Transcripts For CSPAN3 Key Capitol Hill Hearings 20240622

Must remain at the heart of the fcos work and our diplomacy. The Prime Minister and the chancellor have said many times that you cant be a strong country unless you have a Strong Economy. You cant have a Strong Defense unless you have a Strong Economy to underpin it. The Foreign Office is an important part of the agenda. Ive said many times and ill say again today that the role of the Foreign Office, paid for by british taxpayers must be to protect britains security, to promote britains prosperity and to project britains values around the world. If we do these three things successfully, well deliver our obligations to the taxpayers who fund this. We want to be a major player on the world stage. The Prime Minister signaled very clearly that britain is not in retreat, that we will play our role in keeping the world safe and supporting our own allies prosperity. That means rebuilding the office to ensure the best in the world that my predecessor started ensuring that Foreign Policy is made in the Office Building the professional skills of diplomacy, reopening the Foreign Office language school, establishing the diplomatic academy, ensuring that resources within the Foreign Office are aligned with our stated priorities. And i think we can see some of the benefits coming through as we play a role in resolving some of the major crises the world faces most recently taking a role in the vienna talks to resolve the Iranian Nuclear file. We have in the uk almost unrivalled assets at our disposal. We are p5 members. We have world class armed forces and recognized world leading intelligence agencies. We have unrivalled soft power at our disposal through the benefits of language and culture, but also many institutions around the world that have an unrivaled position and reach. We have a world leading development program. Were members of the eu, members of nato, members of the commonwealth. All of these overlapping circles of influence give britain an opportunity to play a significant role for the good in the world, both for the good in a moral sense but also for the good in the sense of protecting our National Interest and were determined to make the most of them. The process is under way and the Spending Review is now, i think, officially under way with the starting gun fired today. Both will be challenging exercises. I have no doubt about that. I am clear that the Foreign Office will be able to deliver further efficiencies. I do not think that savings on the scale that are indicated by the fiscal trajectory can be delivered simply by the pairing. I think we have to look to make some Strategic Decisions about where we need to focus resource and where we have to downgrade. For me personally, im clear that the crown jewel of the force offices capability is the network, the network of International Platforms embassies and missions around the world. We must seek to protect that sharp end presence in addressing the need for further efficiencies and we will look to do a that over the coming months. In that context i think we should note that the response to the atrocity in tunisia and the earthquake in nepal demonstrated the increasing expectations that people have of our consular ser vases and the investment were making in our consular services. In particular, Crisis Response is very important in satisfying those. Were pleased with the way our crisis capability responded to both crises, but clearly we can always do more and we always look to learn lessons. Whats changed between the last government and this government . Well, the governance priorities will have changed a little bit as a consequence of the end of coalition. And some of the ambitions that were tempered in the previous government will come to the fore. Renegotiation of our membership of the European Union would not have been able to be pursued in coalition. The government has already set out its commitment to giving our security agencies the capabilities they need to keep britain safe and to legislate where necessary to do that. Most importantly i think is the signal that is, i hope, being sent clearly that britain wants to play its part in the world to be seen as a reliable and consistent and capable ally. Workload in delivering the world that is safer and which is more conducive in our objectives for the british people, maintaining and promoting our prosperity, protecting our security and projecting our values. Foreign secretary, thank you very much indeed. Picking up the inheritance from your pred ses sor, do you think the Foreign Office has yet achieved that status of a Strong Enough role in directing uk Foreign Policy . Has the process of reenergizing and putting leadership of Foreign Policy back into the Foreign Office has that process been completed yet . The National Security secretary and makes it more complex. I think the arrangements are working well, but the Foreign Office is focusing resource and effort on rebuilding the core capabilities, the Core Competencies that allow it to own that process. You own a process not by bidding for it, but by showing that you have the capabilities to do the work that is required to be done. The predecessor committee concluded that the budget couldnt be cut without affecting the capacity. And since youre still working and trying to improve the capacity of the office, perhaps you could share the challenge you have just been invited to take on by the treasury. What scale of budget saving are they looking for you to find and how is that consistent . I think past experience would suggest that initial pitching should be regarded ass a operational and ranging short. But it is clear to deliver the overall fiscal trajectory departments collectively and unprotected departments collectively will have to make substantial savings, doubledigit percentage savings. In the case of the Foreign Office, we do make use within our activities of oda budgets which are protected of course, and which will grow, assuming the economy continues to grow as projected over coming years. The chancellor has also created some additional protected funds around counterterrorism security activities where the Foreign Office also plays a role in terms of the cash budgets. But isnt it rather frustrating being the secretary of state being the brains that directs british policy oversees that your budget is unprotected yet the m. O. D. s budget is unprotected as has been different for some time. Were not in a real consist accident position here. First of all, im delighted that the mods budget is now protected, as you would expect as a former defense secretary. But not only that, there is no doubt in my mind that the most important measure by which our International Partners and indeed our adversaries judges our willingness to invest in our defense. So although its the mod budget that has the privilege of protection, the benefits in projecting our Foreign Policy will very definitely be felt in the Foreign Office. I dont want to detract from the fact that meeting requirements for further spending reductions will be very challenging. As i said earlier, i think the wrong way to do it would be to try to slice all areas of activity. I think we have to make some clear evidencebased decisions about what it is that adds the core value the Foreign Office is seeking to deliver. Its the Foreign Network that really adds the value and its that presence around the globe, more points of presence than i think in saying any of our partners apart from the United States has, and we want to preserve that and we want to preserve the capability of it as well as the Numerical Strength of it. One of the things you mentioned was projecting British Values around the world. Part of the british value im sure youll agree is respect for hunl an rights. And rumors abound that you intend to drastically scale back on the annual report on human rights. Is that true and if so i dont think its a rumor. I think theres been a written statement published setting out what we intend to do. The intention and it shouldnt be seen as a cutback, the intention is to make what has become a very lengthy document this includes recital of a lot of material available elsewhere a much punchier and usable document and they have published a statement about our intentions in this regard. If she has, i dont know about it. I would ask you how would this committee, parliamentarians and the general public how are we going to hold you to account on human rights unless you publish the details . The annual reports i think have been very useful for those with particular interest in the subject. And some people peruse them over weeks rather than days. I understand that. My own having come to them fresh, my own take would be that what one gets is a very long text repeating most of what was in the previous additions very long text. And what the people who are specifically interested have to do is comb through it to see where there are settle variations in the text. I think what were going to try to do is reduce the volume of material and get more to the point, drawing peoples attention to the issues that need to have attention drawn to them drawing out our conclusions about whats goingson. The thing has become more and more wordy and in our view less and less user friendly over the years. And we want this to be a document that is not only used committed ngos and experts, but is more accessible to people who more generally are interested in the issue and the countries. Human rights have been a continuing point for the predecessors every year. You can anticipate this commission would want to continue that work in whatever form you produce. Thank you, chair. My question, we dont know exactly what the budget will be for the department, but i think everyone is anticipating there will be more cuts. I anticipate that we have more dangerous world, we often soft power is more effective than quite often military options. Wouldnt it be appropriate to expand the budget and expand the work of the Foreign Office so we can have actually more diplomacy and more sort of longterm alleviation of problems . I think as the world has got more complex and many of the challenges were facing has become less clear cut. You think back to the days where the adversary was the soviet union and we knew everybody stood. Terrorism was a a domestic issue. I would think its less important. Thats not the case at all. The nature of the military capability we need to be able to deploy is changing. I think that the distinction between military capability and what we do in Capacity Building through our Development Budgets and programs is becoming more blurred at the edges. I think a lot more joined up government is required to deliver this program than was the case probably five or ten years ago. Fortuitously we created a National Security council in 