 All right. Good afternoon, everyone. Thank you for coming. My name is Benjamin Lennett and I am the policy director for the New America Foundation's Open Technology Institute. Before we get started today, let me say a few brief words about New America. New America is a non-profit, non-partisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States. We have programs that work on a range of public policy issues, including national security, education, health care, and economic growth. My program, the Open Technology Institute, formulates policies to support open networks and open source innovations. We promote universal and affordable communications access through partnerships with communities, researchers, industry, and public interest groups. And we are committed to maximizing the potentials of open technologies for poor, rural, and other underserved constituencies. Today's discussion, upgrading America, better, faster, cheaper broadband energy, involve two essential pillars of economic growth and keeping the U.S. competitive in the 21st century. At the Open Technology Institute, we have long been concerned about the state of U.S. broadband vis-a-vis other nations and the lack of competition in the U.S. marketplace. U.S. consumers pay more for slower broadband service than in other comparable nations. Even our most densest and wealthiest cities are lagging behind other world leaders. As a recent report from OTI that examined broadband prices in 22 cities, both here and abroad, found the U.S. near the bottom in affordability and offerings in major cities like New York and Los Angeles are substantially behind speed leaders such as Hong Kong, Amsterdam, Copenhagen, and Tokyo. Many of these leading countries have pursued more aggressive competition policies to drive innovation, such as open access and unbundling, as well as greater public investment and network infrastructure by local and national governments. In the U.S., competition in the residential and small business market is dwindling. The recently approved purchase of Spectrum by Verizon from several of the nation's largest cable companies, along with joint marketing and operating agreements, signal to many an end to broadband competition between cable and telephone companies. Both Verizon and AT&T have suspended further deployment of their more competitive broadband services such as Fios and U-Verse, leaving cable companies as the only future high-speed option for consumers and small businesses and three-quarters of the nation going forward. There are some bright spots for the U.S. National Education and Research Networks, including the National Lambda Rail and Internet 2, are pushing the boundaries of networking speeds. Publicly owned and community networks in Chattanooga, Tennessee, Lafayette, Louisiana, and Bristol, Virginia are offering world-class speeds and connectivity to residents and small businesses, as are a few private sector deployments like Google Fiber and Kansas City. In mobile, ongoing 4G upgrades to increase the capacity of those networks and make more efficient use of Spectrum, providing consumers with substantially higher speeds. However, the two largest mobile providers, despite possessing vastly larger amounts of Spectrum than their smaller arrivals, continue to impose more restrictive usage caps and plans to discourage users from accessing too many innovative mobile applications and services. In terms of energy, we've made significant investments in renewable technologies, 30 states in the district have set renewable energy targets. The challenge going forward is to determine policies that can accelerate the technology itself, as well as new models to spur adoption by utilities, businesses, and consumers. We have a distinguished and expert panel to discuss these challenges and issues today. We will begin with a presentation by Reed Hunt and Blair Levin based on their forthcoming e-book, Faster, Better, Cheaper, User's Guide to Post-Election Politics. Reed Hunt is a former chairman of the Federal Communications Commission and currently a principal of REH Advisors and CEO of the Coalition for Green Capital. Blair Levin was the principal author of the FCC's national broadband plan and is currently the founder and executive director for GIGU, the university community next generation innovation project. Then we will hear brief responses from Mark Cooper, chief economist for the Consumer Federation of America. We will also hear from Harold Furcott Roth, a former commissioner at the Federal Communications Commission and currently a senior fellow at the Hudson Institute. And finally, my colleague here at New America, Michael Calabrese, director of the Wireless Future Project. After hearing from our respondents, I will ask a few questions of the panel and then open to the audience for additional questions as time permits. So without further ado, let us begin with Reed Hunt and Blair Levin. Thank you very much. Hello, everybody. Thanks for making it here. I am going to talk to you about energy and Blair will talk to you about communication services. But we're both talking to you about a conversation that we have been having with each other and want to invite you into. We've been having this conversation for about a year. In our own conversations, we call it the Politics of Abundance. We read a book by Thomas Edsel, a terrific writer, called The Politics of Scarcity. And the book, which is very well written, is an excellent reflection of many of the conversations that have been going on inside the Beltway for the last couple of years that I think boil down to a debate on the one side. Let's call it from the left that says the economy is in really bad shape. We've got to find ways to use the power of government to invest in activities that get our economy heading in the right direction. And then on the right, I would say the argument is government would be unavailing. And in any case, we don't have the resources to follow that policy even if we agreed with it. The problem with this discussion, as we've heard it, is that it is not consistent with any of the experiences that Blair and I have had in what I will call the private sector for the last decade. I've spent almost one or two weeks of every month for the last decade flying to Silicon Valley and working with different companies. And I've spent the last three and a half years running a non-profit involved in the clean tech area, both in information communications technology and in clean technology. All the evidence that I have, all the evidence that anyone has, tells us that we're on the very verge of an opportunity for the creation of abundance, the like of which has never been seen, certainly not in the energy sector. The breakthroughs in just the last four or five years in the energy sector should completely change the discussion about clean energy, about sustainable energy. Just in the last four years, the price of distributed solar in the United States has dropped on a Moore's Law curve. Moore's Law is the statement that every 12 to 18 months, the price performance of microprocessors will double. In solar, the way you talk about that is for spending a dollar, how much more clean electricity do you get? And solar has been on a curve that resembles the Moore's Law curve for about the last four or five years. The other huge factor that is understood, but maybe not fully translated into policy, is that now in the United States, thanks to the use of supercomputers and radio waves to discover sources of natural gas that previously were not able to be found and then couldn't be extracted even when they were found, we now have seen in the United States that natural gas prices have dropped from $12 a thousand cubic feet to less than $2 a thousand cubic feet in four years. So we have this fantastic decline in the price of solar. We have a fantastic decline in the price of natural gas. And that's just the beginning of the stories of abundance. We've seen tremendous, tremendous innovation in batteries. It is the case that if battery pricing drops by another 50 percent in the, this is, these are all U.S. numbers. If it drops by another 50 percent, then any car that you plug in for fuel, whether it's some version of a hybrid or whether it's actually an all-electric vehicle, any car you plug in, when batteries drop another 50 percent, will be price competitive with a corresponding internal combustion gas-driven car. Battery pricing is on a curve where, according to McKinsey, it will drop by more than, battery prices will drop by more than 50 percent before the end of this decade. This means that in fact, just like China, we could, if we wanted to, begin the conversion of our more than 200 million gas-driven vehicles to a fleet that was electric-driven. And in fact, if battery prices continue to travel on the downward cost path that McKinsey has predicted, electric vehicles will be superior in all in cost to internal combustion engines. For the reason that, you buy a car that needs gas, it always needs gas. You buy a car that needs electricity and at the current numbers for electricity relative to gas, you can charge an electric vehicle relative to filling up a gas tank for about a third of the cost. In other words, if you look at the distance that the car has to travel, it costs about three times as much to fill it up with gas as it does to charge it. So you'll always have that cost advantage. The only fundamental problem is, do you have to pay so much more for the battery? And that's why I've told you the story of how battery costs are dropping. So solar is going down, natural gas is going down. The battery, which is the main gating issue with electric vehicles, is going down. And there are many, many other examples, all of which are a function of the focus of technology on the energy sector, coupled with the adoption of some extremely positive policies for loaning money and for not charging taxes to startup enterprises in the clean tech area. These policies were embodied in the stimulus bill. And in fact, more money was loaned out and more money was spent in research in the stimulus bill than in the previous two decades at the Department of Energy. The results were fantastic in just the four years of the first term of the Obama administration. If you ask the following question, in the energy sector, are we better off now than we were four years ago? In the energy sector, the answer is, it's astounding how much better off we are. We're on the edge of energy independence. All the curves that I've told you are heading in the right direction. Everything that's supposed to go down is going