Heres what is ahead on cspan2. First up, the Community Indicators with Gordon Crovitz then jeb bush outlines his priorities for reducing Government Spending, reforming Veterans Affairs and improving the economy. Later we hear about president ial candidates disclose showers the federal elections commission. And from the Cato Institute a discussion on the rise of synthetic or designer drugs. Host Gordon Crovitz, what too you write about in your wall street journal column . Sunny try to support the newspapers position on free people and free markets in the ers of technology and particularly around the internet and innovation. Host how did you get that assignment. Guest ive been with the wall street journal for many years, publisher of the wall street journal. I spent quite some time overseeing the Digital Businesses of the journal. I consider myself in fact maybe the oldest possible digital native. I oversaw businesses that were based on what we then called electronic publishing, even before the internet, in the 1990s. So i lived in a time before the internet before Technology Poll policy was aimed as encouraging innovation back in the 80s and 90s and before. Government was heavily involved in regulating communications, telephones other technologies. The internet was different in the 1990s. It was liberating. It was permissionless. It vas very little government regulation. Were all beneficiaries of that and my column tries to identify areas where we may be backsliding or where we may be suppressing innovation, or not making the most of this extraordinary opportunity. Host well, you have written that washington is a disaster area for innovation. Why do you write that . Guest i think if you go back to earlier technology, like railroads and the ma Bell Telephone monopoly, those are regulated as common carriers, regulators set prices, they set terms, they set rules and we all know what happened. There was very little innovation in railroads and the trucking and in telephones until they were all deregulate, and all those common carrier constitutes un statutes up done by congress when it was so clear that innovation was being suppressed and the u. S. Was falling behind in its competitiveness. That was the backdrop for the bipartisan consensus in the 1990s the internet would be different. This was during the clinton administration. A clear consensus democrats and republicans, that unlike this earlier technologies, the internet was going to be largely unregulated. Permissionless. Anybody could launch a web site, anybody could launch an app. The government wouldnt get into deciding what prices were reasonable or not reasonable. What innovations could be used or not used. There would be no regulation of content, unlike Traditional Television broadcasting. For example with the fairness doctrine. Up of those rules were going to apply to the internet. In the last couple of years we have seen a significant erosion of that bipartisan consensus that is undermining the internet as a source of permissionless innovation. Thats why i often write about washington which is a bit eye ron yankee. At the beginning of the internet in 1990s Silicon Valley was culturally committed to trying to stay as far away from washington and regulation as it could, having seen what happened to earlier technology. And sometimes i think even people in Silicon Valley forget our lucky they are to be operating still largely in an area where innovation is allowed to happen without in most cases, governments involvement. Host well, lets talk about some of those issues and lets talk about one of the big ones on the table Net Neutrality. The new rules put in place. You say that this will end the internet as we know it. Guest since the beginning of the internet theres been this concept of permissionless innovation. People have been allowed to do what they like on the internet without government involvement. What we now have, and this is just begun quite recently the fcc is treating the internet, large areas of the internet, as if it were a 19 them Century Railroad or he 20th century ma bell monopoly. The fcc with ruled that just recently went into effect will be asked to decide whether prices are fair and reasonable, whether Business Practices are fair and reasonable. This goes under the rubric of net neutralil but really about government regulation and enables companies to lobby regulatears for special treatment to intervene in the market to have regulators secondguess what are now fairly standard Business Practices. I look back at the beginning of the internet. If the internet had been regulated as a utility under what is now called title ii, at the beginning of the speaker enter next newspapers would have octobered to the idea of news publishers who are making their news available for to on the internet. They might have complained that was unfair. News is not free service. How could these new startups not charge for access . And so there are many areas of business where the fact that there are no regulations have, have not been regulations in the past have allowed for innovation and for consumers all of us, to benefit. Lets take google. Google essentially is a massive disrupter to the old farced yellow pages business. People used to have to use the yellow pages to find a local plumber or service or product. Essentially we all now use goggle. I the fcc had had this rules now in effect, the yellow Page Companies could have complained that the pricing approach and the practices of google at the very beginning of the internet were unfair and unreasonable, and they certainly disrupted the yellow page business. All of us benefited from that, but history of regulation is if there are Regulations Companies will do their