2010 in response to this emerging trend, and that definitely gives us the ability to flex budgets across the whole spectrum from respecting the restrictions that there are around oda at one end and respecting the restrictions around what defense money which counts to the nato 2 can be used for at the other end, there is an ability to use a number of budgets including fco budget across the spectrum in a way that delivers the most effect. It will be different in different countries. There are countries where you need a pretty hardedged approach because there isnt a partner government to work with. There are other countries where diplomatic efforts where we have a fragile but functioning government, where working through diplomatic channels and providing Technical Support to build skpasity is the most effective way we can advance britains agenda. Its about having a proper balance and using our budgets flexibly and across government working which is absolutely the way we approach all these things through the National Security council. Can we turn to the most pressing hard challenge that our country faces in terms of isil. Thank you very much. Foreign secretary, welcome. The committee would like to hear in your words what the fcos role is in the uk governments effort to meet the threat from eye sill. Obviously it is multipronged or full spectrum. But what specifically is the fcos role in this . The fco leads on our relations with foreign governments, and if we start in iraq we have the lead responsibility for encouraging the Iraqi Government to adopt the policy stance that we belief will be most conducive to longterm stability in iraq. We work with partners in the gulf and weve consistently encouraged partners in the gulf to be supportive of the Iraqi Government to reach out themselves to the sunni constituency within iraq to try to rally that consistency in support of what the Prime Ministers government is doing. Beyond iraq and syria, working with governments and working to resolve the situation where there is ungoverned space is a key Foreign Office diplomatic role and were working on the one hand with tunisians to ensure they are building the capacity to respond to the challenge that their fragile democracy is now facing. On the other hand, supporting the u. N. Led process in libya in the hope that we will be. Able to see the emergence of a government that we can work with in syria to secure our security equities. See the emergence of a government that we can work with in syria to secure our security equities. What can the fco do to bring about a more active contribution . You know as well as i do military is only one part. Its about the host communities, the sunniarab muslim communities both in rack ka and mows sewell. That needs the cooperation of the regional powers. I think foreign minister zarif said the iran deal brings about some hope of an opportunity for Regional International cooperation. Although over the weekend i think secretary kerry today voiced some concern about the statements of the supreme leader, about being 180 degrees opposed to american policy in the region. What more can we do to bring about saudi arabia, kur key and iran to play a more positive role so the iranianbacked militias should be under the command of Prime Minister abadi, but theyre not clearly on the ground. How do you see our role developing in that space to bring about the cooperation so that the Sunni Community feel that they can trust this process . If youre talking specifically about iraq, i would agree that the iranian deal creates the possibility of an opening to a more constructive dialogue with iran, which will be important in the context of what happens in iraq, but we cant bank that yet. And realistically we have to accept the possibility of a shortterm consequence of an Iranian Nuclear deal, which does not find favor with all our hard line factions in iraq. Maybe a spike in iranian unhelpful activity around the region. But i think in the medium term, there is reason to be cautiously optimistic that as iran starts to see the benefits with the International Community, it will start to feel like a place that has a bit more of a stake in its region and a bit more of a stake in the world. There are many countries in the world who have instincts to do things in their region more widely, which are not necessarily helpful, but those are sometimes tempered by a recognition of their own selfinterest in stability. For example the more International Trade you have, the less likely you are to want to see International Trade routes disrupted. So i think there is reason for cautious optimism and we will be looking for every opportunity to try to gently nudge iran and the other powers in the region towards some kind of businesslike dialogue. Were not expecting them to embrace each other enthusiastically, but a businesslike dialogue that recognizes that while they have and will continue to have very substantial differences, there are nonetheless some areas where their interests align. Rather as while continuing to have substantial differences with russia, we have been able to Work Together on the iran nuclear file because our interests align, and we worked constructively and pragmatically on that file. Before asking daniel to speak fir they are on that i want to offer congratulations on the iran deal my congratulations. Im speaking on my behalf, not the committee, both to you and simon for the role i mow the office has played over a very long time on that. Its certainly my view its a very significant achievement. A very good start to this new administrations diplomatic achievements. Thank you, can i just thank you and its not just the department, but simon personally who submitted himself to the diet for more weeks than any of us would normally be able to tolerate to play the very Important Role in the team that delivered this in vienna. Thank you, mr. Chairman. Coming off the question of iran, i, too, would like to associate myself with the comments of the chairman. I think the United Kingdom has played a unique role in bringing about this agreement, and both you and your officials ought to be congratulated on that. But having secured greater engagement with iran, what are their perceptions, if i may ask, on the spread of isisdaesh in iraq and what chances are there, if i can can press you, on engaging with iran more effectively to take this terrorist organization on . I think the one thing that we can say without any fear of contradiction is that iran shares our concern, to put it mildly, about isil or daesh. They see them as a mortal enemy, which needs to be eradicated and we have a clear alignment. We have many or areas where our interests are not aligned and the trick is to make sure we can Work Together to achieve a Common Objective while respecting the fact that there will be many other areas that we remain in dispute over. And this does require i think some change in the way iran engages with the International Community if that is going to work. But i have no doubt that there will be people in iran who are looking to ensure that one of the consequences of this agreement is that we collectively are able to be more effective in our military response to daesh. Simon . Thank you. The only thing id add to what was said i found myself talking to the foreign minister and we had a conversation and in the end he corrected me slightly when i said we have common interest in the region. He corrected me and said we dont have common interests, we have common cal lengs. Hes right, of course. The interests in the region are very substantially different from our own. There are common challenges. The approach which iran is likely to take to combatting daesh is unlikely to be the same approach that we would take in significant respects. I think the chair has already referred to the control of shia militias, for example. I think there is as the secretary has said, potential for increasing our dialogue, for trying to find areas where we have a commonality of challenge, but i think we will always need to work carefully with iran. I dont see any chance as the foreign secretary has said, of us suddenly becoming great friends in the region. With the prosperity agenda that you clearly outlined at the beginning of your speech, could i ask what will be the sort of signal to British Companies now for actively seeking contracts in iran, particularly with regards to oil exploration. I have to say as somebody who represents midland seat, it was a Midlands Company that actually helped the iranians to build their first state car decades ago. There are obviously many opportunities for british firms. At this early stage, what is your advice to British Companies . I think British Companies will have noted very clearly that the fact that the agreement has been made will, if all goes according to plan, lead to the relaxation of sanctions and, as important, the release of a significant value of frozen assets. So iran will not only get the benefit of regular cash flow from being able to engage in International Trade, but will also have the blocked assets, which amount to 150 billion released to it. So simon is briefing a uk business seminar on friday on the opportunities for british business. Our European Partners are already revving up to engage and we are determined, and the chancellor and the business secretary are absolutely at one with the Foreign Office on this. The uk business will be up there with the best in seeking to be able to meet the requirements that iran has for permitted imports and to look at irans investment potential as the market opens up. Im not sure its going to be as much in the shortterm about exploration in the hydrocarbon sector as about renewing infrastructure to maintain production levels and increased production levels. Theres a lot of very ageing infrastructure and technology. Technology has moved on a long way during the period that iran has been under sanctions and we would expect a significant amount of Capital Investment to go into irans hydrocarbon infrastructure. Time constrains us. We will return with a gentle nudge, to try to get our partners potential partners into a place to actually develop a policy that will put us in the best place to defeat daesh. But let me now turn just one word on that. I think the point that i was trying to make, if i can remember the context in which i used that phrase, i dont think it would be helpful for us to go in there with the sense that we are now banging heads together. You and you, we want you to sit down and talk. It has to be much more subtle than that. It has to be about helping each side to see where there might be limited areas where they could Work Together. Im not a great believer in the grand bargain. Now its all all right, sit down and have a big discussion about everything. Thats unlikely to be productive, but there will