A danger to our citizens and our communities. Secretary fox announced the rule making for the safe transport of crude oil in july of 2014. Were still waiting for those final rules but the longer we delay, the more that lives are actually in danger. And those standards call for tank cars both retro fitting old cars and building new ones for tank car thickness the length of time how long the shippers have to refurbish or build new cars and the speed and routes which these trains take, all of this is in this rule making. I think its critical for us to get some certitude in terms of what the new rules are going to be. So mr. Brown, and mr. Lonegro, just a question to the two of you. About a year ago, jenese whoa eming train carrying 2. 7 million gallons of crude oil derailed in alabama, derailed and spilled oil all over the wet lands. I want to ask to see what your company is doing to make sure that is not happening again. And last year a scx train auto derailed in virginia and spilled 30,000 gallons of crude oil into the james river. What is your company doing to make sure the safety of oil carrying cars what is your company doing to make sure we can give safety to those neighborhoods. Mr. Brown. Yes, as i mentioned earlier, we have some safety precautions and protocols that we have applied all Hazardous Materials on our various railroads. So those protocols kpluinclude things like enhanced infrastructure testing rail fall detection testing it includes track geeometry testing. We changed the visual inspection protocols so were actually inspecting our infrastructure more frequently. We have often we to that just in advance of a crude oil train if that particular commodity is being handled on one of our railroads. We have several that do that. So with a whole slate of initiatives, precautions and protocols, we believe weve far enhanced the safety of the operation and therefore are focused on prevention of future incidents of that type. Thank you. Mr. Lonegro. Yes, mr. Senate joor. Or. Understanding the volatility of the product is part of the equation. The tank car standards. We look forward to continue to work with the regulators to reach a balance in the tank car standards. We do worry about the tank car builders and the freight car builders capability to build those and the impact it will have in the building of other cars which are currently in their portfolio that would impact other commodities. Theres the homogenization between the u. S. Rules and canadian rules and making sure the International Travel of crude by rail can be supported. We have a heavy increase in what we call train securement rules. So making sure that any train that is happened is is not left unattended and b is securely tied down to prevent accidents like you referenced in the canadian incident a couple of years ago that was very tragic. The routing and making sure we have a appropriate balance of the safety and security you know that pimsa has put forward. The 27 factor test in making sure were routingeing them through that set of standards. Weve reduced the speed of oil by rail voluntarily to a maximum speed of 50 miles an hour on the network and 40 miles an hour through high threat urban areas. However the modeling work that weve done indicates that going much below that could cause dramatic impacts on service more broadly, training First Responders is an important thing if an incident unfortunately does occur making sure that everyone understands the commodity thats were dealing with as well as how to handle a freight rail situation versus say a house fire or something that might happen on the roadways. To go farther on mr. Browns point around the track standards, the level of inspections that we have is very important. Certainly the time frame between tiend r findtime frame between finding something and mixing something. We have shrunk that dramatically and make sure we immediately issue a slow order if all trains happen to go over a piece that is detected by that inspection technology. Thank you. Mr. Chairman, i appreciate your indulgence. The witnesses had important information. I did go over. I apologize. Thank you senator. As my new found status as chairman pro tem, i was anxious to rule you out of order and go forward. I am anxious to do that because its now my turn to ask questions. Apparently because i went to senateor marquee first they are now suggesting that i call on senator mansion who is to be supposed to be ahead of the gentleman from massachusetts. Thank you senator. West virginia as you know is quite a rail state. If it werent for rails we might not be there. We have 2,200 miles of rail. Its some of the best paying jobs. So we appreciate the opportunities. With that being said, i start looking at different things. And we go on and debate the keystone pipe line, we talked about it a bit and the concerns we have and the how to make it safer. With the xl pipe line, i believe and i think everyone here believes it will be built. We just dont know exactly when but it will probably be built. With that being said how is that affecting the railroads because i know youre upgrading your systems to be able to handle 800,000 barrels a day. The pipe line will take that tonnage away from you or that revenue. Youll be building up infrastructure for that. Is it your model or plan . How yall prepare for that . So if i could ask anybody who wants to chime in here. Start with csx. Since they are one of the bigger carriers. Thank you senator. Were proud supporters of West Virginia as you know. The Rail Industry by and large is growing and one of the opening remarks that the Ranking Member made at the beginning was that rail freight would grow nearly 100 by 2035 so theres ample growth in many different markets in order to handle the capacity that were building. Were certainly forecasting growth in many markets not simply in the crude business. Crude represents somewhere between 2 and 3 of the railroad. You dont see that being a threat or model to your plan or investments that youre making anyway . Correct. Do all of you feel the same way in what