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tv   The Communicators  CSPAN  October 29, 2011 6:30pm-7:00pm EDT

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>> last month, the first woman to hold the post of executive editor of the "new york times." >> there is a certain lack of discipline sometimes. a point is repeated too many times, or there are three quotes making the same point, where one would do. i like to see a variety. >> she will discuss her career, her new book, and the future of the "times" sunday on q & a. this week of "contenders," tom tauke from verizon discusses the internet, the role of the sec, and spectrum sales. >> this week on the "communicator," tom tauke is our
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guest. we're also joined by tim hart, senior technology reporter for politico. we're here to discuss several telecommunication issues confronting verizon and the wireless world. and we begin with kim. >> thursday, there was a vote on reform and universal service funds, a mouthful and more complicated to follow. i wanted your opinion on how you thought it turned out after seven months of lobbying and years of talking about needing to do this. how did it turn out? >> almost decades of talking about this. the chairman and the commissioner deserve credit for taking on this issue, tackling it, and getting it done. it is a big issue, very complex. essentially we had a system of subsidies under the old
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telephony world that continued as the old telephony world has died away. the subsidies were in many cases being abused. they were not targeted any way that was helpful to consumers. it really became almost an embarrassment for government as well as the industry. i think the fcc tackling this and addressing this was really important. from what i can tell, and we have not seen the order yet, but they have also done a very good job of balancing the various challenges they have faced it and the interests of the various parties to get a package that hangs together well, is coherent, out and will accomplish the course objectives. i think the court objectives are to have some kind of limitation on the subsidies that will gradually phased out, to direct the subsidies to the deployment of broadband rather than supporting voice services, deployment of broadband across
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the country. i think it will get that done. and i think third, they have done this in a way that has permitted the industry to be stable. one of the worst things that could have happened was if there was a rapid change in the subsidy things that would have destabilized companies and resulted in a reduction or elimination of services and some areas. they have done that well. overall they have done a good job in reducing subsidies and targeting them and achieving the objective for which those subsidies should be in place. >> verizon is one of the companies that stands to gain from the reduction of access charges as they go down. you did not rely as a whole lot on universal service funding and the beginning, unlike other companies. so verizon made out pretty well in this whole situation, but are there some pitfalls that we may
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not be looking at closely enough? verizon, various parts of the company have won and lost. at the wire line will all blues. the wireless gains more. as a result, it was something of a mixed bag. overall it will be good for the industry and good for our company, and we are supportive of what the fcc has done. of course there are going to be a lot of issues that will arise because this is very complex. there will be some pitfalls along the way. the fcc still has a lot of work to do to work through those. as it enters the various phases of this plan. the thing that is of greatest concern to me that came out was the notice of proposed rulemaking relating to i.p.
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interconnection. this is the interconnection of internet services for internet companies, particularly voice- over i.p. this is an area that the government has not engaged before and has been left to commercial agreements among companies, clearing arrangements, and the thing that causes us concern about this is if we look at it in the context of the international arena, we have in europe carriers in europe calling for rules on i.p. interconnection that would allow for them to charge for the delivery of traffic into their countries. the developed world has wanted to establish a system that was similar to what we had in the old voice world, a system of charges for physical delivery to the developed world because they want to collect this money to build the infrastructure.