be some areas where people who have quite significant differences can have a limited perhaps relatively junior channel of communication, which delivers some practical benefit to both sides. You start to build in that way i would suggest. Obviously, were going to return in some detail over the course of the next parliamentary session. I think the government made it clear they want to put a vote to the house. Military participation and personnel in syria in airstrikes. There is a general concern that we seem to lack when it comes to full spectrum response. Whether its disrupting financial flow, business interest, taking when it comes to social media. Thats before you even get into iraq and the failure of the iraqi army to make significant progress and a more direct relationship with the kurds in trying to combat daesh. But put all that to one side, can you tell us what you would hope to achieve from participation by uk aircraft in airstrikes in syria given that our contribution would be minimal compared to what the americans are already putting in, even if you put aside the legalities and once you also take into account the air power without effective land forces actually is unlikely to succeed as most military commentators would accept. Well, i think the key to this is seeing iraq and syria as a single theater. At the moment for our military operation, a limited set of permissions that stop at an artificial borderline. As far as the enemy is concerned, theres no borderline on the iraq syria border, but were operating on one side delivering lethal strike and on the other side delivering surveillance and reconnaissance only. So i think there are a number of points. On any logical assessment, thats inefficient. A uk surveillance asset that could be armed over syria is operating unarmed. If it acquires target information, its then got to task another asset belonging to another Coalition Partner to go and make the effective strike, if thats whats required. So theres a simple efficiency logic about being able to conduct operations across both theaters. But i think more importantly, it is difficult to see how daesh will be effectively militarily defeated without being defeated in its home base around ar rack ka. This fight eventually has to go over the iraqi border into syria. And at the moment, the uks permissions are limited to iraq. With respect, just as you point to the border, thats a slightly artificial answer in the sense that without Ground Forces, theres an old adage of boots on the ground, you dont really expect, do you, do defeat daesh through airstrikes alone . There are Ground Forces. The iraqi army is being slowly and painstakingly rebuilt. The peshmerga proved effective in the defense. The various shia militias which weve already spoken about are playing a role in the battle. Im not suggesting we have an optimally configured set of Ground Forces in the region, but im equally clear that injecting western boots on the ground as you say, would not be the solution. That would not deliver us the foreign secretary i didnt suggest western boots on the ground. I said boots on the ground. Secondly we are confining our remarks to syria and not iraq when it comes to military intervention. Can i, if i may move us on i think stephen has a thought thank you, foreign secretary and thank you mr. Chairman. To build on that point, what kind of longterm plan has been done for whatever you hope to achieve with airstrikes . Its a little worrying that you mention Ground Forces in terms of stabilizing, but were talking about in syria. Taking military action without planning subsequently been done after. Hat were your plans and what is the analysis for the military situation after the strikes . Well, the overall plan in syria remains to see a political transition in the regime to a government which has legitimacy and buyin from the majority of groups in syria that can then take the fight to daesh. Thats the outcome that we see. Now its not going to be easy to deliver. We recognize that. In the meantime, its easy to challenge the efficacy of air strikes and i dont think anyone, certainly many relation to this campaign has suggested that air strikes alone can finish off the enemy. They cannot. But they have arrested, if you remember where we were may of last year, isil was speeding towards baghdad and they were stopped. They were forced to change their tactics on the ground. They were forced to operate more as a terrorist organization with a cellular structure rather than a conventional military force because of their vulnerability to air strike and regard to their counter air capability. Theres no doubt that air strikes have degraded not only their military capability but have prevented them from carrying out planned atrocities have degraded their ability to exploit economic infrastructure, Oil Infrastructure in particular and have had a debilitating effect on their occupation of that territory. Thats not the same saying if we do a bit more air strike they will surrender. Of course, they wont. I dont think, just as john has said, nobody believes that airstrikes alone could destroy isil on the ground. I dont think any sensible military commander would be prepared to clear that it ground without having had the benefit of a pretty Solid Campaign of aerial delivered degradation before the boots on the ground went in. Otherwise, theyd get slaughtered. When you talk about boots on the ground in syria, whose boots on the ground are you talking about in syria . Well, we have a longterm strategy to train and equip an opposition, but i would be the first to recognize that that is proving a painstaking process. But that has to be the way that we go. There are two different dynamics in syria. Theres the battle between the islamist fundamentalists and others and then theres the battle between the regime and its opponents. And we have always been clear that what we mustnt do in syria is to repeat the mistake that was made in iraq of dismantling the entire structure and leaving nothing in its place, leaving a void. What we need to do if the regime collapses, isnt that precisely what the effect might be . It depends on what you mean by regime collapse. If the institutions of the regime collapse, then that is what the effect would be. That is not the desired outcome. The desired outcome is political change at the top of the regime to create a situation where the basic infrastructure of the state can be preserved, but with a political legitimacy that is shared by all the major groups competing. Isnt the British American position around assad running the risk that the forces and institutions of the regime would collapse if our policy was successful leaving a void and making the situation as far as taking on isil significantly worse than the challenge we face today . Our political strategy is to work with other players, including the russians and hopefully in the post Nuclear Deal World increasingly the iranians to find the solution that allows a transition from the existing leadership to a new leadership and eventually a transition to a democratic syria. Where the regime has legitimacy. Can i ask whether the uk could be doing more to harness the military capability of Kurdish Forces in both iraq and syria . And a touch to that just remind you several times about the polite of the as sziti, particularly the women, which also the Kurdish Peshmerga were able to assist in a way that i think we failed to assist. Who failed to assist . I think we failed to assist them. We . Yes, we. I think thats a little harsh. Last summer we delivered a considerable operation designed to rescue the azitis stranded on mt. Sinjar. So we did intervene where we saw an intervention that could be helpful. You have asked me a number of times about the fate of the aziti women captured by isil. Im afraid to say that the women and other women captured by isil, we have little clarity about what has happened to them. From what we do know, we cannot be very optimistic about their fate. We know that many women who have been captured have been effectively enslaved, abused and maybe killed. Going back to the question about cant we do more to use a military capacity of the Kurdish Peshmergas and also the peshmergas in syria . Just to be clear, we dont control the peshmerga. The kurds are clear about what they will do and wont do. They see the peshmerga primarily as a force for defending kurdish territory and for liberating kurdish populations. What they are prepared to do beyond that in support of the wider objectives of the government of iraq and the liberation of syria is limited. So we can and we do work with them. We have very good relations with them, but they are quite frank about the limits on what activity they are prepared to engage in. I want to turn now to tunisia. Hopefully well have time to open it up to colleagues for questions arising out of your Opening Statement. The attack and murder of 38 people on the 26th of june didnt lead to the immediate decision by the British Government to restrict travel advice. You changed positions on the 9 of july. Can you tell us the reason for that . Yes intelligence. As they uncovered more of the picture around this attack, the picture that we developed made us more concerned that a further attack targeting western interests was likely. Who took that decision . Was it the National Security council . Was it the Foreign Office . I took the decision to change travel advice. Travel advice is determined in the Foreign Office on any major or sensitive piece of travel advice, i take the ultimate decision personally. In this case, i did discuss it with the Prime Minister because we were very much aware and very conscious of the fact this would have a Significant Impact on the tunisian economy and weve made clear that we want to support tunisia in every way possible but we have to put the security and safety of our citizens as our number one priority. I understand that. But other European Countries with their own people in tunisia have not taken the same position. And there are still, as far as i understand it, tourists from france, germany, in tunisia at this time. Why is it that we have intelligence that gives us the view that we need to evacuate the british people and maybe the danes and the irish took the same view. I think the spanish changed their advice ahead of us and a number of countries have changed their advice, i know sweden has also changed their travel advice, i think the netherlands. The simple answer is the germans, which is the other country that has a significant amount of tourist traffic to tunisia, have a team which only arrived in tunisia yesterday to start doing the work that we started doing in the immediate aftermath of the attack. We have developed a picture very clearly. Our experts, through the joint terrorist Assessment Committee have looked at the threat