Transcripts For CSPAN2 Key Capitol Hill Hearings 20141029

[applause] good morning thanks to ppi for the invitation. With deals like a lot longer but i have been at the fcc a little less than one year. And in the Commission Time barely a blip on the radar but under the chairmans leadership were moving at a very fast pace taking on many complex issues so by way of example we have options incentive option will will spectrum infrastructure spectrum said frontier. 17 Competitive Bidding rules joint bidding rules competition policy and i suspect the pace will not let up anytime soon. What we are busy working on these issues the Wireless Industry continues to involved in challenging ways but we just dont see challenges and that is what i want to talk about todays opportunity that we see in those with arab agenda at the bureau more specifically we see opportunity with Wireless Infrastructure to make more spectrum available is a new ways with Broadband Demand and to promote and protect the marketplace also to promote innovation was divert Devices Networks with policy innovation is important. In with that overarching strategic goal putting into three categories from infrastructure deployment and not just referring to the sec staff and requires the collaboration of stakeholders many parties have the Important Role to make to the u. S. Continues to be the world leader of wireless. Those to approach the issues that they advocate as great opportunities to work collaborative flee. One quick observation in a short time that the agency i have come to appreciate how refreshing it is to have advocates to come before you to offer Reasonable Solutions. Those that benefit the interest but not overly protective defensive or aggressive but the even notice that at the agency. Not everyone comes from this perspective and i will not call anyone out here but. [laughter] may be some time over a couple of big piers. [laughter] but they do notice when they dont look at other perspectives and dont give consideration to other stakeholders. He should not assume it is just Big Companies enter pushing there is no monopoly on that. Last year the german challenge the industry to step up to take new approaches but i want to reiterate the request to take the opportunity for some of these opportunities to find new approaches instead of highlighting problems of specific suggestions when we dont have to adjudicate between legal technicolor policy positions everybody is better off the lessee space is bureaucrats making a decision managing the spectrum and competition and infrastructure deployment looking at collaboration as well as opportunity so first talk about spectrum there are great examples is be seen is an issue to capitalize the mayor hertz of spectrum in the commissions inventory for years but it was perceived to be an unsolvable problem but now they were collaboratively to build on advancements when they found a solution earlier this year we were at the Auction Block raising 1. 5 billion a ws 31755 through 1780 many were skeptical of the spectrum never be available for commercial use the have been working on this problem for years and i saw this from my time on the hill there often period the time there is no hope but due to a Solutions Based thinking the sec and other agencies and congress in just over two weeks will begin auctioning 65 mhz the largest auction in five years marked on your calendars were very excited november 13 building on the successful efforts their other opportunities for other spectrum behans it is an opportunity to explain new way for spectrum and if we are successful capitalizing on the potential opening prospects for access for other behans party still need to come together to drive the solution and over one week ago to embark on an exciting opportunity determined whether to make a spectrum much higher for mobile broadly and. Susan to proceeding with a look at technology to the higher frequency bands to ensure that they flourish. In the bureau this is called the frontier but as the chairman noted that i dont care what they call it even if it is a kumquat i dont care is a part of the spectrum efforts where we strive to create rules that are deployed is also a fresh based approach this is really the ground floor we cannot forget about the first ever auction of the innovative approach ford van spectrum the commissiocommissio n announced last week but were not slowing down those vital input should be coming in the near future as they make more spec available we need to major providers of all sizes have an opportunity in the wireless marketplace backed by the commission of rulemaking to look at the Competitive Bidding rules for the first time in eight years that is a lifetime in the Wireless Industry not to have an opportunity to support Small Businesses. Spectrum is only part of our framework will also need to seize opportunities to foster a competitive marketplace. I have made infrastructure a key priority and i spent some time in the private sector and other private sector history in this area with a special appreciation how hard it is. And when i was in the private sector some of it is realestate some of it is landuse but it is critical to make it available to consumers that has been particular the satisfying we saw an opportunity to revolve the infrastructure demand of the modern wireless network. The commission unanimously adopted to reduce the cost associated with collocation it takes critical steps to promote the deployment necessary to provide the public with the ubiquitous sabaeans wireless on demand. More specifically we update the manner that the fcc by waites the impact of the environment and with rules to implement statutory limitations on state and local governments to review infrastructure including for the first time a remedy of a state or local government to act on ineligible facility and a certain period of time and in codified then narrow exemption but the great thing about this it is pro environment and preservation but it takes into account wireless and they will all help do develop more wireless capacity to consumers throughout the u. S. Real six steps to streamline the rules of marketing to take steps to expedite the facilities Going Forward in any number of towers with the regulatory status being brought into compliance for echolocation this is an example for us to have Reasonable Solutions so all parties came forward we really would miss that spectrum opportunity but finally we will fall flat we dont wish to preserve the competition im sure youve all heard the chairman speak about how important competition is to him as a consideration with everything we do to preserve the competitive marketplace into the future he is encouraged by recent announcements that the industrys robust nine competing in the marketplace from our perspective is a good thing we expect to drive innovation for further Investment One of the major successes was the mobile Spectrum Holdings report we revise our spectrum screen for mobile broadband and treated as a reserve of will band spectrum to be auctioned off in 2016 to secrete the opportunity for providers to get the spectrum they need to compete for large and small but that they wanted as soon as possible there is significant risk of anticompetitive behavior and they will promote competition to that end so long those lines to carefully consider transactions including the enhanced Factor Analysis for the specter malleolus for opportunities for competition in will making casual though it drives innovation and investment for all endusers and devices also working to address questions to data roaming there are formal complaints pending at this time and do occur marketplace were actively reviewing those. Finally the discussion of competition would not be complete but we worked closely with Consumer Protections for the open internet for mobile wireless also as part of that review were considering the implications of