down. Everything that's supposed to go up is going up. The total size of the renewable energy industry in the United States is almost doubled in four years. The story is fantastic. It is a story of abundance. Instead of focusing exclusively on assumptions of scarcity, it would be a wonderful thing if right after the election, everybody in Washington focused on how to take all of the things that are doubling and double down on them. That's what we've written in our ebook. It's tentatively entitled Faster, Better, Cheaper. It is going to be published the day after the election as an open letter to the winner of the election. We're kind of not only desirous but confident that it'll be sent to the re-elected President Obama. But the point here is not a partisan point. It is a point about how the discussion for the United States starting right after the election can be and should be a discussion about how to have a growth strategy. Not about, not a debate in which we decide how little can government do a little more than a little, a little more than that, certainly less than a lot. But rather, what is the role of government in unleashing the opportunities to take advantage of the potential for abundance? Specifically, in the energy sector, and I'll make a few more comments about energy and turn over to Blair to talk to you about broadband. But in the energy sector, our thesis in our working draft, one of the purposes of this gathering is for you all to ask some questions and help us fix the working draft. Our thesis is this. The United States president, whoever the country decides to elect, will believe that the government should not pick national champions. That's a belief held by Democrats. It's a belief held by Republicans. It's a correct belief. But that doesn't mean the president should have no sense of strategy. The president, in fact, is the president of a government that was able to put a vehicle on the surface of Mars at a cost of, I think, about $3 billion. The president can get the advice to make fundamental strategic decisions about the sectors of this economy that deserve the policy attention because they are the areas where we're going to have significant opportunities for growth. There are two platforms on which everything in an information economy and an information society depends. Those two platforms are the two electromagnetic wave platforms. They are the platform of knowledge, sometimes called broadband, and the services on top of it, and they are the platform of power. And that is the need to have a sustainable base of non-polluting power at a very, very low price because that is an input to every single form of human activity. We, in fact, have the opportunity to have faster, better, and cheaper power effective almost immediately and extending to the end of time. Cheaper means actually cheaper. I am on the board of the Connecticut Green Bank. Connecticut electricity prices were 17 cents a kilowatt hour. A year ago, they're now 15 cents a kilowatt hour. It's still too high, but it's going in the right direction. All the changes that are possible in terms of abundance are about being able to deliver electricity cheaper. Better means that it would be truly sustainable. It would not have externalities. It would not create pollution that somewhere along the line generates some other cost. And faster means we need to do all of this much, much more quickly than we currently are doing. That is for two reasons. Reason number one is climate change. 2011, the world set a record for emissions. We currently are, as a world, on a path in which the maximum amount of greenhouse gases that can be tolerated without raising the global temperature more than two degrees centigrade, the maximum amount will be in the air in about 16 to 18 years. When that limit is hit and these greenhouse gases take us over two degrees centigrade, there's two things to be said about that fact. Number one, of all the things that all the nations in the world have been agreed to, the only one been able to agree to, the only one is this, we dare not go above two degrees centigrade without running risks that are simply catastrophic for everyone then alive or anyone who might be alive in future years. We dare not go above an increase of two degrees centigrade. By the way, the increase already has been 0.8 degrees, so we have 1.2 degrees left and we have, we're on a path now within 16 years to hit the maximum number of emissions that will going beyond that raises it above two degrees centigrade. The second thing that all the nations in the world have agreed to is this, no collective treaty to deal with this problem. Therefore, there are two countries in the world that need to get on the faster, better, cheaper plan in terms of energy. They are the two countries that are the biggest in the world for renewables, they are the two countries that are the biggest in the world for emissions, they are the two biggest economies in the world, one of them is the United States and the other is China. These two countries in terms of their current energy footprint are actually extremely similar. Both depend on carbon-based and relatively polluting of fuel for about 70 to 75 percent of their energy. We have about 20 percent nuclear, they don't, they have hydro instead of nuclear. We both have about the same percentage of renewables which is hardly any. Double what it was four years ago in both cases, but hardly any. We both need to vastly accelerate, faster and faster and faster our commitment to renewables and we both need to vastly accelerate our research and development and how to clean the emissions from all the carbon-based fuels. We have to take the lead here in the United States in order to get them to take the lead and that's good for our businesses because we'll be talking about export markets. This is a path that no reasonable people disagree on. The fundamental direction no one disagrees on. Instead of us all saying there's no way to get there, in fact technology and private sector investment is on the verge of taking us there. It can be cheaper, it can be better and it can be faster that we move to this sustainable energy platform. That's what we are trying to write about. That's what we want you all to talk to us about today and the other electromagnetic wave platform we'll be dealt with by my friend and former FCC colleague Blair. So in thinking about the ICT platform that we sometimes call broadband and but also very importantly think about the applications on top, I think we should also recognize that we are better off than we were four years ago with wired broadband we do now have what we didn't have four years ago a platform that actually is capable of delivering for example 100 megabits to about 80% of the population. That's a big jump up on the wireless side. Our country is leading in 3G uses. We lead in application development. We lead in OS and we're leading in the 4G build out. Now a little preemptive strike here. Harold wrote a very good piece that I recommend to everyone. I just disagree with it in which he said that continuing a line that we heard a lot of last week that as to wireless it was the private entrepreneurs who built it and there's certainly some truth to that in terms of the necessity of private capital and technological advancement but they are building it on a spectrum platform that was cleared by the government based on a decision that was made back and Reed saw this very clearly when we got to the FCC the DTV transition was supposed to end maybe in 2023. Fortunately it ended far before that because that's the spectrum that AT&T and Verizon are building their 4G on. Furthermore when we got to the FCC wire line companies which does not want competition from wireless we're charging huge terminating access charges that we then lowered to a much more reasonable rate which led to AT&T starting the one rate which was really the beginning of wireless going from a luxury product to a mass market product. Now the reason I say that partly is just of course to start the debate but also to say very clearly you have to look at this as a partnership in which certain sides have to do certain things and one of the obligations of government is to make sure that there's available spectrum for that sector and in this regard I have to do a little shout out to Michael who's done fantastic work both with white spaces and with the PCAST report that came out this spring talking about spectrum sharing he's really been a leader and I think that in the same way I know Reed and I are extremely proud of the work we did in clearing spectrum and in helping the wireless industry I think 10 years from Michael's going to be extremely proud in this institution New America can be extremely proud of the work they did on spectrum in the same way. We're improving in adoption there are a number of very interesting programs to do that but as Reed said in ICT as with energy what we're really recommending is a strategy of doubling down where we have a potential of doubling up and so in the book we talk about how yeah we've done a lot but there's a lot more to be done and there are just tremendous opportunities the digital platform gives us it's a platform that the United States largely created and that we have a lot of iconic companies that are still headquarters here and the key is to take advantage of the opportunities it now presents. A couple of the key advantages are it's a platform that's always improving every day it gets better whether it be watching how Google gets better or Facebook gets better what we need to do is bring that constant sense of constant improvement to the way we deliver a lot of public goods and services. It also creates a virtuous cycle in which any increase in the functionality of the network increases the ability to do new applications increase the desire for better devices and so you get a virtuous investment cycle that drives new uses new productivity gains as well as economic growth. It creates demands for things that we did not know we needed and now can't live without I happen to be reading today 70 million Americans keep track of their families on GPS on wireless devices and GPS by the way also came out of a government program Steve Johnson his book on innovation tells a very fascinating story which I won't go into about how the GPS industry developed but it also it was the Reagan administration that kind of opened it up in a way that the Obama administration has opened up certain data that I'll talk about that kind of led to this industry and that's the kind of innovation we need it's a digital platform it's a platform