and we get regular updates on the threat picture. We have to look at the scale of the threat. We have to look at the mitigation that is in place. And we have to make a judgment on the balance of threat and mitigation, whether or not we can continue to advise british tourists it is sensible to travel to a particular destination. The position weve taken it is not at the present time. We very much hope that a combination of action that the tunisia government is taking to deal with the network behind this attack and action that the tunisian government is taking to reinforce Preventative Security will allow us to revisit that decision in due course. The tunisian government is obviously publicly and privately very disappointed by the decision and clearly it has terrible implications for their economy. Can you update us on the discussions that youve had with the tunisians . I understand that your minister, mr. Elwood, had a meeting with tunisian officials yesterday, is that correct. I had a meeting with the tunisian Prime Minister, and the foreign minister in brussels, he was invited to attend the Foreign Affairs council in brussels yesterday. The tunisians must obviously be disappointed that we changed our travel advice. But i have to say that the Prime Minister very graciously again said yesterday in the Foreign Affairs council that he recognized why we would have to do that and he respected the decision that we had made and that tune nearby yeahs response is not to sulk about it, but to work with us to try to create the conditions in which we would be able to review that advice as soon as possible. And i would like to place this on the record, we have an extremely constructive relationship with the tunisians at political level, at working level in the security and intelligence agencies and the police and we have found them very willing to engage with our experts and very keen to build their capacity. Have you given any consideration as to giving assistance to the tunisian government to try to help them through this difficult time. Yes. We are at different levels. Were providing Technical Assistance to the Security Services both to help them with the investigation into the attacks as you would expect, but also to help them build their capacity more generally, to ensure that their detention and interrogation processes are fully compliant with human rights requirements which in turn enables us to share intelligence with them. We have undertaken the use of some of our sophisticated assets to gather intelligence that will sophisticated assets to gather intelligence that will be of use in the investigation. Were also working without partners on a package called economic support for tunisia recognizing that the tunisian economy has been significantly impacted. And i think federico, the eu high representative announced yesterday that the eu is working towards package of temporary increases in oil quotas to the eu, which will provide an immediately and welcome to the challenges theyre facing. I have 10 minutes. No mention of israel. There have been discussions here. And also israel generally seems quite detached from being a constructive partner and in the u. S. In some ways. Having said that more as well. How do you feel israel could be made persuaded to be more constructive in its approach and how does it feel as well that the International Community really say to each other its activities and settlement in particular has gotten international condemnation. Well, i think israel had that last message loudly is and clearly. And this government is a friend of israel, a staunch supporter of israel to live in peace and security and defense itself. But were also quite prepared to speak up when what israel is doing is not acceptable. And i have spoken out. The Prime Minister has spoken out. And we have consistently urged israel to engage with the needs of the population in gaza in a much more proactive way. But to answer your first question, yes, i went to israel last thursday and got a clear and distinctive message that Prime Minister netanyahu was not pleased with the deal that we designed in vienna. I did suggest to the Prime Minister, and i suggested in parliament on tuesday, that there was no realistic deliverable nuclear deal with iran that israel would have enforced. And i think the reality is that the israelis still think there is a last chance of possibly derailing this deal by lobbying action in the u. S. So as long as were in the 60day window that congress has to consider the deal, you will see israel maintaining a hostile position and lobbying very aggressively mainly in the u. S. But also elsewhere. Once that lobbying emesis failed as i suspect it will i would suspect the israelies to be pragmatic and engage to try to make the best of what is a bad deal. That means making sure that the commitments iran has entered into are delivered and that that delivery is properly pleased and enforced. And i hope in time that we can persuade the israelis that the possibility of a dividend from greater engagement in the region can be a positive. I fully understand why israel is skeptical about this. They see iran through the prism of a nation which has repeatedly denied israels right to exist. And which funds terrorist organizations who repeatedly attack Israeli Citizens and israeli interests. So i understand their skepticism. But i said to Prime Minister netanyahu, frankly the alternative approach, when we have been practicing for the last decade, has not delivered a cessation of that iranian behavior. And going on doing more of it, expecting to get a different result, is frankly not going to happen. We need to do something different. We need to be prepared to take a little bit of risk in engaging more with iran. And see if we can persuade iran that it is in its interest to moderate. We wont change its behavior in the region but to moderate the region. Thank you for your initial remarks and your current Foreign Affairs situation. You mentioned eu extensively. And you said that our partners in the eu would be would feel the eu would be unrecognizable if britain were to leave. Surely that should be our goal. We want the eu to be fundamentally challenged, at the Prime Minister has given a commitment to. So surely that should be an encouragement to be bold about the type of changes we want. More towards Trading Corporation and less to a political union. Thats my first question. Second question is this you are the former and current secretary. I dont think the commonwealth mentioned once in opening remarks. Do we still have where they replaced sit and put it back five years vote. And issues that need to be addressed as well. Any one of them in particular . I did mention it. It was one of the overlapping footprints in the world. It is very firmly. As we head to the commonwealth meeting this year and the election of a new secretarygeneral of the commonwealth. This is an important moment to think about restating the purpose and the direction of the commonwealth going farther. It is an organization, in my view, in need of some direction. It operates in a competitive environment. It is unique among them. But it is at least arguable in some respects it lost its direction and course. After the meeting and the election of a new secretarygeneral it is to seek to reinvigorate the commonwealth. It is being a group of nations that have come together for a specific set to achieve a specific set of objectives distinct from what other International Organizations do. On the eu agenda is, what i said was that all of our partners in europe have suppressed to me a desire that britain should remain part of the European Union. Some of them have gone much further and said the European Union would be the poorer for not. That is i think a reflection of what in their eyes is britains role in keeping the eu focused on free trade open markets outward looking agenda. And an important part of our reform pitch is making sure it doesnt suck couple to being inward looking, our special model when in fact, the only real way to protect our standard of living is to be competitive in a globalizing economy. That has to be the number one challenge for the European Union. And that is at the heart of the renegotiation and reinstatement of the objectives of the union. Small in number, small in population. But a very solemn obligation and commitment we have spelled out in the papers of previous governments published. Bringing us back to syria there is analysis when it comes to our approach that is short of maneuvers. Less than two years ago we were thinking we could contain the forces. This is a civil war. We cant get this right. This sort of change of approach and lack of analysis doesnt inspire confidence generally. Well, i think thats a great misrepresentation of the situation. Whats happened is the situation on the ground has changed. When we were first looking at the situation in syria it was a civil war with opposition groups fighting a regime, which was responding with ever more ruthless military means. And whats happened in the meantime, is that isil has become a fact on the ground, controlling a significant area of territory. Dash itself and much more extreme groups have become a much more important factor of the conflicts on the ground. That hugely complicates the situation. If i may say so it was a relatively black and white thing at the beginning. There were regime people and good opposition people. inaudible . I think the holding of substantial territory and the establishing of Something Like the government in that territory is a new phenomenon. Just for the record, it is still our intention to arm moderate opposition and at no time was there a proposal in general terms for an attack. There was a specific proposition to respond to the use of chemical weapons by the regime for further use of chemical weapons. For crimes against humanity. Can i thank you very much in the initial session with us. Very grateful to you. We should look at resuming on a night in september. Order, order. The meeting is now adjourned. Up next on cspan3 a hearing on Internet Technology privacy and intellectual property. Discussion on federal investments and scientific research. Later, the director of the federal air marshal service. After that, a conversation with transportation secretary anthony fox. When congress is in session, cspan3 brings you more of the best access to congress with live coverage of hearings news conferences and key Public Affairs events. And every weekend its American History tv traveling to historic sites, discussions with authors and historians and eyewitness accounts of events that define the nation. Cspan3, coverage of congress, and American History tv. Next, officials from Technology Companies and associations testify about new Internet Technologies and the potential impact on consumers and businesses. They