capacity constraints meanders and wireless is different and if you wrap the roundtable the chairman understand it is different your actively exploring what that means in practice in what applies to mobile providers also looking if it could interpret the statute definition to be applied to mobile van service we will commit to encourage additional thoughts now is a time to wait and. It is a time at the Wireless Bureau and we need to seize opportunities to promote competition in access we want to do everything we can to stimulate innovation in all forms so we can continue to be the world leader in wireless. Thank you for your time. [applause] the panelists may come up to now. [inaudible conversations] we have more chairs available here if you want to come closer. Thank you roger and thanks for coming and ppi for hosting this event a want to sink the folks behind the scenes close to get the show going i appreciate all you do to put all this together but now it is time for the expert panel that what they have in common is they have written papers on wireless issues so give them an opportunity to talk about their research and it is all available on the ppi web page with else is available to recent ppi shows and proud of the last two of you have not seen them with policy watch we had one on interconnection and we had the key note and then one on neutrality debates were thought we had reach a consensus but i guess that did not put an end to the debate the their fabulous. I am very excited to have cspan3 covering the event i called my mom she said who is on one and two . It will take time. [laughter] the purposes to explore wireless issues but versos go over ground rules i will ask questions of the panel if they go along with the premise of the question there will insert you want to fight we will get cost file questions. [laughter] and one tip for the audience i will rely heavily on the audience i will go to you about 20 minutes is going to sit back there and listen so be thinking right now about tough questions you want for that panel and with that money quickly introduce the panel with mary brown director of Government Affairs from Cisco Systems senior director for spectrum policy from the Government Affairs office in during her career she has worked as a staff lawyer and manager at the second holds a masters of science in telecommunications from syracuse and Michael Mandel chief economist also holds an appointment as a senior fellow at whartons institute for management innovation in pennsylvania prior to joining ppi he was the chief economist at business week 21 years . Amazing he has a ph. D. In economics from harvard that is fairly impressive almost as prestigious as from johns hopkins. [laughter] writer at the end of the table founder and leading analyst leading expert on telecom with Wireless Communications in the Senior Vice President and head of research of Telecom Practice for the Nielsen Company will largest providers in the world also Senior Vice President at research and Vice President of telecom incs for joining us. Finally peter is an expert on the capabilities of Wireless Technology and president and executive director. Notice called Wireless Technology. Import in the year as a master of science from Electrical Engineering from stanford we will be known that heavily particularly with my first question. Even though it question is directed to one panelist i encourage you to weigh in so we can get some conversation going. Let me start on that issue of the day of neutrality to talk about how this relates to wireless but put that engineering degree to work. Advocates of strong neutralitys want to be an deals where they pay for priority theyre worried everyone else will get of lower Quality Service if true it would be a legitimate concern. But does a priority necessarily entail a sacrifice of the quality of service or is it possible to introduce a priority without degrading the quality of nine prior ties traffic . It depends if it is a zero sum game or not i dont view it as such there may be some scenarios where there is capacity and that tends to be much more of the case but certainly with wired networks there is plenty of capacity so to prioritize and it will have any adverse effect. So in light of peters answer. That could be a priority deal that there are no injured parties, does it matter of that moment economically with the large pool of investments with very low Interest Rates so writer mentioned investments we need to set a policy with the incentives for investing with the pay parity raising quality at the same time can do thats so the favor needs to look at that what can we do to create longlasting incentives for investment . If you have paid priority you have a commodity product and allowing Higher Quality that will produce more competition. With a blanket prohibition and case by case. That would be a terrible mistake from the big picture pointed you because if we want to create more capacity and more room for competition we have to create a structure that people say i can earn back that many in investing but if it is what new providers can do . And they blocked off the possibility to create a new network that could create a lot more competition and investment it is a bad idea to have a blanket prohibition and what we have seen with economics allowing a differentiation of products is better. A blanket prohibition means were freezing innovation the way Business Models are evolving those deals that may be bad yes but then we should address that on the case by case basis regional route every participant in the marketplace to innovate with a new innovative ways to provide services to consumers not to say it is only this way or the highway. We should think of policy in long term rather than shortterm cents to produce different outcomes. There is a lot of talk they want a different set of neutrality rules so what is the right answer . There is a different Market Structure there is wireless providers or a different capacity constraint with different sets as the fcc did . Cisco supported the 2010 order we saw what was made by the fcc and it made a lot of sense to us we did not base that on Market Structure as the basic difference of technology the wireless carriers deal with endusers to move around with capacity constraints that vary by time of day and physical space by defense happening whether the world cup for though world series so these have a impact relative to wireline we thought that 2010 decision hit the right notes to stick to that as it contemplates the next wave in the decision. I would like to add to that i heard mentioned that wireless and wireline a different avenue of the average person knows how different they really are so let me provide some insight one fiber optic cable has 2,000 times the capacity of all broadband spectrum so with that difference of capacity there extremely dynamic with those connections if they have a good signal quality bentleys in order of magnitude of coverage areas of the whole environment is extremely dynamic in Wireless Networks move to that capacity so how theyre managed is different said also looked at the capability like ltv with the transition boyce over lte voice over it for wireless that traffic handled with higher priority it just will not work there is nothing comparable happening right now i just want to emphasize that fundamental distinction what i am hearing perhaps is they should be treated different with a different set of rules and ill make that counter argument so lets go back to his largely vacated by the d. C. Circuit and then reconsidered a blanket prohibition we will not do that here that there was a presumption that a priority is in violation of nondiscrimination law this is what got them and in trouble with the d. C. Circuit to come for regard bended knee to say we have led deal they thought that was tantamount. If we were to new flip that presumption around to make the priority