youre seeing and analyzing . I think in the short line were very similar. We see growth in some Market Segments. We see diminished volumes in other Market Segments over time. So we dont have the railroad pitted against the oil pipe line. No. You think they basically Work Together . Certainly we would like to move most of it by rail but, you know, there are refineries on the east coast which im sure will still need crude by rail and we look forward to continuing to serve them. The other thing infrastructure such as highways and waterway products for infrastructure, weve been able to extreme line that through legislation, for some reason we werent able to stream line the ner still very costly and time consuming. Do you you all have a way that you can try to give us some help that we can help you all to stream line the needs that we have for infrastructure including rails in this country. From my perspective, the critical part of doing that is the smorhoreline tax credit being skpeer extended over time. Just a two week extension at the end of 2014 leaves a lot of potential investment. So the uncertainty in the tax code gives you constraints. It leaves potential return on investment when you dont know how the tax credit may apply or not apply. What type of cost are you occurring because of the permitting process and time consumption. Is it 1 , 5 or more. Do you have any idea of the cost to you . It certainly is adding a lot of opportunity cost. A lot of the infrastructure that we build, were building because customers need that infrastructure to generate additional capacity so that we can handle their additional volumes. And so the length of time that it takes, the amount of money that we end up paying consultants and lawyers in order to help us through the process. Any reduction in time and the amount of documentation and review process that it has to go through will help us put that Infra Infrastructure in the ground more quickly. Ptc will be would be. The positive train control. If anyone can chime in on that. I know youre not going to make the 2015 dead line, correct . Correct. And you spent 5 billion so far. Correct. If youre repeating but any quick solution to that and resolving to that. What kind of time extensions do you need . There arent any Quick Solutions unfortunately. To your point, weve invested 5 billion so far. We will invest another 4 billion as an industry before were all said and done. I was asked about how long it would take csx in order to complete positive train control. I suggested with a large caveat that our plans would take us through the end of 2020 so were certainly looking forward to working with this committee in introducing legislation very similar to what was introduced in the last session. Thank you mr. Chairman. Youre welcome. Senator. Thank you very much. Appreciate it. Thank you to all the witnesses. Just as senator mansion was talking about his state, the state of West Virginia, minnesota also has a lot of train service, freight service. In fact we hit a record 6. 8 billion in agricultural exports in 2012 which is an increase over the previous year. Its continuing to go up. Were the fourth largest agricultural exporter state in the country. You can imagine we care a lot about the freight rail issue. Were proud of the work thats going on next door to us in north dakota. Its helped to bring down the cost of oil and it has helped to bring down the cost of manufacturing. So it has opinion good but we also have a lot of needs for rail. I think its been a balance with all of that as well as our increasing agricultural market. Im truly one to believe that the way we have gotten out of this down turn and the way we now expand our economy is by bringing more goods to market. By exporting to the world. Weve learned were not we have a steady domestic economy but the way we truly expand is by getting these goods to other markets and making things in america again. So thats why i care so much about this. Our farmers have traditionally held a competitive advantage over foreign producers like brazil and argentina due to the reliability and cost effectiveness of our rail and because agriculture is the largest user of freight transportation in the u. S. , the rail service delays we saw last year resulted in a lot of cost increases. Obviously its damaging but what im concerned about is it starts making us less competitive with these other food producers. Mr. John what do you think the impact would be on domestic agriculture of american export markets turn to producers like brazil and argentina. It would be significant. As you said agriculture in some ways is leading the economy. Were very quickly going from a world that has 7 billion people to in the year 2059 billion people and they are all going to want to eat and they are going to need agriculture to provide that for them and certainly fertilizer so were concerned that the railroads are spending billions of dollars but we see that unfortunately they are not adequate in many areas to meet the demand and whether its in a number of different areas, wed like to see more focus on the ag space. Thats why last year the Surface Transportation Board as you know required reporting has that been helpful. We worked on that. Absolutely. We appreciate that. Its interesting how affective sun sunshine and transparency could be in terms of motivating productivity. You mentioned in terms of peak capacity, one thing id like to note is in 2014 were very close to peak car load volume. Everybody expects growth again this year so were looking at a net worth thats strained. Any time theres any kind of challenge or shock whether it be weather, record harvest et cetera, its very tough for that network to respond so thats why were supportive of efforts to try to dressaddress that ahead of time. Thank you. We have seen some of the markets that weve seen some improvement in. We want to keep that up. We got some help with some of the our iron ore shipments that had to go out and some of the shipments up in northern minnesota. As you know lakes freeze at some point and we