talk about the implications of automobile Security Systems and even Household Appliances becoming connected to the internet. This house judiciary subcommittee is chaired by darryl ice of california. The subcommittee on courts intellectual property is and the internet will come to order. The chair is authorize said to declare a recess of the subcommittee at any time. Today we welcome everyone here for a hearing on the internet of things. Throughout its short history, the internet has been transform active and powerful tool and has shaped communication, commerce worldwide. Technology, too, has proven to advance at rates that only moores law scribes. With a doubling of capacity so quickly that about the time you run out of your short warranty, you in fact have a product that can out perform the one on your desk. But the internet of things which broadly refers to a Network Connected real world items, able to Exchange Data with each other and across existing Network Infrastructure is a newer portion of what now becomes the future of our lives and our communication in the 21st century. It is estimated by 2020 there will be 25 billion connected things. And without a doubt, before we reach 2020, i will be wrong and there will be more connected things. By imbedding devices with electronic sensors, software capable of connecting market, we in fact, have smart devices. Those smarter devices today already include if you choose every light switch in your home, the watch you wear, and products throughout the home whether they be speakers to hear from or in fact sensors to control climate down to a portion of every room. Datadriven technology is also improving the way we understand health care and the introduction of new Health Monitoring systems can, in fact prevent detect, and treat today any number of afflictions. A generation ago, the insulin pump was an amazing product. But it wasnt a true command pump. It wasnt connected to your physician. It wasnt, in fact, sensing other environments. Today, it not only could but it soon will. At the same time as we talk about your home your lighting your messaging your voice, and of course your health and your actual biological function issues like privacy and Data Security for these inoperable technologies become not just something to talk about but an area in which we in Congress Play a large and potentially destructive role if were not careful in the development of these technologies. Every day in america somewhere someone is being hacked. And somewhere someone is finding out their personal identifiable information has been compromised. Too often it in fact, is the government who we hear it from. The government who controls, if you will whether or not you can further secure your internet of things, products, or not. A generation ago i stood with one of our witnesses at a time in which a member of congress, a former fbi agent was trying to prevent 256 encryption. He was doing so because the fbi needed to be able to quickly crack the bad guyss transmissions. They needed to be able to unbundle a floppy disk information in a matter of second if they were going to deter organized crime. Unfortunately, it meant that hackers were take microsoft operating system and quickly duplicating and denying them millions of dollars. It took a number of years for congress to realize that that artificial control was not only circumventable by reimporting it, but it was ludicrous because the bad guys were not going to limit their protection to 256 bits. Unlicensed spectrum is going to be talked about again and again today. I hope my witnesses will feel tree to take about the greater spectrum of things. I would remind all panelists, however, that the sec is not within our primary jurisdiction. But to unbanal and these other things will take a coordination between committees that do control spectrum. Those of us who control a great deal of the privacy requirements and overseeing what the government allows. In january, the federal trade commission released a report that focused on data privacy and security. The report made a broad, nonbinding recommendation about how companies should address these issues from the onset and laid out the groundwork for the internet of things and ftc involvement. When the congresswoman and i launched the caucus in january the first question we received were usually what is the internet of things and why does congress care. To a great extent, we have laid out a number of those in my Opening Statement today. But i would be remiss if i didnt say that the federal trade commission is an agency that has been enforcing breaches in security while providing little guidance. This is where we can come in with the heavy hand of government but seldom with a safe haven. Thats an area in which the internet of things caucus and this committee has a an obligation to make sure we do both. Today we look forward to a hearing with stakeholders in the marketplace. And further opportunities to deal with the challenges that congress brings and those in which we can bring relief. Thank you and i look forward to our witnesses. And the Ranking Member from new york for his Opening Statement. Thank you, mr. Chairman. The internet of things is next in our increasingly wired world. Everything from Household Appliances, Transportation Systems, can harness the power of the internet and increase productive and choice. It holds great promise for consumers and businesses alike. But we must also face the threat of privacy. Todays hearing is an opportunity to examine the benefits and the risks that the internet of things exists. It is experiencing explosive growth in years. By some estimates larry 25 billion connected devices today. By 2020, in five short years, maybe 50 billion. We are already seeing many innovative uses of things. Across various industries and the potential risk this Technology May hold. For example, according to one study by 2020 up to 90 of consumer cars may have an internet connection. Up from less than 10 in 2013. With this Technology Drivers can monitor whether their car needs maintenance the fuel efficiency of various routes. As the new york sometimes described last week, researchers were able to track internet enabled cars location, determine their speed, turn on and off their blinkers from a far, turn on and off their blinkers lights, windshield wipers and radios, interfere with navigation devices and in some cases, control their brakes and steering. As more and more vehicles use Internet Technology its vital automakers install strict features. For example, traffic lights can be time to maximize traffic flow and ease congestion in realtime. Garbage cans can signal when trash out to be collected. Imagine a garbage can talking to the sanitation department. It has the chance to revolutionize. But unless cities integrate Strong Security measures, their infrastructure could be volatile to hackers. A in addition to security concerns, the internet of things raises a host of privacy implications particularly with respect to consumer devices. There is no doubt the technology can improve in ways large and small. To maximize energy efficiently, your thermostat could be controlled remotely. Amazon has introduced the dash button, which will allow customers to press a button and reorder certain household supplies. What do they do with the massive amounts of data they collect from customers. What choice do consumers have about how their information is used . And how will companies protect their Sensitive Information from being compromised in a cyber attack . These are all questions that must be considered as the Technology Expands its reach. Many wear devices to track their physical health. One Insurance Company is offering a discount if they demonstrate a healthy lifestyle. It is not clear how Health Insurance Companies May seek to use this personal information in the future. Will it be sold for marketing purposes . Will it be used in a discriminatory manner to determine suitability, for credit or employment. In its examination of these important questions of the federal trade commission made a number of important considerations we must consider. It suggests the Company Build security at the outset rather than as an afterthought. It also recommended they monitor devices throughout their expected life cycle to provide security patches where possible to cover known risks. In addition, they urged protection of consumers privacy by engaging in data minimization and notices and choices to consumers as to how their data may be used. Although the ftc did not make any specific legislative recommendations, we should consider whether it is appropriate to address privacy concerns. If so should we Seek Solutions to these or should they be addressed to broader legislation on these topics . The internet of things has led to important technological breakthroughs. Our challenge is to promote the proper balance and making sure privacy is protect as this Value Technology continues to grow. I look forward to hearing from our witnesses in how to address these challenges and i yield back the balance of my time. Thank you, mr. Adler. Thank you, mr. Chairman. Today were here to learning more about the internet of things. It has the ability to not only improve the more mundane aspects of our lives, but transform health care and Information Technology industries. This is of particular interest to the Judiciary Committee considering our longstanding jurisdiction when it comes to intellectual property Cloud Computing and digital trade. The internet of things refers to machines containing sensors that transmit data to other connected devices and the internet. Dramatic in Cloud Computing the past several years has helped to enable the technology to reach its full potential. Without the ability for data from an enter is net of things device to be analyzed in realtime, the data itself would certain little valuable. The a ability to access through mobile apps or even our cars makes these internet of things devices a key tool to finding Creative Solutions for many of the problems of daily life in the 21st century. Smart agriculture will help us grow more food and prevent waste. Smart transportation will help prevent traffic jams but can also be used to monitor Road Conditions and structural components of bridges and overpass toss detect problems immediately. New wearables not only monitor the number of steps we take but can include sensors that can catch and alert taos potential medical emergencies before it actually becomes one. As this committee continues to study this new technology, it is important for us to keep in mind the full scope of the internet of things and be cognizant of policies today and in the future. In particular, we need to examine the privacy and security implications of this technology and look into the Security Privacy measures they are building