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this is something which puts, in essence, old world regulation into the new world. and allows countries to prevent the free flow of information into those countries. and it is really targeted at our internet companies in the u.s. we provide the content, they provide the search. we have the amazon, we have netflix. we are the ones sending traffic. at that want to charge us. it is in part to collect money from u.s. companies. when you look at it in that context, we have to be careful about what we do domestically and setting up a regime for government regime for interconnection rather than allowing the commercial agreements that have governed this in the past. >> what about phasing out usf
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out completely? >> i think that is what it would have accomplished in the long haul. now what it is focused on is not ongoing subsidies but focused on trying to provide the capital investment for the networks to bring broad band to underserved areas. while we are doing a great job as an industry and country getting broadband deployed rapidly, both wire line and wireless, that at out are parts of the country where does not make sense to build these networks and provide this service. i believe the fcc is of the view that once the of the structure is built and it to provide multiple services over a broad band infrastructure that you will not need subsidies, or at least very limited subsidies and very few areas, to sustain those networks. these networks provide more
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services than just voice. you have multiple revenue streams over these networks. as a result, i think the key is to use the subsidy to build the infrastructure, but then you ought to be up to phase out the subsidies once the of the structure is built and the services are flowing. >> there were some complaints that nontraditional carriers were shut out from this rule making, that they were not allowed to enter that and it favored the large companies, verizon and at&t. >> i would argue the opposite. under the old system, the money was targeted to the old voice carriers, the traditional tacos. it was designed to subsidize voice. in rural areas, the role companies got the money. this i think, through the auction system on the wireless side and through the system that
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is underway on the wire line side will at some point move to a new auction system. i think we will see it opening up for other carriers to be up to receive subsidies. i should observe, and this is not exactly what you asked, but one of the abuses of the system has been among wireless carriers. we have had areas of the country where we have had a dozen, 15, 16 carriers that received subsidies to provide service to that community. the subsidy was based on the cost of delivering a wire line service to the community. obviously if the strong eighth line to a home that it took a mile of wire to reach it, that could be expensive. the wireless carrier could come in, but the same subsidy and get it three, four times depending on how many mobile phones were
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in that family and became a boondoggle. why would the government want to subsidize 15, 16 carriers, even five, six, and a hard to serve bararea? it became an abuse of the system. i think in some sense, some of that abuse has gone away, will go away on the wireless side because we focus on areas that do not have service. second, what i think we will see is that all carriers eventually, they'll have the opportunity to bid to serve areas that have service today. >> a few months ago, talked about the sheer number of small carriers and some states, like iowa. will this lead to consolidation of some rural carriers or put some of business qwest?
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>> the consolidation has been happening, and this is good. when i represented iowa, there were 161 phone companies in iowa. we are down from that number, but that consolidation is gradually taking place and this is positive for the consumers. when it comes to building infrastructure, there are benefits to having scale. generally, these smaller carriers have built already the infrastructure for broadband because they were able to receive substantial subsidies coming through for voice services. they will receive less subsidy, many of them, over the next several years, less than before. i don't think this will put them out of business because the fact is they have built broadband networks and to deliver more services over those networks, so
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now they get not just boys revenue but video revenue and other services that will continue to come into the arena because of the new technology and the new infrastructure that is in place. i think the fcc did a very good job in balancing, so they're mature companies did not have financial shock. they are avoiding financial shot and they are leading us into a world where the new technology and the new services. >> following yesterday's meeting of the fcc commissioners, they talked about the cost. we just want to play a little of this and get your reaction. overall't expect consumer rates will go up as a result of this order, has appeared to not doing reform. so the reform, what we are doing today, it eliminates hidden
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subsidies that end up on consumer phone bills. it constrains the growth of the fund it, and that growth would have translated directly into increases on consumer phone bills. >> i think the chairman is right. i don't think we will see increases in phone bills as a result of this. the trend in the industry is down. more service for the dollar that is spent, and that trend will continue. there may be a company here or there were there is a move sought in the part of the bill and a decrease in part of the bill, but overall this will result in less money being paid by consumers to the industry for their services that are provided. >> kim, any more questions about the universal service fund? >> i think we have covered it. >> tom tauke is the executive vice president for policy for verizon.
