Transcripts For CSPAN Public Transportation 20140127

Chairman. We were looking at different ways to maximize our fuel efficiency and taking advantage of what we have in our country with the abundance of natural gas coming on in our state and country right now. I thought you could lead the charge on giving us the incentive to change toward natural gas vehicles. The uptick is going from diesel to natural gas. If you take that lead and we follow up with the state and School Transportation of the school buses, every state can transform the commercial what we call commercial vehicular traffic. Away from petroleum in to natural gas with you taking the lead on mass transit. Were going in the Public Transportation as far as our children. Then we follow up with our state vehicles and our state road vehicles. Most of the gas company convert them free of any contract. No cost to convention. The only cost we have is the first uptick going to a natural gas powered. If you can look at that differently it would help us. We can reduce about 20 to 35 . Im told our dependency of petroleum. A couple of thought senator. I think the agency has historically leaned far forward to promote the government natural gas buses. Los angeles is natural gas bus. Youre right theres an added investment cost going on. We obviously dont play in that im saying you set the tone. The federal government setting the tone to do that. If they do that and if we 50 states were able to do that. We would reduce im told, around 20 to 25 of our dependency. Basically all of these are done locally. County by county. They run you fill up natural gas commercial vehicle. They are running out of bulk station. Its the most doable thing we have to convert and remove about 25 of our dependency. Im not sure that was the strongest and most effect i have impetus to make it happen. Part of the is whether we as a matter of federal policy are going to fry to dictate the local decision. Thats something that i think the committee should debate. Im not saying dictate. The basically only thing im saying incentivize. You are giving us x amount of dollars to buy a diesel bus. Right. Lets say the same incentive you give us the money to buy the natural gas bus. Let us make the decision. The vast majority are done by formula its converted to the low and know missions gas law. So those incentives have been there. I believe we have advanced. We have made those vehicles commercially viableed a vied to make the manufacturing go in to the space. If West Virginia wanted to buy a natural gas bus and use the formula dollars are in versus the diesel bus they are eligible expenses. We not blink either way. Okay. Ill work with you. Im over my time. I would like to work with you. Absolutely. The converses will be done. Say that dot convention at no cost to the taxpayer. None. They have ten year return now. Thats fine. We can work. Okay we can mirror those. Okay. Look forward to it. Thank you sir. Senator schumer is on the way. Senator men then does take your time. [laughter] im happy to hear that, mr. Chairman. And i ask that a statement i have be included in the record. Meritter, i welcome my colleague from West Virginia interested in mass transit. We need more advocate as someone one of the leader of the fight here on mass transit and all of it. I can tell you we can use all the help we can get. Its constantly a challenge. Thats why i appreciate it. Its a challenge to understand the importance of mass transit we worked hard last year to ratchet up a little bit. We are nowhere near where we should be for the demand. I want to limit you administrator, for a very, i think, good job in the challenges. And i appreciate your approach to the whole effort nationally. In that regard, let me say that map 21 i work to create a new transit oriented Planning Program to provide grant for communities to create Mix Development and fairly federally supported transit. I sent a letter to fta this december with seven of my colleague including three on the committee. Its program we get the Program Underway so we have sooner results. What time line do you have for making the announcement . Senator, we are well aware of the program and cognizant of the Committee Members interest. And most notably yours as a champion for the program. In our prioritization scheme, i was asked what are we going prioritize given all the new requirement of map 21. As i said in my opening at the same statement. Its like seven years of policy in a twoyear bill. We had prioritize what we were going take on in what order. Also for the opportunity for the communities to come in to get two years of money and compete two years of money. We will have a competition for the full 120 million rather than ten one year and ten the next. We thought it would be both efficient also increase the opportunity for diversity of players to come in at the more meaningful level of money. Our goal is to start that process and get notices out the door in the spring and compete this summer. I apologize for the delay in getting to this. Its stacked up with a lot of other map 11 requirements. Which we had to put on the street rapidly. I appreciate that. And i realize what we did in map 21. Work with the chair we the subcommittee chair we butt a lot of things in there. But to the extend we have a Pilot Program and resources dedicated for it what i hate to see is that the Pilot Program doesnt ever get to fruition. No. Thats not going happen. Its strictly matter of time. All right. Next is the fta recently announced the next round of sandy transit funding. 3 billion for resiliency effort. According to your announcement its quote, intended to protect Public Transportation administration that has been rebuilt after Hurricane Sandy. My question is how high of a priority will fta place on protecting assets that were hardest hit by Hurricane Sandy and how you balance the considerations of geographic and Model Diversity versus protecting the area most devastated by Hurricane Sandy. Ive said before, at this table, in fact, but in other venues. Our highest priority in allocating the funds is going protecting the existing transit infrastructure that serve millions of passengers each day. Those systems and existing rail lines have in many cases flooded multiple times. As you know, some of the infrastructure that flooded under Hurricane Sandy had flooded one year earlier. Under hurricane eye irene and the president in asking this resiliency funding made clear he puts a strong priority in asking that funding on the taxpayer will not, going forward, have to pay to restore the infrastructure a second, third or fourth time. Its going to be our priority as we look at it. That also is serving 80 of the same traffic washed out. That is not going to maintain mobility in the face of the next disaster so those are going to be our priorities going in. It is hard for me to say now until we. Notice that takes into account all of the critical factors that we need to look at and when we get the applications and we will then have to rack and stack them to make sure the investments costs are beneficial and capture the most Critical Infrastructure on both sides of the river and also make sure that we are fulfilling the president s commitment to ensuring that we dont pay a second, third and fourth time to restore it. I appreciate it that and as someone who along with senators schumer led the fight was andy money and to make sure the transportation elements were a part of it i certainly believe that the consequences of systems moving large numbers of americans and to have a history of constant challenges due to flooding and weather related issues make a highest priority use just simply on the number of people being serviced and the reality that we have repetitive loss. We want to avoid the repetitive loss to the taxpayer and maximize they number of americans who are using the Transit System so while theres obviously a whole host of challenges that would be the reality and finally by me mr. Chairman mr. Wise reference the Rapid Transit projects. How do you see the role of the prt playing in the future of u. S. Transit services . These projects are very often appealed as a lowercost more flexible option but they lack some of the surface characteristics and Economic Development potential of others. Yes to both of those senator thank you. In the work we did actually for the committee several years ago on brt i think the result of that are promising but there are constraints as you mentioned. A bus is not a train and some people view it that way. That said, given the funding environment we are in right now and will be in for the foreseeable future i think a lot of areas c brt is a Good Alternative and one that is much more feasible to implement then rail which tends to be as i noted in my statement much more expensive. Now, that said there are characteristics of brts he implemented that make it stand apart from regular buses so you will see in the systems we visited seattle eugene and a few other places there will be nicer, newer more brightly you know painted buses. The bus stops will be above the ground. They will be not people putting the card into the machine but buying them before him. There are similarities to rail travel and the very sophisticated brts mouse a much what you we see here but now for example probably the poster child for the best brt system in the world is in bogota colombia where looks very much like a train. In fact you have to look closely to see the difference. The stations are very ornate and they look like very nice rail stations. You dont really see that here in the dedicated guideways are kind of a mixed bag. There are some that where they have more dedicated guideways than others and some of it is cost. I recall when he visited the system and Eugene Springfield oregon that there were a couple of areas where its just impossible to give a dedicated guideways to the system just because of the complicated intersection trying to navigate so we have seen some mixed results but i know that most of the people we talked to in the different systems really see promise with the brt. Its much less expensive and much quicker to implement and they have seen Economic Development. As i mentioned the one in Cleveland Ohio where they officials have seen