deal is presumptively efficient otherwise by a content provider to prove that treatment was discriminatory with that approach would we need to different structures 14 wireless or one for wireline . Assuming your analysis is correct is a better approach. I hearkened way back to my a sec at was deputy chief even there looking and a discrimination case the moving party to make then a demonstration had some burden to come forward to show the tariff was discriminatory was no presumption pages to the wave the flag of discrimination for it to occur like we were going with the idea to have to think about it. [laughter] it is the same approach the sec uses to adjudicate in the videos space the Cable Network has the burden to prove that it was discriminatory not to mention the blog yesterday with the takeaways at the roundtable the authors without two from three alternative paths and a case by case resumption it is in violation of the standard but they did not lay out this third approach which they were begging for was the case by case resumption. That is my eyes like critique but i have two more questions on that neutrality then we will go to the panel. This goes to the audience and pertains to the sponsorship to sponsorship deals. Metro pc has introduced an unlimited data planned 40 a month that excluded Video Service youtube was included but all others were excluded into understand for that odor of youtube had to compress but i dont know if google made us side payments they said this was in it neutrality violation and in april 2011 they quietly pulled the plan but was that planned a good thing for wireless consumers or a bad faith . First of all, the recognition that there is only a certain amount of available and video is the biggest spectrum peace that exist because of the steady traffic. And for this to work already 3g is a challenge tucci is the bigger challenge teeeighteen is a bigger challenge so with high compression with the need to compress this and at that time youtube was the biggest of consumption so did deal that metro did for people that otherwise could not have that video at all. It is better to bring some water to somebody who was thirsty in the desert and no water at all. I like that analogy. Rather than pay parity think of quality differentiation for better Quality Services and also lower quality that they could charge less for to make it accessible to lowerincome but higherQuality Services for those that produce no wider range of services and if you think about the economics you end up with more revenue and tired consumer welfare if you allow the products rather than leaving it. My followup question goes to the audience but it is conceivable certain content providers such as facebook and google and others may want to subsidize access for low income users and maybe they could monetize the eyeballs to defray the cost of the subsidy so should the sec stepped in between to bar any sponsor data plan is a provider subsidizes the price . I think one of the goals we have is to bring Broadband Services to more people and money is an obstacle for us to bring access to or did it is a win for everybody involved so they could not use it to that extent it is a positive thing. So in terms of general principles to the board attila commission dawned that telecommunication one is maximizing investment and in this case so we should think about this as an investment as well with an investment with a Better Service possibility with the lower end of the spectrum. So to recognize with the companys that are provided over wireless are sitting quite handsomely the average google user has 40 of revenue for google b average Facebook User generates more than 10 of revenue for facebook. So for them to users of these services and benefits the companies if they would like to stimulate usage for them to share the revenues that they make from users using that service they would benefit as the usage would go up. Were in the early days of mobile probate broadband it is hard to predict exactly what kinds of applications so and the constraints on the evolution of a likely to have adverse consequences we should experiment with different ways to make content and Broadband Services available with pricing models and serve as models and i am all for the encroaching flexibility in this area. We have been going 45 minutes now i want to see if there any questions from the audience and if you could perhaps introduce yourself . I want to followup on the last question to ask what opportunities for private companies are changes of policy to make meaningful Broadband Access . So not just the pipeline barrasso the Technical Support to make that meaningful as well as entertainment . I will start little ball is the dancer looked around the globe at ways most of the worlds population connects to the internet through mobile devices. And i would suspect as to march forward that trend will continue certainly the embrace of mobile technologies is firm and a growing and as we watch the cost of the connection drop those are all good things. So that space is important to keep the price down but the answer will bring people into the broad band space. That they are leading in the wireless revolution with the higher percentage of ownership and caucasians that the minorities have already made that we just have to make it more affordable. Talking about the premise of Net Neutrality with new startups talk on the video side there are rules with the new provider of discrimination whether the isp but on the program side of the those claims are hard to prove for a small start up and suddenly looking at those terms and conditions to get that customer to come out to say we can improve it is very hard in the boat have lawyers and smart lines but can you talk about how that works they will not be sophisticated have a large enterprise backing them. Go ahead i give you permission to answer that. [laughter] it all depends that Burden Committee been shift one very low threshold but at that point the burden could shift to the isp like it was desperate nine the grounds but if it is excessively burdensome it to go on five years there are infirmities have is set up but that does not mean that is the right answer we can design the rules to accommodate. Are there any other questions. Larry downs is in the house. Name from the Georgetown Center Public Policy making my way through the infrastructure order and i am curious are there any items that were this saying that the fcc could do to greatly accelerate the deployment that should be in future orders . Anybody . What about the detail to encourage infrastructure . We will look to the future it is very important to encourage Infrastructure Investment as much as possible for that spectrums though anything that makes it easier is an improvement especially with the small cells. I think the conversation Going Forward will be more evenly balanced with infrastructure than it is now. I thought it was one of the most Interesting Data points 60 percent of voice trafficking is happening and the cutting edges around the south side placing is around building comforts this will help significantly for wireless carriers that the outdoor coverage is not alone for those municipalities the u. S. Had vowed your coverage . It is fine. But the reality of the use it indoors this will help stimulate investment to recognize how much happens but to give more help to the carriers to build the sites. There was a question over here then we will go back. Talk about access to Wireless Service and demand that the providers are doing but we have not talked about spectrum to keep costs as low as possible to have more spectrum in the pipeline to any panelist had been a creative idea is to have more government spectrum that is into usable spectrum for mobile carriers . That is a great question. How to get them to give up spectrum . It incentives are a good way there is the inertia happening there is one case