that's always on and so it's not it's not nine to five it's not five days a week but it's a platform that provides very valuable things 24 7365 and for life and this is incredibly important when we think about education job training and job retraining it's a platform where the best for one is the best for all there really is no 91 99 1% when it comes to the the nature of internet uses I would I suspect that all of us use whatever our different incomes use a similar search engine when my daughter who went to a very fine public high school needed some assistance on a certain topic where she had frankly not such a great teacher she went to a website that's available to the wealthiest but also to the poorest kid with a broadband connection it's a platform that in simultaneously allows us to improve life for everyone while we're very specifically improving it for an individual sometimes referred to as mass customization we think of it as simultaneously doing globalization and personalization and one of the most important things that allows is that personalization and so it's also a platform that allows America to create new export markets we've seen already a lot of entrepreneurial ventures coming out of that digital platform and I would just note that new america foundation has done a lot of work Barry Lynn and Lena Lena con I did a great paper over the summer that actually says that entrepreneurship and startups in America are actually going down not up some very interesting research but I think that this is one of the areas where we can kind of counter some of the trends that they point to I think it's a real important thing so the straw what's the strategy here the strategy is simply to accelerate the move to digital we're at a threshold moment where that which we have all long thought about but wasn't possibly for now is possible we want to accelerate because productivity gains today mean economic better economic growth tomorrow it's the only way frankly to deliver some of the things we need in health care and education and because leadership matters if the United States accelerates this movement of many things to the digital platform we will have the opportunity to lead and again export and so for example in health care we're going to build on we recommend kind of a strategy building on the electronic medical records building in something that one might think of as a medic cloud key things here being for example the interoperability of data and the utilization of that then of that data for comparative effectiveness utilizing a kind of a strategic bandwidth approach to big bandwidth applications to make sure we lead in things like genetic sequencing which require greater bandwidth or do things like in-home treatment which through the utilization of new technologies like 4k cameras can vastly improve how we monitor certain people in the house we want to accelerate pharmaceutical innovation which is now possible we want to make sure that government eliminates restrictions on network based medicine and provides incentives for more utilization similarly in education the key is to utilize the data for personalization we need to accelerate the movement to digital content we need to require constant assessment and enable transparency for parents and teachers to be able to constantly evaluate material which wouldn't be possible on a analog platform we talk about how we can provide incentives to do so through the e-rate funding and we suggest moving some of the funding which is currently just funding last century's network to fund new experimentation with this century's leading network and then we have to make sure that data caps don't interfere with kids getting a good education we talk a bit about how we can utilize the same types of digital trends for public safety and how the new first net proposal which congress passed on a bipartisan basis in the commerce department is now in charge of implementing can be utilized to drive more private investment to drive more rural build out and that there's a need for kind of standard applications that people can in a time of some kind of public safety emergency gain access to necessary information both from the government sector but also from essential facilities such as electrical providers we basically need to utilize all of we need to move all of the government over to that digital platform we need to get rid of paper this is an analog to what the president recently did on broadband to dig once we need to make sure that we only take information once by getting rid of forms and there's new technologies such as private data vaults which can dramatically reduce the time and effort to reduce those forms we suggest a plan for something we call my problem solve dot gov which allows them which allows someone to put in information and get access very easily to what government programs may be available to assist them what other kinds of programs may be available or or or in some other way help them through a comprehensive algorithm we want to use that secure platform which is now available to solve problems of voting and we suggest that there are ways in which there there have been a number of studies from McKinsey for example or from the high tech CEO council that suggested savings in the neighborhood of a trillion dollars in the next eight to ten years and so one of the things that we suggest is that in the negotiation between the president and congress that something like the base closing commission is established to deal with how do you utilize technology to drive those kinds of improved efficiencies and savings and part of the problem is because of the way the government does its budgeting it's very difficult to put upfront money in making that transition but this is kind of a one-time transfer to leading edge technology for the government so that we can be the first real all-digital government now I should note that a move to digitization is of course a shift that like the shift of about a hundred years ago with agriculture has a lot of jobs at stake but it's not necessarily a job destroyer when innovation increased agricultural productivity we need a fewer farm workers however his food became cheaper the money saved helped fuel demand for other things like cars appliances travel and all of this created new jobs and created essentially the economy of the last century innovations in digital create the same kind of shift but we have to retain a retrain significant part of the workforces so one of the few places where we actually ask for increased funding is to create some kind of job retraining for the jobs of this coming century but also it is a lot easier to do that on a digital platform which is always available and which can be in somebody's house so the training itself can be better let me just close by saying that this spring we celebrated the 150th anniversary of a very extraordinary congress there was a congress that recognized that that our country needed to have the most productive land the best transportation to get crops to consumers and the best mind and so the homestead act and the railroad act and the moral act which is responsible for the wonderful public education leading institutions that we have and that really are the most important asset that we have for the 21st century economy congress took those necessary steps today knowledge and power are the two key inputs to everything in the economy if we have the best energy in broadband platforms we will continue to grow and we will continue to lead thank you i'd also note there's several seats up front if anybody in the back would like to move up i have a somewhat different take on this i'm going to start with a fairly famous american that was really a well-beloved man of the people ben franklin he is reputed to have said those willing to give up liberty for security deserve neither and will lose both a 21st century version of that for broadband would be something like those who would trade freedom of speech for fat pipes will get neither the private sector companies in the us have made it clear that they will not deploy a 21st century communications network if there's any restraint on their ability to charge whatever they want from whom ever they want no matter how discriminatory or antisocial the result the comcast Verizon joint venture leaves us with a quasi duopoly in fat pipes which means that the only thing that will stop them from taxing speech is public policy the vast majority of americans have a cozy duopoly where the networks are not good substitutes that's dsl versus cable modem where there could have been vigorous competition between reasonably competitive entities they have chosen to be a collaborative duopoly as opposed to a cozy duopoly and of course a small number of americans face a noopoly under these circumstances the odds are that the communications companies simply will not deliver the pipes in the 1980s and i was in these proceedings the companies demanded accelerated depreciation of copper as a quid pro quo for upgrading the network in the 1990s and i was in these proceedings they demanded incentive regulation as a quid they took the money twice and never built the network once now they insist that discriminatory pricing and what they call policy based routing are the only way to pay for and manage a 21st century communications network but they will not make binding commitments to deploy it it is time to face reality it is time to give up the fiction that competition between platforms will ensure universal service or freedom of speech it's time to admit that there will not be a sufficient number of well matched rivals to protect consumers from abuse or deliver the benefits we normally associate with competition which starts with a relentless drive to innovate and invest it is time to recognize that the 21st century communications network will not be built without public support as has been the case with every other national network in our continental economy it is time also to that the digital economy provides much greater support for the next generation of infrastructure the free ride is over we have to build the infrastructure and the digital economy has to pay for it but it cannot be at the discretion of the phone companies because they will take the money and not give us the network the social contract that successfully built the 20th century infrastructure and made the 20th century the american century in the economy was based on a fundamental principle freedom of speech universal service and non discriminatory access the social contract needs to be updated but the fundamental values