four or 5 billion worth of development along the euclid avenue corridor that leads downtown up to the Cleveland Clinic area and another one in kansas city in a rather depressed area not too far from downtown kansas city. The true system has brought Additional Development and gotten some additional grants but the promise of brt would help spur development in that area. So i think and i think youll see a lot of Development Going on here in Montgomery County which is looking to implement a fairly extensive bus rapid route on the corridor quarter. A lot of them are seeing real promise and bus Rapid Transit. Senator schumer. Thank you mr. Chairman and i want to welcome you mr. Wise and congratulate you mr. Rogoff on your promotion. I know you from your days here. I know you are filling large shoes because your predecessor worked for me for nine years and now is going on to become d. O. T. Commissioner in new york city. I know that office well. I know she will do a great job. But im glad you are there. I feel very good about that. I have a few questions. First regarding capital grants under 5309. I know that under map21 we tried to streamline and accelerate block project delivery on both new starts and small starts. I know thats working well so i congratulate you on that. I have a couple of specifics here in terms of brt. First, albany our Capital District Transportation Authority is becoming a leader in brt. Albany is growing with a lot of economic activity. And they have three core cities troy schenectady and albany and all the People Living in the midst of those so it has metropolitan area with a little over a million people. Its not large enough for a subway system or rail system but bus Rapid Transit is made for it traded fits to a tea and i help them get as cdt eight grant plan for their brt. They have been working with fta regional offices in new york and they are poised to apply for ignition to a Small Starts Program. They are already working really well on this and they have a red line already from downtown albany downtown schenectady and they plan to more one to try and one out to the u. Of albany. Its great so are you familiar with the plan in albany at all . I spoke with people at cdt eight. We are pleased to give them that Planning Grant and you are right they are well along in the development. I think the good news here really as it relates to this project in all of the interested new entrants to the new starts in Small Starts Program is the agreement currently pending on the floor. You will recall last year the combination of the continuing resolution in the sequester below that left funding for the new starts in Small Starts Program in a place where we could not even fulfill our existing obligations that we have already signed up. The appropriations bill currently pending before you is through the combination of on obligated balances and new appropriations gets us to our request level which means we are back in the business of looking at new folks to admit. Speak and i have to commend me you will work personally with cdt a and do everything you can . Sure. When they make the requisite request we see no stopping to that being a successful project. The second one is buffalo. Buffalo has experimented with different kinds of transit particularly the main Street Project which was a flop and we are helping them undo that right now 30 years later that day too are made for this type of system. Again similar size and a little more than 1. 5 million in the metropolitan area. They want to study an extension of the buffalo Transit System out to amherst which is the eastern suburb and where the university of buffalo is in now the university of buffalo is in the medical corridor so its a perfect situation. Again cannot have your commitmencommitmen t to help them get into the Small Starts Program . Sure. We will look at the applications as they come in but here again i think its fair to say that the nft a is taking time to look at what they want to do and i think mr. Wise pointed out some of the benefits we can see when we do Rapid Transit the right way which is to say all of the full investments the unique vehicles and signal priority which means they almost always get a green light when they could assemble. Signal. You can move quite a few people at a affordable cost compared to rail. Do you seamy barriers in the way theyre . As you pointed out there are some geometric hurdles you can always overcome but there are also great opportunities and i think whenever you connect large employers Like University and the help center those are the kind of sentiments that we see grace great success. That would like to go to gateway. As you know new starts is really helpful for the east side access to the largest programs in the country is supported. Theres another being developed on the western and as amtraks gateway program. To build two new tunnels under the hudson river into manhattan. The current tunnel is 100 years old and not flood proof. They are at full capacity. Its not just a Passenger Rail project but a critical transit project. New Jersey Transit runs twothirds of the trains from new jersey to manhattan. We have our end a fight with governor christie over that and i had federal funding so now we are going back at it because the need for tumult is crucial. So i had three questions on the gateway program. First you agree that its a critical Passenger Rail and a transit project . Second you believe it could be a candidate for the new starts program and third, do you need legislative authority to admit gateway into the new starts program . Let me take those in order. I would point out that we have had a painful history and trying to get the necessary tunnel link capacity under the hudson and the time off that are currently serving an extraordinary number of passengers both on on the amtrak site in new Jersey Transit side. Those tunnels are over 100 years old. Do i agree that its an essential investment . We absolutely must do something about those. I believe we are approaching 110yearold tunnels. They not only constrain capacity but it is certain point they will become a real safety risk. And you know think about the people that will result if we were to lose that capacity all of a sudden. Could it be a candidate for the new starts program . Yes it could do what we would need is a project sponsored to come forward and do the Development Work and most importantly with the necessary local match. Your final question, do i need special legislation to help make that happen . We will take around turn on that but i dont think so. Obviously the entire Program Expires at the end of the year but i think the question you may be alluding to is how do we deal with the new start project for which amtrak is a participant . I dont know if i would need legislation for that. You know we have had amtrak do some necessary investments in this part of the east side access. They are responsible for the herald interlock which is a large portion of the project so there may we be a way of doing this without special legislation but if its needed we will simply call it to your attention. You dont think it will be . I dont think so on its face. Speak and you get back to me in a couple of days . Finally the montague tunnel. As you know we have a real interest in restoring this time ill. Give me a status report on how its going and how the repair is going. You my understanding as things are going along well. This is one of benefits that you get him closing the entire facility is you do not have to worry about the safety risks posed by the workers. You have the ability to put all kinds of equipment in the tunnel and you dont have to move trains through the same time. I have heard nothing that they are off schedule or over budget and indeed in some of these tunnels we are making what we call a local resiliency funding some investments to allow them to move utilities to the roof of the time also should we have flooding again we wont lose all the signal capacity. Though i had . Yes, sir. He i want to thank our witnesses for your testimony today. This hearing is adjourned. [inaudible conversations] on the next washington journal, todd zwilich will preview the state of the union speech. Then, Rebecca Adams on the role young people will play in the Health Care Law and how many have signed up for health insurance. A discussion about the 9 billion dollars spent on the Early Childhood Education Program head start, with olivia golden. All that on washington journal , live with your calls and comments at 7 00 a. M. Eastern on cspan. Bill and hillary began their teaching careers at the university of arkansas. Hillary clintons career began inside this building. She was a professor she taught classes like criminal law, trial procedure, and the prison project. Hillary was wellesleyeducated, Ivy League Law school grad. She had worked in d. C. Nixon had been impeached about two weeks before she taught her first class. Hillary clinton, tonight at 9 00 eastern on cspan and cspan3. Also, on cspan radio and cspan network. The d. C. Circuit court heard a case on debit card swipe fees charge to retailers. Under the durbin amendment of the doddfrank act, the Federal Reserve can place a cap on the fees. The fee was set at . 44 by visa, mastercard, and others. It was reduced to . 