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i want to move onto that neutrality. what is the status of verizon of's suit against the fcc? >> the process has occurred among the various circuit courts to determine which circuit court will hear it. it is the d.c. circuit court that will hear the case. to the best of my knowledge, they have not set the calendar for that, so we will wait and see what the calendar will be that as set forth by the court. >> there was an article recently in an "politico" that it was serendipitously beneficial to verizon that the d.c. court was chosen. >> in this case, the choice was made by lottery, and the d.c. circuit was pulled. we believe that if another court had been selected, that court would have deferred to the d.c. circuit because the d.c. circuit generally has handled
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these issues in the past and handled the most recent case, which was the comcast case for which the current order developed. in addition to that, we believe because of the impact on wireless licenses. there was another ankle for bringing it to the d.c. circuit since it has responsibility by statute for all of those cases. >> rep greg golden recently wrote a letter to the chairman of the fcc saying, do not move forward on the net neutrality proposal. if for any reason it goes through, could congress that been? -- could con step in? >> there is a review process for overturning these, including the fcc. the house has passed a motion to disapprove the regulation. it is now pending action in the
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senate. it does not happen very often. that happens occasionally, but it appears as if there is sufficient senators to force a vote. we expect that will happen some time over the next few weeks or months. >> kim? >> in that lawsuit, verizon said the sec overstepped its jurisdiction and is not have authority over broadband and should not be madelyn without manages its network -- it said the sec overstepped its jurisdiction. said it creates rules. >> i disagree that create certainty. the main issue we have this jurisdiction. what is the jurisdiction or the authority of the federal communications commission over the internet space or broadband space. the fcc is relying on a statute that was built for the old
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telecom world, voice services over wire line networks. it is trying to find a 40 there to extend the coverage it -- is trying to find a 40 there to extend coverage to the internet. we cannot believe that gives them the authority. we cannot believe they have the jurisdiction to impose these rules. and in the order they adopted, not only did they claim jurisdiction to impose these rules but the claim jurisdiction to essentially regulate the entire internet space, including price regulation, interconnection, which we talked about, and essentially a claim that we could introduce the world of telephony regulation into the internet and broadband space. we think that is wrong, they don't have that authority. we also think from a policy perspective that it is dangerous. as a result, we are fighting this in part because of the
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implications of the claim of jurisdiction more than the actual rules. just to be clear, we don't have to change any of our business practices to comply with these rules. we are in full compliance, and we were before they were adopted. it is not a matter of a dispute over open networks. we favor open networks. this is a dispute about whether the fcc has authority to regulate the internet space. >> ctia, which represents a lot of the wireless industry, has taken a back seat on the net neutrality. what are your thoughts about that? >> aretwo sets of suits against the fcc. one said the rules that were applied to the wire line side of the business should apply to the wireless industry.
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the ctia is weighing in to fight that. the ctia is taking a slightly different position. in part this is because these rules were a result of a lengthy negotiation with various players in the industry. i was part of a lot of those discussions. some of the country. some of the companies in essence agreed to support the rules if they were shaped the way they were. we never agree to that, and so we are challenging it on jurisdictional grounds, but other companies reached an agreement with the fcc and not challenging and some are members of ctia, and we think that is why they're doing what they're doing. >> this is "comunicators." our guest is tom tauke, from verizon, who served in congress.
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our guest reporter, from politico, kim hart. >> a wanted to shift the discussion to spectrum issues. as we know, the super committee is right now trying to figure out its recommendation for deficit reduction, and spectrum auctions could be part of that recommendation. it how do you think the super committee will handle whether to include at the spectrum auction or allow that to go through the regular congressional process? >> i think the odds are that the super committee, as it comes up with recommendations, if it comes up with recommendations for congress on deficit reduction it will include a proposal relating to auctions of spectrum. they are scrambling to find the money, and there are not many places to find money for the treasury without raising taxes.