now and as they plan to implement as open standards are to develop. I am hoping it helps fuel prosperity and creativity. I think we have a fantastic panel assembled today. I know all the witnesses and i look forward to hearing from them about this exciting new area of technology. Thank you, mr. Chairman. On behalf of the Ranking Member, the gentlelady from washington First District will make a short Opening Statement. Thank you. I want to thank my cochair on internet of things caucus as well as the Ranking Member for calling this hearing on this important subject. When we examine the way products and sensors are being used and whats called the internet of things from Home Appliances to personal wearables it might be easy to conclude it is only by american ingenuity. We have an emerging set of challenges for innovators and consumers. To start, we need to make sure we update existing laws to reflect the way the world works today and where we are headed in the future. That means, for example, updating the Electronic Communications privacy act to make sure data on a server is the same as the documents in the file cabinet. For the multibillion dollar internet of things to be successful, we need to be responsible stewards of policy. They must feel their devices can be secure and private, not vulnerable to hacking or spying. Forging a path to adoption of uniform, preferably international standards. Regulatory agencies must find ways to strike the right balance between encouragingen know vacations and upholding their duty in the realm of protected cars. All of these collect unprecedented amounts of adult, they hold great things like health research. Provide individuals with control over their own data. Again, i want ta thank the chair and the Ranking Member for calling todays important hearing and setting the stage for a productive and informative series of hearings on the role that congress and our committee can play and create an environment where internet of things innovation can prosper and Consumer Protection is at the forefront. Thank you, mr. Chair. And i yield back. I thank you. And thank you for your leadership on this issue. It is now my pleasure to introduce our distinguished panel. The witnesses have written statements and have been entered into the record and will be placed in their entirety. And i would ask witnesses to summarize in about five minutes. Their statements so we can leave time for lots of questions. But before i introduce the witnesses formally pursuant to the committee rules, i ask that all witnesses stand to take the oath. Customarily raising your right hand. Do you solemnly swear or affirm that the testimony you are about to give will be the truth the whole truth and nothing but the truth. Please be seated. Let the record reflect that all witnesses answered in the affirmative. Today our witnesses including mr. Gary shapiro, president and ceo of Consumer Electronics association. Mr. Dean garfield, president and ceo of the Technology Industry council. Baywall, president and ceo of a alliance of automobile manufacturers. And mr. Morgan reid, executive director of act, a. C. T. , act association. Before i go down the road for the witnesses, i have to a little bit of a personal privilege. The other three know it. Mr. Shapiro and i go back a long time. We were there at the berth of the modern Consumer Electronics association. And i once worked for him on an unpaid highly compensated by unpaid position as the chairman. So if today i rough him up, remember, get back. It takes a while. And with that, mr. Shapiro. Thank you, chairman. This is indeed a historic moment in my life. I have been referring to you as boss for 25 years. And you as chairman oversaw a good portion of our freedom and our growth. And thank you Ranking Member adler, chairman goodin and other members as well. It represents 2,000 Technology Companies. We own and produce the ces which is held each january in las vegas and is the Worlds Largest innovation event. The internet of things is a big part of the ces. It is so big that 900 of our 3,600 exhibitors had related products in our recent show. And the other thing you should know exist because of smartphones. Over a billion smartphones have been sold. And they contain something called micro electronics mechanical systems mems. They measure things like pressure, temperature, location movement, and other valuable information. And because of the billions of these devices in phones they cost now just pennies to piece. They use very little energy. They hook up the internet. From garden soil to Baby Monitors and wearables like smart catches thermostats and lights, household products. They are using them to stay healthy, increase efficiency to be secure. And to make better decisions. You have heard the estimate ises of how these are going to grow. And they are estimates. I swore to tell the truth so i cant say theyre factual. There is definite growth. We grew 32 in the United States alone in terms of the connected home devices. It is almost a billion dollar marketplace in the United States. It allows consumers to mount Security Systems, manage heating and cooling and lighting systems. And they also increase home efficiency and cut bills. They can learn patterns over time. They can adjust temperatures. And maximize efficiency even when no one is home. While they save time and money for ordinary americans, there is an opportunity here to care for our aging population, as well as the 56 million americans with disabilities. The technology has been customized and costly. And professional novel interface like voice control. Smoke detectors can be through lighting control. It can light up the whole house for a safe excite. They are life changing and sustaining for many americans. Think about our older loved ones. We have limited caregivers in an aging population. They will help seniors live independently and comfortably, maintain their quality of life and they can do this with remote, with caregivers watchly remotely at the same time Older Americans will retain their privacy and share just what they are comfortable sharing is. It requires spectrum. Wireless is the platform in which most connect. We need an additional licensed and unlicensed spectrum. It is changing what skills we need to maintain our competitive advantage. We dont have enough skilled workers. Thats why we are pushing for highly skilled integration reform. Third, it requires government restraint. It does require us to consider new challenges. Legitimate concerns about safety privacy, security. Who actually owns the data. Stakeholders, including government can and should be discussing these today. As we said in our filing with the ftc it hinges on building trust. I just heard that again congresswoman. Its up to manufacturers and manufacturing to make good decisions about privacy and security. We are a passion a doing our best to protect consumers. But we recognize and respect the legitimate role of transparency, clarity. 30 standard making operations, activities that produce anti certified standards. Focusing on technical aspects of the internet of things. And of course its just beginning. And we have to be careful of overprescripted because that could stimy the growth of things. Any Government Action should be very now and focus on real harm. The Internet Things thing is huge. We will Work Together to make sure it supports growth in this dynamic sector. Thank you. And i look forward to answering your questions. Thank you, mr. Shapiro. Mr. Garfield . Ranking member adler, members of the committee. On behalf of 61 of the most dynamic and Innovative Companies in the world, we thank you for hosting this hearing. We thank you as well for the context which is outside pending legislation. As well, mr. Chairman and congresswoman for your leadership in creating the internet of things caucus. Sit our firm view that the internet of things has the poe to be one of the most Technological Innovations in history. That is with the right policy involvement to make sure i am not accused of hyperbolic. Our humble recommendations on how congress can be helpful. As to the first, the internet of things is the digitization of the connected world with computing systems. One may sound similar has the potential to be seismic in the creation of new industries. Whether were talking about watches that have the potential to not only help you to be more fit, but as well to prevent Catastrophic Health incidence through monitoring your heart rate. Or were talking about windshield wipers that have the ability to communicate with other windshield wipers and alert your car to an impending storm or an Autonomous Vehicle to a Construction Zone soon arriving. There has been much discussion of the home and personal manifestations of things. It is important, however, not to ignore the commercial deployment. They are real, tangible, and have huge potential economic benefit. Whether it is the demyment of centers in our energy grid to ensure greater resiliency and reliance, the deployment of sensors in Transportation Systems to allow more efficient delivery. Or to ensure safety for workers. The Economic Impact, much of the Economic Impact will come from the deployment which by 2030 is expected to be almost 7 trillion. So what are we doing to ensure that is the case . Were focused on a multifaceted approach that is heavily emphasized security, privacy standards as well as investment in infrastructure. With regard to security and privacy or we are working innovating around those issues. Making sure they are developed by design so they are part of our forethought rather than afterthought. We are developing solution toss ensure that both security and privacy are tailored to the particular environment. And as well we are investing in innovation because consumers demand high security and privacy and increasing transparency. Its in our interest and its the right thing to do to meet the consumer demand. As well we are moving forward on Global Standards that are really privately better driven by the sector. And as well that are open standards to ensure that we have high inter opability as well as scaleability. Finally, we are invested in the infrastructure. Mr. Shapiro noted the need for broadband, band and wireless as well as ensuring that spectrum is available. The use of speck truck is growing on mobile date by 55 each year. With the internet of things and digitizization it will only grow more expeditiously. So spectrum will be increasingly important. In addition to doing those things we intend and need to partner with congress and the administration to make sure that policy is smartly in focus. One is we need a National Strategy around the internet of things. Much in the same way that a broadband, having a natural strategy will be incredibly helpful. Second, we need more spectrum as mr. Shapiro and i pointed out