21 by the fed three years ago. A group of retailers argued the fees were still too high and won the case in a lower court, the decision is being reviewed by the d. C. Circuit. This is about one hour. Good morning, this involves whether the fees are foreclosed by the act and whether or not they debit cards currently operate over two made authentication methods. Signature or pin based on the atm infrastructure. Signature is based on credit card infrastructure. It is easier for cards to be enabled with different pin networks we have heard the briefs, we understand how they work. We dont have that much time. Before our role was effective, the networks could have exclusivity clauses in their agreements that prevented merchants or issuers from having multiple options available on their cars in some cases. To put an end to those exclusivity arrangements section 920 b1a requires that a Payment Network cannot restrict the number of networks on which a transaction might be processed to less than two unaffiliated networks. The regulation does it in the very words of the statute. This is supposed to focus on ensuring two unaffiliated networks for each transaction not the District Court, focus on that. We understand how this works. Then i want you to get quickly to the exchange. The language of the statute does not require two unaffiliated networks for every transaction. It is focusing on affirmative restrictions imposed by the issuer or the Payment Card Network. The language, as i said, we have to have regulations providing that the issuer or network shall not restrict. Now, what the merchants say is that the important word is transaction. In that paragraph. The important word is really restricts, it is looking at restrictions imposed by networks and issuers on the number of Networks Available for a transaction. The network and issuers are not the ones that restrict the number of now that there is a minimum of two Networks Available on every card the networks and issuers are not the ones who are restricting the number of Networks Available to fewer than two. In our view, the District Court misread the statutory provision. Which is aimed at restrictions by issuers and merchants. [indiscernible] maybe you could start with explaining the fixed cost issue for us and how fixed cost can be a, lowcost how fixed costs can be in criminal costs can be incramental costs. The main point is that we are not limited in the statute to incremental costs. This is the misunderstanding of the District Court. The boards instruction from congress is to establish a standard where the fees will be reasonable and proportional to the costs incurred by the issuer with respect to the transaction. That is the main goal here. Reasonable and proportional to the costs. Congress then provided additional instruction about things to think about. But did not say, as the merchants would have you believe, that those are the only things that the board can take into consideration. We have to consider little one and little two do not equal 100 . Between must and may not, there is a big empty space, may. How can fixed cost be related to a specific transaction . The board looked at costs that had to be incurred in order for an electronic debit transaction to occur. For example, if you have a server over which these transactions are implemented, if you do not have the server you do not have the transaction. That is going to be a cost a cost incurred by the issuer with respect to the transaction. I would the board did not define in criminal costs incremental costs. Normally long run incremental costs the move would not even involved one of the difficulties was with a word like incremental, there is not a standard definition. Incramental costs is clearly a subset of incramental costs. People some people, the merchants were thinking each individual transaction, the incramental costs of that one transaction is what congress had in mind. We determined that we did not have to enter that thicket and define incramental costs. We looked at all the costs incurred other than the ones that we are prohibited from looking at it has to be fixed with respect to authorization clearance, and settlement. No. I am asking. No. Unless it is prohibited by roman unless it is prohibited, we can consider it. There are things we must consider, those are the ones that are in criminal costs. The transaction monitoring, network fees, do you consider these to be network fees are not fixed. With respect to authorization, clearance, and settlement. What other fixed costs are you talking about . Labor costs, Computer Software and hardware, those are the types of fixed costs in the you are right, those are authorization clearance and settlement we are not required i understand that, i am trying to understand your answer to my question on what kind of fixed costs we are talking about. You do not need to suggest all fixed costs. I thought it was mostly about fixed costs related to authorization, clearance, and settlement. Let me ask you about your definition of the way the board interprets specific to a particular transaction. The board said all costs necessary to complete a transaction. When we get to transaction monitoring, the different categories, the board has a different definition of the same phrase specific to a particular transaction, it needs only per transaction costs, not systemwide costs transaction how can the same phrase mean one thing for fixed cost another thing for monitoring costs . I am sorry, your honor, i do not think we changed our this reading here. What we are saying about transaction monitoring costs is that they are part of the authorization process. There are a lot of parts of authorization that involve checking to make sure those costs it acf costs, is that the point . Yes. Between Fraud Prevention and other aspects of monitoring as i understand it, transaction monitoring is a part of the authorization process that cannot be divided up into a part for fraud and a part not for fraud. The reason i raise the question, there is a provision on Fraud Prevention of that is subject to procedures and the argument is made that Fraud Prevention provision enables issuers to avoid that. What we would say, what we have done in the separate fraud adjustments is to limit that only two programmatic activities that are intended to reduce fraud. Not in a particular transaction, but in over the entire program. What would be an example of something in the latter category, the specific transaction category. Among other things, that would be the transaction monitoring that we included within the interchange fees standard. Included in employee training compliance programs perhaps public announcements and our rage. And outreach. It requires that the costs be subject to certain standards set by the board. Why would that be true of monitoring specific transactions . I assume you are talking about computer programs that spot unusual purchases. Why wouldnt that be subject to standards . A5 does not speak about it does not direct us to limit the to include everything that could possibly relate to fraud. In fact, i agree with that therefore, because transaction monitoring fits within a4 and a3, reasonable and good fortune incurred by the issuer reasonable and proportional to the costs incurred by the issuer. I agree. A5 does not require all fraud monetary to be there. It does have to be subject to guidelines. I would have thought that the costs that do not have to be included there do not have to be subject to those standards and there should be a difference between them. The board could have put these transaction costs into the separate fraud adjustment. In our view, the board was not required to do that. Costs in a2 and a3 none under a5. There are costs that relate to Fraud Prevention not related to authorization and settlement. These other things that we have been talking about that are broader, programmatic does that seem odd . That congress would have wanted Public Service announcements to only be done through regulations approved by the board Everything Else does not need to comply with Fraud Prevention regulation. That does not make sense. The line at the boardroom was between costs the line that the board drew was between costs of authorizeing the transaction, a3 and other costs, a5. We drew the line there. I dont under i understand the principle. I have not heard that yet. Your honor, i cannot get inside the mind of congress. I am trying to get inside the mind of the board . [laughter] the board is what we are trying to review. The mind of the way we read the statute was to enable us to put in the energy and transaction fee all the costs related to that are incurred by the issuer with respect to the transaction. That includes this transaction monitoring element so we included that. I know that is not answering your question about why congress would have made that c hoice. I was not asking about congress i was asking why the board distinguish between these two different categories. Let me take you back to fixed costs. Lets assume you are right there are fixed costs related to specific transactions that can be included. Help me understand this is another line drawing question, how the board distinguish between those who included those included and those it did not. It allowed them to include Computer Services and Internet Connection fees, for example. But not production of the cards themselves. One of the Things Congress directed us to look out was the comparison to check that clears out par clears at par, the provision of the card is a good example of the way in which the board at that. And that check transaction world, banks are not reimbursed for producing checks, consumers pay for it. Banks are not reimbursed through the clearance system. For that reason, we determined the card itself, the price of the card, creating them card was not one we were going to include. Let me try another one. That is a good point. It includes, the boarding colluded fixed trees it includes, the board included fixed fees charged by to process but excluded board overhead. Overhead was something that was not sufficiently at the level of it was not incurred by the issuer with respect to transactions. Those overhead costs would exist anyway. For that reason, they were excluded. Just one more question. Suppose we thought that some of these specific items like text costs fixed costs or its transaction monitoring should not be included or there was not sufficient explanation. What is should we vacate the rule . The issue of vacating the rule was hotly discussed at the district level. The District Court determined it was going to keep the rule in place while the board worked on a revision. I would think that would be the appropriate thing to do here as well. The industry and all of the players in this, in the debit card world are relying on this rule to limit the fees and certainly, Congress Wants fees limited from where they had been before, double at least the . 