house to perhaps adjust per-country limits, but comprehensive immigration reform will be very difficult, given the balance in congress. it doesn't mean the issue shouldn't be talked about. there are a whole series of issues that matter and we'll come testify and explain how we use these people to generate jobs, to generate new patents, to expands our manufacturing. immigration reform is crucial going forward. >> speaking specifically of the h-1-b visa program, some are concerned there aren't enough out there. i've also seen reports of mostly -- most of the visas are going to staffing firms or that there are reports of a disproportionate number go to staffing firms that are based outside the u.s. and then routed to technical companies here in the u.s. do you have any views as to how the program should be administered? would intel like to see any changes in the way the visas are disbursed? >> i think you raise a valid point about who gets the visas, the 61,000 that are allotted annually. we compete vigorously for those slots, as do other american technology companies. there are international staffing firms that have a different function and a different business model. and we operate differently than those firms. so administrative changes would be appropriate as congress considers this. >> you mentioned president obama's visit to your facility in oregon. and they took that opportunity to announce that you guys will be building a new, i believe, $5 billion facility in arizona. can you talk about that plan? and also, was there any thought given to building that facility outside of the u.s.? because you've discussed some of the tax issues and that sort of thing. >> we'll be investing $5 billion in a new manufacturing facility in arizona. it signals our commitment to our workers, the education that they have, the system of government in this country that is very friendly towards how we operate. these are not easy decisions for us, because we can build a factory overseas much more cheaply. it would cost us $1 billion less. but we're dedicated to our own country. we believe in our workers. we work very closely with public officials, both state, local and federal. and we'll continue investing in this country. the investment decisions get tougher for companies like intel. you don't have to subsidize us like you did g.m. or a.i.g. we're very profitable, very successful. but it does make sense for the government to go the extra mile on all these various areas, so that we can continue to build out domestically versus going overseas. >> peter cleveland, let's talk a little bit about tax rates. one of the issues is the foreign tax rate versus the american tax rate. what would intel like to have done with the tax system? >> we'd like statutory rates to come down, so that we can compete more effectively. many foreign nations have a much lower statutory tax rate. they have a much lower effective marginal rate of taxation as well. we recognize that there will be a tradeoff. if you reduce those rates, then tax loopholes or expenditures, as they're called, some will have to be closed. and that may not benefit us. but overall, we want to compete the semiconductor companies in korea and elsewhere. we beat the competition right now. we're first class, we're number one, but tax rates are crucial. so if president obama and speaker boehner talk about the tax issues over the next year and a half, they ought to try to find some common ground such that comprehensive tax reform might be able to occur after the next presidential election. >> and is it true that the u.s. is the only company that taxes foreign earnings if you bring it back into the borders? >> that is true. and it is a deterrent for fantastic companies like cisco or intel to bring their money back for r&d purposes, or for hiring purposes. our money is stuck due to the punitive high tax rate. and so something has to give here. there needs to be a consensus, a negotiation, a compromise. and president obama gets it. he knows the arguments. and politics intrudes sometimes when you have tax debates. so we're in a wait-and-see mode, but we're hopeful. >> switching again to patent reform, we recently saw the senate pass senatorlyly's reform bill with a fairly strong bipartisan coalition. how does it favor the system to favor the first to file as opposed to the first to invent? >> senator leahy has done terrific work on patent reform for many years on all sorts of provisions in that legislation, damages on venue, on the legal standard of review for how a judgment occurs, on first to file, on the patent and trademark's offices diverted to other parts of government. senator leahy deserves a medal. the senate has acted 95-5, and that's a good consensus. that's positive when you have republicans and democrats joining together. our c.e.o. was in town last week to take the next step. to speak to the chairman of the committee, who is a republican, and he also has worked on this issue for years. you had leahy a democrat on the health side, lamar smith, a republican, who wants to move forward. this is an area where something could get enacted into law and intel is right in the middle of it. we're very hopeful about legislation in the patent reform area. >> anything you'd like to see in the house version that's not in the senate version? >> we would like to see a process of p.t.o. called interparties review which is fair and appropriate administratively, so that there's not extensive litigation. there's a way to judge how patents are issued and the elements of those patents, and do it administratively on a less costly basis. we spend $125 million on patent litigation oftentimes bound in texas. and we fight hard, and we fight hard, because we have plaintiffs who sue us, these non-practicing entities, and we believe in our pa tents. we have 46,000 patents in our portfolio, so this is a drag on our ability to innovate. it is frivolous litigation. and we're not the only ones that suffer from this. microsoft and other tech companies suffer like we do. >> when you do a little research on some of the lawsuits against intel and on your own website, in fact, as well, antitrust is always the issue, including