and regulators like ignore information about these transactions. Capital markets work out when information is available to all. Places like the u. K. And hong kong require companies to disclose stock buybacks within one day. But here in the u. S. , you can go an entire quarter without disclosing. So lets change that. And buybacks read directly to the third area of focus. Reforming executive compensation. We cannot address the challenge of quarterly capitalism without making sure that incentives for ceos and other executives or my focused on the longterm growth and strength of the company they run and less on the shortterm fluctuation in its share price. I am all for rewarding ceos well when their companies prosper, and their employees also share in the rewards. But there is something wrong with Senior Executives getting rich from companies stuttering and employees struggling. There is something wrong when corporate boards allow exorbitant pay packages that arent based on credible assessments of executive performance or a companys longterm interest. 30 years ago, top ceos made 50 times what typical worker did. Today, they make 300 times more. That just doesnt make sense. Previous generations of executives were just as talented and hardworking, and he managed to get by with much more reasonable compensation. So have ceos in other countries. It would be good for our economy and our country if we get back to compensating all employees with productivity, not just to those at the top. In the 1990s, there was an effort to tie executive compensation to company performance, including through the use of stock options. But many stock heavy pay packages have created a perverse incentive for executives to seek the big payouts that could come for a temporary rise in share price. We ended up encouraging some of the same shortterm thinking we meant to discourage. In addition, while the dodd frank financial reform legislation passed in 2010 called for new regulations regarding disclosure of executive compensation, many rules have yet to be put in place. That includes a requirement to publish the ratio between ceo pay and the paychecks of everyday employees. There is no excuse for taking five years to get this done. Workers have a right to know whether executive pay at their company has gotten out of balance, and so does the public. We need to take several steps here. Defend the dodd frank act, the republican attacks, and finally promised rules on the books. Reform of the performancebased taxdeductible for top executives. Expand Disclosure Requirements under the say on pay rule to include an expedition of how executive compensation will promote the longterm health of the company. Now a crucial fourth area of reform is how workers are seen as the engines of growth as they are. Research shows that wellpaid and welltrained employees tend to work more efficiently, stay on the job longer, and provide better customer service. But those rewards can be harder to measure then the immediate costs of payroll and training. So under the pressure of quarterly capitalism, they are often squandered. Employer funded job training has fallen by more than one third in the past two decades, even as the premium on skilled workers has increased in a competitive level economy. Even where Training Programs do exist, too few are focused on providing broadly applicable sectoral skills. The decline of unions and worker Bargaining Power has led to a decline in worker voices, in longterm decisionmaking at many companies. It snows apprise that we have seen it is no surprise we have seen Corporate Investment in Human Capital decline as well. We need to start reverse all of these trends. As president , i will fight to defend workers rights and encourage more companies to invest in their employees. In this campaign, i have already proposed a package for every new worker that businesses train and hire, as well as a plan to encourage more companies to offer more generous profitsharing programs. Ive also called for raising the minimum wage and incrementing present obamas new rule on overtime. Let me add, i agree with new yorks proposal to raise wages for fast food workers to 15 an hour. The National Minimum wage needs to be raised. Lets also remember that the cost of living in manhattan is different than in little rock and other places. So new york or los angeles or seattle are right to go higher. We are going to ask the private sector to invest in the longterm, lets also face up to the fact that washington may well be the worst offender of all when it comes to shortterm thinking. This is the fifth area of reform that is desperately needed. It is time to and the end the era of budget brinksmanship and stop careening from one selfinflicted crisis to another. [applause] that just creates more uncertainty for businesses, for investors, and for our country. I have been asking a lot of Business Leaders whom i have talked to, what are a couple things would love to see happen . Almost to a person, well always say, we need more particularly. We can deal with whatever does come out of washington, but when it doesnt come, when there are stalemates or government shutdowns, that interferes with our business. And particularly, without Global Business with our Global Business. That is an obvious thing to say, but i hope the people in washington will pay attention. Lets stop pouring subsidies into industries that are already thriving, like the giveaways in the tax code to oil companies. [applause] start investing in the future to create millions more new jobs in the new economy. We should be making Smart Investments in infrastructure, innovation, education, and clean energy that will help businesses and entrepreneurs grow and create the next generation of highpaying jobs. We know the investment that would be made in these areas have very high returns. There is no excuse not to make them, and to make them now. For example, we should improve and make permanent the research and experimentation tax credit. Every year, congress has another squabble over to renew this credit. They have done it 16 times in the past 35 years. Isnt it time we stop kicking the can down the road and actually get down to doing peoples business . As important as the specific reforms i have outlined are, the truth is that to fight against quarterly capitalism cannot be won in washington