Transcripts For CSPAN Key Capitol Hill Hearings 20240622

Researchers, not just serves working. I hesitate to do this because he represented the state that is the most affected but i would love to see if someone has the courage to question the scale of money we give the universities for administering this. You look at the percent are part gets percent harvard gets. Come on guys, cant work that go straight into research . Sen. Warren let me ask you the question on the funding part of this. Should we be doing Capital Budgeting as a way to increase the funding substantially for nih . In order to fund nih, do we have to cut shortterm spending . Speaker gingrich we dont have to. I would take it off budget and issue an alzheimers bond. The longterm tidal wave is so enormous the most fiscally prudent thing you can do is to find a way to undercut that wave through research. I and happy to defend that notion anywhere in the country in terms of talking with conservatives. There is no all are other alternative that works. If you look at how the navy builds aircraft carriers, they cannot put the money in so they cannot buy the entire carrier but they can send a contract that makes it prohibitive to not complete the carrier. It is a clever sleight of hand. I do think we should find ways to fund fairly large projects over at least a four or five year period. I am a constitutional conservative. I believe congress has control over things but i think there are practicalities. The Transcontinental Railroad could never have been built on an annual budget. They had to design a plan that enabled them to get the capital over a multiyear time and i think i would challenge this puts my friends in a bind i would challenge nih to come back and say give us a project so large and exciting that they justify a Capital Budget and then lets go fight for the Capital Budget. Sen. Warren thank you very much. I feel like im standing here pitching low and slow over the plate. Ims very pleased to hear your answers. We had a gaping hole in the nih budget. It is 12. 5 billion. We need a plan to fix it and if we want to dream big about what we can create, we need to get out here and fight for more funding for nih. I proposed a bill called the medical ovation act, which would increase nih funding by 20 without raising taxes and it doesnt even have to go off budget. If there are other ideas, people should put them on the table but it is time to get this done. I think it goes without saying that you and i have a fundamental disagreements in some areas but it is clear that one thing we agree on is what Congress Must do and i hope that we will be able to follow your example, double the funding for nih as you did in the 1990s come and bring home some of the promises of medical research in this country. Thank you. Sen. Cummings i went to thank you. I am hoping you will use your influence to help us achieve the things we need to achieve. I dont want something to go unnoticed. You talked about key people who played a significant role in making sure we had appropriate funding for research and particularly medical research. I opted say out of our pain comes our passion to do our purpose. The people you spoke about obviously had pain they experienced and were able to take it to the halls of congress and make a differencedifference. Then i thought about what you said about how important this research is. I had a Family Member 10 years ago who had a terminal type cancer, but it is now fine. Those are things that mean though much so much. The bank both of you let me thank both of you for your leadership. What you are doing is very important. Thank you very much. But let this be the start of a new alliance. But i would like our folks to step up for the second panel. We invite the second panel to take their place is. Places. Our first guest is the professor at the university of Maryland School of engineering. Dr. Wilson is a member of the National Advisory board of the national and appeared of health. And the board of health. Welcome. Back i am very proud to introduce an associate professor at Harvard Medicine School medical school. He direct the program on therapeutics and law. He earned his bachelors degree from harvard and his medical and law degree from the universe the of pennsylvania. University of pennsylvania. He is certified in medicine and. Welcome. We are very pleased to have you today. Thank you for lending your ex ortiz. X are teased. Expertise. I am honored to welcome our next guest. She completed her degree in new york. She is the author of the entrepreneurial state, which was included in the 2013 book of the year list issued by the financial times. If you can issue opening remarks, we will get started. Back thank you for the opportunity to be heard today to share my expertise. I have enabled this is in a Research Program with the support of the national ion foundation. I am in the process of working on technology from the nationals i am foundation and is mall science foundation. I think it would be informative to start by describing the academic career track will start as postdoc and then an assistant professor, on to an associate professor or, and after five years one may become a full professor. A significant amount of time is spent conduct thing research. We want to build a pipeline of student excited about research and graduate cool and collaboration graduate school and collaboration in several this up since. Disciplines. Professors are able to share their permission so it can be applied to solve useful problem and to motivate to dance to seek students to seek research career. This has helped us solve problems and develop technology that can be transformative and developing the next generation. This provides the basis that will benefit our children and grandchildren. There are alternative sources of report. Without Faith Research there is lied research. There is no research. It is as though as 9 . Low as 9 . This has had a significant negative impact on morale. Also on the peers who are saying these proposals. It has a negative impact. They are making career choice is. Choices. These are the people we should encourage because they are the drivers. They can find research job. However, many young scientist are heading to under a limit. Under employment. One of the first thank you will cut is your travel ajit. Budget. That does not allow you to send students to conference to get the job skills they need. There are no and intense encourage meant, and financials support to creative ways of thinking. While Government Support is shrinking in the u. S. , it is growing in europe and asia. This trend begs the question of where will the next big break throughs come from. I am sure you are aware of it listing student existing you didntstudents going into stem cell. It is the case that at the phd level our graduate consist of mostly foreign to dance, not american. Foreign students, not americans. This has a huge return. These are not necessarily for ourselves in the short term but our children and ran children. Grandchildren. I would like to address the translation. The research translated at my company was supported by multiple grants. Giving some talks, i got a lot of encouragement to do a company, and that became my foray into entrepreneurship. They have an active incubation program. It was of the utmost importance to me that the transfer program existed. The grant was a critical catalyst for beginning the effort to transform original research into a commercially viable solution. It enabled me to reach out to per active partners for evaluation. Perspective partners for valuation. It was critical in his tablet showing credibility establishing credibility. It allowed us to further x than the team expand the team. The government must continue to provide incentives to support new technologies, as these lead to ask ended employment expanded employment and improve in quality of life. They are doing well. The Funding Amount is from 500,000 to 550,000. Commercializing technology can take a lot of effort resources and time. In my case my given the code we were starting with, that was very expensive. We had to optimize the code to run fast or. Faster. It took a lot longer to do the test than we imagined. I want to point out they have developed a program, and the primary goal is to foster entrepreneurship for engineers and scientists to expand in the technology reported previously. This has shown to make a significant difference. They are fostering and egos to stem wrapping around these companies, and ecosystem wrapping around these companies. It helps them get to the next level. This program only it to sit for two or