around Cape Canaveral 10 minutes during the course of a year we blocked it out nationwide there is a lot of inertia if you take a spectrum analyzer to hold out with his commercial mobile Radio Service the analyzer will show virtually no usage is used to 99 percent of the time. I just want to say were getting ready to start that a dip u. S. Auction in drear pausing to consider but the congressional policy makers with that leadership with the department of defense to enable them to go forward so it took creative law making to pay for the changes the dod will be incurring it required a long process that the department of commerce that the end of the day where it cleared to put in place for mobile broadband so we should applaud our friends on capitol hill and tattersalls on the back. Critical to that a debut last 8ws spectrum but it is the only sector may and the kenaf have roaming rag everybody on the planet if everybody could agree with they will allow americans theyve mayor may not be lucky if you go overseas to actually access the lte network that people had in that country. Think of it as an improvement of Global Consumer welfare. It is transferred because of the roaming and it is in billions of dollars. Asking agencies to give that up one economist said we should pay them. That is why we dont get invited back to the cocktail parties. But if you have spectrum they never talk about paying them to do so. Can i do have a question. With a and a unlaces spectrum economists think of that as a Common Property resource with increasing demands overtime it is it a Common Property resource . Eventually it anticipated the very next part of my topic so lettuce knockout unlicensed spectrum because this is what i wanted to get into february 2013 was touting a new super public life by network to be so powerful and abroad in reached that consumers could use them to make calls or surf the internet without paying a soulful bill every month. I got very excited because i dont like to pay for my cellphone. [laughter] i not what you or cisco to state in the way of my free cell phone service. As best as i can tell what that was referencing was the Initiative Led by proponents in the tech sector with the license used of the television and what i have from the auction being done with it chairmans labeling of that of license used as super life by neither suchard nor wife by at the time those not steeped in the technology it is a technology that began in the 2. Four of megahertz band in the unlicensed junk base and then also now migrated into the five gigabyte though the latest is exclusively designed for the five gigahertz band. Why is that . Because the Technology Uses requires very wide channels to deliver very high throughput of gigabytes per second there are a the mhz wide or 160 mhz wide. That is super wife i. They are not unusable but to design a a radio system but youll have the specter of available in the big city may have just 6 megahertz so what you do with 6 megahertz of spectrum in the technology whose latest iteration . There is a mismatch so while i read the article with great interest i was reminded back in 2006 when the sec issued its very first report my good friend and commissioner complaint under the Christmas Tree 2009 and i am still waiting. [laughter] with my view with that wide kiryat as mutually exclusive they are incompatible the we have coverage areas of and access point then if you need capacity your coverage there is another in the next room and those will actually go to other channels even if there is a neighbor loiret a business below is a way to coordinate to make that work. But now getting into a situation that premise is you can build Community Networks that have coverage with multiple people to use that spectrum it is completely on coordinated nobody with any of the standards with unlicensed use their like those multiple Service Operators operating at the same time so those situations where we have no idea with function does not make sense but made with wireless isp but in general will not seek efficient use. And in that defense with small groups of people that is an unlicensed usage with the designated speaker of the evening somebody will bring order so they will quiet down and if not when everybody is quiet with the designated speaker then somebody has the question they get the microphone in you can do that what is most beneficial . And unlicensed four small areas. Looking at may 2014 auction rules that came out and it depends on how much spectrum up at 28 megahertz broadband will be available that seems like a minimum of 14 then and additional six will be made available by allowing unlicensed use of channel 37 bob bob lot. But how much and where should it be . And to i am not going to use it theres something wrong with my equipment because of the 600 mhz says somebody the other part of town so if we want the unlicensed spectrum we should move up and if we go higher up there is more spectrum available and with that use the fcc had some very difficult problems as a contingent with how many broadcasters will show up which is why we dont see what we used to in this spectrum. And they have done a heroic job so far. And gives that tool a huge boost for future transitions of other things, and that is the most important thing. So people have got to walk into that auction, particularly the forward auction with the confidence that what they are buying is going to be usable by them. Any other comments are maybe its time to get to the audience . Neither super nor wifi. I think i used those same words in an article i wrote. I just want to mentioned that the current wifi standards do not work in that span. Theyre looking at entirely new standards. So no existing device is going to work in those bands, and i think it is instructive to look at where they are getting the most usage today. It is not in the u. S. It is in places like africa providing coverage to places where there is no broad band at all and then using those low frequencies in a fantastic way of providing back call to towns that do not have broadband and using it as a back haul connection from providing local wifi at higher frequency. There are use cases for the spectrum. I am just not sure that we will ever be a viable alternative to the mobile Broadband Systems that we all enjoy today. I think that there was a question from the audience back here. I think that you were waiting. Go ahead. My name is sarah, and i have, perhaps, what is a much less sophisticated question that what you all are talking about in terms of spectrum. I have recently been accepted to a global start up Incubator Program to launch on mobile Application Development company, specifically centered on health. And based upon what i heard today and have read in the Industry First on the Positive Side i am thrilled at the market potential. Estimated to be about a 6 trillion industry Going Forward. Having said that, i have a concern based upon the into dependency of what we are talking about in terms of infrastructure, and that is that if i travel from Dulles Airport to of this location and use my mobile device i have a couple of challenges. One will drain my batteries, and there is no way to charge on the metro. The second concern is that i do not have Reliable Service in terms of video and application usage. Here we are in a very tech center, how do we, capitalizing on what you referred to as both maximizing the investment and the equity of consumers, feel comfortable capitalizing on this tremendous opportunity but understanding that our Customer Base is going to shrink if we cannot provide the liability and increase the power in connection. That me answer your first question first. You probably dont know, but on the silver line they have power outlets. [laughter] no, it is not true. It is not true. They shared. We wish it was true, but it is not. Okay. I wake up in the morning, my phone friends before i get to work. If