best to use them to give themselves competitive advantage, and we are just at the beginning of seeing how this will now play out with the fcc the rules only just recently went into effect. Were already seeing cases being prepared and filed and well see whether this fcc decides to set rates or regulations. The president obama and tom wheeler, head of the fcc have said this is not about regulation but the law requires the fcc to consider complaints about regulation and other issues having to do with practices on the internet. Host you have written about one case that has already been foiled, where filed where the litigant said that the regulationed rate should be zero. Guest one of the big issues on the Internet Service is lite netflix and youtube which of course transmit video on the internet, at peek times account for more than half of the traffic on broadband. That particular case involved another provider of video. It wants its video to be delivered essentially for free. That is to set a rate of zero. And that case will now wind through the system. The fcc will have to decide whether to act or to not act but for the first time, the doors now are open to companies to lobby at the fcc to have business terms reconsidered. The irony is one of the companies that was quite active in supporting this new approach to regulation was netflix. Netflix thought i think at least at the beginning of its lobbying process, that this would only affect isps. The verizons and others of the world. Thats not necessarily true. A come pelt for to netflix, for example, could complain that netflix itself has fast lanes has preferred distribution opportunities on the internet, because its built its own content delivery network. Its built its own fast lanesas has youtube. Its a good thing that netflix and youtube did build their own fast lanes otherwise it would slow down traffic for all the rest of us. But Net Neutrality was lobbied for and advocated by lobbying groups in washington on the ground there shouldnt be fast lanes. The internet cannot possibly function without fast lanes so its now were now at the point where we have to see which fast lane regulators think are okay and which ones they think are not okay. Host are we approaching internet 3. 0, 4. 0 with the build ago the extra fast lanes . Guest well, i think the demand for broadband continues to grow enormously. I dont know if were in 3. 0 or 4. 0. I think its still early days. The technology of the internet and broadband is less than a generation old. People are finding new yous for braun all the time. New Business Models, new services. Every day there are in innovations that require more broadband and more access by more people, and so the need to have investments in broadband provision continues to grow. This is not a mature industry. This is not a railroad from the 19th century where all the rail track are layne and the question is how much people should be called to use them. This is a highly dynamic industry with a lot of known vacation left to be done. Host your surprised by tom wheelers decision to put Net Neutrality rules into effect . Guest i think he had said earlier that he was looking for ways to ensure basic concepts of Net Neutrality which aberdeen agrees with no discrimination based on content. Everyone agrees with that. There were also no cases of that happening. A broadband provider, if it discriminated against a particular kind of content would find consumers getting their broadband somewhere else so they were under Competitive Pressures in that regard. I think president obama lobbied very hard for the most extreme form of regulation, title ii regulation, again, treating them like the internet, as if it were a 19th Century Railroad or ma bell monopoly of the 20th century and tom wheeler in an email to his own staff that was uncovered bay Congressional Committee indicated he felt pressure by the president and by this pressure to adopt most extreme form or regulation, but tom wheeler is a student of history and im sure is aware of the history of regulatory agencies and what happened to innovation and at every opportunity he says there wont be regulations. This is not about regulation. But the rules that the three democrats among the five fcc commissioners voted for require the fcc to consider rate complaints and other complaints. So i was surprised that tom wheeler wasnt able to find a less intrusive way to accomplish what everybody agrees are strong open internet principles. There was a page one report in the wall street journal that went in great depth on the political pressure from the white house on the fcc, which is after all, supposed to be an independent regulatory agency, and i believe that reporting in the wall street journal is quite sound. Host that was the story on the front page of the wall street journal. Gordon crovitz one of your favorite targets in your columns iseye can and whats your take on the administration of the internet. Guest lets step back a little bit. This is part of the same theme of the internet being an extraordinarily innovation and one that has been largely selfregulated. What happened in the 1990s when the internet first became open for commercial use it had previously been for academic scientist, the military during the clinton administration. Its was opened up for commercial use, and the issue arose who is going to keep to ensure the integrity of the underlying plumbing of the internet . If somebody guess to cspan. Org, how will they be sure they end aunt cspan and not somewhere else. And there was a strong view that the internet should reflect American Values of free speech and open access and innovation. At that time, the 1990s the contract to oversee the plumbing of the