should not be abandoned what we need is an incentive structure that ensures the network will be built and a regulatory structure that is sufficiently flexible to ensure we have the full benefits of competition on the platform not between platforms we already have the model from the late 1960s to the late 1990s this is exactly the environment in which the internet was born and grew the department of defense initiated and supported the idea of a decentralized communications network over the objection of the telephone company the federal communications commission mandated non-discriminatory access for data communications with the cartophone and computer inquiries in the late 1960s over the objection of the telephone companies by creating a space between the market and the state for a decentralized communications system to grow the u.s. government created an environment in which innovation and entrepreneurship thrived and when the government stepped back internet governments remained between the market and the state as much as people complained about ican the intention was to keep it between the market and the state and they did a pretty good job exactly the same approach was used in the mid 1990s to create the wi-fi miracle a simple set of rules for sharing an essential bottleneck resource then called forth effective self-regulation innovation and entrepreneurship precisely because both the government and the incumbent telecommunications companies were held in check thus we must institutionalize this model between the state and the market by developing i believe what i call participatory governance in which there is greater collaboration between industry civil society and technologists as the state recedes but we must preserve a fundamental commitment to public policy universal service freedom of speech non-discrimination now interestingly this approach works in the energy sector too with a little bit of an exception in the electricity sector the recipe is going to have to have a bit more state because the electricity grid is a classic commons because economies of scale are much stronger and because electricity is a non-storable commodity that is very difficult to transport there's just a lot more market power there nevertheless the challenge is essentially the same to decentralize decision-making to allow decentralize decisions on the monopoly platform to use the monopoly platform the transmission grid and the distribution grid we have to hold in check the incumbent utilities that will in fact despise just as AT&T did the idea of decentralized decision-making neither the 19th century approach of unregulated market power nor the 20th century approach of command and control regulation will work very well to deliver information and electricity which are the lifeblood of our dynamic diverse 21st century economy we know the successful model lies between the market and the state when ben franklin exited the continental convention a hometown crowd had gathered a very popular guy to ask him miss franklin what have you given us he answered a republic if you can keep it we created the digital revolution but if we abandon those principles we use to do so and veer too far back to the state or the market we will certainly lose it thank you first of all i'd like to thank the new america foundation for having me here today i particularly want to thank my call for organizing this session it's a it's a great honor to be on this distinguished panel and it's always a great pleasure to to be with my friends and former colleagues read and blare they have they've made a wonderful presentation and as is always the case with read and blare it it does not lack for ambition and it tackles important problems and uh i very much agree with them that i think whoever the next president is getting a memo on what should be done in these two sectors is very important what what i have not heard from from read and blare yet but i'm sure i will uh is uh exactly what needs to be done is there a need for more regulation is uh is re-described there's been enormous progress made in the energy sector over the past few years uh if the graphs are true um get out of the way we're there if if the technology is improving according to morris law you don't need government intervention morris law applied to the microchip industry the microchip industry did not have government regulations determining what manufacturing would be or how we go forward and it's a great example of how the private sector can and will work when there isn't excessive government regulation what read and blare did not mention and perhaps they will in their book i don't know is whether there's any necessity for changes in law um and i'm sure they would likely agree that in discussions with the investment community and with the the management teams of major corporations one of the the major problems i can at least say in the telecommunication sector that's holding back investment is uncertainty about what the government will do uncertainty about what the rules of the road are um it's it's been an ever-changing world uh a great amount of money was invested in the 1990s under an assumption of what the telecommunications rules were that that read and blare helped develop and those got radically changed and uh many investors i've spoken with have said you know what i'm never going to invest in the telecommunications industry again because i just don't know what the rules of the road are it's very important to get those straight uh and i hope that will be part of the message that uh that they provide in their book um uh i think getting government back towards following what the law actually says and regulating where it's required in the law but not where the law doesn't require it that those are the keys to success in these two industries they both have described the enormous progress that's been made in the past four years that could be said the past 20 years there's been enormous progress in both of these sectors a lot of progress in the private sector and uh i think the challenge for the next president i completely agree this is where economic growth is going to come from it's not going to this is the challenge is how do you get these sectors going and to me i think the right approach is a clear role of what the law is and then get the government out of the way thank you why i'm your wrap up respondent and then we can get to some discussions and questions and comments from you all again i'm michael calibri's here at new america foundation the open technology institute and um i guess i would you know really start by uh with some very you know kind of emphatic agreement uh with uh with reed and blare about the need to redirect our national policy priorities from managing scarcity to facilitating abundance of both energy and connectivity because power and broadband are not ordinary products traded on private markets uh and with all respect do respect the herald that they're not even like you know all the you know the cool devices that use faster and faster chips um broadband connectivity and energy our inputs into everything else in the economy they make everything else more productive as well as you know our lives better as a result upgrading our core common infrastructure should be a priority for public investment just as it was in in you know in in years gone by for canals railroads electrification airports and the interstate highway system all of which in you know in addition to private investment uh was undergirded by uh public support and the imposition of public responsibilities so focusing on broadband i'd like to suggest a um since blare and and reed are in the market for um suggestions for how they can push their ebook further like to suggest a need to go further in at least two respects to promote a market entry competition and ultimately abundant bandwidth at affordable prices first um uh first i believe the nation needs more public investment in middle mile fiber in particular to drive it into deep into every community open fiber and not government run networks at all and second we need to prioritize spectrum sharing particularly on the very much underutilized federal uh airwaves federal bands and make more unused public spectrum capacity available at low cost something that is a policy very much in addition to auctioning the limited amounts that can be auctioned and i'll double back on that in a minute blare is correctly acknowledged that it's important to drive fiber deep into networks that is to bring it as close to each residence and business as possible to facilitate gigabit connectivity and that's what his gig you initiative is all about uh but i think there's there's another facet to this that's almost a step prior which is that the u.s. still lacks a key infrastructure building block which is to bring fiber backhaul into every community and neighborhood in the first place you know to get it there um that's why new america helped was one of the founders of the school schools health library broadband coalition a few years back um during the early debates about what we would use the economic recovery money for and what what the shelby coalition advocated which include american library association and other groups was gigabit connectivity a gigabit connection to every public anchor community anchor institution schools libraries hospitals because almost by definition if you put a gig to every elementary and high school right um you you get fiber into every community and then you have an open interconnection requirement and in fact the obama administration particularly on the second round of funding for the for the stimulus uh went along with that they shifted a huge uh they shifted a priority so that particularly in the second round a great number of grants went to middle mile fiber infrastructure i just visited one you know a week ago in west virginia w v net um a 10 gig fiber ring around the state which they're going they're using to particularly for uh for schools and other public anchor institutions a public fiber highway system open to any market entrant incumbent or community networking effort can facilitate both initial deployments and competitive overbuilding it's also disruptive because currently the dominant isps have a stranglehold on what's called the special access market in other words the competitive carriers like the you know companies like even large ones like t mobile but certainly the small ones the the regional and rural wireless carriers they can't they can't get backhaul for their for their cell phone networks uh without without purchasing it from the