21 fee we have imposed here. We would say that at most, the ok, thank you. May it please the court. With the courts permission, i will reserve two minutes for rebuttal. First to some of the questions judge tatel uber asking with respect to interchange fees. The court found that the language of section 920 is so clear that under chevron step one it is impossible to read the language of section 920 two including to inclusede the four categories of costs. That is incorrect, section 920 contains one mandate that governs primary conduct, it is included in a2 and a3, it mandates that interchange fees shall be reasonable and proportional to the costs incurred by the issuer with respect to the transaction. There is no way that that language can be read to exclude the four costs at issue in this case. We think our position is that there is no way that that language can be read to exclude any of those costs. And for that matter, some other costs the board did not include. Related to specific transaction the costs have to be related to a specific transaction. Yes. These four categories we think they do that that standard. I will tick through. Network charges, the amount the issuer has to pay the network in order to engage in the process of authorization clearing and settlement are clearly particular to a specific transaction, they are charged on the basis of that transaction. What about fixed . The statue does not talk about fixed costs, it talks about costs. With the board did was to say we are going to include what they Call Transactions processing costs. Those costs, whether they are average fixed or average variable that are specific to particular transactions and necessarily incurred in the course of effecting a transaction. I was going to make the point that judge williams has already made. The board we think all of these costs are in criminal. In we think all of these costs are incramental costs. Whether one calls an incramental costs incremental under your theory they just have to be related to a certain transaction. We agree with the board that i and ii do not define mutually exclusive universes and there is another category of costs. Specifically, costs that are specific to transactions but are not incremental acs costs. Our further submission is that the four categories of costs including fixed costs are incramental acs costs. What about let me make my point about fixed versus average variable. When the board when we are talking about fixed costs specific to a particular transaction, hardware, software, personal necessary for that. Whether one views those costs the board recognize this, as fixed or variable depends on the time period and volume range you are looking out. The statue talked about incremental costs. The costs at issue were from zero transaction to one are huge. They might be less or if you are looking in terms of extra pennies for transactions 2, 3, and 4. If you have a system that can accommodate 20,000 debit transactions and a day and your volume goes up to 20,001, those additional costs and hardware, software, and personnel are incremental as to that transaction. Which is why we think the board is right in saying we do not have to decide which definition of incremental we need. What about a5. Transaction monitoring and Fraud Prevention, that is one. There are quite a few in the regulation, regulators have drawn a arbitrary distinctions between costs. Why should the board you are right that agencies have made an effort to draw lines, that may or may not be the best place. The question is whether the line that the boardroom was within its confidence given the dictates of the statue. What the board said, fraud comes up in three ways in terms of costs. Fraud losses, nobody thinks that has to do with Fraud Prevention. I can as just fraud losses, but it seems that these fraud losses are the paradigmatic costs specific to a particular transaction. Then there is Fraud Prevention, merchants say a5 deals with Fraud Prevention. There is an element of the transaction monitoring process that serves Fraud Prevention, which is to wreck. What the board said it is, with respect which is correct. What the board said is, the Fraud Prevention that occurs incident to a specific request to settle a particular transaction, that is included in costs that are recoverable. I see that the language covers that. In two categories. The upshot of the boards decision is to remove it altogether. From one category that appears to cover it and put in the other. The impact of that complying with the boards rule. I would have to disagree, you and i could either agree or disagree about whether the distinction that the boardroom is the best one. What they said is we are going to distinguish between Fraud Prevention activities in general research and development on how to harden the system or to give an example, i got an email last night from my card company asking me to call. They told me they had charged my wifes card for auto repair services, i kid you not, in toronto, ontario yesterday. Was she there . [laughter] the person did acknowledge that there were also charges at the white flint mall. They thought this was suspicious. That call goes in the a5 category, they had already processed the thing. They were calling, under guidelines from the board, they were calling to ascertain whether something needed to be done with the duplicate card. Why cant the board do one or two things draw a line between the two types of transaction monitoring Fraud Prevention another. And either put the pure Fraud Prevention in a5 subject to compliance with regulation. Or say that if the issuer wont do it that way, it can put it in the transactions monitoring, that is also subject to a5. I am not arguing that the board could not have made that choice. I think the choice the board made from the issuers perspective, we just want to be compensated. The one thing i think we know for certain there is no intention and congress to simply say we are not going to allow issuers to recover falluja mcauliffes. The merchant there is no intention in congress to simply say we are not going to allow issues to recover costs. The notion that senator durbin thought that issuers should be transferring costs onto small depositors is fanciful. Thank you. Thank you. May it please the court. Lets stay with the interchange fee, if thats all right. Sure. Just press the button when you are ready, bottom, to your right, down, down. Can someone help him . See the button . Are you suggesting it is too low. I had already done that. Sorry. Your honor, the notion that there is a third bucket of costs, a category over which the board has discretion is incorrect. Can i suggest, if you are going to have a discussion i think you might want to save time. You can say that we both think that the panel thanks that the critical facts is there is no comma. The absence of a comma makes it a restrictive phrase. You should assume you are welcome to spend your time you should spend your argument under the assumption that we think there are nonincremental acs costs that are turns usr ansaction specific that can be included. [indiscernible] you ought to move on, you are not going to win on chevron step 1. We went on either stop. Judge ttaatel is saying focus on the real issue. The problem is the narrowing of the second category by the board. The board has interpreted, not particular to a specific transaction, they have done the opposite of what the statute and 10 of what the statute intents. Of what the statute intends. It is the narrowing other than the which and at at issue, what does the statute support . Other than the which that combination . These are two statutory phrases that work together. Reasonable and proportional to specific transactions. Yes, and the very next section says in determining what reasonable proportion to the transaction means, you have to take into account these considerations. These two considerations, the board took them into account now there is another pot of costs that do not fall into either one and can be included. Other than that, what in the statute supports your position that these costs at chevron 1 cannot be included. Particular and specific that is what we are saying. What the board has done, to get to understand how the board clues fixed costs. The costs necessary for a specific transaction to be executed are includable, you think that is barred in chevron one . Specific to a particular transaction. And issuer has to have a computer the computer handles more than one transaction. Yes. The poet is that the point is that, if a particular transaction can be processed without changing the costs those are not costs that are specific to a particular transaction. Judge tatel you point out the boards inconsistency on page 65 and page 66, talking about a5. The borst says when congress wanted to speak about transactions as a whole, it used different language than a4. The board is also interpreting a4 in the same way. Is your argument that are you now arguing that only incremental acs costs can be included on that these are not that . Or if incremental acs costs can be included, these are not those. I am not saying these are incremental acs costs, the board is not saying these are incremental costs the board has not even defined what a incremental acs cost is. You cannot defer to the board we are not understanding what you are saying, are you saying that b ii, i equal 100 . There are another set of costs . I think the equal 100 . When i tried to tell you that at the beginning that is your chevron one type argument. We try to tell you so you do not waste your time, not of us buy that. It is the same argument under step two. The fixed costs. If you keep fighting the fight that i and ii capture the entire universe of costs, you have a difficult argument to make. If you persist that is your call, you are wasting time. Washington journal all he am saying, even if there were a third category, these costs cannot fall within it. Your argument has to be, the boards interpretation is unreasonable. Chevron 2 you have to make the argument it is unreasonable for the board to say that costs specific to a specific transaction are all costs that make it possible for that transaction to occur. Your argument has to be that that is reasonable. Yes, your honor. Is that you are yet . Is that your argument . It has always been our argument. Part of the reason first of all, you have to look to legislative history. The legislative history supports this you are not to chevron one. If you look at the statute as a whole, it is clear that