werent going to be able to get the shipments to the ports. We also had some improvements with propane that we were worried about. So i know the Rail Companies are trying to improve this but its been a froinggrowing problem. We want to make sure that people understand the importance of ag as we go forward. Another challenge to the implementation, i know some of my colleagues asked about the ptc implementation is the fcc as you all know must approve the citing construction and replacement of the 25,000 towers. I know senator i want here for his question but we have a confirmation hearing going on for the attorney general in judiciary. I wanted to followup with something. That is following the fccs announcement last year that the class 1 railroads to begin using previously constructed poles, something that we advocated for. Do you think that will help stream line the approval process. I appreciate the support for the stream lining efforts and the exemption for existing towers. That was certainly very helpful and brought that number down to that 20,000 that you referenced. My sense is the batching will help stream line the process. Theres a limit to the amount of batching. For example we cant send all 20,000 through at one time. So it will certainly help. At least in the preProgram Comment and post Program Comment we are seeing the approval process in essence reduced by upwards of half. I think it has been helpful. I think its a magnitude problem now. Very good. My question is coming from the port perspective. But in deluth, we have a major part. Obviously part of this has been with the increased rail usage to coordinate it with the port. Can you talk about the importance of connecting freight rail and the ports and how do you think we better align planning from the federal government among the states ports, and local communities to address those choke points and whats been going on . Thank you senator. My testimony really folked on the importance of the connectivity. Clearly, global trade is a huge part of the driver of the u. S. Economy and will continue to be so, including agriculture. The ports to be successful, i stated that no port today i believe, can be successful without having rail and intermodel. For us in miami at the end of a long peninsula its very important that we have partners like csx because they are the ability to go from 1 million to 4 million. We have the infrastructure but without the ability to move the product. You cant move it on your nations highway system. I cant grow double triple volume by moving it up i 95. It has to get into the heartland of america. Thats the vital link. The policy and again i think over the last few years, i will say this, i have noticed more of an interest on the part of ustot. A lot of it is focused partly on the tiger grant. A number of ports including mine received tiger funding. I think you wont find any port, large or small, the entire system of ports in the United States believes in the importance of connectivity. Not just within our country but clearly the ability to connect globally to the world. Rail is essential, not just deep water. Dredging is important. Harbor maintenance is important but often times, rail is the missing link, excuse the pun but it is in fact the vital piece. As i have stated the billions that i have invested a billion dollar port tunnel, 50 feet of water would make no difference whatsoever without having that rail connection. Thank you. Thank you very much. I am going to go back to the judiciary thing. If you have any questions you want me to ask. I trust your judgment. Let me start with mr. Brown. Mr. Brown i introduced the 45 g tax credit in the year 2003 as a house member. I apologize for our inability to reach decisions in regard to its extension, other tax Code Provisions in any kind of timely fashion that would provide a level of certainty and an ability to make better decisions about investments. This hearing and this committee is generally focused on rail transportation and the safety aspect of rail. What does 45 g do that allows you and other short line railroads to be more safe in your operations . How its thought of as an Infrastructure Investment but i assume there are consequences, the money that you spend on infrastructure as a result of 45 g, means that theres an ability to support other efforts within your company in regard to rail safety is that a fair assumption and would you describe that to me . Yes, sir. Why does this matter. Thank you senator. Yes, its actually very critical. We have limited amount of capital that we can invest in properties. Some of the railroads are challenged because of low density. They serve important customers but often its a very low density customer. Its often a customer in a rural area who otherwise would not have the ability to have rail Service Provided to them. So it allows our limit capital dollars to be spread further and certainly those capital dollars are invested based upon the important upgrading of infrastructure from a safety perspective so as we prioritize our investments each year in our infrastructure, were certainly basing that upon improved safety through improved infrastructure integrity integrity, maybe bridge updates, maybe uping the weight limits. Things that make it more economically viable for our customers to safely and efficiently over those short lines and often in rural areas link to the class one networks and therefore throughout the entire transportation network. Well, what i wanted to make certain that we get on the record that while 45 g is an important tool for providing greater efficiency, it also has a significant consequence to the ability to provide safety, is that true . Yes, sir. The vast majority of what were investing in is rail upgraded bridges, things that improve theinfrastructure. The intention is to introduce the extension of 45 g here in the next few days. I look forward to educating and encouraging our colleagues to continue the practice of utilizing that provision in the tax code for the benefit of safety and efficiency. Yes, sir. Certainly