dominant incumbents at and t and verizon primarily same with businesses a bank a chain of banks can't connect all of their branches and atm's without going hand on knee uh to the incumbents to get access to their fiber but if we had more open access uh public fiber running everywhere and particularly in the less densely populated areas uh we would we would you know be a huge step forward the second and i guess final thing i'll cover is the is a great opportunity for abundance in wireless connectivity the constant refrain we've heard over and over and you know apologies to blair of it who who i think started this uh is spectrum scarcity uh which has been used now most recently and blair certainly didn't intend this to justify things like bandwidth caps and pricey tiered plans on on uh on wireless data that deter both bandwidth intensive applications and the substitution of 4g wireless for slow dsl for people who live in those areas however this conventional wisdom is not quite right that some of you are tired of hearing me say uh what scares our licenses from the government that fit a certain business model that fit the current carrier business model which is exclusive use of the public airwaves over wide areas using their centralized infrastructure and bill you minutes or bandwidth spectrum bandwidth however if you actually go out and measure it uh again about a week ago i was in chicago at the illinois institute of technology they have a spectrum observatory on the roof 22 stories above uh where they also you know provide you know basically connect all the uh video surveillance for the chicago police among other things and they're observing all the spectrum the use of the spectrum over to over the whole lake front of chicago and downtown you know and they'll tell you they have you can go online and see their measurements uh that less than 20 percent of even the prime frequencies right the so-called beachfront spectrum over the city of chicago and we measured it from our building years ago over over to white house is being used on any given day or time so there's tremendous abundance of spectrum capacity there's just a scarcity of exclusive licenses so the alternative is a more disruptive strategy make shared spectrum access abundant and adopt and enforce regulations that give device makers and consumers the ability to choose which network is most cost effective for the for their for their use from second to second and increasingly in most places and times as you know with wi-fi if you have an iphone your iphone's always looking for wi-fi right increasingly um what the consumer and the device will choose will be short hops at low power over shared spectrum such as unlicensed spectrum into high capacity wired backhaul that's already there because you're buying it from comcast or time Warner cable or your employer is or you're in a public hot spot or hot zone so that's going to be much better than sending everything long distances over billion dollar airwaves into centrally built carrier infrastructure that's that's based on large cells instead of small cells because spectrum reuse is how we get all the efficiency in in wireless broadband and make it abundant um so so to close when we just mentioned a you know a year ago uh i published the paper we talked about proposing a use it or share it approach to the airwave since since so much of the capacity is unused um particularly the fed the bands held by the federal government the federal government has the mother load of spectrum actually uh which you know they make a good case when they need it they really need it but most of the time they're not using it uh the military in particular and so uh Blair mentioned the the president's council of advisors in science and technology um i was part of a report came out a few weeks ago they recommended that you know currently we're having a kind of a trench warfare over one federal band to see if we can move the military out and auction it you know numbers clear clear the military auction it for exclusive use that's fine i mean god bless them let them fight it out hopefully that'll happen but in the meantime what pcast recommended was there's a thousand megahertz of spec of prime spectrum particularly from 2.7 to 3.7 and if we if we can open that for sharing now we can create an abundance which will be disruptive uh to the wireless markets spur more entry more innovation and i think again you know be right in step with the uh with with the theme of uh of Blair and Reed's uh excellent work thank you thanks first off uh i'm going to give Blair and Reed an opportunity to respond to to anything they heard uh previously just a couple minutes anything that's uh dying to respond to i'm just going to respond to herald i'm going to say those comments were very courteous and very salient uh i love the fact that you agree that these two platforms are right strategic goals uh and you asked what really are the substantive ideas these are the ones in the draft right now on the uh on the energy platform uh we ought to have changes many of the changes with an eraser not with a not with the other side of the writing implement we ought to have changes in the regulation and the law with respect to mortgages taxes utilities and the environment specifically uh EPA has been in a uh never-ending battle with congress and the courts about its regulations it's much much better for industry if the EPA regulation of all the things that pollute actually were laid out clearly endorsed by the courts no longer the subject of congressional efforts to overturn by statute business would rise to the occasion of investing to that plan as to utilities they're principally regulated as you know at the state level we really do need a federal law that to some degree resembles the 1996 telecommunications act meaning that act made some modifications but did not take the jurisdiction away from the states in telecom but it made some modifications of what was permissible the federal law that i'd like to see that we see in our book with respect to utilities ought to make states reward utilities for investing in energy efficiency and in renewables instead states many states discourage investment in these activities in order to maintain the status quo states also raise obstacles to mergers which actually are useful mergers in the utility area because they create greater economies of scale the states do these things for reasons that make sense in those states but don't make sense for the nation as a whole let me give you a test case can you name any national wireless carrier and the answer is sure Verizon T-mobile AT&T sprint and many others that aren't everywhere better in many many cities there is no national energy company there's no national energy service company there's hardly anyone in any two cities of the united states who has served by the same people in the energy area this is an artifact of a network that resembles the same thing that Edison had in his mind it's time to move beyond that and say there's a reason why national businesses make sense mortgage reform almost every single house in america will have a lower energy bill if it does either one of two things put solar on the roof or puts insulation in the walls it usually doesn't need to do both if you call a solar city or sun jevity or sun whatever and you're one of about 25 percent of all houses in america they will put solar on your roof and they will charge you for electricity a lower price in most states than you're paying today and where that isn't an attractive deal you ought to be able to get the insulation or better lighting or better windows also financed except for that mortgage law does not permit you to put the financing on your mortgage there's a lot of plumbing here that needs to be replumped it is not necessary to have a new stimulus it is necessary to have a bunch of green eye shaded blinkered former regulators like you herald or you Blair or me or any others say we can actually change all of these rules and laws so that they are pro investment across the board as far as tax policy is concerned i'll uh say one thing and i'll resist saying anymore it's with all due respect to governor Romney not a good idea to start taxing wind in the united states more than it has been taxed for the last several years not a good idea the department of energy under president bush published a plan that says that 20 percent of our energy can come from wind it is not a good idea to change the tax law so that we tax that industry more so that we are less likely to achieve that plan because it's anti-investment one last statement people under the age of 30 today will be 75 percent of the workforce by 2020 if your hair is my color or if one area of abundance that you lack is hair at all then let me say your job is to make sure that there's a sustainable productive set of careers for people who today are under the age of 30 because they will be 75 percent of the workforce in eight years and working on these two platforms and using these two platforms is the right direction for america and if just those people voted it would be the way we would go i'm just going to respond very quickly from here to say i i greatly appreciated mark's comments on social contract i i'm actually giving a speech in cleveland on friday where i'm going to address something very similar which is what i think of as the new communication social contract but i'm going to wait till then or another question for the audience because i want to get the questions of the audience but i certainly agree that the current contract is in the process of becoming obsolete i will say that i focus more on the digital platform and what government can do in part because that's where the low-lying fruit are we can really improve things in this country by understanding what that digital platform is and kind of in the use case but there's also something where i think i have a little bit of a different point of view from both mark and herald which is uh and and actually from ben i think our from his earlier comments which is um the challenge right now is on the demand side less more than the supply side the supply side we actually had tremendous upgrades over the last 15 years and the companies are in a very reasonable way harvesting that upgrade i disagree with herald that uncertainty is a problem and indeed if you look at the stock market performance the telecom and the cable sector over the last year it's been fantastic um uncertainty is not blocking investment they're making they're making they're certainly making money um the the fundamental problem is one