you think about health applications, highvalue use, especially if especially in monitoring in real time peoples condition, and it is exactly this sort of high value use that you would imagine being prioritized. And so this is where the different pieces come in. If you have a high value you use that can be prioritized and paid at a higher rate than you can end up being able to find the infrastructure and a way that provides more coverage. You ask yourself the question, what would you need to make sure that your health that was having a sufficient connection and every point. And youre talking about investing a lot of money. We won a risk that policy is a concerning the ability to identify high value uses and direct the money in that way. They would have a way of healthrelated gaps in real time. What is it that directly related to people that have priority and do it in a way that gets funded in a different way. So when we are talking about Business Models here, Business Models is not an abstract work that says some people make money and some people dont. It has to do with this sort of services you can deliver to consumers in a way it works. And i am grateful for the question because when we applied that neutrality to mobile where we have a constrained environment, you know, neutrality in its purest sense, everyone should be treated the same way. Your potential customer, somebody who has medical monitoring gets treated exactly the same way as somebody who is downloading a youtube field. And if you are not allowed to prioritize somebody with a heart monitor over somebody who plays the game because all usage is supposed to be exactly the same way. This does not really allow for a your Health Initiatives to be flourishing. Somebody with more entertainment usage rather than lifes critical applications. This is a good example of where we should really make them let the marketplace decide. I am sure someone with a heart condition will put a higher premium on standards that somebody playing, you know, words with friends. This is one place where the fcc has to be active in terms of making sure there is not oppression of large stock left by smaller companies. Two things going on. One is that the ability to sort of create higher liability channels is extremely important, but it has to allow that small startups should have a fair shot as well, and when hal talks about what sorts of roles he you need to have in order to make sure that that is sure, this is every what he is talking about. If there are no pending questions up, yes. That is the problem. Let me move to another topic that is near and dear to my heart, wireless wireline substitution. The first question is for mary. You know, some folks are trading in wireline connections for wireless ones. In october 2011, your firm estimated up to 15 of u. S. Consumers that cut their broadband wireline connection in favor of a mobile data connection by 2016 and more recently in a 2013 survey we found onethird of the Internet Users use mostly their farm to access the internet as opposed to other devices like a desktop, laptop, or tablet computer. What is stopping more folks from making the plunge and going to your wireless . The 2011 study, sort of a top down steady estimate if you will of what could happen. The point of the study was really to say that the wireline providers, you need to put wire line at the edge of your network to try to make your offering more 60. And full disclosure that is what is going on. It did identify some useful trans. There are categories of consumers who are probably not going to cut their wireline connection. A family with multiple people in their family using broadband connectivity. They might have coverage issues. There are a category of customers and a steady reproduced. Mobil is that compelling choice. They might be one person households. There mobile, renters, there is no real wireline comparable coverage. That still remains the case today despite all of our efforts to of find universal service and change it to a broad band plan. Their is a component of the consumer marketplace that is eligible. And i think we are still early days in terms of figuring out how large that will grow. Going mobile then using mobile spectrum for Internet Usage makes a lot of sense in their rural parts of this country where we are always talking about we have a spectrum crunch in this country, which is true in the major metropolitan areas at the same time we actually have a glut of spectrum because the population density is low. So the distance as many took cover is far. Theyre trying to serve them with dsl. It dsl punishes you severely. The best ways for them to serve that customer would be wirelessly so we can put 20 mhz if not more to that customer and then only five or ten in rural kansas or south dakota where is the boom is not hit yet, you know, and full of customers sharing a cell. A 20 megahertz, it can go up to 150 mhz as second which is something that you cannot dream of providing with, you know, dsl or even fiber because the cost is simply prohibitive. Providing these customers with Wireless Service would be the best solution for consumers and the providers alike. And roger brings up a great point. Let me amend my earlier response. From a technology perspective, we are early days. We are about to move this conversation about of the 5g technology. We are getting to the point where Wireless Technologies are really very, very substantial throughput. As those technologies become available, it becomes a lot more compelling, particularly in these situations. Especially when only a few people actually shared. When less people than in this room actually share the band would have us sell, the throughput is delightful, you know,. What you expect from a fiber connection. It is just that in washington, new york, silicon valley, we have so many people trying to use the same spectrum. I would like that, i think we have made unbelievable progress involved with Wireless Technology for 20 years now. You know, l. T e networks are a thousand times faster then 20 years ago. You know, we still have a long way to go. Immobile broadband seven. A comment was just made it that it is not commonly used. I am lucky enough that i have a Remote Office in a rural area. When i am there i should use my phone as a hot spot and my family, share plan is sufficient to run my business of my phone. Cutting the cord to the tv cutting the corinth ickes at at disasters situation. The fact is, we consume when watching netflix in Higher Definition you consume about mb per hour. You will go through whatever you have fairly quickly. But that is going to change. Small cells ultimately, all those developments will keep augmenting capacity. So to report, a subset of people that can be served by wireless broadband only that percentage is going to keep increasing. Wireless is never going to replace fibered. Fifty to talk to percent of people can be served by wireless now. By the end of the decade it might be twice that. Five years after that it may be twice again. It is hard to predict exactly. The trend is positive. I think if we have our regular are Regulatory Environment that lets us use the right technology and their rights and iran for example, wireless and Rural America and equivalent to wireline service. That will allow operators to adopt and adapt a Business Model that they do not have to provide the same type of pricing and bundles that you have in a mobile environment these problems will go away and everyone wins. If youre thinking about where people locate in the u. S. , reverses durbin, the ability to offer different types of access and there wrote areas, they have a large social benefit in terms of spreading people out to lowercost areas. If you think of one of the things we think about, the larger Economic Development policies, i think it is important in an era where wireless is essential that would allow the pricing plans to adapt