matters in places like kansas where short line rail has become such a significant component of how we get agricultural goods and products to market. In an effort to be its easier to be bipartisan here than it is to be a kansian supporting missouri but i just wanted to make the offer to you and senator blunt that those trains that operate in kansas city, are also the trains that operate in kansas. And so if i and my staff can be of help to you in the terminal staff in kansas city, please help us to ask in ways that we can. Kansas city is a major terminal for what transportation occurs in our state. Its growing. But what happens at your terminal is critical to us. Id be glad if you had something that you want to tell me this morning that we ought to be focused or remind me of your importance that you do for kansas. Thank you. I look forward to working with you. Great. Let me ask some questions about circumstances that we found in kansas. Our Utility Companies have expressed some concern about access to coal. Our Grain Elevators have expressed particularly a year or so ago a concern about access to rail cars for grain. The culprit at least and the explanations that are often provided is that rail cars are being used for the transportation of petroleum for oil and therefore less available for grain and coal. Is that and i assume the suggestion is that theres more money to be made in hauling oil than there is in hauling either one of those products. I am interested if either one of those situations is true. This is probably a mr. Brown question for the kind of things that youre hauling but is there a decision thats made based upon the most profitable return based upon the commodity being hauled and i would guess that theres a consequence now to declining oil prices such that are the circumstance that you may have been in with a shortage of rail cars is less of a problem today than it was maybe to the benefit of mr. Johns customers fertilizer prices may be slightly lower. Any thoughts about how the change in oil price structure affects your ability to provide services otherwise to kansas and others and agriculture and utility states that utilize coal. Well, in terms of the various commodities that you mentioned often they are in different types of equipment. Cole is handled in coal cars and oil is handled in tank cars and agriculture are certainly in covered hoppers. So its different types of equipment. We certainly endeavor to have the available supply of cars either through our car 1 partners or those that we provide ourselves for our customers to be able to move the amount of commodity that they wish to ship. As that grows we try to keep pace with additional equipment throughout the various Market Segments. So in terms of the oil business, we know that price is reduced the volume has lessened greatly so in some cases we have some of those cars in a storage status but maybe mr. Lonegro deals with it on a much larger scale than i do. Thanks. David is right they all move in different pieces of equipment. In the crude situation specifically, the grand majority of those are privately owned by the shippers not by any of the railroad so we dont allocate those cars to any particular customer. You know, there are different prices depending on different commodities and ultimately what the market will bare based on alternative means of transportation, risk, et cetera. You know the Service Equation there are multiple networks within the broader Freight Network so we look at the coal network and Grain Network and things of that nature but they all utilize the same crew base the same locomotives and the same track infrastructure so it is very difficult if not impossible to give priority, you know, to any one particular commodity over another because you know if for example, you have one commodity that wants to move at 50 or 60 miles an hour and you have another commodity that might move a little bit slower it actually degrades your Network Capacity for everybody so we try very, very hard to balance under our common carrier obligation to balance the way that we treat all of our customers and make sure we have the equipment and resources necessary to handle todays demand and tomorrows demand. Thank you very much. Thank you mr. Chairman. Thank you senator. That kansas missouri feeling will end when the first basketball game comes up im guessing. Senator pete ers. Peters. Thank you mr. Chairman and thank you for your witnesses on your testimony about the Freight System today. I appreciate it. As a new member of the committee, i have enjoyed learning more about this wonder wonderful system that we have in the country and the ways we can improve it. I have a couple of questions one for mr. Lonegro and one for mr. Brown related to michigan specifically. My understanding is michigan presents somewhat of a challenge to the Railroad Industry because were a peninsula, basically two peninsula so in terms of cycle time its a little bit more problematic particularly in Northern Michigan. I know yours are up in central and Northern Michigan servicing just a few customers is your bread and butter as you take their products and try to get them into markets and then has to get into the broader stream of csx and other National Rail ways go. If you could comment on cycle time and the interconnectivity with csx and other rail lines that service michigan. Has that been a challenge. Is it something that we need to be aware of . Does it perhaps impact michigan more than other states for the fact that were geographically a peninsula. Yes. Certainly last winter with our class one interchange partners, thats primarily csx in michigan. We saw cycle times increased as they did over the entire national network. Our michigan shorelines are a really good example of the g and w short of niche where we have height lighter density line thats are well connected to class 1 partners and they are very fluid as we talked throughout the testimony. There was a period of time when in 2014 when fluidity was challenged. It started in the winter. It was asser erxacerbated by and