of demand i think and this has been a lot of the work that we've been doing on gig dot you as to how do we how do we have network leading i'm sorry demand leading networks that then drive a cycle of an upgrade so it's a little but i'm going to step away from that i will only say that we do have some things in the book on spectrum of kind of following up on on that work and i certainly agree that if we want to have bandwidth abundance which is very much at the heart of it we have to have a smart spectrum policies but we also have to have ways in which we kind of lead the demand that kind of create um the private investment that i really think can do it uh and and you know when we were at the FCC we there was a huge uh private investment into that sector i think that's the kind of thing we'd like to see in energy on the network side it's the kind of thing we'd like to see in broadband on those on the application side particularly in those areas where government is either the major buyer or the major supplier and to move those platforms make sure the government does it in a way that is digitally smart i'm going to sort of continue sort of on that that theme and give mark a chance to respond but so cable is is likely to have a monopoly over three quarters of the country in terms of sort of the hundred megabits per second speeds if you define that as a market okay which it is not today um their margins on broadband service are already fairly substantial one estimate was around 95 percent which is dramatic uh they are also vertically integrated operators with a traditional cable television revenue stream where higher speeds on broadband in particular encourage further consumption of over-the-top internet video um so what is their incentive at this point now you've sort of said demand alone would sort of drive an upgrade but if go ahead okay um what is their incentive at this point to substantially upgrade their networks especially if telephone companies are only investing in wireless where's the competition going to come from and and player you can go first and then i'd like to hear from mark well it's funny because you seem to be quoting speeches i've given out on behalf of gig dot you i i think the incentive to upgrade is not there that's the whole point um now from the perspective of if you're the president of the president uh which we i believe will be the re-elected president uh the day after the election and you're trying to do what read and i think is very important which is to develop a growth strategy you want to look at what can you effectively do what are the levers of government where you can drive uh economic growth and a rising standard of living for all americans and i have to say that i think that the kind of things we outlined in the book are things that the the president does have the kind of control over um largely by the way in the executive branch though as we'll discuss in the book some in negotiations with congress and so i think that that kind of those digital applications uh are are where i would focus in terms of the competition i think it is a complicated picture i've actually spoken a lot on it and i don't want to bore people with the repetition but at the end of the day you fundamentally don't have the math in place for the upgrade and what we are doing at gig.u and actually what michael and i are working on together with a similar project called air.u is trying to figure out how can you change that math to drive the upgrade um by reducing capex op-ex and risk and by increasing revenues and uh system benefits and competitive uh opportunities and i think when you look at what google is doing in canza city you see the wisdom of competition where google went into canza city time warner a few days later um right after the announcement announced an increase in speed i think they went from three to fifty if i recall and now i've announced about a 10% increase in their workforce so i'm in favor of that but i i you know ben you'll have to explain to me what uh what you would do other than unbundling which was something that people proposed during the broadband plan and reasonable minds can differ i think unbundling in the context in which uh it was being discussed would and which other countries have done actually does not drive investment does not drive growth and i think if you look at the european example um there's there's problems with it and if we had suggested it putting aside all the politics it would have killed a lot of other investment and jobs that uh frankly i don't i don't think that's a path forward so i do think it's tricky but i think the what we have to do is find where there are opportunities where market forces can drive that upgrade market either side well the the uh let's be clear the cable companies and the telephone companies they're essential interests it's in scarcity not abundance um and that's the way they price things um so that the hope that uh if they're not pushed by competition they will create scarcity is uh one of the realities we have to the fictions we have to give up it won't happen um but the quite the solution becomes the way you inset stimulate demand on a broad scale across a continental economy is not by picking itty bitty plate little places and say well see we built a there now here's a demonstration project everybody else do it you built it there without demand you built it there on the supply side and so that doesn't work what has to work is the model of creating the space where the private sector now can do its thing and the internet and wi-fi are perfect examples the best examples we have of true deregulated markets entry was easy because the rules made it easy without those rules they would not have happened and so if i look at the cable space if i look at the quasi you know duopoly between cable and files which is the only place you have reasonably well-matched competitors they will both benefit if we make sure their platforms are open to competition they will moan and groan about they thought they could make more money by jacking up the price which is what people who specialize in scarcity do but we know they will do be better off if we ensure competition on the platform that's that's the model we need and it involves targeted places where you say i am gonna hope i'm gonna tie you down in this space constrain your instincts to slow innovation as long as i create a space where i get innovation from outside that's the model that works and we really do and uh mike mentioned a series of national quasi monopolies canals railroads electricity airports and the highway system those don't work in the 21st century they were static stable undifferentiated products that you could regulate that way and hope demand would fill it up we need something different for the 21st century any other comments from the panel let's turn to usage-based pricing now the chairman of the FCC has oh harrell sorry go ahead just very quickly there there are no laws that prevent companies from offering broadband services in the united states nothing prohibits telephone companies from investing in broadband nothing prohibits cable companies from investing broadband nothing prohibits other companies from from coming in and offering these services what the market reveals is i think exactly what blair was saying is that companies are making decisions every day and and determine that they can't make money on investing more in this this service but it's not a it's not a legal or regulatory impediment at this point well the law of economics actually is the impediment this this is an industry that tends towards monopoly or best duopoly and the and that has been the fact that lots of people thought that would happen and we now see it the question then becomes what does public policy do about it that's and i understand you don't accept the proposition that we could have four competing broadband pipes full service hundred megabit pipes ain't going to happen we can't even get two and once you admit the reality that you can't have two then the public policy question becomes how do i make sure i get at least one good one and then the full benefits of competition on that pipe um and that's a complete i understand that's a completely different mind frame but it's it's it says the laws of economics apply on both sides of the congressional aisle um let's turn to usage-based pricing uh the chairman of the sec has uh on a few occasions endorsed data caps as a business model innovation and saying that usage-based pricing could be healthy and beneficial part of the ecosystem Blair you've sort of advocated for a psychology of bandwidth abundance what do you sort of see as the role for the the FCC and the chairman and sort of encouraging more of a an environment of abundance rather than scarcity um well i think you know if you uh as re talked about early on if you see your mission as abundance then you set a strategy to do it and you make the choices to do it and so it involves a number of different things uh and i'll simply say that i think that as i've said in other speeches that uh getting this country a strategic bandwidth advantage and getting consumers a psychology of bandwidth abundance will drive a lot of economic activity um particularly in terms of the development of new markets and what we talk about in terms of big bandwidth medicine education i do think that um i would be uh very reluctant to have government involved in the micromanaging of the pricing of the service or the nature of the particular service so i don't uh i wouldn't have a government intervention per se in that area of usage-based pricing i do think however there are certain public goods such as education and healthcare emergency services where and we talked about this in the plan um if it turns out that that usage-based pricing is discouraging the utilization of networks for those public goods uh that's something that the government has to look at and that's we we chat about that in the book a little bit too do you have well so let me just ask ask some questions uh these are not uh the suggestions we are definitively putting in but they're questions suppose that uh the government said the following to medicare providers uh on such and such a date all your services have to be provided uh on a mobile broadband platform would that create demand for mobile broadband is it a good idea would it be a useful service suppose that uh a state government were to say on such and such a date all the textbooks and all the high schools have to be available digitally you can have paper too if that's what you want in your school but you