alone. The private sector has to rise to the challenge. We are already seeing a movement for change taking shape. Investors, executives, and employees are all starting to step up. Union leaders are investing their own Pension Funds in putting people to work to build tomorrows clean energy economy. They earn a good returns doing that. We need to build on this momentum. Its time to return to an Old Fashioned idea. That companies response abilities to their shareholders also encompasses a responsibility to employees, customers, communities, and ultimately to our country, and yes, our planet. [applause] the strength and legitimacy of american capitalism has always depended on its ability to create opportunities for hardworking families, to get ahead generation after generation. We cant lose sight of that. Im pleased that since 2010, 31 states have enacted legislation authorizing socalled benefit corporations, which allow businesses to pursue that has real merit, and we should explore it further. What is good for middleclass families also happens to be good economics. We know that a strong, Sustainable Growth can only happen when communities are thriving and workers are wellpaid. After all, our economy is a 70 conception economy. It is the old henry ford story when he decided he would be paying his workers, as i recalled, the princely sum five dollars a day. A lot of his peers really rose up in opposition. How can you do this . Youre going to throw off the labor market, youre setting a bad example. His response was, i am building these cars, i need people to buy then. Our economy is not working because we are not putting paychecks in enough americans so that they can refuel this economy which not only holds up the american economy, but holds up the Global Economy. It is in everyones interest including corporate americas, to contribute to a vibrant middle class and rising incomes. Now as president , i wont try to impose a onesizefitsall solution. But i will use the convening power of the office to bring all relevant parties together to help move our Corporate Culture towards solid, longterm growth and investment. Just imagine how different our history would have been if shorttermism had dominated earlier eras the way it does today. What if an activist hedge fund had persuaded at t to maximize cash flow and close bell labs before the transistor, or the laser was invented . What if xerox had decided that it Palo Alto Research firm wasnt doing enough to boost share prices in the short term . A young steve jobs would never have visited, and the personal computer revolution might not have happened. What if congressional budget cuts had shut down darpa, the Defense Advanced Research project agency, before it developed the early internet . Today, we face a choice between the future and the past. Republicans running for president seem totally unconcerned about the problem of quarterly capitalism. In fact, their policies would make it worse. Most would eliminate Capital Gains for wealthy investors with no incentives for longterm holding. They would wipe out the new rules on wall street, imposed after the crisis. And of course, they would further strip Worker Rights and weaken Bargaining Power. Their approach to government mirrors the worst tendencies of hitandrun shareholders demanding quick payouts in the form of tax breaks to the wealthy at the expense of investing in the future. They ignore longterm challenges like climate change, poverty and inequality, failing infrastructure. Just look at the current mess in congress with the highway bill. We cant afford to return to staying out of touch, out of date policies that have wrecked our economy. We have to Work Together to drive strong growth, longterm growth and fair growth. That is the only way we will renew the basic bargain of america. You know it. If you work hard, you should be able to work hard and stay ahead. The only way we can build an economy for tomorrow, not just today. I invite you to join me in this discussion. I am looking for new, creative innovative, disruptive ideas that will save capitalism for the 21st century. Because it is the greatest engine of Economic Opportunity and potential thats ever been invented. Its one of the great accomplishments of the american political and economic history that created the opportunities that so many generations of americans took advantage of and that led to the middle class the extraordinary economic accomplishments of our countries. And like in previous eras, it needs to be reinvented, put back to balance. It needs to recognize that we really are in this together. The better we all do, the more there will be for everybody. To invest in, to profit from. So i ask you, in particularly here, the students and faculty and others who are studying business, help us think through the best ways to change the culture, to move it back to where it used to be, which was much more focused on longterm investing. With the results of the extraordinary prosperity that we enjoyed for decades. With new challenges from technology and globalization and other big problems on the horizon like climate change. But that is what we are best at doing in this country. We are problem solvers, not problem deniers. We roll up our sleeves, we get to work, and we keep moving forward. It is always all about tomorrow. Love that song, dont stop thinking about tomorrow. [laughter] so help me think about it, and lets make it happen. Thank you all very much. [applause] your on cspan this morning washington journal is next with your calls in todays latest headlines. And im 40 5 a. M. Eastern we take you live to West Virginia where the National Governors association is hosting it in all meeting if an its annual meeting. Coming up this morning, Norbert Michel and julia gordon on the dodd frank Financial Regulation law which marked his fifth anniversary this month. And john facility on a looks at Energy Legislation that being worked on in the house and the senate. Host good saturday morning to you. This week marks the anniversary of the sweeping overhaul of the Financial System since the great disruption. The dodd frank act and forced banks to build bigger buffers. His american Financial System safer today than it was five years ago . We want to hear your thoughts on wall street. You can start driving dialing and now. Democrats can call 202 7488000