we shared in that growth as well. We have seen marked improvement and overall velocity and fluidity in the interchanges in michigan. So the point where we have seen additional traffic come to those railroads and we saw demand increasing and overall equipment utilization through fluidity. Thank you. Michigan has revitalized as i know youre well aware of it used to be the mainstay of our automotive business. We waited for the economy in michigan to come back. Its nice to see that it has. So we are putting investments in the grand rapids and plymouth subdivisions which we have there. I think the Overall Service networks you will see as the Broader Network improves. Certainly the cycle times will be instrumental in that. We have, i think some new business that is interchanged between some of the kancanadian railroads and csx so we look forward to having our traffic run through the crew bases there. Right. Thank you. One final question. You mentioned in your opening comments the impact of the positive train control systems and cost associated with that because of your unique Customer Base, very small Customer Base and i know i mentioned to you before the hearing some Grain Elevators. They have their lifeline to get to markets. Just maybe a few customers. Could you kind of flush out and elaborate a little bit. You talk ed about how the requirements are really disproportionately impact your lines and the customers that you Serve Service particularly in Northern Michigan. Yes, sir. Well, most of the g and w owned railroads do not require ptc to be installed overall. There are literally, hundreds of interactions with class ones where there will be ptc installed on their lines. Maybe we cross their line or its a point where we operate across over the class 1 line for some distance. So those are the areas theres still not much clarity on exactly what we will be required to do in terms of equipping locomotives. In terms of other ininfrastructure requirement thats may fall to our short line properties. To the point that its possible just that capital intensive requirement to a shoreline pushes it into a Economic Situation thats not viable. So i mean its that critical. In terms of michigan, its relatively a minor issue. Again, it centers around interactions with class 1 ptc installed routes. Okay. Great. Thank you. Appreciate that. Thank you. Yield back mr. Chairman. Thank you. Senator johnson. Thank you mr. Chairman. Certainly in the state of wisconsin, weve experienced some of these Service Disruptions from a number of nakt or factors, whether the increase in the freight required for transporting oil. The result of those Service Disruptions has been in some quarters a call for greater involvement by the Service Transportation board. Other potential government intervention. Id like to go down the panel. Certainly personally as somebody who utilized rail service for 31 years in my Plastics Company i would have a great deal of certain for the federal government getting involved and starting to allocate who should get what but i kind of want to get all of the witnesses, their opinion in terms of the pros or potentially cons of greater involvement by the federal government as opposed to the private sector taking care of it. The railroads produced to the order we produced measures to the stb that go to the fluidity of the rail network. Those are published on a weekly basis so you have a good understanding already about the fluid of the rail network. That said, most of those are going to give you a snap shot and a retrospective on how the railroads have performed. As i mentioned earlier in the hearing, weve invested literally billions of additional dollars based on where we saw service and volumes in 2014, months ahead of the temporary order. So in terms of spurring action by the railroads, we had already taken the action, we had already recognized that we needed to invest more in order to deliver service for our customers. Let me interject. My concern is if the government got involved the incentive for investment might be proreduced. Would you be concerned about that as well. I think the challenge is if the government begins to pin point where that investment should care. Again its a network of networks so its very difficult to say that the investment should go to a specific location or to favor a specific commodity when were trying to serve, you know, a multitude of commodities and have hundreds of thousands of cars on the system evident. Its hard enough for a business thats fully aware of the Customer Base to make those Capital Investment decisions efficiently much less a bureaucracy. As a customer, what are your thoughts on that . Im sorry. Well, from my er secretaryive, having been inside government for 35 years what i have learned and being in an Infra Infrastructure person, i what i seen is the successes come from our partnership with private sector. Having run a port which is a 30 billion economic engine to my community in order to make our port successful and to move things forward, we try to get government out of the way. One of the problems whether its at the National Level or washington or state level or local, the success comes where youre able to truly partner with your private sector partner and with all levels of government. Really to understand what are the rules and try to one of the frustrations i find in government is that there is way too much bureaucracy. We tend to get weighed down. We lose our way. We cant find our way out of the forest for all the rules and regulations. So i think its a problem at all level including within my own local government. The state of florida, i think has taken a lot of advances over the last four years regardless of political affiliations, democrat or republican, one of the things florida is focused on is how can we be more business friendly and create that environment. Mind you im stepping in as the top salesman for the state. My new role is the head of secretary of commerce for the state so my job is to sell the state. One of the things we will sell is the fact that were a business