have to have everything in a digital format would that create demand would that drive new services would that be a platform for change uh suppose that the state regulator with respect to energy said uh to uh every utility that was in its jurisdiction if you lower the uh bill that Blair is paying in his house by providing him insulation you get to recover a profit on the amount that you aren't providing you get to make a return on your investment these are sometimes called negawats a few states do this most states do not would that create demand for efficiency so these are all ways that demand can be created by this major major player in the economy which is called the government sometimes local sometimes state sometimes federal about seven uh about seven point eight percent of all the people in the united states work in government that's about twenty percent of the workforce uh suppose that everybody employed in any level of government uh had all of their uh salaries and all of their personnel records provided uh in a digital format and the deposits were automatically digital in a e savings account most in most places it can be done in no place is it absolutely necessary would that create demand these are many many many different ways that we can attack the problem of demand creation without saying oh we really have to have another trillion dollar stimulus oh we can't yes we have to know we can't yes we have to know we can't let's try to let's try to tap resources to create abundance i want to ask a different question you missed it seems to me and i'm a mobile guy you know that Blair knows that i i believe that a good 20 megabit mobile network is in fact a a part of the communications ecology for the rest of this century much more highly valued than 100 megabit service actually if you look around the world there's no doubt the question i would ask is do you observe a paucity of demand from mobile broadband as result of insufficient applications and services that people want i think you've asked the wrong question that's the one area where there is no paucity of demand the minute people get can get mobile broadband they will grab it and choose one of those million applications out there i agree and i mean i was just responding to ben's question about why aren't we seeing an upgrade on the wire line side yeah the line is the bottleneck i mean but so that all of the things you suggested that we should do to stimulate the man from mobile broadband we don't have to stimulate the man from warband we've we've the the mobile miracle as it's called in the rest of the world achieved the penetration of mobile voice four times wire line in one sixth the time frame yeah and the challenge is now to get that mobile voice revolution to be a mobile broadband revolution and they will take it up this is not the question so so so let me just say the mobile broadband growth is absolutely terrific the mobile broadband growth with respect to the provision of public goods is not meaning it fundamentally has been driven by from for almost everybody by entertainment that's not bad that's not bad but the whole thrust of our book is let's double down on what is doubling now i i disagree it's not entertainment a street map that helps me find stuff and get around that's efficiency i'm talking well we can debate this offline but i'm with all due respect i'm absolutely positive that the revenue lies in personal entertainment it does not lie in any of the services that i'm talking about you look at the education market in the united states almost none of it is digital you look at the delivery of public goods such as security almost none of it is mobile michael did you have a response yeah we started this uh this red ben was asking about bandwidth caps and and tiered pricing and i think um i just want to make up for the fact that i think reading blare passed up an opportunity to toot their own horn because i think uh it implicitly criticizes the the current chairman of the fcc and that's just to make the point that um to avoid you know that that mentality and policy of managing scarcity you need a conscious competition policy and and blare when he spoke i think you know alluded to the fact that you know when these guys were at the running the fcc and we you know we were in the analog self still in the analog cell phone era and remember you paid high prices for little buckets of minutes it was buckets of minutes for lots of money and it was almost a luxury uh to have a cell phone and so you know they took a it was a number of conscious competition policies blare mentioned to really reduce the terminating access charges to the plain old telephone uh you know system to the copper uh which really greased the wheels the spectrum auctions spectrum caps in other words no provider like the two dominant carriers that started with free spectrum could not just um roll up all the spectrum so it achieved their goal of having four or five wireless competitors in every in every market uh roaming was required which meant that regional and rural carriers could actually exist and you wouldn't only have national and and the result was you ended up very quickly fairly quickly through competition with unlimited packages of of minutes so minutes and you know suddenly for voice uh was not the issue in the pricing you had abundance and what we need is conscious competition policy certainly you can see the way on wireless i think it's a tougher one on wired for the reasons mark said but to get too abundance you can't do it without a conscious policy the economics of caps usage pricing or usage signaling because you could signal by quality of service as opposed to price is simple if it's a competitive marketplace the usage caps will be cost based and if it's not a competitive marketplace they will be rent seeking and um the problem is in one space they may be rent seeking the other space they may be cost based depending on on the level of competition okay i'm gonna go ahead and open it up to questions from the audience uh if folks before you ask a question if you could identify yourself uh wait for the mic identify yourself and the representing organization or company if wildstream tech opinions uh i think saying that most of the demand is coming from entertainment is correct but rather misses the point uh the fact is that entertainment particularly hd video uh simply demand so much bandwidth that no matter what else people are doing uh the total bandwidth consumption is always going to be dominated by video um you know one hour of netflix is probably a lifetime of con academy videos even comparing video even comparing video to video so i think you really have to look not at the just the bandwidth consumption but sort of the the time consumption on the part of consumers to understand what's really going on out there any responses from the panel okay up front here i roll com stock with com stock consulting and i i guess i wanted to pick on two points that read and blare raise you're talking about electricity versus telecom and what's fascinating to me in this entire panel um i have great respect for nobody mentioned the dreaded word common carriage uh but frankly that's a model that's been well litigated well tried and what you're all talking about is essentially circling around the same thing which is we have certain essential facilities uh you know whether there's a monopoly duopoly even a quadruple you can argue about but what wasn't really discussed but but i think it'd be interesting to look at in your book is it's accessed by devices and if you think of the electric grid and what states that do have electricity competition have done is essentially provide access by devices namely the generation devices to a common carrier grid and that's what's leading to a lot of the success of the green energy your ability to put your energy back on the grid but interestingly enough in telecom we've done the reverse we've increasingly removed access to devices and i point to the cable here and 20 years ago congress said in the 96 act you're supposed to promote access to devices to cable well 20 years later we still don't have that and that's where the innovation came from it's not the demand we don't need to boost demand there's plenty of demand out there if you look what consumers today pay for communications it's five times what people were paying for back in the 1990s when we had the cable act and we had the 96 act so there's plenty of demand there but what's missing is the access for devices and then that goes to your usage base as well which is if you could put devices on those networks whether it's to access spectrum or to access the fixed wire you would see people respond to the increasing prices by creating more efficient devices to more efficiently utilize the spectrum that is available so i'd be curious to know why there hasn't been more discussion of access to devices it's a very simple regulatory requirement but it's what the key to me it's missing in the telecom world today let me make a comment Earl about energy because you're making a great point i'll let Blair pick up on your nice observations with respect to the knowledge platform in energy we don't have the emergence of something like wireless as to wire line which was transformational as mark and everybody knows in the telecom area in electricity wireless is called lightning you don't you don't really want to buy some of that or have that hit your device right but there are two major major major areas of opportunity for different kinds of network architecture in energy that have emerged in just the last few years a point number one all the electricity looks and feels the same whether it's there's no such thing as a video version of it right so you don't have the ability to distinguish the product by its wrapping in a form of content however there are two different fundamentally different ways to consume it that have different architectures and this is what to pick up on what Harold said earlier we're going to say in the book is where we need to change law and regulation in order to open doors for private sector investment area number one is distributed energy so that's whether the solar panels are put in a park and shared by everybody in the surrounding area that's a common solar solution or whether they are put on your house they are not on the other side of the meter they're not on the other side of the utility distribution network they're distributed you are self providing the electricity in a community or at home this is a solution that is potentially really really really really huge and financiers and