congress did not intend that these sorts of costs could be recovered. The debate over which that other than that, what supports that . The division of a5 itself supports it. What about the other costs they are talking about apart from the costs that might be within the a5 category . Of heart from those fraud costs, there are other things that are talking about. Fraud losses are one of the things take fraud out, other costs. Fixed costs. With respect to authorization, clearance, and settlement. The provision comes in, the purpose was to Tell Congress to keep in mind that since 1916 checks have been clearing out at par. And that is why they did not include the costs of producing the cards they are comparable to checks. That is not what the council the fed argued in their brief. That is what she just told us. Isnt that what she just told us . They has said something different, they did not include those, they occur without regard to whether there is a transaction. That is how they have always argued this. Counselor, trying to get into this transaction bit. Suppose you have a machine that is useful and can handle one billion transactions. Each transaction incurs a cost of one billionth of the machine. How do you think the statute requires that to be treated . Marginal cost is actually corresponding in the very short run. Incremental cost is effectively zero. Zero is the answer . Yes, that would be the answer. How does that produce reasonable charges . The fed is saying we can disregard the use of the term incremental. No, you are wrong. Incremental clearly that might be if the fed had gone there, but they said here we do not have to define that. They did say a distinction between variable and fixed cost is a matter of the time horizon you are looking at. They chose the time horizon that encompasses fixed costs, what is wrong with that . Your honor, again, the design of the statute was to assimilate check clearing. I we believe that is intended to put downward pressure on fees and not allow these sorts of things. One of the things ret ailers lose on bad checks, do the board introduce that at all . If it did, when the fees if it did, wouldnt fees skyrocket . That, there the board took those into account. Well. I am not sure it did very much. That creates a it seems to be nowhere near. I am sorry, i do not understand. 107 billion a year on bad checks. We have charges here that dont add up. No, not the interchange fee. I want to go back to what we said in response to question when youre answering judge williams. It has to do with the word incremental. You say these are not incremental. If you are wrong about the reading of this statue, of a4 d,. If there is a category of costs related to a transaction that can be included that are not incremental acs costs, they do not have to be incremental, they only have to be related to a specific transaction. Right . Correct. Why did you answer judge williams by saying fixed costs maybe because i am pigheaded your honor. You agree, they do not have to be incremental. If there is a third category, they do not have to be incremental. Again, the focus of this entire exercise is on processing costs there are plenty of things that the board included that were not processing costs. We think como new student groups we think, at least in the categories we have identified can we talk about exclusivity . Well, you go ahead. There is the nonexclusivity provision. What the board has done is to use the card as a proxy for the transaction. We believe that fails under either chevron as well. The statute says the board shall take steps that prevent the banks and their networks from restricting the number of networks on which an electronic debit transaction may be processed. And you are focusing on the word transaction. But the operative word is network. Fewer when you were in Elementary School did you diagram sentences . If you diagrammed this sentence, the phrase i which an electronic on which an electronic transaction, it modifies network. The issuers and networks, the rule is setting up a system in which the issuers limit the number of networks on which a transaction may be processed. One of the things the number of networks the number of networks on which a transaction may be processed. So, the very rule that the fed has adopted violates the statute. The reason for that, as congress recognized, recognizing there are different methods of authentication of a transaction, congress recognizes that when a customer goes to a merchant and presents them card and says i want this processed as a visa credit transaction, the margin erchant has no choice but to process that on one network that is what the rule sets up. Any new authentication method [indiscernible] all the issuers have to encompass that network. Our argument has never said it needs to be two of the same sort of network. What we are saying is that there have been roles historically that prevent signature transactions from being processed over pin networks and vice versa. Those cross routing rules those rules are out your honor, we would be happy if they were. Those rules still exist. The rules that have been cited to this court by visa and mastercard prevent a pin transaction or a signature transaction from being routed over a pin network those rules are still in place. The board has cited limited exceptions that allow within a pin network a pin to be processed without a pin. Its still it still prevents cross routing. We do not believe the feds rule prevents cross routing. The banks i am sorry, the fed says that when a customer makes the election, it is the customer determining routing and not the issuer. Visas rules require that a merchant honor the customer choice. If a customer says i want this processed as a visa transaction that transaction has to be processed as a visa transaction as a credit or signature transaction. The merchant cannot route. It is visars rules that set up this whole problem. This rule allows those sorts of rules to stay in place, if you look at footnotes 160 and 165 there will only be one signature option under this rule. For each transaction, it is always going to be visa, mastercard discover. Whatever that Signature Network is. The rule, basically memorializes that. Judge williams, we would be very happy if cross routing were prohibited, any pin network could process a signature transaction. We do not believe that is the case. In 2. 5 years of litigation the first time that representation was made by the board was and that reply was ubin their reply brief in this court. We think this is a post hot rationalization we think this is a post hoc rationalization and we are not comfortable. If cross routing were allowed if a pin network could in any circumstance route a signature transaction, it would be fine. It would meet the statutory requirements. We do not think it does and we think a close parsing of visas rules does not provide for that, your honor. Our position is that, yes network and issuer and restrictions are part of the rule. But it is the network and issuer that are restricting the choice for the merchant. No more questions, your honor . Thank you. Counsel you can take two minutes, ms. Wheatley. I wanted to respond on the issue of network exclusivity, i am puzzled by his statement. Our rule specifically permits if there is a new network out there that can figure out how to do sig and pin transactions at the same time, that is happening now, our rule says a Payment Card Network may not limited and issuers ability to contract with that network. 235. 7a3. Any restriction visa puts, if there is a rule like that, it violates our rule. It would not comply if it existed. We the boards rule provides that networks and issuers cannot restrict to fewer thatn two the number of networks that can operate a card. If there are restrictions put on the ability to operate one of those networks, for example, a merchant chooses not to have pen technology, that is not a restriction that this statute is addressing. There is no need for it to be. As far as cross routing rules, i am there are no restrictions on cross routing. The practical restrictions that result from the fact that the Technology Infrastructure is different, those are not restrictions imposed by networks or issuers. Thank you. That completes my time. Mr. Waxman . Do you need a minute or two . I am happy to answer any questions that the court has otherwise i am happy to waiver bottle. Waive rebuttle. Thank you, the case is submitted. Today, q and a with jehane noujaim, director of the square. Followed by washington journal. Later, the house of representatives gavels back into session. Congress gavels back into session later today, the house is in at noon eastern. On the agenda, a bill that would ban federal funding for abortion. Roll call votes are scheduled after 6 30 eastern. The Senate Returns to consider consideration of Flood Insurance legislation, a vote is scheduled for 5 30. Watch the senate on cspan2. We bring Public Affairs and events from washington directly to you, putting in putting you in the room at briefings and conferences and offering complete coverage of the u. S. House, all as a Public Service of credit industry. Cspan, created 35 years ago and found the by your local cable or satellite provider. Follow us on twitter and like us on facebook. This week, jehane noujaim, the director of the square. Jehane noujaim, when was the first time he thought about being a documentary producer . I went to college to be a doctor, like a good egyptian. I took up chemistry and realized there were other People Better suited for the job than i was. I disappeared into photography and film labs and loved it. I started thinking about it and, when i left college, i went and worked for unfiltered. We sent cameras to kids and we would edit their stories. It was the prelude to youtube. I entered my own film, where i collaborated with incredible amenities filmmakers who had been doing this a long time. Ive met them and they were a couple who had been doing this for years. I thought, you get to go wherever you want to go. Basically, meet whoever you want to meet. You put yourself in situations that you would never get to experience. It seemed like a world of Lifelong Learning and it was something that i wanted to do. I want to show a