earlier. The u. S. Government is the largest holder of spectrum and has the greatest ability to impact spectrum and we hope to make it more efficient. Finally, we need the exercise of restraint. It is in stages. In order to grow to reach its full potential it is important that we avoid mandates that put the thumb on the scale of particular technologies versus others. I look forward to your questions and the testimony of my colleagues. Thank you. Thank you. You only have to deal with all the questions set up in the Opening Statements. So i look forward to your five minutes. A piece of cake. Chairman, members of the committee, thank you for the opportunity to testify this morning. A wore a different hat the last time i was here. Another industry that was engaging with the challenge of technology. During my time, it access began to replace ownership. The model transformed. Now the last four years instead of fighting with gary shapiro, i mostly team up with him. Its easier. Thats a good thing. Only in washington. Yeah, right. I represent the detroit three, six major european manufacturers, and three major japanese manufacturers as well. For us the impact of technology is every bit of profound but not threatening. Technology and connectivity are ushering in a new era. Some may say a golden age of mobility. We have seen enormous safety and environmental gains. Striking the numbers and emissions as well as increases in mpg. The next generation of progress will come from iot based technologies. Ownership patterns may evolve somewhat as ride sharing becomes more prevalent. But the truly Material Impact of technology is the convergence of environmental safety productive and life quality benefits that arise from connectivity of an iot world. When it comes to cars, safety and objective conflicted. Heavy and safe or light and green. Every parent struggled with the choice for their teenagers. Strategies for safety centered on surviving crashes. It harmonizes safety in green, crash avoidance. Manages the car better than a human can fosters more efficient mobility because there will be fewer crashes on congestion. It translates into more economic productivity, more personal time fewer injuries fewer fatalities and fewer emissions and less wasted fuel. Getting to the future as fast as we can is critical. 95 of all traffic fatalities results in human error or environmental conditions. Vehicle factors account for just a fraction. Technology is so powerful because it offers the promise of mitt gating human error. As todays innovation automatic breaking adaptive lighting and Tomorrows Technology is going to be and ultimately selfdriving vehicles. It must be embraced and seen as the answer, not the problem. That means working proactively with privacy and cyber security. Last year auto manufacturers began the first in the iot, nonpure play internet sector to adopt a comprehensive set of policies and principles. The principles have a strong lineage. The Consumer Product bill of rights and suggestions from privacy advocates. Transparency, respect for contacts. That is security. The most sensitive types of information needed for some technologies geo location where youre going. How fast youre going. Biometrics. Clear and prominent notice. The purposes of why it is collected and the entity with which it can be shared. Similarly, the industry is working to stay ahead of the threat posed by malicious hackers. We announced the formation of auto isac. For sharing information existing or potential cyber threats. The Alliance Security bills in the house that would facilitate the public and private sectors while protecting individual security. We hope the senate is acts soon to move the bill to the present. The next 20 years the evolution of the internet is enormously exciting. Strengthening the quality of life, the environment and our economy. We look forward to working with you to realize the benefits of innovation and address the challenges that come along the way. Thank you. Mr. Reid . Chairman Ranking Member adler, distinguished members of the commute, i thank you for holding this important hearing on the internet of things. It represents 5,000 companies and Technology Firms around the globe making the software and the a apps you love. We are spearheading an effort to clarify outdated Health Regulation and remote patient monitoring and ensuring in which patients and consumers can see an improvement in the health. Key stakeholders in congress. Fda, hhs to encourage and support Health Policy toss keep information priority and secure. I should talk about jobs created. But i would like to break from that a little bit. I want to tell you a story. Its one that i think is relevant to many of you and certainly to a huge chunk of your constituents. Nearly everyone in this room caring for an aging parent or knows someone who is. Now, imagine your parents are fortunate. They are living in their own home but significant medical challenges are beginning to face them. The questions begin. Do i get a home health ant . Do we pay 12,000 a month to move them into assist said living facility . Do they move into my basement . How do i deal with the fact that my parents dont want to move into my basement . What do i do to help them live at home with dignity. Most of you remember life alert, help, ive fallen and i cant get up. Well, that kind of device is a personal Emergency Response system. They are great devices but incredibly limited to what they can do. Now, imagine a far more sophisticated that can track Blood Pressure blood sugar geo fencing for alzheimers and much more. Since they are small enough to fit in a watch like this one or maybe this one. And all of those devices i think everyone here has got one. All of them connect to a loved ones phone alert service, physician tablet and medical record. Suddenly mom can stay at home another year maybe to maybe three. A all while managing her health. And if mom allows the data to be sent to you, you can be part of the solution. Staying in touch and on top of her needs. And not insignificantly, your basement gets to keep its big screen tv. By 2050 there will be 83. 7 million americans over the age of 65. Twice the amount from 2012. 80 will have at least one chronic condition. Without question the age groups rapid growth will strain public and private health resources. The picture i painted is not a pipe dream but a cataclysmic outcome in aging adults. What is standing in the way of this dream. What is needed to make sure everyone can benefit from the new innovations. Three quick messages. One, innovation helps happening. It can lead to lower costs better case, and improve patient outcome. The future will be founded on trust. Which requires Strong Security and privacy measures. Three, regulatory barriers outdated laws and lack of clarity around reimbursement are a threat to the advancement of mobile health. Congress can and in cases must play an Important Role in helping health outcomes. Questions about Privacy Security reimbursement and government regulation have met to create an environment where they are work to go make them more medically relevant. Patients and care providers but know their information is private and secure. Industry best practices around Sensitive Health data to support these practices are important to establish trust and push the industry forward. Clarifications on government access to data matter as well. Including expert reform and lees act. As most of this information will eventually end up in the cloud. And congress has been pushing back on any government pressure to weaken encryption. Finally, ensuring that doctors are reimbursed will be essential. Currently, cms is statutorily prevented from certain monitoring because of absurd geographic restrictions and ant acquitted requirements. Successful Technology Trumps and means to pay for it all come together. I hope that happens now rather than see one more Family Member move out of the home they love because we failed to act. I look forward to your questions. On that note, i have questions. I recognize myself for a series of questions. Mr. Shapiro, youre not an engineer. Youre a long recovering lawyer. But ill ask you this question because i think your industry is well aware of the answer. As we sit here in error what percentage more or less of the band width are we using in this room, of the speier spectrum. If we were to look at the radio waves being used, the a. M. The fm, the old band width from television, what percentage of the spectrum is being used as we hit here . Well, its all spoken for. It uses a small percent. Less than 1 will actually be in these airways. I said i wasnt going to dwell too much on spectrum. If we are trying to create the a ability for an unlimited amount of communications between large and small devices, isnt one of our greatest tasks to recognize that we have allocated all the band width virtually and not used hardly any of it in any given time, any given room stpwhrfplt. Yes. Now i realize you gave me a softball. Now you can take advantage of the devices. Thank you. We through the laws, categorize it differently. By whether its licensed or unlicensed. They have gotten for free a broadcast license and unlicensed anyone can use it. It promotes innovation. We calculated in a study we did last year 62 billion of activity created by unlicensed spectrum. We are advocates for increasing the spectrum because it allows innovators to do cool things that will provide benefits. But there is a lot of spectrum that the government uses. What we are asking and there is legislation pending the government can figure out what can be repurposed for commercial purposes. It would create a huge amount of economic activity. If so it will make a tremendous a amount of money for the treasury. There is technology being developed which allows it will be split finer and fighter and used. Thats some of the issues involving going forward. We are passionate about Driverless Cars and all the benefits and all the great things that are there. But we think there is an opportunity there to look and test some of that being purposed for the area and split it up a little bit and share it. Thats what mitch and i love to have wonderful conversations about. Following up with mitch. Mr. Baywall there is going to be a lot of questions about obviously whether or not automobiles that are communicating with the internet are safe or not. And thats topical. But would it be fair to say that whether or not you share the band width has virtually nothing to do with whether or not youre going to be effectively hacked on your en crypted signals . Thats a softball. Well, maybe. And sometimes i cant do soft balls. And im also not an engineer. I think i would say a few things. One is as it relates to spectrum, we have heard the message from congress. And the notion of sharing if we can make that work. It