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i think they will grab on to this and included in the deficit reduction package that comes forth from that committee. this is a good thing, from our perspective, because it is important that more spectrum be made available. the yankee group just did a study not long ago that said by 2015 the capacity of wireless networks would have to increase 60-fold from what they are today, 60 times more than today to accommodate the demands for additional video services at other kinds of traffic over wireless networks. consumers are eating out the wireless capacity, which is good from our perspective, downloading videos and so on. i think there is going to be a real need for spectrum. this is a long process, to clear spectrum. congress gives authorization
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now, you go through a link the process to clear the spectrum and you have options, then you build the infrastructure using that spectrum. from the time we start to bring the benefit to the consumer is coming isan 8 to 12-year process. it is in portis start now. -- it is important to start now. the committee has been working on it. at the super committee has something to work with from the committees of expertise. >> a harvard law professor recently argued in the huffington post is not the right approach to make the networks sell some of their spectrum because it will stifle innovation. he goes on to talk about the use of unlicensed spectrum and how wifi has been successful in short distance. >> the congress is looking at
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how to achieve a balance. i suspect there will be some support in the super committee for not providing some unlicensed spectrum. part of the question is what part is used for licensed, unlicensed, sun on. -- so on. i think the 84 megahertz will come from the broadcast side. it is probably better suited for the kinds of mobile services that we have today than for a lesson that services, -- of licensed services, and therefore we hope the committee would set up that spectrum for mobile services and perhaps some spectrum from the government, but there will be other spectrum that over time will be more specter made available for unlicensed. >> i wanted to touch on the at&t and t-mobile deal. c.e.o.nth, verizon's
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said at the deal had to occur because of a lack of spectrum on the market and it was almost gravity that was pushing the companies together. is verizon supporting the deal? i know he had said you were not taking a position, but you are at least not opposing it. >> we are staying out of it. we're trying to stay neutral. the point he was making was this -- that what drove this, the motivation for the transaction was spectrum. in essence, it highlighted the need for the u.s. government to address the spectrum issue, as we talked about earlier. congress needs to do something to make spectrum out, more spectrum available. the companies recognize there will be a great need for spectrum.
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it was just another sign that more spectrum is needed, and that is the factor that drove that transaction. >> given that the department of justice has sued to block that deal, what kind of applications does that have for the overall industry going forward, which needs more spectrum, as you said, and flexibility to acquire that? >> it is not clear what the implication would be at the doj or fcc turning down the transaction. i think it is safe to say that companies will adapt to the circumstances that are in place. t-mobile, some have observed, is already taking steps in the marketplace to go after the prepaid lower-cost services and try to carve out a niche there in anticipation of a potential turned out of the transaction. companies will adapt to the
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circumstances. for the overall industry, i think it will highlight the need, however, for congress to act on the spectrum issue and for the fcc to move. the bottom line is out there is huge consumer demand coming. if you don't increase the spectrum available, the costs of services will inevitably go up, and that is not in anybody's interests, not in the company's interests or the consumers interests. >> i wanted to touch on the other lawsuit that verizon is involved with over data roaming. can you give us an update on that? >> this is in large part a jurisdictional issue. we don't have a clear time frame for action by the court. the bottom line is that we dealt what the fcc to have an
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unlimited authority to regulate the wireless space. we are again attempting to confine their authority to the statutory jurisdiction that has. >> 15 years ago, verizon was basically a telephone company. today it. fios, wireless -- today is fios, wireless and wireline. how about 10 years from now? >> we are regional and national company and we are becoming a global company. we are ready have the best connected global internet backbone, the premier internet backbone. we have also recently engaged in cloud computing services. those aretwo of our efforts. secondly, we have siloed
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networks, wireless, i.p. we want a uniform platform to bring to consumers and businesses so they can converge their services. video, anytime, anywhere, anyplace, similar with other services. i think those are two things you expect. going global and trying to bring to the consumer and businesses a converged set of communications services. >> tom tauke is the executive vice president for verizon for policy, and kim hart is the senior technology reporter for "politico." >> this weekend on "book tv," general westmoreland to let u.s. forces.
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the new york times bureau chief details the unravelling of the u.s. automobile industry during the 2008 financial crisis and an interview of over 100 african- americans and an examination of race, identity, politics, and being black in america today. also, it is not still week on "book tv." the complete schedule is online at booktv.org. every weekend, the people and events that document the american story. this week, picketing, protests, arrests. occupy wall street? no, the national women's party. women's suffrage, and archival film from abc and the army signal corps. also, a look at the young harry truman and the 12 years he spent working on the family

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