three years. Can i ask you to wrap up so we make sure we get everyone . This is the last part. On the entrepreneurship side the federal government is doing well. We have to start at the base. It is my pleasure to talk about transformative medicine. The holy grail is innovative drugs that have a groundbreaking affect. Patients have worried about a reduction. It is important to direct policy. There is controversy. The pharmaceutical industry has contended it leads to development of and while arguing nih goes to drug development. I want to focus on the valuable yet underrecognized roleplayed a public invest. I lead us ready to determine what they thought was the most led a study to determine what they thought was the most important drug. I then examine the development his three of these drugs. The full result of these are available, but one of the major recurring themes was conceptualizing an approach and even damaged trading proof of concept. And even demanding proof of concept. Researchers loan the gene and produced large quantities leading to the approval. The first effective treatment for a rare form of emea leukemia was the first successful. At set out to prove they could inhibit the malfunctioning enzyme. He and his colleagues identified the agent. It was synthesized many years ago. In 1984, sam broder Commission Companies for candidates. Broder and his colleague documented activities. Clinical trials were conducted. One variation is several concept first arose in University Setting and were followed up in industries that things. An example can be found in antidepressant. They invest to gated serotonin investigated serotonins role in depression. Around that same time, a Research Teams darted designing it. The transformative conditions were discovered at a variety of it did to ship. A variety of places. Industry collaborators provide support to move forward, but our findings do not support affirmative dickel industry pharmaceutical industry. Further support can be found in us torry behind recent drugs. Story behind recent drugs. They discovered drugs and conduct trials. The Senior Scientist formed a startup to develop drugs to treat a hepatitis see c virus. Many of the key drugs arose in government sponsored settings. Ownership under patent laws is generally reserved for product. This leads to misperception about the relative importance of the contribution of these products. One argument is postal often focus on providing greater incentives for drug producers by x pending patent extending patents. In contrast, reductions have threatened the sources did support most transformative drug innovation. I firmly believe these are powerful ways of producing transformative drugs in the future. This is subject to high costs and high risk may lead to new therapies that will raise concern about whether this could lead to socialization of risk. We should think of how the public can gain from this. As demonstrated by the significant role in creating trance fermentative drug, publicly funded hold great promise for drug development. Thank you. Thank you for inviting me. I must say this is one of the only topics economist agree about. Spending on r d has an important longterm effect. The main issue is how do we talk about this. We have a real problem. I want to focus on how it has influenced the way policymakers have read enabled been enabled to increase. Its not a coincidence i work at the university of sussex. It was one of the only place iss that confronted the notion the role is to fix market failures. We have heard a lot about research. It is fundamental for innovation. I was happy to see you say the word innovation. It has the in market shaping. We really do not have the word to talk about creation. The spillovers are ohio that it is hard to appropriate the return. The government has stepped in. If you look at places, what used theyou see is they are invest in research. If you know anything about Venture Capital, they are exit driven. That tends to happen through a buyout for an ipo. That is not going to get you the biotech revolution or the cleantech revolution people are hoping for. I want to focus on the inability to talk about this. Lots of youth aged these lots of these agencies have been mission oriented. They have a mission to nurture outofthebox thinking. How do we include mission . We dont. Beware of those tests. If you look at the big problems we have today, the cuts we are when thing in research, so the latest figure, it was peaking in the 60s. It has dropped in the 2000. Recently it has on up. It is increasingly focused on the thick research. Basic research. We have to remember the big successes come from nurturing linkages between basic and applied research. It looks like the private sector is leading up to that. That has been increasingly around research. They used to spend 35 on the are. It has fallen. It is narrow in scope. We have an increasing financial is asian of Companies Spending more on inks like share buybacks. When you had an active sector you had to ask why are they doing that. It actually came from a deal with government. Government says you can maintain your status as long as you reinvest in innovation. We really dont have that kind of deal make it. Dealmaking. Have allowed this narrative to become so pervasive. All the cool stuff is going to happen within business. The problem is that is historically correct. As long as we talk just about basic research, we miss the wider story. Let me start with the question about where innovation comes from. If we want to improve medical, we need to understand where it comes from. One analyst found that two thirds of the drugs stemmed from discoveries made from publicly funded research. You found most of our trance fermentative drug most of our trance formative drugs tra nsformative drugs are from research. A study found 91 of drug patent are owned by the drive it sector. Private sector. This suggests innovation comes straight from the Drug Companies. I want to understand this discrepancy of where innovation comes from. There are a number of different x the nation x the nations. Explanations. A lot of the key insights, which inspire a whole field of therapeutics are not necessarily patentable but a rise from decades of government funded research usually conducted in the academic center. Those key insight are not patentable, although the product are. Pharmaceutical companies do it one job do an excellent job and will patent changes and will build we did one study around the particular drug. A lot of the key innovation is not patentable. They pursue patent to excess. We did a study and found the small sliver of patent held by academic petition and government are much more important and had more impact on the field. Senator warren the federal government conducts research. They use that to develop new drugs. When they earn money, the tax payers do not necessarily reap the reward. Some Drug Companies argue the government recoups its investment. Do you believe the taxpayers are being adequately compensated . I think we could do a lot more to invest. When you look at pharmaceutical many of actors and how much they devote to research and development. The amount based then on research and advertising the amount they spend on research and development is far more. I think what we need to be doing is figuring out ways to take the enormous profit and filing them back in the enterprise that provided the studies that allow these profits to be made. Much of it was going in the opposite direction. There is a lot of talk about cutting Corporate Tax is for companies that can trace their product back to patents or other forms of intellectual property. I want to know what you think about this innovation tax cut. Would it increase investment in research . I think its important we remember what a patent is. A patent is a monopoly. The goal should not be to increase profit of companies. It should be to increase research. The evidence is they are not are a good at that because they are targeting the income generated. The tax credits and up being designed poorly. In holland they designed one that is in college and. Intelligent. I think we should remember, the act in 1980 allowed Public Research to be patented. They say, better make sure the taxpayer does not pay twice. They spend around arty one billion in research. 