is something that we really want to do. And field testing is going to happen in 15. And the notion of finding a way to satisfy the spectrum but also meet safety is something that balance has to be struck and we are prepared to try to test to succeed rather than test to fail. So we are committed to that notion. I want to set the context in terms of v to v. This estimates that it could mitigate or eliminate up to 80 of all crashes on the road. And so the promise is overwhelming. The implications for life for injuries, for productivity are enormous. So i think the predicate for moving forward has on to do no harm. Find a way to share but no harm. I want to quickly follow up. The history of data in the automobile has been one in the automobile manufacturers having proprietary data buses keeping them closed not publishing. As a representative, is that going to be different in and its a selfasking question answering question. In the vehicle to vehicle world it has to be an open standard that in fact is published so your windshield wipers on one vehicle talk efficiently to another. Isnt that true . I think it is true. But i think it is also true that in the world, dangerous world where you have malicious hackers that Integrity Matters a ton. And finding a balance for both is the test. I recognize the Ranking Member. I will tell you at least from this part of the day is working on legislation it makes the penalties specific, high and enforceable against those 2w0 try to maliciously attack automobiles is an area our jurisdiction is not only appropriate but our need for action is immediate. If i may. With mr. Nabers permission yes. Its just a point that we have a history of driving open consensus standards that fully integrate privacy and security production and can do that in the context as well. Thank you. Thank you, mr. Chairman. Mr. Shapiro, you argued through a market approach to addressing privacy and security concerns raised by the internet of things. We all hope the companies will act responsibly and the market will punish. But suspect it clear the deposit sets clear rules as to what is and is not permissible . Thank you. It is important i think that Companies Know what is legal and not legal. The company know what is legal and not legal, but theres something between the two and thats what is right and what will get customers and not. Weve talked about trust for companies. Brand and reputation relies entire on trust. Hipaa was passed for medical privacy. Theres different information and how far it goes. Hipaa that ha down sides records have been lost, Vice President been transferred easily because of hipaa. There is a tradeoff. If you put too much of a line behind privacy, youre trading off opportunities for new Services Customers will desire. I think what companies have an obligation to provide is transparency and what they are offering and the consumers could be able to make a reasoned decision about what they are going to give up in turn for sharing their privacy. I think its premature for congress to say this is the line were drawing. Having the discussion is important. This is a National Consensus about what should be protect and what should not and what a consumer should be allowed to give up freely and make that choice. Should there at least be notice to consumers required . In terms of giving up what you if you are sharing something which you shouldnt expect normally to share i think there should be notice and it should be clear and conspicuous. You do think government should mandate notice. The trade commission has significant jurisdiction in this area. Theres a lot of private lawyers who will be happy to sue those that dont give sufficient notice. If the law is unclear which i do not believe it is yet. So the law is clear enough the ftc should require notice and we should leave it at that for the time being. It has taken step by step approach to provide sufficient guidance. I dont think theres a need yet. Theres not a need for congress to do anything because ftc should handle it so far. I think case by case is a good approach. This is a quickly evolving area. New Information Services all these things happening, rather than jump in we should take a breath lets assume congress chooses to disagree with what you said and chooses to north dakota privacy and security measures. In that case are there ways we should treat products connected to the internet differently from other companies that collect data or connect to the internet. Id like to think about this answer and perhaps answer in writing. The internet does easy connectivity quickly and rapidly. Clearly theres sometimes when knowledge is appropriate and permission, sometimes there isnt. Internet allows Police Forces to monitor crowds in a public area. It allows them to monitor conversations and see whether people are angry or not in a public area. It provides an opportunity to have video and see whether theres bad people fbi wants through identification of not only facial but voice. Theres a tremendous opportunity here in many different areas. To me whats most important we let it play out. If were going to legislate or youre going to legislate, i dont have that right that it be specific and narrow. Thank you. In your testimony you referenced Consumer Privacy protection released by alliance of automobile manufacturers. Can you briefly ski these in detail. Briefly and in detail. It focuses on things like transparencyish context, data minimization and clearly the notion of express consent for marketing. So we provide heightened protection for things like biometrics driving behavior, and geo location. We think it works. Its a floor weve provided to ftc so it is enforceable. I build on garys point, it applies to privacy and Everything Else as we enter an era of massive innovation. We should be careful and wait for experience. Im sorry . We should be careful and wait for experience. I think the fundamental challenge this ive got, the pace of innovation far outstrips the pace of regulation. Thats just a fundamental truism. Were seeing that in the area of distraction at nhtsa. Ill give you a specific example. Dont, given what said do you think principles you number rated in Privacy Protection principles should provide to all Things Technology or uniquely relevant to the Automobile Industry . Well, they are based on pretty generally accepted notions. They are more broadly applicable. My im testifying today on behalf of the Auto Industry and im reluctant to impose my judgment on others. I can give you my perspective on it. Please. Which is that saves me from answering other questions because my time is out. Ill be brief. Were talking about internet as if its a single thing but it is not. What is the privacy or security regime wed have in place for a windshield wiper versus a wash monitoring your closely. The s. E. C. Torl approach were taking is one that works. In addition we shouldnt assume this is a wild wild west and theres no one out there monitoring today. The ftc has been very engaged in this space and is actually taking action. I know youre out of time but if the chairman will i want to point out something important. In the Health Context i think youre about to see significant best practices that rise up. Ultimately whats happening is we arent seeing the kind of growth. Interesting study comes out only 15 of doctors are talking about wearable to their patients but 50 think they would benefit from those. Why the difference . Privacy. The question they have about privacy, how it will effect them when the data comes back. Aging population concerned about how they might be used for marketing or other purposes. They hate those late night telephone calls. I think the industry is working i know. We are working closely with folks to come up with industry best practices that give some more brightline. We believe ftc will be a good enforcement but thats where we are today. Thank you very much. My time has expired. Thank you. You didnt even get to the question what does the garbage man say to the garbage can and what does the garbage say back. I assume its you stink. Thats going to cost me. To that we go to the gentleman, mr. Moreno for his questions. Thank you, mr. Chairman. Mr. Garfield, today is estimated the average home that ha 11 wifi deviceses. In my home with tech savvy kids its triple that. Ill give you an example my children have a different taste in music than i do. So this just happened last week. Im in the study listening to this music. The next thing i hear is captain john luc picards voice saying this does not compute. My son found a way to get bought music and switch the music im playing compared to what he wants to play and tell me he didnt like this music. Its fascinating what these kids can do with this equipment. Be that as it may unprecedented boom provides significantly more wireless spectrum i think beyond what we realize at this point. That is commercially available today. Can you expand on implication ss how this might impact consumers as well as the overall growth of the economy. Both are significant. Your household sounds a lot like mine so i emphasize with you. I agree with what my colleagues said about the need for more, licensure on license in this context wireless is particularly important. Given the lack of optimization in the spectrum and how much curtailed by the government theres a significant opportunity both in appointment of iot and economically as well to more efficiently use spectrum and make it more available. So i think theres a huge opportunity there. The reality is its absolutely necessary. As we think about all of the physical world essentially being digitized, then the growth that weve experienced in the use of spectrum will explode. Its something we need to plan for participate and take action to deal with. Thank you. We realize now that i can raise my garage door up and down from 2,000 miles away, turn my lights on. What is to prevent the hacker stateoftheart thief from checking in on my software on my Computer System in my house, for example, when i go on vacation i will turn the heat down. So they can tap into my thermostat, read when the heat is reduced over a period of time, come to the Conclusion Even though there are lights going on and off all over the house that no one is there. This is open to anyone. What is the industry doing to protect us from that. First of all, thank you for your question and thank you for your work on a lot of encryption and privacy issues, congressman. First off, welcome to encryption. Encryption is a critical element preventing that from happening. Theres technological things can you do man in the middle, forms of attacks we can run. You know what once you get there it takes an enormous amount of power to break it. One of the questions the Consumer Electronics side of the world as well as the Cloud Computing side of the world