friendly state so we are concerned about the environment. Were concerned with obviously the importance of education but were also concerned making sure that we dont overregulate. Thats a big way to sell your community and sell your state. Okay. Mr. Brown. I would just kind of echo what mr. Lonegro said as well as say, you know, for example, mr. Chairman, the state where we started a new Railroad Operation called the rapid city Eastern Railroad in 2014, we will start up operation a itthe stb did require the Canadian Pacific did conduct regular communications with stb about the fluidity to require how many locomotives and how many cars are interchanged at the new interchange. It was the point where we began operating. We, as a part of that process, we voluntarily eftstablished astb, regular communication ourselves. So we could make sure that we understood the level of communication that was happening between the two companies. They understood the amount of cooperation that was required and was occurring in order to successfully began that operation and that we were all talking about the same facts. So that process occurred over a period of a few months. It got to the point where there really wasnt much to talk about. So it was a 15 minute how is it going this week call. We ended that process. So that can be helpful. I think it more informed stb so that as shippers come to them about a specific operation whether it be congestion or start up operation as in our case, they have the information that they need to respond and hopefully, we are successful in how we do that and its a positive story and in this case, it turned out to be extremely positive. So thats a good involvement. Thank you. Thank you mr. Chairman. Thank you senator johnson. I would just say too, i would agree with the senator from wisconsin when it comes to having the government mandate investment. I do think what we saw last year with some of the bottlenecks is a need for Greater Transparency about where those were car supply, power, those sorts of things which was very helpful because we have literally millions and millions of dollars at stake in our economy when you cant get rail transportation in a timely way. So weve introduced a bill which we passed out we will introduce a bill which we passed out of this Committee Last year which would basically focus on process reforms at the stb and allow more members to discuss pending business and address serve hesices on the front end rather than when it becomes a crisis. I look forward to working with members of the committee on something that makes sense. Senator. Thank you mr. Chairman. Thank you for holding this hearing on a really critical issue thats unappreciated by a lot of the public who focus on passengers and commuters but we know how critical freight is and how important safety and reliability of freight transportation is so i want to thank all of you for being here today and focus for a moment on the safety issue as it concerns folks who work on the tracks, our workers who are out there and whose safety can be at issue and even at risk. So often. Late last fall the national Transportation Safety poured ishboard issued an in depth report on the tragic loss of 15 workers in 2013 alone. 11 on railroads and four on transit systems. The ntsb made recommendations as you know across the industry to the federal Railroad Administration as well as other actions like oshca. These recommendations urge the agencies and the industry to do more to protect employees on the railroads, insureing that they are given proper briefings and sufficient information and devices that will protect them in the course of their work. The death of robert luden a little more than a year ago in west haven connecticut tragic death, fully preventible unnecessary, leaving his family and his colleagues without him, just shows how this issue can be a matter of littererally life and death. So id like to ask each of you what can be done to make sure that regulators like the fra, its an agency of government, act on recommendations from the ntsb especially for workers who are often the most in danger . And my view is that there should be consequences for the failure of the fra to act in protecting workers. This issue is national in scope. So id like to ask even of you beginning with mr. Lonegro, what can be done to compel the fra to follow recommendations of the ntsb and other common sense measures that should be taken. Thank you senator. We opened up a dialogue with ntsb as part of the positive train control mandate. I have met with them several times, both in terms of the departing chair person as well as the new chairman. And as part of that, i think it has been a healthy dialogue around what training requirements are necessary to protect Railroad Workers both in the cab and locomotive and on what we call the waste side or track side. One of the four mine pillars of positive train control is to protect the track workers when they have an established authority along the line line. That area will be where the head worker in charge there the foreman or employee in charge we call them will have the authority to allow a train to pass through or not and at what specific speed. So i do think positive train control will significantly address that certainly on the process side, the training side, the safety briefing piece and the communication in additional technologies like, you know, the cameras which are both inward facing and outward facing will help us understand the true root cause of many of these accidents. In terms of the interwork rz between the ntsb and fra, i will have to leave that one to which commit committee committee. I will tell you that we look at the ntsbs most wanted list that they published for many years and determine whether or not those make sense for us to deploy. This inward facing camera which has been a part of the number of investigations that the ntsb has put forward makes a lot of sense to us. Thank you. You know i have been an advocate of positive train control as well as a number of the other measures that