as well. Let me bring you back to a concrete policy issues. How you perceive wireless and wireline can influence their answer for a lot of key policy issues. My dear friend who wants us to see them as strict complements, and that drives a lot of her world view and how she comes up with policy. It sounds to me that while it might not be a perfect substitute today, there is a lot of substitution going on in the margin and it could be better in the future. Let me have some concrete policy questions. He have a piece that talks about how the fcc should carve out the spectrum when it goes to sell in the broadcast auction. And you say to you, to regain its lead the United States should quickly allocate more license spectrums a larger contiguous blocks. It seems to me that if you had your way it would make life at the margin more difficult for smaller wireless carriers. We are and small slices that would never allow for greater opportunities for smaller folks. Whenever a half a service thats when my local coffee vendor or starbucks, go with the smaller while local back. Im actually a big fan of smaller Telecom Providers in general there on the proverbial by citgo. They are going up against the big carrier and a steamroller. If a small carrier gets rolled over by a steamroller they did something wrong. I think it is an important part for small providers, but we have to recognize that the small world providers have 3 market share. Where there are operating there is a lot of spectrum. So on top of it i think it is a laudable to protect them. But you cannot eat the cake and have it at the same time. You cannot have the fastest possible internet and the world and carve it up in small pieces. Does not work. So there is room and there is necessary protection for the three percentage in this country, but for the 97 of consumers that are working with the larger carriers, we need to use it in larger spectrum. You know, for example, in switzerland the swiss regulator card did not and 20 and 40 mhz compared spectrum. They have just started with spectrum allocation, a carrier aggregation where they are offering 300 megabits per second bundles. If you cannot like in the United States that big is spectrum and four contiguous spectrum is the 1900 see block with 15 mhz pared. You are not going anywhere near, even if you add on another ten mhz for a piece of spectrum. If we actually are serious about having a world of Wireless Internet Service to we cannot do anything but have large services. If not we should make a conscious decision that we value competition over raw speed. It is a very valid decision. You cannot have the cake and eat it at the same time. Mike, i would like you to weigh in here from an economic perspective. What i see happening is, if wireless is becoming more and more of a substitute for wireline overtime and people will start using wireless, leaning on wireless to do heavy demand, have the capacity demanding caps like video, it seems to me that that is going to push the benefits of having a larger network, all things equal. I am wondering if they should inform our health issue inform the fcc when figuring out the number of carriers are how to carve up the spectrum. At think the word you used before was on the margin. I think that is important. Even if you do not cut the cord completely, the wireless still provide competition on the margin. If what you have is the ability to sort of use a wireless some of the times you do not have to break your day cap because i know that i shift back and forth almost seamlessly between using wired and wireless broadband depending on what is happening. So in terms of your original question, does it provide competition, the answer is, it does. We should think about it as providing competition, even if we do not cut the cord completely. Let me get peter to weigh in from an engineering perspective. If what i am positing is true and the economys will be so large that it will be difficult for a small player to compete, you know, what role is left for the small wireless . Well, certainly if you are trying to deploy a National Network today it requires many, many billions of dollars in investment. And i certainly think in rural areas, there are opportunities. I happen to live in oregon, Columbia River gorge. We have a very innovative Internet Service provider sit. And they have been using wireless forever. They are all over it because there are a lot of people that can be served by wireless. That is one example. Absolutely. There is an important place for small carriers. And it is predominantly outside of the major metropolitan areas. Unfortunately huge economies of scale. And if you want to have, you know, it is very laudable that we are helping with designated entities, but we have to recognize that building in nationwide network is 5 billion, 10 billion. Halas small, familyowned business can raise that amount of money is of little bit difficult to grasp. So we have very laudable social policy goals that are in direct conflict with economic reality. Last question, and i hope the audience has more questions for me. This one is to marry. You guys have a new 2014 immobile gni report out. Projecting mobile data traffic 2018, and 8fold increase over the next fall to five years. What is driving all this demand. Could it be substitution from wire line connections to iraq the main drivers of demand were seeing are as follows, devices are getting bigger. I will go out this afternoon and get one of this new apple devices that is bigger than mild one. We have embraced tablets as well as smart phones. Because we are assuming some much video, a lot more bits of data are moving over these networks. So explosion tablets, smart phones, the tablets themselves are getting much more processing power. We are projecting on a monthly basis a tablet today is consuming on average about one half gigabit of data per month. So this is becoming as powerful or more powerful than the laptops. And the number of connections is growing as well. Not just things happening to us. Driving demand. The substitution fits in there somewhere, but it is probably not the primary mover at this point of what is going on with the explosion in dated demand. Here is an interesting tidbit. Every change your screen size goes up, your data consumption doubles. Why is that from an engineering perspective . Because it is a sum much more enjoyable User Experience the number of pixels on the screen to go up, and so that really drives. Youre much more likely to watch a movie on a 5inch device than on a one or 2inch device. That is exactly right. It is not just in addition to screen size, it is the resolution. When apple came out with iran and that is played which everyone has matched, what they meant was there are more pixels than your eyes were able to you could not see the individual pixels anymore, meaning the screen has better resolution than your eyeballs. So there right now displayed quadrupled the number of pixels, and we are seeing it with a 4k this place. That has a four times the resolution of the standard hd display. Unfortunately, it will be accompanied by better compression. The bandwidth requirement while only double instead of qua they have built in certain assumptions about what is going to happen in the marketplace, which is constrained by capacity, regulation, and price. Just to echo that, it does not really make sense for me to consume hd video on my five hands found. I cannot really see the difference between that and video at onequarter the resolution. We could be looking at a 1 inch screen. My previous point, Service Plans where i could have a discounted plan which automatically trenchcoats video to eight coarser resolution which i might not even be able to tell the difference. This is a deeply important policy point. The policy and the technology and economics intersect, and every time someone on the panel says the erin an early stage, that is what they