31 billion in research. The pricing mechanism it self could be one way the taxpayers could be rewarded. The government has never felt the confident precise and because of this narrative, with the idea your meddling and the market, where you created that market. This finance has shaped the industry but as soon as we talk about government having an influence on the price, we hear about government meddling. It would say we get more innovation if we plow more into basic research, not if we make these are the ways to big Drug Companies. It might increase time people golf. That could be tested. What drives innovation are the perceptions over future market opportunities. Were in buffett is good in this. We are talking about what drives those future opportunities. Were in Buffett Warren buffet is good in this. One more thing which is to ask about the act, which could boost the budget by about 20 by asking Drug Companies to put more of their profit into the nih. Could i ask you how the medical innovation act might of the pipeline of new product and the drug industry it self . I think its a good idea because it provides a substantial sum to the nih and the work to make sure drugs are evaluated and approved so we know they are safe before they can come on the market. Unfortunately, the amount of money pharmaceutical companies have made over false advertising has led to a substantial amount of money they could be contributing through this medical innovation act. Thank you very much. Its weird new drugs are built on a foundation of taxpayer support in basic research. Its clear new drug are built on a foundation of taxpayer support in basic research. It is time for lawmakers to put their money where their mouth is. I think the medical innovation act is one way it will get back on track. The journey certainly involves many gaps. Some of the most, sing once have not succeeded in making it. Is that right . For that reason, it is my under his ending it is often called the valley of death. You are in the process of taking Software Tech knowledge he you develop technology you developed. You received several Small Business grants from the National Science foundation. How important are those across the socalled valley of death . Dr. Wilson i hope we have crossed it. Critical. I would not have started the company if those did not eggs this. Exist. Being a professor, i know how to write proposals. I will add the university of maryland has been very supportive to forming companies and has developed a lot of programs. One i joined where you have people who have been entrepreneurs several times. They are there to it lies you to write a Business Plan and help you think like a business person. Faxed that goes to that goes efficientcy of what you are doing. Sometimes you have people trying to reinvent thate wheel, and they dont know how to do it. That is the goal of the i Corps Program being developed. I wasnt able to take advantage of that program but one of the main things they have, people who are entrepreneurs do is to test the market. And understand what the market needs. Often we develop technology only to find there is nobody who want that take knowledge he. Technology. Backs how efficient are they at hitting that to market . It depends. If you can get enough revenue in early. It is going to take it could durable amount of time to get that kind of traction. Then you need Venture Capital. Facts you talked about you talked about how younger people cannot get grant to do research. They often become under employed. Senator warren and i have in looking at this middleclass prosperity situation. We talked about people being saddled with debt. Then we have a situation where if they dont have opportunities, they dont have a job to even pay the debt. I havent even gotten to the feeling of hope was this hopelessness and wasted possibilities that we could be giving this to the world. We have a lot of young people who want to do great things, but unless we open these doors, this allows us to create jobs. That is very effective. Do you see young people becoming discouraged . Definitely. Even the young scientist who are able to apply through nih. The young ones are heard the most hurt the most. When you are sitting there, you know what they are capable of. They get favored because they dont have a proven track record. We are cutting off the pipeline. They try to make efforts to give special attention to young investigators, but there ares bill a lot of them without support. Still a lot of them without support. In your book, the u. S. Has one of the most interventionist governments when it comes to innovation. If the government no longer plays a role, is there any other force capable of taking what president kennedy called National Commitment of manpower or facilities to solve our greatest challenges . No. The point is it has always been an important interaction fundamental to creating the kinds of innovations that have in fundamental. That have been fundamental. We have less confident for agencies to talk about it. They themselves are becoming short term. In some ways what they were able to do is act like a fundamental fund. This is not about communism. This is how to get capitalist invest. We havent allowed them to do what a normal Venture Capitalist can do, which is to welcome failure. When you try to innovate, you will fail and fail again. They have the ability to reap some of the reward to count for the downside. The lack of ability to admit we are a Venture Capital fund has not allowed them to think about how to create a revolving fund. You think about the guaranteed loans. It was a great story. Government should just do background leveling the Playing Field condition whereas everything about the iphone was actually picked by different government institutions for finance. If we admit that. We should start gig more concretely thinking more concretely to do these investments again and again. They have to talk about whether it is bringing money to do these it ferment again and again. Experiments again and again. It was continuing to make doubledigit increases in research and development budget. If the rate of Growth Continues china could surpass the u. S. In total r d spending by 2022. Is china trying to emulate the model we use in the u. S. And trying to entice resources to leave the United States . Ask china has an in edible ability to adapt. Wet china has an incredible china has an incredible ability to adapt. The technology is mainly around green. They are increasing massively r d at ended chores, expenditures, but what is interesting is those countries are able to see it as an opportunity. Denmark is the number one provider of hightech service the green economy. They themselves have enabled to engage with china in an interesting way that these this as an opportunity. What be what would be transformational is to actually ask how they can benefit from this massive increase in spending, because they are potentially supplying a demandside whole, not just the supply side push. That is an important point which is all of the revolution in the u. S. Required a demandside technology. Demandside policy is around things like suburbanization. China is thinking about using green as the new direction, also for the vip revolution. You are not just spending on r d and hightech areas. You are thinking about the deployment of the new innovation across the economy. Green becomes an interesting direction. Senator warren i think this makes it clear to create real innovation we need or invest meant in basic research. Congress is focused in bed on lowering standards for approval so companies can get their product on the market faster. The industry argues companies are not getting drugs fast enough. I think this is a dangerous case. Can you tell us about the authority the fda always already has two speed drugs to market and if they are using that authority . Back sure, there are a number of pathways to provide access to important new drugs treating conditions or meeting need. There are five different pathways the intent of trying to speed new cares to market. Last your two thirds of the drug were approved via these accelerated pathways. Not only does the fda have these in place, but they are using them quite liberally. If you look at the statistics, a lot of new drugs are approved with the basis of treating biomarkers or other. In point. Most new drugs are approved on the basis of studies of month or less x month or less. Six months or less. There is an arduous process for approving new drugs. It is quite the. Quite the opposite. Lowering standards may make Drug Companies profitable, but it is not going to make innovative. If them of the proposals would allow drugmakers to advertise and promote uses that are not approved why the fda that have only an initial cynical evidence they might work like a case study or a small trial. As an expert, can you ask late how innovation and safety would be affected if these proposals were passed into law . Ask these are very dangerous for public health. They would allow companies to get drugs approved on the basis of a limited application and promote them for condition where they may be an safe because her has not been any test thing. There has not been any testing. Customers want treatments that work and are safe area and a do not just want innovation for the sake of innovation. Companies his directly companies historically wont do them. You are not going to get the kind of test and we need to guide patient looking for these drugs. We wouldnt know how to use them. We would be dumping tons of resources into these, when we could the testing them first to make sure they work and using them appropriately. The fda is the gold standard. It has attacked did this tasty of american and ensured the drug are affect him. It certainly wouldnt keep us any day for. If we are serious any safer. If we are serious we need to make a real commitment of real dollars. Thank you very much. Between july 25 teen and june 2015 and june 2014 the drugs more than doubled in price. Are you aware of this . Back yet. There is one generic rug drugs that can reverse the effect of a heroine overdose in just 15 minutes. It has become important for workers. Heroine overdose is have more than put drupal. Yet the company that makes it is increasing. Yet the company that takes it is increasing by more than 15 . Where i live, the cost more than doubled in less than one year. Are you aware of this . The only explanation seems to be this Company Season in these and is increasing prices. This bill would require them to pay rebates to state and Medicaid Programs when prices increase faster than inflation. Brandname drugs. My bill would extend this aim requirements to generic drugs so they are treated equally. The Budget Office estimates the change would save taxpayers 1 billion. Do you think this makes sense . Ask absolutely. I think its great we are talking about generic rugs. Drugs. What really drives innovation is when the Market Exclusivity pe riod ends. It forces them to pursue the next great thing. It seems there is a major market failure and being able to provide these for reasonable price is. Prices. We Pay Attention to these cases. I think your bill is a good cap in the right direction. I think there are lots of things to be done to try to promote innovation and brandname and generic drugs. A lot of people dont realize this but there are hospitals. Over 90 of all hospitals suffer from drug shortages. A lot of this is folks are hoarding drug and jacking up the price. It is happening over and over again and reading situations where hospitals cannot get first rate drugs. Are you aware as to mark x i am. Are you aware of this . X i am. This is a problem, making sure there is a vibrant generic drug market and policies that can ensure these shortages are addressed in a timely fashion. They can use attention to resources. Going back to this project we are trying to figure out how do they keep more of their paychecks. They are paying more and not getting paid more. They see the paycheck they are getting shrinking. They are trying to make ends meet and cannot be a future for their children. It is amazing all of this comes together and every asked back is hitting the middle class over and over again. People are tired. Many are throwing up their hands to figure out what we can do to make it better. Senator warren i want to thank you for being here today area i think the key message here today has been that innovation is built on federally funded research. Speaker gingrich we were delighted for him to talk about how he doubled the n. I. H. Budget. He said his only mistake was that he did triple budget. But since then we have headed in the wrong direction and cut and cut support for basic research and this is a matter of the ultimate success of americas middle class. We theed to support that research because we need to support good jobs here in america. We need to support that research because we need to make sure that america doesnt go to bankrupt trying to deal with the problems of the future. Congressman comings thank you all. Its interesting when president obama was in kenya, i sat up at 5 oclock in the morning and watched his speech. One of the things he said is one of my favorite quotes he said we do not inherent what we have its mainly our environment and opportunities from our ancestors we borrow them from our children. We borrow them. The question is what are we going to provide for our children . And when you look at research, making sure that people have the best medical care, making sure that we take advantage of innovation and make sure we open the door for jobs, good jobs, jobs here in the United States that have impact all over the world, its all connected. Its all connected to what were trying to do here today. You all have contributed greatly to our discussion. Were going to take what you said and use it in every way we can. Well probably be calling on you again trying to get your advice seeking your advice because we want the best minds and we have them sitting in front of us. We also of course thank speaker gingrich for his contributions and thank you very much as we march forward trying to make a difference. My mom used to say in my time and in my space i will make a difference with gods grace. Thank you very much. Thank you. Cspan gives you the best access to congress. Live coverage of the u. S. House. Congressional hearings and news conferences. Every morning, washington journal is life with elected officials, policymakers and journalists. Cspan. Created by americas Cable Companies and brought to you as a Public Service by your local cable or satellite provider. On the next washington journal, former transportation secretary ray lawhood talks about the transit fund and the attempts to fund it. They later Megan Mccarthy discusses the current legal challenges facing the health care law. We will take your phone calls and look for your comments on facebook and twitter. Cabinet officials returned to capitol hill today to testify on the iran nuclear agreement. The House Foreign Affairs Committee Hears from secretary kerry and treasury secretary jack lew. At 10 00 a. M. Et on cspan3. Up next, a hearing on expanding Broadband Services to rural immunities. Communities. The subcommittee is chaired by greg walden and the top democrat is anna heschew. It is one hour 15 minutes. If we should go ahead and get started, i will call to order the committee for communications and technology. With apologies for the classified briefing that was scheduled at the same time this was supposed to start her to so we moved this up so we could hear from the Statement Panel of witnesses. So that we can here from this distinguished panel of witnesses. Ive asked my colleagues because we now have a vote scheduled we will dispense with Opening Statements which is anyone knows is unprecedented historical annals that they we will all be in the official record. Unless there is objection i would like to proceed straight to our panel of witnesses. Witnesses. This is an important hearing on promoting broadband infrastructure investment. You all are in the frontlines command we look to you. We will start right out delighted to have you. Thank you for your leadership on this issue and appreciate the opportunity to testify. We represent the companies that design own build command manage for communications companies. Wireless carriers, infrastructure providers and professional services firm. Our mission is to help members provide wireless facilities to meet consumers growing mobile data needs. The industry plays an essential role in meeting mandated demand. Infrastructure makes wireless work enables delivery of data services. Wireless infrastructure as a catalyst for Economic Growth and job creation. The study found investments in our industry will generate 1. 2 trillion in Economic Growth and create 1. 