trailer of the documentary from 2004, the control room. Before we do this, give us the timeframe of what you are doing. I filmed in 2000 and three 2003, i was living with a friend from college. Sorry, i do not know what is wrong with my throat. She was watching it on fox news. I would wake up and fox news would be talking about duct taping your doors and in egypt where my family lives, it was a different story being told about what is happening. I thought, how are people supposed to commit it with each other when their understanding and what they are getting on the news is so radically different. Where can i do work and i go to be in the center of news creation where can i go to be in the center of news creation . You had Central Command and, 10 minutes away, you had out to zero al jazeera. You could be in Central Command. Central command for the u. S. Military . That is right. Lets watch this clip and you can explain more. We know that they have a pattern of playing propaganda over and over and over again. [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2014] the captives are in violation of the geneva convention. The decision to broadcast this material is deplorable. Yesterday, on American Television i can tell what they are showing. I ditto what theyre not showing i can tell what they are not showing by choice. When a bomb goes off, they grab women and children and pretend it is them. They are working their audience. Fox plays to american patriotism for the same reason. The control room, from your experience, what was the result . What did you find out that you did not know before you did it . I go into these films with a lot of questions and come out with more questions than answers. What was incredible was that we showed it in both the u. S. And in egypt and across the arab world. People saw that people had empathy for josh rushing, he was an incredible character. He is the military guy. He starts talking about the iraqis as human beings and says, it makes me hate war when i see these kind of things. I see someone in a military uniform after the attacks in afghanistan and iraq. People who would never want to speak to a person in a uniform were excited to speak to josh because she showed empathy. The same thing happened in the United States. When people met the reporters in the film, the reputation of them was people saw the two journalists that i followed in the film and saw a human personality i cared deeply about the coverage of the area and people connected with them. They saw a human face behind nice new stories and who was creating them. You know, it was a fascinating film to make. I learned a great deal about what was happening in those early days of the war. The showing of the film was incredible. Josh rushing was interviewed on fox news. Underneath his face was a huge sign that said traitor . Why . He was somebody sympathizing with the enemy and saying that these were human beings. We are there to free the iraqi people. Did he go to work for them . At the end of the story, he got in trouble from the military by speaking out and doing interviews for the film. He took a job with al jazeera. Still there . He thought he could bridge the understanding and he is someone i am proud to call a friend. What services he an is he in . The marines. It was his job to be dealing with the press. That is why he got close to that story. His job is to deal with the arab press. I was considered, as a student coming from egypt, and working with i was not a student but, when we met, he said that somebody from the American University has called me to talk with you and he assumed that i was a student which is why he was a symptom assigned to me. You mentioned that having an egyptian father who expected you to be a doctor it is mentioned that your father is a syrianleboneseegyptian. My grandmother is syrian. My grandfather is lebanese. I am half egyptian. Would you parents live where do your parents live . In cairo. How did they meet . Friends had set them up and my mother had broken off an engagement. They said that this was somebody to have fun with and not take seriously. That was my dad. My father is in finance. Are you an american citizen . Yes. I am a dual citizen. Dual citizen. Dual citizen. I was born in washington dc at George Washington hospital. They moved to kuwait. We moved to cairo when mubarak took over. I left for college when i was 16. I had a year of high school in boston and went to college at harvard. We moved to new york after that to do film. I went back and forth between new york and cairo ever sense. Since. Lets run the trailer. Millions of egyptians came down to the streets in protest. This uprising defies definition. People are gathering. They are large demonstrations against mubarak. [speaking egyptian] the secretary [speaking egyptian] what are we seeing . We met a few of the characters from the film. You met the lead character, who takes you through the film. You met someone who was with the brotherhood for 25 years. He starts to question his relationship with the brotherhood. And a wellknown actor. His father and grandfather were jailed by previous regimes in egypt. He is an incredible person because she is articulate about what is happening at a time when things were very confusing. These are the main characters and it is a personal story that shows you the human face of what was happening and the human story behind the headlines. We follow these three guys, and human rights lawyer, a young filmmaker, for three years. How did you pick the people . You pick people that do not bore you and excite you. They take you places that you want to go and you know you want to travel. These films, you never know if they will be seen anywhere. You want to feel like you are learning something as a filmmaker. You hope that if you are learning, if you are surprised if somebody is making you laugh, that translates to an audience. I met them in 18 days being there. I met my entire crew in the square and all the people the film gods were really smiling down on us. It was incredible that we have ran into those people. There was a lot of hanging by the fire and talking to these people to get to know them. I found, pretty quickly, that these were people from diverse backgrounds. Yet, their commonality is a principled nature and being willing to put everything on the line to fight for changing the country. There is a lovely story where he talks to a cab driver. The cabdriver told him that it is either you take me or me and my grandkids. It is better that you just take me. That was the attitude at the time. Where is the square in relationship to the river . You have the nile. The square is next to the river. It is a very central place. You have the river on one side. You had the Egyptian Museum on the other. You have the arab league. You have the largest bureaucratic building, any paperwork you want to do, you have to go to that building. You have the university of cairo. You had an American Embassy a couple of minutes away. One funny thing that happened was that, when there was an attack on the occupy movement in california, there was a march to the embassy. Where do you sit, politically, as to what you want to happen in egypt . You know, what people are fighting for our basic rights. They are fighting for human rights, you know . A country where you have economic freedoms, personal freedoms, freedom of the press. These this was not the country and we lived in. We had been living under emergency law. If more than 4 people gathered and spoke about politics, you can be arrested. Living under emergency law, as you know. Elections have been a sham. Free and Fair Elections have not existed. Elections are not the only thing. It was about building the pillars of democracy and that needed to happen. Heres a clip from the documentary. It is 144 minutes long. Hassan on power. The young kid, where did you find him and what is his background . He is a representative of the people who came down to that square. The population in egypt, in many places, where the arab spring was happening, 70 are under the age of 40. He is representative of the people who want to change their future. He grew up with a mother who was a vegetable seller who was illiterate. His father died when he was a little boy. It was important for her to put her kids through school. He ended up with two years of journalism training. He was i was making a news piece about him and i fell in love with him. He has a charisma and a joyful mess and street smarts. He projects a lot of what happens at various points. How long did you live in the square . Our cameras were there over the stretch of three years. I was there most of the time. Every time there would be a citizen. Did you live there . Oh yeah. I was sleeping there. If youd asked me if there was any way i would be sleeping into a traffic circle, i would have said that you were bananas. There was no way that this would happen. It was incredible and an incredible backdrop to make a movie and. In. You were arrested or detained how many times . Twice. I was arrested once. My hero was the human rights lawyer you meet in the film. She was awarded the rfk award for human rights in washington. She has someone i have known since kindergarten. She tweeted a picture of me and a person in a Police Station saw me. They tended to disappear you. It is a way to get people off the streets. If you worry at family enough times, that is a way to do that. She got me out after two days. Here is more from the documentary. How much of what we see of him was acting on his part . When you follow someone for three years, they start ignoring you and dont think about the camera. That interview is the only time you see him being interviewed on camera. He wears his heart on his sleeve. None of it is acting. All of it is following. I try to make the viewer feel like they have experienced and been in his shoes. They experienced this revolution live and had to make the difficult decisions that these characters make. That is inspired by penny baker and chris, who made films in the 1960s, where there is no narration or voice of god telling you what to think. You feel like youre sitting in the back of the cab with bob dylan and experiencing those moments. It is the closest that you can get to time travel. I