an f.t.c. issue with intel and antitrust. new york has issues, and europe has issues with antitrust. would you like to explain that? >> fundamentally big is not bad. we have been extremely successful. european companies, chinese companies, american companies, they love our microprocessors. so we have a sizable market share. we have worked with the f.t.c. and commercial litigants and the european commission to resolve the differences. we don't engage in anti-competitive behavior. our business practices are sound. but we recognize that the public authorities have the right to raise these types of questions, and we are as responsive as we can be. at the end of the day we produce a fantastic product. we're ahead of the competition in terms of the size of our microprocessors, in terms of the architecture, and that's why car companies or computermakers and many, many others buy intel chips. there's nothing we can do about it, but we will continue to work on a cooperative basis with authorities around the world on this issue. >> what's it like to work with europe and their governing bodies? >> we try to become -- we've tried to become a trusted advisor to the european commission on all sorts of issues, on environmental and energy issues, on privacy, data security issues. we've worked very closely with them on antitrust questions. we have 85,000, 86,000 employees around the world who are trying to do the right thing. and they have incredible backgrounds and we have a lot to offer. so if we can provide that information and knowledge and analysis to the leadership in europe, that's the goal. i'm flying to europe this afternoon and will be there this week to take just these kinds of steps. >> this is c-span's "communicators" program, our guest is peter cleveland, vice president of global public policy for the intel corporation, and also a technology reporter is with us as well, mr. nagesh. >> speaking of antitrust, we saw intel settle in august an antitrust complaint, no admissions of wrongdoing. but we did see some concerns from the government regarding anticompetitive behavior. do you expect similar concerns, given your recent acquisition in the mobile sector and mcafee? do you expect the government to be scrutinizing those transactions? >> we've worked closely with authorities on the mcafee transaction and the infineon transaction and we've listened carefully. the mcafee transaction in the security software area was approved, a $7.7 billion deal. and security is becoming more and more crucial to consumers. so we'll take steps to integrate mcafee successfully into our business. the bottom line is broadband is exploding. we're at the dawn of the internet age and we are trying to diversify away from just microprocessors into new area, into software and into operating systems. and it's challenging, because there are other competitors in that space. but we recognize that open standards and markets and free trade agreements are positive in terms of expanding our business prospects. >> has the government's broadband plan enacted last year been beneficial, number one, in your view to the country and to intel? >> absolutely. the president talked about a sputnik moment for this country in his state of the union address in late january and he set a goal for expanding broadband to 98% of the country. he's got the right ideas here. the problem is that spectrum allocation right now needs to be re-arranged on a voluntary basis. we need to make sure that mobile providers have sufficient spectrum so that people that are on the go and on the move can rely on data in email communications. and right now that's just not the case. so we need to expand spectrum allocations to mobile wireless providers. there would be a law that we'd be required to do that. the president is supportive. there are democrats and republicans that are supportive. it's going to take some leg work to complete that process. >> can intel be more efficient in the way they design their microprocessors to increase spectrum usage? >> we are trying to get smaller and smaller with our product, our microprocesses. we're coming from above. we have done very well with servers and desktops and net books and laptops and we're getting into smaller devices, and that's called convergence as others come up with their processors and other types of communications chips. so we have to lower our power management and produce different types of chips, which will be difficult, but we're making steady progress in that area. >> switching once again to the r&d tax credits, we've spoken before about the importance of making that credit permanent to the technology industry to lessen uncertainty. we've seen now how a bipartisan push, again, to make the credit permanent. how optimistic are you that this is going to be successful, and can you explain once again why it's important to intel to -- for this to be a permanent program, rather than being renewed every year? >> 18,000 companies benefit from the r&d tax credit and we're probably one of the largest beneficiaries of that tax credit, because we invest so much in research. $67.3 billion a year. so a congressman that is introduced a good bill. it's a starting step to talk with democrats about making the r & d tax credit permanent, simplifying it and raising the amount of the credit. we've dropped, on the r&d tax credit, from first place 20 years ago, to about 24th place in terms of the value of the credit. the government needs to do better. it's re-enacted every other year or so. it stalls. it's hard to know when it will be enacted again. and so legislators on both sides of the aisle and the president recognize the value of the credit. we just need to improve the process for considering it. >> well, peter cleveland, make the argument, then, on the other side against the r&d, making it permanent. because we've been doing this show for several years and we have our morning show, the "washington journal" as well. i have never met one legislator who is against making the r&d permanent. what's the argument on the other side? >> i think the argument on the other side would be that if you extended it on a yearly basis only, then legislators can act