installers want to be in this business and the regulators need to open the doors for them to be in this business big time in every single state probably about 30 of 50 states are highly desirable the United States is very blessed in solar very blessed in solar the worst place in the United States for solar is only half as bad as the best place in the United States for solar meaning because of our latitude the ranges are really great let's take our the outlier case for everything Alaska well of course in the summer it's a great place for a solar so the you know the averages are extremely appealing for everybody but that's not part of the traditional architecture and it is a threat to the traditional regulatory approach to the electric grid I said there were two opportunities here's the other opportunity what is the network for provisioning electricity to transportation it doesn't now exist there's no one who says well the government has cleared out of the way as as Harold said and let me go and has given me the chance to go ahead and build that government said every level are in the way of anyone that might want to build a real charging network or really collect profits for doing that we don't really even have in any particular state more than a few models and examples there are no there's no national plan for an electric grid it is totally a chicken and egg story all the eggs are saying where the chickens all the chickens are saying where's the eggs but in fact if you've got the cycle going because of the advances that I talked about earlier with respect to batteries you could see a tremendous transformation we're blessed with vehicles in the United States we average about two per household of those two in almost every case one is extremely suitable for fairly short distance driving and the other is the one that ought to be used for really long distances or to put another way roughly speaking the electric vehicle in the market is the electric vehicle market is about 100 million vehicles in the United States and if we brought from the confused distant non-transparent prospects into reality the ability to for people to say it's now worth me in making the purchase if we brought that into this second term of the Obama administration or the first term of the Romney administration if we brought that kind of growth prospect it would be an astounding boom to the economy any other thoughts from the panel mark or right player the thing that concerns me is that the common carriage in the long history of non-discrimination is the exception rather than the rule and I'm very concerned because every time you use it of course there's a heart attack over on the utility side of the room the simple fact of the matter is that we achieved non-discriminatory access to the means of communication for about 400 years before we had common carriage and I think we're barking upon a period of time where we may have hundreds of years in this new environment and maybe we can achieve non-discrimination without the concept of common carriage so we don't we we need to agree on the goal that we want to achieve and it may well be that the law of common carriage developed over the last hundred years is a big part of the problem because it's got so much it's such a thicket that we lose sight of the principle of of where we want to go so but I agree entirely if you look at the internet and if you look at the Carter phone decision right let's remember for 30 years every device that connected to the internet was governed was made possible by Carter phone which said you can plug it in and so that's a device driven it and the network operator also was not allowed to get in your way if you look at wi-fi exactly the same thing happened they said you can use that space but the the rules were amazingly efficient and brutally simple and now at this point where everyone says hey we want more complex rules the minute you want complex rules you'll get regulators involved and you also get people who understand how to manipulate those rules to get in the way of competition so I want to focus on non-discrimination and find the simplest set of rules I can to accomplish your goal of device connectivity Blair I would just say without for the sake of the c-span audience who may not be familiar with the 20-year history of the set top box situation which which you know we dealt with back in 96 or maybe we didn't deal with but and then again try to address the national broadband plan I would simply say that I agree with Mark's history that I think that the the value of the Carter phone decision it may be kind of the single most important decision in some sense in terms of innovation and growth and I would I would add to that list Harold your former aid Kevin Martin when he was chairman of the FCC what he did on the C block in terms of having that spectrum be an open platform for device attachments I think was all good it's not clear to me maybe you couldn't tell me offline how if you had that rule you would drive an up on the wire line side with the simplicity that I think you're looking for and that I think you what your your work demonstrates is you kind of need that simplicity how that would suddenly drive an upgrade I don't think it would but happy to to have that conversation okay we're a little bit over on time but I will take any final questions to gather one or two and then give the panel an opportunity for a final statement as well any additional questions I'm Judith Burrell and I work with Smith Dawson and Andrews a government relations firm but I was intrigued by your suggestion of creating a demand through public sector facilities library schools government public records those kinds of things but in this economic climate and I know you're trying to avoid stem the controversy of additional stimulus state and local governments would need help to meet that kind of demand I don't I don't see within the context of their struggling budgets the ability to do that in an efficiently timed manner where demand would would kick in I just wanted to explore that thought a little further well I would simply say first of all very conscious of the constraints on governments at all levels right now and part of what we're going to be kind of laying out or different approaches to it and I think that when you look at how local governments through a series of different actions can actually lower what they pay but but drive an upgrade and this can be in a variety of different ways but you know one of the great things that the United States government did in driving the kind of change that Reid talked about was to have GSA be a leader and saying we're going to purchase essentially green materials for our buildings and what that does because of the volume of that you drive down the cost curve and there you get kind of a very wonderful situation and if you had local governments combining with state governments combined with the federal governments to achieve certain kinds of innovative uses I think you can drive energy efficiency and you can drive bandwidth abundant any final statements from the panel I'll make a final statement the federal government right now spends about three point six trillion dollars a year and takes in as tax revenue two point three trillion which is less than two point six trillion it's one point three trillion dollars less that's the reason why the total federal deficit has gone from about 10 trillion to about 16 trillion dollars on about a hundred percent of GDP in a frighteningly short period of time no one worried about the short-run or long-term health of our country no one worried about everyone who's now under the age of 30 can take lightly this extreme imbalance in the deficit the period of 1995 to 2000 the five fabulous years in terms of the federal budget were years in which the GDP averaged a growth rate of four percent a quarter if we all could wave a magic wand and have it be that the growth rate was five percent for the next five years or even better the next ten years that would do much much much more to close the federal deficit than any outcome that could be negotiated between the two parties that doesn't mean that a magic wand will do the trick but it does mean that having a growth agenda be a central part of the discussion about the deficit is the best thing for all concerned I'm not saying it's the only thing it cannot be the only thing the 1.3 trillion dollar deficit is a big hole and just saying we're going to grow the way out of it is not what we're saying or any reasonable person should say but on the other hand having no growth agenda that would be self-inflicted injury Blair Michael if I could just follow up on what Reed said those years President Clinton in January of 1996 state of the union address said the era of big government is over and those years also were relative to prior years both of nonpartisan it was it was a deregulatory time and I would just urge you in your recommendations to whoever is the next president to keep that concept in mind a deregulatory time that included the implementation of the 96 the challenge here and the paper I left here talks about the the why growing up is hard to do the quarter-life crisis of the digital revolution this is a revolution that's been around for about 25 years and it turns out that every major industrial revolution goes through a quarter-life crisis where you start to figure out what set of institutions are going to channel this immense amount of economic power and it's it's hard the 96 act was a little bit early but it understood what was what was coming and so the the thing is and then the new deal was the end of the quarter-life crisis of the last the progressive era the new deal it's the same cycle and it's really important I think to understand that each revolution produces a new set of institutions we don't have to give up our values but we have to fix our institutions and for me the interesting thing is electricity and and and ICT are the only two technologies that are completely widely accepted as general purpose technologies they fight about steam and they love agriculture which is 10 000 years ago but these two technologies have come in a very short order between each other combined to completely transform the world there is absolutely no doubt you go out and look at the world but with the mobile miracle you look at the rate of growth in the developing nations in the last couple decades and it is a function of these two revolutions and we need to find a way to make sure we don't muck it up going forward thank you mark please give our panel a round of applause thank you