mean. We do not actually know where the intersection ought to be, and we have to allow more flexibility to find out where the sweet spot worse sweet spots are. Where is the point where the hockey stick goes up . Ino, the flat piece. At one point in time with the right policies in place, with the right incentives in place, right Business Model, it will go up dramatically. Let me go back to the audience and see if we have any questions before my next set of topics which will be international comparisons. Is anyone waiting with questions . All right. And lets march forward. I want to go back to your latest gni steady. It shows that for g connections are expected to overtake 3g connections in the u. S. Around 2016. But 3g will not surpass for gm europe, even by 2018. I was confused. I thought that the u. S. Should be looking to europe for how to define its wireless ecosystem. Do they have a problem . It is the rest of the world which lives for now in two or 3g land. One of the things we have done is uniquely here, and industry policymakers take credit, we have made spectrum available that has enabled our carriers to move to 40 and get those networks filled out in a way that other countries are lagging. We did this 700 mhz Digital Television transition. We were the first in the world. Other countries are playing catchup. These kind of advances, the flexible life approach that Roger Sherman talked about earlier today, these enable carriers to move to 4g in a rapid way, and we have benefited from that. We have the first broad scale deployment, the first country that moves to 40 advanced technologies. We have, from a Vendor Community perspective driven Development Jobs into this country. Every major vendors, regardless of the nationality of their headquarters to what is their fourth developed in the u. S. If it has been a tremendous benefit to the u. S. To use the spectrum policy to drive the head and be the world leader right now, and it would be nice if we could continue to do that it would be nice if recognize that this is jobcreating. Being a leader produces jobs in the u. S. We also have to give the american carriers credit because in this country, what we take for granted is the exception and not the rule. When you are buying Wireless Service your paying the same amount if you are 2g, 3g, 4g connection because the wireless carriers want you to have the best possible User Experience, and that is usually the most advanced. In other countries, in europe, in the u. K. , for example, three out of four carriers charge a premium for 4g. You have to pay somewhere between five and 10 pounds, eight to 15 extra per month to have 40 services. When the smallest carrier in the u. K. Offered for she service for the same price as 3g, you know, the other carriers accused him of devaluing the product rather than, you know, realizing their great advantage that consumers have and the carrier actually has because the price per bid goes down. If you go to continental europe, here, you know, you get to it does not matter how big your pocket is, you get the fastest speed. For example, in germany the bigger the bucket you have the faster the down the speed that they give you. So usage like that, you know, is also, by the way, an explanation why sometimes that output speeds are faster because they are artificially limiting the access to the 14 networks. So the average speed goes up if we take all of this piece the number of people, the average. Whereas in the United States the median speed, it is actually higher. Because we approach wireless in a much more democratic way and in much more bleach and way than the people and carriers in europe. You have nine new study on these international comparisons. I got some amazing statistics, many of which make the United States look pretty awesome. That me talk about two in particular. The u. S. Used to lead the world in wireless download speeds, but we have been overtaken by canada, japan, and france. How can understand losing out to canada and japan, but not france. What is another route of this loss in speed and how can we get it back . There rick is spectrum allocation and sizes. They have made larger pieces of spectrum available. And we have to college together. Through pure happenstance the wireless carrier can gate 20 megahertz of spectrum. Speeds are compatible, but it is not working everywhere. In europe you buy this spectrum and nationwide. Here, you know, wireless spectrum is divided in 437, no joke. 437 with those levers of spectrum, and then they are put together in different ways. With the cellular spectrum, the pc as spectrum is 100 something. So having contiguous spectrum is extremely difficult and a trivial task for carriers everywhere rose and so that is part of the cancer. One other statistic that struck me from your report is about how much more the u. S. Wireless operators are investing relative to their peers. You are looking at a wireless cap x and say that we are at about 109 per inhabitant verses 55 and the european union. Now, can you attribute this difference to any particular policy differences . Just too many things changing that would come found that analysis. The most significant policy differences that in the United States of wireless carrier can use whatever technology they want on whatever spectrum the half. And that allows significant flexibility for the carrier, and they can mix and match. In europe and this changed in a few countries, but previously to this round you pop spectrum for a specific technology, and if the market said, i dont want to g service anymore, the carrier had to say, im sorry, the government tells me i can only give you to g service on this spectrum which is inhibiting the market to market development, investment and, you know, the welfare of the entire country. Go ahead. This question is for roger. He mentioned the difference between the United States and u. K. I was wondering if you could talk about the 3g options. I no there was a huge issue. They came in at 22 or 23 million pounds. Again, about three to 4 billion pounds if i recall. I am wondering if that had any effect on how the service is deployed. Many people criticize the auction for being botched. I am wondering if you have opinions one way or the other . I think, you know, what we see and saw was a lot of really bad hangover from the 3g auction where the european carriers went really crazy and spent a tremendous amount of money. And to a certain extent they botched it themselves by, you know, adopting a very needed approach. And rather than stimulated usage like the u. S. Carriers for a European Company at that time. And that was, you know, 2,000 when did not work for them . Late 90s, almost 2,000 when we were chastised for using our Wireless Connection for silly things like power point presentation is because the cost was so prohibitive. And i think that this hangover and the very slow adoption is what actually diminished the value. Are there any other questions . We are getting close to the top of the hour. Thank you. Roger is gone, but i would like task the panel how we will maintain the global and the two most urgent things you would ask for implore the fcc to do or not to do in order to speed as along the road . Well, i think i will start with it. You know, we can all agree that we need more spectrum. Spectrum is the fuel that drives this engine. And the other thing, you know, maintaining and light touch environment that has benefited as so greatly over the last 30 years. And now that things are working so well we are trying to change the formula and i would greatly caution from doing that. To which i would add, resist the temptation to take a snapshot of todays market and consider it static. This is the hardest thing for policymakers to get their arms around. Markets are dynamic, technology is dynamic, everything is moving in changing. The north star should be whether consumers will benefit or be harmed, but resist