you just mentioned such as cameras, alerters, redundant signal protection, i think they are vital but positive train control, certainly is kritingiccritical to the safety strategy. Many of the really tragic incidents could have been prevented with positive train control, wouldnt you agree . I would. And let me ask all the witnesses, isnt it unfair to the railroads that have made advances and are on a path to meet the deadline to potentially postpone the positive train control mandate . With all due respect i would be very surprised if any railroad makes the 2015 deadline. You may remember that the california delegation had proposed a 2012 deadline as part of the deliberations and clearly that was a reaction to the tragic accident in chatsworth, california. At the same time that agency metro link had committed at that time which was 2008 to be finished with positive train control by 2012. They have just recent ri announced that they will only be in testing in 2016. So we are all working as diligently as possible and, you know companies can show their will and their commitment by the number of dollars that they spend and the number of people that they allocate to positive train control in the thousands of people that are working on it everyday at csx and in the industry and the billions of dollars that were spending in order to deliver it just as quickly and safely and efficiently as possible i think is testament to that. My time has expired. I dont know whether any of the other witnesses have answers to that question but i thank you mr. Chairman. I thank the senator from connecticut connecticut. I want to thank all of the panelists for all of your great responses today. We will keep the record open for a couple of weeks but i appreciate everybody being here today and participating in this. We will il inform our discussions and decisions with regard to how we deal with and manage the rail issues under this committees jurisdiction. So thank you again and with that, this hearing is adjourned. Thursday on cspan, day two of the confirmation hearing for attorney general nominee. Live coverage from the Senate Judiciary committee begins at 10 00 a. M. Eastern time and the Senate Banking Committee Considers a bill that would impose new sanctions against iran for its nuclear program. Live coverage at 10 00 a. M. Eastern here on cspan 3. Keep track of the Republican Led Congress and follow its new members through the first session. New congress, best access on cspan. Cspan 2, cspan radio and cspan radio. Org. On tuesday, the Internet Education Foundation head its annual internet policy conference in washington d. C. In this part of the conference, well hear from the head of the federal trade commission and the u. S. Chief Technology Officer about federal technology initiatives. And congresswoman rogers talks about how members of congress use social media. This is an hour and 45 minutes. Hello folks. Were just going to get going. And i cant believe were getting going at 9 00. So im really excited. Thank you everybody who braved the weather and made it out today. I know a lot of folks have some trouble because a lot of School Closings in Montgomery County and fair fax. So a lot of folks have to deal with child care issues. So we are Live Streaming thanks to the Internet Society and cspan is here today so we will be televising this. Theres a lot of ways to gt out and of course on our byoutube channel wevell be showing the video and audio at a later date. Thank you for everyone showing up. Im really excited that you made it here and that were ready to go. On your agenda which you have in your packet, you should see that the person speaking should be jerry burman. I am not jerry burman. I am tim lorden. Terry is the founder of the Internet Education Foundation which organizes and produces the state of the net along with other projects like the congressional internet caucus advisory events and congressional app challenge and several other projects over the years. Jerry lives in a cabin in West Virginia during this time of year and he never got out of that cabin. So he sends his regrets and i wish he could be here because jerry reates the Internet Education Foundation 18 years ago with a lot of folks in this room to be a neutral platform where every internet stakeholder could come together in good faith and with civility debate these really important internet issues. And jerry believed that everybody was an internet stakeholder even if they didnt realize it. And i think that has born out over the years to be truer and truer and truer. There are more people coming to state of the net. There are more people coming to the debates in discussion about internet policy that never would have considered themselves internet stakeholders several years ago. That vision from jerry has proven to be more and more true as the years go by. In your pocket just a little house keeping. You have an agenda. You have a list of our Board Members to whom we are really grateful that keeps us balanced so we dont take any positions on legislation but were fair brokers in these debates. The Board Members will be introducing people throughout the day and youll get to meet a new of them. We also have the wifi information which is superimportant and the for twitter if youre tweeting please do. The sotn15. So please tweet early and often. I want to thank our sponsors. Our sponsors are google, comcast, nbc and verizon. We really are appreciative to them and we have several other sponsors in the packet. Theres more information on them. Without them we could not find a venue of this size to host all of the conversations that we really need to do. So lets see if i missed anything. People were asking me if we should have whats the theme for state of the net this year . I kind of thought it was prettyself skplan ittoor. Explanatory explanatory. We have bit coin coming up this afternoon which we think is a very fascinating environment. But trying to put together a theme really is kind of difficult. I mean when we had state of the net last year, i looked around and hbo and