internet was handled by, and continues to me handled by, the u. S. Commerce department. In that way the u. S. Is a backstop. It protect this ultimate protecter of the open internet. Other countries have resented the role of the u. S. From the very beginning. China, russia, iran, and others. Have argued its unfair. That the u. S. Government has the ultimate control over the underlying plumbing of the internet and theyve been lobbying for years to try to move that protection away and to give Regulatory Oversight to the u. N. Or another agency. The reason that theyve been unable to censor the Global Internet they can cent sore theber net in their one countries as of course china and russia do. They devote enormous resources to censoring the internet but ron they have never been able to censor the internet outside their own country is because of the up mat u. S. Control the ultimate u. S. Control over internet addresses and numbersits killed. Names and addresses the Obama Administration announced it planned to give up u. S. Protection for the internet, ending the Commerce Department contract with icann the group that handles that aspect of the plumbing of the internet. And when that happened there was a lot of opposition to it. President clinton said that there war a lot of countries in the world that have long wanted control over the internet, and that the u. S. Had done a Great Service by keeping the internet free. Congress, through budgeting laws has postponed the handing off of the contract by the Commerce Department to any other group or to icann as an independent group. Run republics largely some democrats as well, skeptical that we can have a protected internet without ultimate protection by the u. S. Government. One of the challenges is if its not going to be overseen by the u. S. Government, who is going to oversee it . Will it be a series of other governments . The Obama Administration has said no, it should be done some other way. But the International Community the Multistakeholder Community around the internet, has been trying very hard to find some other way to make sure that icann is conditionable and also keep it out of the hands of other government, and so far its been very difficult to find any other way to protect the internet other than the system thats currently in place where the u. S. Government has ultimate protection for the open internet. So, i think people around the world who value the free speech culture of the internet, a lot of us would say if the internet aint broke dont try to fix it. Host the significance of which hady retiring and leaving icann early is that important . Sunny think it is. The Obama Administration was counseling on icann running itself. I dont think that the administration really fully thought through exactly how icann could beheld accountable. Doesnt have it oats plan to do that in the absence of ultimate u. S. Control. He is the head of icann and announced he was going to step down prematurely from the position. Its another wrinkle but its not the key issue. The key issue is really how do we protect the integrity of the internet make sure the countries that spend enormous resources trying to censor the internet in their countries are not able to censor the internet in the u. S. Or outside of their own countries. How can that be done without ultimate u. S. Government control, and its now been a very long time since the Obama Administration asked for ideas how that can be done and so far there are no proposals that would ensure the integrity of the internet we have enjoyed since then 1990s. Host when it comes to issues affecting the internet and technology what do you think the impact of Edward Snowden has been . Guest i think people who followed the National Security agency closely probably were not terribly surprised by the disclosures that snowden made. I think in retrospect it probably would have been wiser for the nsa and the executive branch of government generally to have disclosed more about how it operated so that it would not have been quite such a shock when people saw exactly how it did operate. On the other hand, many of the claims that yesterday ward snowden made and early media coverage, that was really quite misleading and not a accurate representation of what actually goes on. This all does go back to the Fourth Amendment of our constitution reasonable searches and seasures, and over the years thats been interpret different ways but essentially it says the government does have the ability, should have the ability, to make reasonable searches in order to prevent crime or prevent terrorist activities. The nsa of course, is involved with activities outside of the u. S. , where for many years there was not even a concept of that Fourth Amendment principle applied. Really the question is in a digital era an Information Age what is the balance between peoples privacy and National Security . Are there ways where the nsa can use anonymous information not personalized information in order to identify and prevent terror acts, for example. And to do that in a way that leaves americans feelingatheir privacy interests are still protected. Some of the reporting early on was really quite inaccurate. People got the wrong impression that the government was eavesdropping on everybodys telephone calls and that sort of thing and thats really not the case. The issue before us now i think, is groups like isis and other are quite adept at using technology as isis looks for recruits that may use facebook or twitter but quickly tells its recruits to go on to systems where theres no possibility of the nsa or other agencies having access to the communications, going dark, as its called. And thats now quite easy for people to