the temptation to take a snapshot. Make that voluntary incentive an option. I am not focusing on static. This is the early days. One of the projects we have going on is a 15 me your look at the wireless market. And this is comparable to what the Semiconductor Industry does, which is think about laying out a road map 15 years out. And once you start thinking about eight in 15year terms you stop thinking about the market being static and start thinking about all the different possible uses and realized it puts more weight on the investments. It puts more weight on the flexibility, and it puts less weight on what is happening in the market right now. So having a longer time frame which emphasizes the dynamism is extremely important. You will get the last word if you can tell the chairman one thing. One thing. I would say, you know, encourage innovation. To not put up barriers that will make Application Developers trying to do creative applications, operators trying to deploy new networks, do not put up barriers that will make them think twice about investing in the marketplace. I want to thank everyone for coming. I well wrap it up. We will see if i get invited back. Thank you for hosting as. Thank you for coming. Lets give the panelists and nice round of applause. [applause] [inaudible conversations] coming up on cspan2, more Campaign Debates in key races from across the country, nxt. On that next washington journal with the 2014 Midterm Election next week our Campaign Debate coverage continues. More than 100 debates for the control of congress. The cspan city story takes book tv and American History tv on the road traveling to cities to learn about the history and literary life. We partnered with comcast for a visit to Colorado Springs, colorado. Sent into the american southwest to explore the region, similar to lewis and clark who were sent to the northwestern part of the newly acquired louisiana territory, pike was sent to the southwest part of the territory. And from his perspective when he came out here he walked off the map, went to an area that was unknown. When he first sees a grand peaky thinks he will reach the top of it in a few days. It takes weeks to approach. Any breach what we believe is a lower down. They turned around and at that point he wrote in his journals that given the condition, given the equipment that they had at the time, no one could have cemented the peak. Pikes peak inspired the poem that became america the beautiful written by a man who came here to teach a summer course. And that you down to the planes from the top of the mountain inspired poetry and the images that are captured in that poetry of the United States. Watch all of our events from Colorado Springs saturday at noon eastern on cspan2 book tv and sunday afternoon at 2 00 on American History tv. In georgias 12th Congressional District incumbent john barrow is up against republican challenger rick allen. They recently met for a debate in atlanta. A political reporter lists the race as lean democrats. This is a half hour. The 2014 Atlanta Press club today series brought to you by georgia public broadcasting. Now the race for the 12 Congressional Districts. Good evening, everybody. I am brad means. We would like to welcome you and our live studio audience to the Atlanta Press debate series originated from this areas of georgia public broadcasting in atlanta, a debate between the candidates for georgias 12th Congressional District. Setoff Congressional District is in southeastern georgia, some of the law of larger counties. Lets meet the candidates. They are, in alphabetical order, break allen, president , ceo. And incumbent john barrow currently serving his fourth term as congressman from georgias 12th Congressional District. Lets meet our panelists. Merediths anderson is an evening anchor. Walter jones is a political reporter and analyst. And Michelle Wirth is a reporter for wabe. This debate will consist of three rounds. For more information on the rules, please visit Atlanta Press club website. Lets get started. The candidates will be asked one question from a specific panelist, and one question will be posted both candid its. You get the first question. Good evening and thank you for participating. Mr. John barrow, an issue in this campaign has been the percentage which you have voted with the Democratic Leaders of your party. What is the correct percentage . More importantly, you have said that independence, what is important to you is not telling the line of either party, but how can voters be assured of that as long as there is a deep behind your name . None of the percentages that have been offered provide a reliable guide because you can cherry pick, the statistics to say almost anything. My opponent says i support president obama 80 of the time. He is counting votes in some years and not other years, treating small points the same as big points which is why the depollute watch congress for a living never rely upon this aggregate statistics because they know that it is meaningless. When it comes to this position on obamacare, gun control, immigration, you name it. That is why organizations like the chamber of commerce , the National Federation of independent business and the National Rifle association are endorsing me. If they agreed with ricks position there would be endorsing me. What hes saying about my record just is not true. Allen i would like to respond to that, if i could. Moderator go ahead. Just to be fair, very quickly. There will be opportunity for statements and rebuttals. Abject. Moderator Michelle Wirth, it is your turn. Please tell us what you think about what mr. John barrow said about his voting record. Allen what we were referring to with our ad was a letter that mr. John barrow wrote two years ago. And he said, he did, in fact , vote with the president 85 percent of the time. And so i dont understand why you would write a letter telling their constituents you will vote with them if you voted with the president 85 percent of the time but in this cycle utah something totally different. I can tell you that i would not be voting for the president. Moderator meredith anderson, you get to ask a question to both candid its a lot of your voters, in fact most of them our viewers. We are from that area. I wanted to put out to them, to the people will be voting for either one of you, what do you want asked. And the majority of those who reached out to me wanted to know about the ads. They say, negative, negative , negative. Why. And they wanted both of you to respond to. Moderator . , you get to go first. Barrow first off, i am not responsible for the ads attacking my opponent. I share a lot of concerns that people have. This is my opponents who has made his Outstanding Achievement as a private businessman his soul qualification for office. So people have concerns. People are more concerned when some of these contracts have been set aside for being illegally entered into in the first place. When everything my opponent says about my record, which is a matter of Public Record , this stuff about his is something i cannot find out about that pawlenty wants folks to take his word on. When anything is said about my record it is demonstrably false. I am not buying it and i dont did anyone elses. Moderator you get to respond to the question about negative ads, rick allen. Allen there is some reason that barack obama and nancy pelosi are out there raising money and spending almost 7 million trying to trash my business. Now, the Biggest Issue is not ads. The Biggest Issue is jobs, the economy, and this deficit. Why in the world, if that is the Biggest Issue, which you try to take down the Small Business . We are one of the most trusted businesses in the country. I am proud of the business. In fact, i am proud of this fact, they have not been able to find one owner, one employee, or one subcontractor i have worked with to put up on television and talk abou