hope that, with this film, people can watch this 50100 years from now and feel like they are experiencing it. There will be many films and retrospectives, where people will look back and give interviews. What cannot be created is a feeling of being there. When you were there under mubarak, what was the feeling that everybody had . There was a fear. There was a fear of what you were speaking and what political thoughts were of the president. People would not speak about what they actually felt. There was a fear that they did not know who they were talking to. There was also a feeling that you could not you did not have a hand in your future. That was difficult for most people to accept. If felt like depending on the class you are built into, your destiny was determined. How much warning did you get that you wanted to have a career and follow this . This was built out of the square. I made a film called egypt, we are watching you. We were trying to videotape everything and all the corruption that was happening, all the people being shunned away from voting stations and uploading that online. It was on bbc and international channels. I have been following the protest movement and spoke to the characters in the film. At the end of 2010, in the summer of 2010 and what had happened that summer, there was a young man who had been arrested and brutally tortured and killed by the police. A Facebook Page was made in his name that was signed onto by millions. You could feel the rumbling of things happening. Tunisia exploded. People said they would go down and massive numbers on january 25, 2011. There was no place i wanted to be more. At the same time, there were many cameras in the square on the 25th and i had experienced many protest before. I knew that the whole country would not change and it would take time. I had been invited to davos. The leadership of egypt was going to be there. Meaning . The mubarak leadershiptypes . Yes. I thought, if i go, there is a possibility that i can meet the leadership as the country explodes and that would be interesting. All the middle eastern i went. Nobody showed up. The street exploded in egypt and it was bigger than people thought it would be. People continue to go back. That was what was different. It would be cleared and people would not go back. This time, people went back and i try to get to egypt as quickly as i could. I heard that camera equipment was being confiscated at the airport. Most of my camera equipment was and i made it in. 20 minutes after landing, the military came down to the street. They searched the car and found my previous film. It did not have a good title for military intelligence as the country is exploding. They said, come with us, we want to talk with you for a while. I was taken by people in plane close and you do not know who was interrogating you. Plain clothes and i did not know who was interrogating me. I excused myself to the bathroom and tried to destroy the dvd. I do not know if you have ever tried to break apart a dvd. They are quite hard. I shove it down the drain. I was confident that i had gotten rid of evidence that could have kept me there for longer. Five minutes later, a man clean the bathroom comes back with a piece of the dvd. The interrogators look at the guy and look at me. He says, i found this. I had been denying. At that point, i said look, i made a film for years ago about three incredible women in egypt that are fighting for change. People in the square are fighting for change and i want to be in the middle of it. He looked at me and said, do you think these people represent all of egypt . Do you know how big the square is compared to egypt . Theyre making the president and the country look bad in the eyes of the international media. We had an interesting discussion for a while and he let me go. I was immersed in the middle of the scene that you saw. It was magical. Men and women of upper class and lower class, christian, muslim altogether and thinking about a different future for themselves and the country. It was a dream and a fairytale that the country could change in the space of 18 days. It was a magical moment and you make films because you want to share magical moments. How much did you shoot yourself . I shot a lot of it. That is my favorite thing about filmmaking and an important part. If you are putting a lot of shooters on people, you do not gain their trust. There were four people shooting. They said, you are using the cameras wrong. Let me teach you. He taught me how to use the camera properly. What type of camera . The canon. They look beautiful. It was a lucky accident that we had to use them. This is the protest against the army. The army has consistently lied to us, killed us, tortured us over the last nine months. The people know what they want and are not leaving until they get it. That isabella is abdullah. I met his wife, who became another person shooting the film with us. She gave us incredible access to khalid. I met him in the square. Lets go back to some more video. Before we do that, the army is now in charge. What is the attitude of the egyptian people towards the army . You see this in the film. Where first of all, you are drafted to be in the army and everybody has to be in the army unless you are and will be son. An only son. People feel close to the army in egypt. When the army takes control after mubarak steps down, as khalid says, they did not want mubaraks son taking over. They were not upset about mubarak stepping down. They thought this was stopping the inheritance project. They kept trying to clear people out of the square violently. The protesters that we follow, the people on the forefront of change in pushing for change they start to see the violence on the part of the army that was not expected at the beginning. Many people were in disbelief. When some of the protesters begin filming the torture and violence of the army, most of the country is completely shocked and does not believe this is happening. When we knew we had a story, we were filming characters and we did not know what the story was. After mubarak stepped down, you had a character in the film who is a singer and has turned the chants of the revolution into songs. We call him a musical narrator. He has a song for every chapter. He is celebrated on international and local news channels as a hero of the revolution and a singer and vision of the new egypt. Mubarak steps down and, three weeks after he steps down, he is brutally tortured. One of our characters films this and put it online. It is not covered anywhere. For media, egyptian media, nowhere. Foreign media, egyptian media, nowhere. People said that the Egyptian Army would not do this. Here is more of this clip. I am not going to go and vote when my friends are being lost in the streets. I know people web died. Who have died. Im not going to go and cast my vote in the circumstances. This is an army that has tortured and put people on trial. International governments, who i hold accountable for replacing the stock supports and the tear gas that is clinging to my lungs. People of conscience know what future they want to build and know how to build it instinctively. We need to enter that process and the army needs to step aside. By the way, how did people survive financially during this time . It was a difficult time. You hear from the Muslim Brotherhood characters mother. She says, who do you think supports his five kids . It is the Muslim Brotherhood. His loyalties have to be towards them. He started taking odd jobs and started learning how to use a camera. The camera becomes his weapon. He was not only shooting his film. He was on the from line, shooting evidence on the frontline, shooting evidence. He has become a good filmmaker in his own right. That is how he is making money now. Khalid is an actor and has not had the same troubles. For a lot in the square, there is huge unemployment and still is. How many people died . I dont want to give a number. The numbers are drastically different, depending on where you look. Thousands. How many people injured . Thousands. Did you come close to being injured . If so, how . I feel lucky. I was not injured. Everybody in our crew came out uninjured. This film became we have an office nearby and revolutionaries in the square have learned how to use sound and edit. It became a school as we were making it. Everybody on the team i tell the story because everybody came from the square and wanted to be there. They were tear gassed and jailed. Every Single Person on the team. They had to want to be there and the film came out of that. Me, personally, it was a difficult situation a lot of times. I was never actually physically, injured. My parents were about 10 minutes away. I think that they have reached a point in time where they have given up trying to tell me what to do. There was a time where my mother called me in a scene in the film where you see a body being dragged across the square. One of our filmmakers shot at. It was a body being thrown in the garbage. It was shown on International News stations and the local media could not ignore it. Many. In egypt sought i in egypt saw it in egypt. People came down to the square and said, this cannot happen in my name. My mother called me up and said, there are bodies being dragged across the square. Where are you . Come home. The film was made on fumes. We got grants from the sundance institute. Small grants. We had to work independently and could not be funded by an arab or western station, due to trust issues and people wanted to hear that we were independent filmmakers and not allied with a station or something. It was made by personal family friends, people donating their time. Did you use kickstarter at all . We did. We had a number of executive producers who came on and were incredibly generous. They allowed us to finish the film. That is where the expensive part comes. You are editing and have to do postproduction. We had executive producers come on and we used kickstarter. How much did you raise . 