espn were cable programmars and amazon and net flicks flix were internet companies. A year later im not sure if those classifications hold. Amazon just won a couple of Golden Globes and espn astreaming online as well as hbo. Things change very quickly. Thats why we dont go with themes because things happen to quickly around here. I think we really need to hurryup because the other day in switzerland eric schmitt said the internet is going to disappear. Well have a series of keynotes. Starting off, we will go right to the afternoon till lunch and then we will go into the break out sessions. A lot of the folks in the later sessions are coming in from out of town got stuck in new york and boston. We have a few fill in folks. Every keynote we have this morning is female which i think is really, really awesome. And we have a panel on diversity and tech leader in the day that will punctuate that happenstance. So right now, id like to introduce alvero who will have a keynote conversation with the federal trade Commission Chair woman. This is the first time weve ever had an ftc chairman at the event. Im super excited. So welcome, please. [ applause ] good morning. Chair woman, ill thrilled to be here with you this morning. Good morning. Im delighted to be here. I want to thank everyone for being here this morning. And i want to thank tim for the invitation to join you. For braving the snow . D. C. So chairwoman, you are affectively the nations leading Consumer Privacy officer. You have to do a lot of big picture thinking around privacy. This morning, i want to focus around your big picture thinking on the it netnterfletnet of things but first you have an announcement to make. Yes, im pleased to be able to share with all of you that the ftc is issuing its internet of things report this morning so im pleased to be able to have a chance to discuss the report and i hope you will all have a chance to take a look at it. Wonderful. So there seems to be a tension at the core of Internet Things and wearable technology. A tension between convenience and privacy on the other. You had doggy fitness trackers connected toothbrushes and my personal favorite was the smart sock that tracked the rhythm and cadence of your run whether youre going to injure yourself. None of these things have screens screens. So there are a lot of people in this industry who think we need to fundamentally rethink of the way we do things like privacy because its really hard to give consent to a sock. On the other hand this technology produces extraordinarily sensitive information. At ces, you had ear buds that tracked the oxygen level in your blood. You had a wearable bracelet that didnt just track the calories you were burning, it also tracked the calories you were intaking by measuring your blood glucose level. How do you think about privacy for a technology that seems to collect all of your most Sensitive Data all of the time but doesnt have a screen to ask you about it . Let me answer that question by backing ape little bit and really getting to the first part of where you started which is this you called it a tension. From my perspective, i think all of the benefits that the internet of things world or big data world can provide really i think, can only flourish when you take privacy and security in to account. I think its important to understand how an Internet Things internet of things world changes the landscape and with the privacy and Data Security implications, youve already alluded to this but i think its really worth delving into it in a little more depth. The first thing is, youre right. Were now in a world where data is being collected all the time. And not only that but we are bringing these devices in to our homes. Into what used to be private spheres into our homes, into our cars and work places. Were wearing them. And the data thats being generated is increasingly much more sensitive. So thats important to keep in mind. Not only that but just the volume of data thats being generated, is exponentially greater now. What that means is there are now the potential for these very large data sets from which even very neutral or seemingly benign information from which you can make sensitive inferences. So that changes the landscape considerably. Thats one piece of it. Another dimension is what happens to that information . If im wearing a witness bandfitness band thats tracking how many calories i can consume and i wouldnt want to share that with my insurance company. What is happening to that information. Do they understand that it could be possible to a data broker that it could end up in an insurance companys hands. So thats another question that we need to think about very closely. I think the third of this that in my mind stands out is the security aspect. Few nengsdimensions here too. Not only is personal information deeply personal information at stake but as you have more and more devices, it also means that theres more potential for exposure. As of this year, experts estimated there are 25 billion connected devices in the world. In the next five years that number is going to double. And a lot of the companies that are getting into this space may not necessarily have expertise in security. Also, a lot of the devices are small. Many of them are low cost making making security much more challenging and some of these devices that were using could also implicate our physical safety so its not only personal information thats at stake but also personal safety. So lets talk about a couple of those. Sharing and security. So first on sharing. This is, i think one of the aspects that troubled a lot of the Consumer Privacy folks that a lot of that information does not necessarily stay private. The ftc released a report that found that the 12 apps connected to Health Including a diabetes app, pregnancy app they shared the data with 76 third parties. What is wrong with that picture and what is the ftc doing to fix it. Thats another issue thats a problem in this area. That is the lack of transparency
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