3 million knew jobs in five years. This committee has shown great leadership trying to eliminate barriers infrastructure deployment. I commend you. Most notably section 649 a has had an impact on the ground itelement a major local barriers to upgrading Wireless Infrastructure. They have done an outstanding job of implementing the law. We still face for the spectrum is expensive, expensive, scarce command takes a long time the unity use. All the more reason to move quickly. Technological advances to foster greater efficiencies. In the networks themselves there getting smarter directing capacity to where its needed, these take time to develop and implement. The 3rd way is through the Rapid Deployment of infrastructure. Wireless infrastructure driven by private capital addresses a wireless data conscious and is deployed ranging from traditional cell towers to white coverage and capacity to small cells. Intensification of networks reduces scarce spectrum. Allowing users please more out of existing spectrum. There is Resistance Congress can help even more to remove the barriers. Streamlining these barriers. Streamlining the process of setting Wireless Infrastructure for land despite the law enacted by congress and the executive order by the president significant challenges remain. Furtherfurther legislation will extend broadband coverage and increased employment in rural areas. Bci supports f1618 recently introduced in the senate to address this issue and we look forward to continuing work to develop legislation. Additional roadblocks remain some state and local entities require proof of need which are both illogical and costly. Local communities should not be in the business of citing where services are needed. Where is needed to serve consumers and local governments are not in a good position to be secondguessing technical questions. Efforts to harmonize the rates would help promote broadband investment. The fcc has taken important steps. States that regulatesstates that regulate should follow the fccs lead. Wireless infrastructure boosts every sector of the economy. Demonstrating its effectiveness Global Competitiveness the challenges remain in reaching the full potential. They need to eliminate regulatory barriers so that industry can invest capital without resistance and not at cost and delays that we will slow the rollout of wireless broadband. Member companies aremember companies are grateful for bipartisan recognition of the centrality of Wireless Infrastructure. I wouldi would add that we look forward to making continued progress and we thank you for joining us and for holding this hearing. Thank you. We appreciate your testimony the owner, we are delighted to have you here. I enjoy the time i was i was in your committee and toward your facilities command we are glad you could be hear to share your thoughts on the challenges you face. Thank you, chairman members of the committee. Thank you for the opportunity to testify. I also want to thank the chairman for visiting the committee to see firsthand the obstacles that drives face in deploying broadband and i want to thank the Ranking Member for the request to have the Government Accounting Office look into the challenges and barriers to employment prevalence. Broadband provider which we refer to was founded in 1988 dollars 12,000 and members living in a reservation. Whenwhen we 1st and purchased the exchange only 10 and percent of our residents have access to basic phone service. Those looking to get connected had to pay tens of thousands of dollars before Mountain Dale today they offer phone service to 100 percent of our residents we also offer Broadband Service across the reservation. They Work Together to raise awareness tribal lands only served areas in the country. 40 percent lack access to speeds. A number of obstacles that present challenges to broadband deployment. I have set those out with more detail. First population density is an obstacle. Twenty person per square mile. Maricopa county has approximately 414 persons per square mile. Rugged terrain characterized by mountains and hard soil is typical of farmland. Low, medium, and high rates of poverty prison a severe challenge for the delivery of broadband. The Median Income is 24,000 to 59000 in arizona. Approximately 48 percent of persons living on a reservation live below the Poverty Level compared to 50 verizon. These50 percent for arizona. These economic circumstances are not unique to our travel community. This continues to negatively impact tribes. Our committee and others like it continues struggle. Because of the allotment policy obtaining rightsofway is complex and raises cost substantially and delays deployment. Access to capital is a barrier. Trouble lands can be leveraged as collateral for securing loans because they are held in trust. This private capitol is often not available meaning the only when your available is the federal government specifically the utility service. Loans were critical to gr g. I. When it took over its service area and remains critical. The combination of these challenges has resulted in average cost per loop be over 2,873. Because travel nations face unique challenges we often need unique solutions. Having tried athaving tried at the table and engaging in government to government consultations critical. Too often policies have an intense consequences of price because were not properly consulted in the beginning. The current effort to reform the universal service fund is a good example. Usf is when properly scoped a critically important source of funding that can help make it possible to deploy broadband to our reservations. Tribes have offered a proposal that would target specific support to lands through a broadband factor that can be added to proposals for standalone broadband fun. Inclusion of this travel broadband factor would promote a targeted use of universal Service Funding to advance the policy objective. The office of native american has been a welcome addition to the commissions outreach efforts to ensure that tribes are included in the development of proposals to employ more broadband. Sometimes the fcc forgets about tribes which is why we appreciate the letters sent from a Bipartisan Group of members of this committee mining the commission that tribal leaders need a seat table. I appreciate the opportunity to speak with you and hope to be an ongoing resource for the committee. Thank you. You can count on that. We that. We appreciate your testimony. People dont have a craig moffett. Thank you for your kind invitation to participate. By way of introduction i have been a financial analyst for the past 14 years. Before that i spent 11 years advising telecommunications companies. So this is now my 25th year and i have spent much of that focused on issues of broadband deployment. I thought i would share general observations particularly focusing on the economics of ` competitive broadband. I would start by saying the obvious. That should be taken as a given but the issue of return on capital is either ignored or misunderstood. It is not a matter of whether a business is risen are profitable but that are of whether a business is sufficiently profitable toward the high levels of is required for a structure. 2014 the largest phase of the cable industry and a healthy return. The physical aspects all and healthy returns in excess of cost of capital with returns ranging from 13 to 33 percent which are usually high. Onon the other hand it should be noted they earned returns below the cost of capital. Longterm return as to earn returns well an axis of the cost of capital during the maturity of the network to offset for years or even decades of losses. By contrast large Telephone Companies do not attractive returns. For example, a decade after 1st undertaking the homebuilder out verizon has not yet come close to the return. The paltry 1. 2 percent return. For the nonfinancial types of that is the equivalent of borrowing money at 5 in order to earn 1 . Thats a good way to go bankrupt. No one would undertake to replicate those disastrous returns. At t began deploying and much less robust and less costly fiber is also earned poor returns. Committed to make five are available for 12 and a half million homes in order to make the acquisition of directv more palatable. But it is hard to believe that we will be much better this time around. Around. There have been changes in the market. Developed bendable fiber that has helped lower the labor costs. Google has popularized the demand. They can target areas with the companywhere the company has the best chance of earning an acceptable return some critics call that redlining but it typically means it will be billed to the lower income communities and has been successful. You can think of it as a way of ensuring all the children are above average. The broader take away is theyre are concerns to be had from over building. Let that can. Marketmarket forces are unlikely to yield the fully competitive broadband market. Among some to regulate incumbent networks. That is if the not unreasonable assumption that any attempts to foster competition will be ultimately unsuccessful and regulation in this case the Cable Operators are therefore require. The counterargument that regulation will only step investment among incumbent providers amble there for mick the problem worse and will in the process generate unwelcome