104,000. What do people expect to get back . Depending on your level, you get gets. Gifts. We are behind and have apologized profusely for that. You get a dvd, tshirts, the highest level gets if you see the film, you see a wall being painted through the film by a graffiti artist, who becomes known in the streets of egypt because tear gas canisters fly and he keeps painting. Someone would die and he would paint a picture of them on the walls that could not be ignored. He would paint stories and egyptians have an incredible sense of humor. His sense of humor would be on the walls. He was interviewed by International News stations. People said it was amazing and egyptians are painting on walls. He said, we have been painting on walls for 5000 years. So, not exactly the first time. In the end, it was a wall that we built and it broke because this huge windstorm came in. We have artifacts from the wall. There are a whole bunch of names at the end. Yes. All the supporters are credited. Here is more from your documentary, the square. How do you keep track of who is on what side . It was easy. The army is on one side and the protesters are on another. You had the Muslim Brotherhood. Later on, it becomes more difficult. Protesters fight with the Muslim Brotherhood and it is more difficult. What does the Muslim Brotherhood stand for . That is a good question. They are an organization that has existed for many years in egypt. They have not used violence in the past 30 years. They ran for office. The choice for presidency was between morsi and mubaraks previous prime minister. For many people, it was a choice of the previous regime or change. That is why we had people voting for the brotherhood, voting for change, even if they did not believe in a religious government, which is what the brotherhood stands for. Can you be in the military and in the Muslim Brotherhood at the same time . You can. I say that because, during the process of making this film, we filmed inside of the political campaigns. We filmed inside of mubaraks prime minister. At that time, when we talked to many of the people inside the campaign who are now in jail and have been arrested where is morsi. That is a good question. Where is mubaraks son . My understanding is that he is in prison. Is that in cairo . Yeah. I was driven there when i was arrested. It was 20 minutes outside 30 minutes outside of downtown. They voted on the constitution and parliamentary election. When do you think the next election will be held . They are saying april. They say there will be president ial elections that are followed by parliamentary elections. How do you feel about the situation . I feel like we are in a dark time in egypt. Because the reason why i say that is that there are human rights abuses that are continuing to happen and i have had a couple of friends be arrested a couple weeks ago who are accused of being Muslim Brotherhood sympathizers and are simply journalists. This is why i feel like it is important to get this film in egypt. If we try to whitewash the past and the government tries to whitewash the past, we allow these human rights abuses to continue. It is what is said in the film when the tanks run over protesters, he says, to a Family Member who has died, i encourage you to do an autopsy. People need to be accountable and know that their actions will be held accountable. Your documentary talks about the leader he wants. [speaking foreign language] interesting. He asks for a leader and everybody in the square is a leader, he says. Do you know leadership types . He is really young. He is really young. He is 26. This will take time. These are disorganized social movements. What he said to us is that, with this film being out there, this gives voice and they cannot prevent our story from getting out there. Is he being moved around quietly . Definitely. People are showing it quietly and we are attempting to have a wider release there. A constitution that protects the right of every egyptian, no matter who. What he is also talking about is an active citizen. We come from egypt, the land of the pharaohs, where you always have a leader who can transform the country. We do not have rosa parks or individuals who have changed things. That is important for young people to grow up with. It is important to have a consciousness that you can, as individuals, change things. It involves us Holding Government accountable. What you think of the United States and their position towards egypt . The United States has to do the same thing. You cannot elect obama it is the same thing and the u. S. You have to have an active citizen. What do i think of the u. S. And the Foreign Policy towards egypt . We still send money and military. There needs to be a redefinition of aid and thinking about it as pure the military purely military. Another clip. Khalid reflects on what the movement means. How many different documentaries could you have made . I think what is happening is more powerful than any individual organization. I do not know how you kill that. How many different documentaries could you have made . 1600 hrs and many films could have come out of this. We are working on a film about our lawyer who is in prisons facing the struggles that everyone who went down to that square went to fight, the dignity and respect of human beings. Is there a network and a way for you to stay in touch . For sure. How do you do it . I am in Constant Contact through twitter with all of our characters all of the time. Constant contact. If people want to look at what is going on, there are fantastic citizenjournalism sites going on. They make short films about what is happening on the ground. How do you spell that . One more piece of video i want to show. This is from the ted talks and you won a big prize. It gives it calls on you to talk to the community, a community of creative and powerful dogooders. Many different types of people. Did they give you any money . A hundred thousand dollars 100,000. What did you do with it . I spent it on the wish and bought a lot of shoes. We basically said, we made a call out to filmmakers around the world. If you had a few minutes, what story would you tell . We put it to music and the idea was, we have the world cup, the olympics, these moments in the world where people talk about the same athletes or goal that was scored. We do not have that with film, where People Exchange on ideas like this. There are 1800 selforganized organizations. Can you watch this on the web . You can. This is a clip out of that speech that i want to to put in context. There is working films, current tv, an incredible platform. It is amazing. I have watched it and i am blown away by its potential to bring independent voices from around the world to create a truly global democratic television. They were owned by al gore and others. They were sold for 500 million. You are excited about what current tv was doing. Now i have not watched it yet. Im not sure the question. What do i think . You are excited about this and a lot of video was provided by individuals like you to current tv. They were sold for a lot of money. A lot of what we were trying to do was capture the conversations. This film was not about it is about the zeitgeist of our time. All of these people are communicating through facebook and it is a fascinating time that we are going through. Im a big proponent of television stations and was excited. It is excited to have exciting to have fewer ships viewerships telling their story. How do i keep in touch with the next movement . I will give you the twitter handles. A lot of the calls are through twitter and facebook. It is wordofmouth, for people who are not online. How many people were the most number of people protesting . The number that was the largest number that was said to have gone down was the protest against morsi. That was said to be 20 million. How many people had a phone . Everybody. If theyre working the phones, do they jam up . Definitely. I could not use my phone. What you do . There is nothing to do. The phone lines get jammed. At the beginning of the revolution, the government turned off electronics. People manage to gather. They went down to the street and were tear gassed. They became part of the movement. There was a lot of communication of people without cell phones. They had a cell phone before a television. You were in the finals for an oscar documentary nomination. Your way to find out if you will be a member of the final five. Is that important to you . It is the first film i have went on an oscar journey for that i think is usually important. Crucially important. It will be like the world cup. It will be the first time that an egyptian film is nominated. When we were shortlisted, i just wanted to run down the street screaming and shouting. People always say that history is written by the victors. Not in this case. The movie is called the square. When will be available . It is on netflix. You can find all the information on thesquarefilm. Com. Our guest has been jehane noujaim. Like you for joining us thank you for joining us. For a free transcript or to give us your comments about this program, visit us at our website. Also available as podcasts. Today your calls tweets, and Facebook Comments live on washington journal. Then, the u. S. House of are presented it gathers back and forth the session of the week. Then our first ladies series continues with a look at hillary clinton. Cspan launched its first c span school bus and 1990 three, visiting hundreds of schools and communities nationwide. Today, 20 years later, the c span bus continues on the road, campaign trail in visiting book festivals, education conferences and schools. Look for us on the road and online at our website cspan. Org. All brought to you by your cable cable or satellite writer. Join us mornings live on washington journal as we hit the road for the big conference tour. Coming up, we will take a look at todays headlines followed by Public Radio International todd slowik with a preview of the president states of the union speech. Then Rebecca Adams on the role young people will play in the future of the health care while. Aider, a look at the roughly 9 billion spent on head start with the executive director for law and social policy. Host the former secretary of state says she is months away from making a decision about a run for the presidency. That does not stop a campaign from building on her behalf for a year. Hillary clintons future and in politics is the focus of this morning. Late