unintended consequences is equally wellintentioned and well supported by the historical evidence. That is to say there are no easy answers here. I will conclude by adding a few it is not observations about the cable industry. Everyone understands the cable video business is facing pressure. Cord cutting has been talked about but its finally showing up in a meaningful way in the numbers and program in cost or eating that way at cost. The video business in the broadband business are on opposite sides of the same coin. It is after all all on infrastructure. Rashana video profit pool would therefore naturally turn a pricing response of broadband or Cable Operators have greater leverage. It may sound nefarious but not intended to be so. Simply not duration the Cable Operators have benefited from the fact that their infrastructure can support two separate businesses and each can be delivered a lower cost if that were not the case. The aca American Cable Association is made this case eloquently in arguing absent reforms to restrain runaway programming cost growth video will be unprofitable and broadband will be left to carry the entire burden of incremental deployment. All things equal that will mean that new broadband will become increasingly challenged and therefore will become less and less likely or simply to add this is my own editorial they will simply have to sharply raise the price of broadband. Now i would simply observe the pressures in the video business are relatively broadbased and attributable to more than programming and cost inflation and this they therefore been unavoidable scenario that i will leave my remarks there. While my remarks sound gloomy they are not meant to. Notwithstanding my view that there are politicized statistics i would suggest otherwise. Its simply the case abroad and infrastructure that is very difficult to support two of you in some cases even one upped and i submit that cleared alakman to the microeconomics of rock band business demand to see that the policy table so thank you mr. Chairman and subcommittee members for your time and the opportunity to testify. Thank you very much mr. Moffett. We will go to Michael Slinger erector of global google fiber cities. We welcome in the floor is yours. You will need to pull the microphone very close and push the button until the light stays on. Chairman walden recommender ed sheeran members of the subcommittee thank you for the invitation to testify about investment in broadband infrastructure. We believe the successful agenda will benefit consumer Small Business is in the economy. My name is Michael Slinger and i currently serve as the director of google fiber city teams. In this role like oversee the operation of Business Strategy to bring gigabyte speeds across United States. We have long believed that the next chapter of the internet will be built on gigabit speeds. The gig delivers enough bandwidth for everyone in the home or Small Business brother devices and fast connections on lease entrepreneur ship. If today we were riding a bike having eight could be writing a race car. Thats why we launched google fiber which provides download and upload connections of up to 1000 megabits per second. Our goal is to make the web faster and more affordable more relevant and more useful for everyone. We launched the service five years ago and todays available in kansas city kansas Kansas City Missouri austin texas and provo utah. Deshermer in the process of building our network in six markets in exploring bring it to another floor on top of that. In rolling out Google Google fiber we go from scratch one street one house at a time. This means repairing infrastructure and working closely with cities to make sure we are ready to Work Together to build a brandnew network. This experience has given us inside into barriers to deployment. I will outline thoughts on policy changes. First policymakers can ease gaining access to existing infrastructure. To construct highspeed networks broadband providers need access to existing utility infrastructure such as pauls conduits on a consistent costeffective and timely basis. While the fcc has taken important steps to improve rules relate to infrastructure access our own experience of building new Broadband Networks demonstrates more work needs to be done to reduce those barriers. Second, policymakers can the east rightsofway the expense and complexity of obtaining the access to public jurisdictions and increased the cost of broadband employment deployment. Policy that facilitates partnerships between different entities and companies doing local construction will be beneficial. We see a lot of benefit instituting policy which may involve the installation of an oversight conduit and buy any new network. Third, policymakers can help resolve the challenge of high rates for access to video programming. This would help smaller players in the business negotiate fair terms for access to popular broadcast cable content and make it easier to attract and retain subscribers. Finally i would be remiss if i failed to mention the importance of balanced spectrum policies. Federal agencies should pursue a balanced approach to spectrum reallocation that allows for licensed and unlicensed commercial use frequencies. I will note as we think about deploying gigabit. Networks when to keep in mind 30 of Americans Still dont use the internet at home. This means they there are disadvantage when it comes to education Job Opportunities social and civic engagement. One of her main priorities in Building Digital inclusion into our deployment plans from the beginning. We are guided by a couple of main principles make the internet more affordable make access to the community and teach people how to get on line. Just last week as part of the connectome Initiative Announced by the president obama and hud secretary castro we bring our service to Affordable Housing properties for 0 per month with no installation fees. We are partnering with Community Organizations on computer labs and letters to programming. Thank you again for the invitation to speak at this hearing and to share our views on how we can remove barriers give americans more choices and help reach the goal of nationwide broadband abundance. Thank you mr. Slinger. We appreciate your testimony now without our final witness today deb socia associate director next 30 and please go ahead with your comments. Good afternoon. Thank you for opening this hearing on such an important topic. My name is deb socia and im the executive director of next century cities a bipartisan city to city collaborate formed last october. We have grown to 100 member cities all of them are dedicated to ensuring access to fast affordable and reliable broadband. Highspeed access is essential to americas economic future. Its as simple as that. With what can be complicated as making it happen on the ground. Cities face a range of technical economic and political challenges including obstacles at the state and federal levels. Providing for this critical need has emerged as a core responsibility for local government. Many cities and towns from around the country taking diverse and creative steps to secure their internet teacher. When it comes to providing access to highquality internet everyone has a role to play. Its initiatives bans Political Parties and issue that crosses the urban world divide in an issue that on many sectors of our society. Theres no single pathway to nextgeneration broadband network. Several of the most Innovative Solutions have emerged in unexpected places. The small towns in idaho and mt. Vernon washington have each developed a ticket that open Access Network radius local governments are directly involved in building physical infrastructure and leasing access to competing private providers. Just outside of baltimore westminster maryland has initiated a Publicprivate Partnership with a provider of Fiber Internet Service and with the introduction of google fiber in kansas city experiencing speeds and affordable rate. Cities like Los Los Angeles and i and chattanooga tennessee have built their own networks and now have some of the fastest most of what competitive access available. Next century city is dedicated to helping all committees achieve highquality access regardless of the path they choose to pursue. If a membership represents an inclusive crosssection of america from small rural such as winthrop minnesota to large urban areas like l. A. And boston boston. What unites these is a commitment to the imperative rock band access for continued growth and understanding that local governments are best situated to understand and provide for the needs of their residence. Its exciting time to time for creative local solutions to usher in a new generation of innovation as the internet continues to transform all aspects of society. Next century city is only developed the policy agenda showing how multiple stakeholders can help communities develop the crucial infrastructure needed today consistent with our mission this new resource provides guidance that will be useful to communities regardless of how they choose to pursue their broadband goals. Part of the policy agenda looks at steps local and State Government can use to ensure highquality access. Locally governments can Institute Policies that minimize disruption as well as take other steps to ensure their cities are fiber ready. At the statelevel policy agenda addresses changes such as state regulations and making investments in the middle mile infrastructure. We are here in capitol hill and i want to emphasize a recommendation we heard from mayors about steps the government could take to empower local communities. First and foremost congress can encourage competitive local markets through National Legislation and other avenues. In addition you have the ability to provide the National Platform for the issue of broadband is a necessary infrastructure. Hearing such as this helped to elevate this discussion and attract National Attention to this critical issue. Finally the policy agenda discusses how congress can better require information about available Internet Access including speed up connection price for consumers and areas of operation for service providers. As is clear from everything we have heard so far today the need for fast affordable and reliable broadband Internet Access is undeniable. Innovative leaders in communities across the country recognized as urgent need and developing the critical broadband infrastructure that will allow residents and their cities to thrive. Its evident by the over 100 next century cities i am speaking on behalf of today communities they represent over 18 million americans. Thank you for providing this platform for communities to develop opportunities for collaboration with federal policymakers. What are we to working with members of this committee and your colleagues to ensure that communities across the country at the nextgeneration access to all americans need and deserve. Missa or thank you for your testimony and your insight. I will start off with questions. As you probably know the job creation act directed to gsa Government Service agency to develop a master contract to simplify replacement of wireless antennas on federal buildings. Lasted a minute Straight Year of the tsa the master contractors completed and available by executive agencies. In your opinion to believe gsa has done everything in its power to give life to section 6409 which are referenced in your testimony for the middleclass tax relief act . Have they done everything they can . I dont believe they have. I met federal agency in a fight implemented something that congress instructed me to do i would be embarrassed recent. To date nothing has been done. Three years after congress enacted this legislation progress has been slow in gsa has not been practiced to the agencies in the Wireless Industry members are having to negotiate for each and every site individually just as they have in the past. Tsa has not implemented the intent of congress in me cannot wait three more years for whats needed today is an urgent lack of lands. Gsa i think its been driving its heels. I think there might be need for further legislation. Or maybe a hearing with one witness. I appreciate that in for the rest of the panelists there are issues you are writing. Let us know because this is one way raise because its important and we concur with what commissioner atul steen said it i dont think they have gotten it right yet. Ms. Socia Network Operators were tipping an offer in exchange for the obligation to serve anyone upon reasonable request. The models we have been discussing carriers deployed to areas where theres an economic case for the bill. How do we allens our Network Economies with the threat of redlining practice and refusing service to areas deemed a poor financial risk and as i heard about the incredible buildup google is doing what i applaud east of the mississippi getting access into our tribal lands and access into our remote in rural amenities whether its wired or wireless remains a big problem. So i wonder how we can address that . The interesting thing about when you think about profit but think that is problem acrosstheboard with building out to these more rural locations and therefore requires an influx of capital. Theres is no way to do this without support the ways that our cities are looking at what profit genoways a Company Might look at whether profit is. Its about education and public safety. Its about Economic Development and transportation and all of these opportunities that are presented when you have access. So what is that worth and how do we ensure that our tribal lands in our Rural Communities can benefit in the same ways our communities are able to back. Before i go to mr. Moffett this is an issue and getting Wireless Phone coverage in areas of fontana upstate new york. Just getting access and connectivity remains a real issue. The job is not done so mr. Moffett from your perspective what do we do . I would certainly agree with ms. Socias comments that is not realistic to think those projects are going to be selffunding in rural areas. That said i think the targeting of the funds that are available to connect america funds can be improved such that those funds are more carefully directed to new greenfield projects that really are bringing broadband to places that havent been served in the past. Theres why some controversy around whether an area is either partially served or sufficiently served and secondarily i think its also important that those connect america funds be made available to all manner of companies so they can be more competition of potential providers. A quick answer mr. Slinger to try a model out in rural remote areas of the country to make that work . As you know fiber may not be the right solution technologically for rural areas and we want to make sure there is sufficient spectrum available for Wireless Technologies as well as we are experimenting with technology and is well with fixedwing aircraft out of new mexico. We think in rural areas that may be new technologies that can bring internet to those areas. I hate to cut you off but we are all tied for time so i will turn to my colleague from california. Thank you mr. Chairman first of all for having this important hearing and a high level of operation relative to witnesses and invitations. We appreciate it. Jonathan its great to see you former commissioner of the fcc and everyone that accepted our invitation to be here today. To mr. Slinger and ms. Socia thank you for your important advocacy. I wish the congress had passed it i guess i think we have more of that policy actually to use the expression and embedded in our federal roadways but how do you think a the executive order is working . I want to get my questions out first, okay because time is very brief and if you think there are any additional steps that congress should take two and sent that deployment of conduit as part of the federal highway projects and that system which i dont know right now doesnt seem like the highway project system is going anywhere. It looks like its being driven off the road in congress but here maybe we can concentrate on that. Mr. Moffett i listened carefully to what you said and i think its highly pessimistic. Its depressing to listen to your description of every last sector of the Telecommunications Marketplace and my question to you would be where do you see a bright spot. Governor lewis thank you for being here. There was a report that just came out in terms of rock band penetration in our country. We are 24th in the world that i think it could part of that number is a representation of native americans on reservations in our country. Its a shameful record. Its a shameful record and i think if there is going to be something that moves up to the top of the list to your in a bipartisan way is to see that we bring to the parts of the country where there are reservations that you get First Class Service for firstclass citizenship. You really do. I mean for students to have to be driven by their parents 65 to 75 miles away to sit in a car in the to get some kind of connection to do their homework something any member of congress who is a parent here would ever put up with that. And we shouldnt have that in our country. I hope that mr. Slinger and governor lewis will form a partnership and then come back and report to us. I would really like to have you meet and see what you can come up with because you both need each other and we need those of you. And to miss out or the use of port and a snack century city support the local having local municipal systems . We support whatever it is our local communities need to do in order to get where they are going. That doesnt answer my question though. Its too broad. I understand. Many of our neighbors signed on to the preemption. The two cities that filed petitions chattanooga and wilson were two of our cities and we have we believe deeply in the idea that competition is important and we believe deeply in the idea that local folks should be able to solve their local problems in a way that makes sense. I come from a government so i agree with you and i think they should have the opportunity to do that as well. Jonathan i regularly hear from constituents who are frustrated with the tower siting process. Now here is one for you. Everyone wants great service, the service in the whole wide world but no one wants a wireless tower in their backyard or where they can see it anywhere near where they live. So how do you respond to this . The people are saying that performs me to be made to take away local jurisdictions say over the placement of cell towers. Its really its like trying to get socks on an octopus. They wanted, they dont want it and yet there are some have to send us. Those are my questions and you have 13 seconds to answer them. You dont have any time because im overtime that you can respond in writing and that way i will get more meat on the bones i think. Thank you for being here and please mr. Slinger and governor luis come together and if my office or other offices can help facilitate let you know. Thank you mr. Chairman and thank you for the panel today. Its always a great discussion we have in subcommittee. I would like to go back to some of the questions that the chairman was posing and also the gsa dragging its feet and getting some of these things done. Especially lew talk about streamlining the process to providers to obtain federal lands and protect the lands. Just out of curiosity on average how long does it take for a negotiation process at the federal government compared to the private industry . Takes four years and sometimes they can drag out longer for many years. Generally private companies will avoid federal lands because it takes so long. You dont seen a return on the investments that craig was talking about so they will go right next door if there is nonfederal land thereby. You were saying on average its for predicate can drag out even longer . Any ideas or examples of how long it has taken over four years . I have heard it for years and longer. Sometimes it never gets done. There is never finality to it or decisionmaking process in place. The gsa was supposed to take steps to standardize the process and it hasnt been done. Let me follow up on that. Maybe infinity and beyond what additional costs have occurred when the government is unable to streamline its process and a broadband structure buildout . There is lost revenue. There is a huge cost trying to go through that ross is to get the site acquisition done. 30 above the landmass is federal property and a lot of great viable buildings in dense urban areas could use a facility to do with the capacity demands so its a shame that these negotiations take so long. Not only do you use Revenue Companies lose viable places and consumers lose access to service they need. Think you. Mr. Slinger i think in your testimony talked about the percentage of the population that doesnt have access to broadband. But her senate with that he . What we are seeing now is 60 million americans and some of our cities we work and now 25 to 30 of people never had an Internet Connection at home. They may have access to cell phones that they dont have an Internet Connection at home. Two quick followups because again i represent urban tiberi rural ambu may look at the numbers for the percentages when you have what her senator that would be urban suburban very rural and was at 60 million . How would that write down and also how many people would that include that would not want to have access to broadband . I dont have a breakdown of rural but in urban areas i can save 25 to 30 of residents dont have anything at home at all. No Internet Connection. Governor if i could turn to you and thanks very much for being with us today and your testimony. Again you said you have a very rural population. I think you said you have 20 persons per square mile and its a great concern in your area along with the rural areas in the country about having that essential brought and for constituents. He talks about the u. S. And if that would help you but are there areas that would be a benefit to you and your community . Thank you for that question. First of all i would like to recognize that i have two of my councilmembers here. And also from our telecommunications blended nelson and pamela thomas. Thank you. Thank you. I would say one critical issue is right to way. Right away as a challenge where its a complex issue that has to do with the nature of tribal lands. It goes back to the allotments policy that had devastating effect on tribal lands and so the short answer if they do not get right of ways we have to build around them and of course that is very capital expensive. Obviously this is pretty costly compared to establishing it right away but sometimes this is our only course of action. That is an issue that we really need to look at grade another is b. E. T. C. Designation process which is overly complicated so streamlining of the process would you welcome to many tribes. Thank you very much and my time has expired create. I will now recognize the gentleman from new jersey mr. Pallone for five minutes. I want to get one question to mr. Adelstein about infrastructure or in disasters like Hurricane Sandy but then i want to get a question to governor lewis so im trying to split this up. Three years ago Hurricane Sandy devastated my district. The force of the storm knocked out some indications for days. Mr. Adelstein you testified about the Wireless Infrastructure being deployed and up raided across the country and issa port this to plummet but my constituents are concerned about whether the equipment works in a disaster so what should and should do to make sure people can call for help and reach loved ones in an emergency and what do you think that the fccs work to improve resiliency . At the top priority for industry. We want to make sure customers get access when they needed the most. We saw cooperation between tmobile and t. At t and share their Network Operation centers. I would say in terms of the structures themselves not one of them might down during the storm storm. The issue was things that were beyond the control of Power Companies access to roads and trees that fell but what makes it difficult sometimes we cant even get generators sited on these things. Going back to the issue this committee the generator violates a noise statute. I dont think any neighbors would complain about the noise of the generator and yet counties will not allow us to put them there and then complain when the system doesnt work. We need proactive thinking about having facilitating access to it and one more point to add the best thing you can do is redundancy. All of the work done by the committee to promote deployment is promoting redundancy and ensuring there will be adequate facilities and more likely they will survive the disaster. You want to comment on the cease work because chairman camilla. We work mostly with chairman wheeler and the members of the commission and looking out a corporate arrangement where we can provide incentives for the industry to deploy this kind of equipment. I think you industry is doing a lot taking investment in things like backup power and working in a corporate fashion. We believe the goals are shared to ensure that these networks are resilient and redundant. Thank you. That he go to governor luis and i should say i love the reservation. I havent been there for a long time and its about time i go back grade on the one hand i was thinking relative to many tribes you might have more ability and the remote areas were poorer tribes if you will to achieve similar goals that you mentioned. So i just wanted to ask about hunting. You mentioned the universal service funds. I guess the gentleman from google talked about this connect palm initiative. I think the president