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tv   Key Capitol Hill Hearings  CSPAN  April 9, 2014 10:00pm-12:01am EDT

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of minnesota. we don't have them in the state of utah. i can comment on that for now. we haven't gotten deeply enough into looking at where the potential overlap is for me to be more specific than that, but cable -- because cable is such a local business, most of our jobs are the customer facing jobs technicians and we don't anticipate any reductions many those jobs. >> thank you. i see i'm about to run out of time. let me ask one more question about sort of terms and conditions. >> the significant roll-out of the internet essentials program which is a very promising program to provide low cost high speed internet access for low income households to help address the achievement gap to
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help improve access and deal with the digital divide and there are also commitments made about diversity of programming and i'm interested in both diversity in the work force and diversity in programming and the accessibility of your service platform to a wide variety of content providers. let me focus you as an example on tv one a if you would. >> and closing to both of those and then mr. kimmelman if you might on whether terms and conditions or the appropriate way to address concerns that some might have about this merger. mr. cohen on you would in your progress towards internet essentials and meeting commitments made about programmiprogrammi ng and then mr. kimmelman. >> at the time he proposed in 2010, it was an experiment. we had no idea if it would work. we had a concept for a program based on research and as we have rolled it out it is now the most important investment initiative
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of comcast corp. and the program that i think not only the executives in the company that but rank-and-file employees have an enormous amount of pride in. in 30 months we have successfully connected about 300,000 families, 1.2 million low-income americans to the internet most of them for the first time in their lives. 80% of those families are minority and when we survey those customers and say what you do with the internet the number one answer is her kids do homework on it. 94% of the families say their kids do homework on it and that those 94% of the families 90% of them say they think their kids are doing better in school as a result of having internet at home. it's a program that is an amazing success. we are together with thousands of community partners it's not just us are really making a difference in closing the digital divide and we are incredibly proud and
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enthusiastic in being able to extend that program throughout the time warner cable footprint. there have been multiple references to the size of his company being in 19 of the 20 largest cities in america and 37 of 40 and whatever the numbers are. i look at those numbers and when i think about the essentials i'm excited because we are bringing the nation's largest and most comprehensive rock right and adoption program for low-income americans to 19 of the 20 largest cities in america, 37 of the 40 largest cities and i really think we are going to make a difference in moving the needle. in terms of the diversity of programming we are very proud of our record there too. we agreed to launch 10 new independent networks at least eight of which would be minority-owned and controlled on a schedule consistent with that schedule. we have launched five including four networks that are minority-owned and controlled. tv one which you referenced was a network that we originally helped to launch after the tv
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one transaction being an investor in giving it its first carriage deal. so we are enormously proud of our record for enhancing minority-owned and minority focused networks both in terms of creating wealth opportunities for minority entrepreneurs and in terms of making sure we have programming that is being designed by and run by diverse ownership and management teams to be able to provide that type of programming in a particular ethnic community in diverse communities that are represented >> thank you mr. kimmelman. >> thank you senator. i will try to be briefed senator because i will address the competitive kinds of conditions that i think are important here to customers users and consumers in the kinds of regulations that have been cited in this hearing and the kinds of benchmarks that
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have been there and used in the past that some are trying to rely on the difficulty here is none of them are absolute. none of them are you may do x and may obsolete not do y. a lot of them depend on business practices, practices the lead companies in the industry and the difficulty here is what the size of comcast combined with time warner. they could drive with those practices are. it becomes a bit of a circular reasoning of what is reasonable is what they do. it is acceptable in the industry and what they decide. the standards are just determined by them so that's the concern. my suggestion would be for all the conditions in a transaction like this the oversight agency should go back and review whether they work and have worked in the past and whether they can work given the factors involved in the transaction. >> thank you for your testimony. thank you madam chairman. >> thank you. senator lee. >> thank you madam chair. professor u i would like to get
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back to you to follow back on a question that senator blumenthal asked earlier about regional sports networks. how do you respond to this question in this concern that has been expressed about the rsn that emerged -- a merged entity they may own and the potential for this ownership to be used in an anti-competitive manner. do you see a risk of this? >> i don't for the most part because if for example to use the l.a. lakers, right now the fact that time warner -- previously time warner had owned the l.a. regional sports network and they are bargaining with other l.a. oriented video providers and that company is now co-owned by comcast. it doesn't really change the bargaining leverage of the l.a. lakers network because any of those other l.a. based video
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distributors. this is again because l.a. programming is only interested in the people in l.a. the fact that it's now co-owned by a person who owns a regional sports network in philadelphia doesn't really change their bargaining power in the l.a. market. >> i suppose you are presupposing that most or all rsms with every regional fan base. >> that is correct. >> that won't always be the case. >> for the most part it is because the program migrates to the national sports networks as opposed to the regionals and the companies have a choice about where they're going to place their programming. on a much broader level we have been fighting about rsn -- rsn and this is a classic example. we are working on a dispute resolution mechanism as part of the access provisions overseen by the fcc and has been around for a long time and in fact is
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believed to be a reasonably effective means for resolving disputes that have been high-profile and if there's a problem the solution lies in fixing that process because then all programmers regardless of whether they are operating in areas governed by time warner cable are comcast will gain the benefit of it because this is a bigger problem that receives with the merger requires. >> thank you. mr. kimmelman shifting gears i want to talk for a minute about the advertising spot market. i understand comcast has been saying that its acquisition will provide something of a one-stop shop for cable advertising. do you have any concerns with regard to the market for cable advertising and how the merger might impact that market? >> yes, i think it's an important area to look at because this after all is all about eyeballs and viewership and i think it ought to be looked at carefully through
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antitrust review as to whether this consolidates. one-stop shopping is greater among level and on the other level if it leads to market power and the ability to dominate in the market it may strip out advertising opportunities for potential competitors to comcast particularly on the programming side. >> is this concern higher with regard to local advertising? is that the concern? >> i think a lot of the local advertising is very important. i have to think more about -- the importance here is that for every one of whether its regional sports or local effort sizing and cable systems keep in mind that a kind of competitor we are talking about on some level our satellite companies that are nationwide competitors. when we are talking about internet provider services those may also be increasingly marketed nationwide so there are some national implications here. they would all be driven by the levels of concentration in the specific markets.
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>> you levels of concentration which could lead to options. professor yoo let's get back to one of different issue. as you know in your testimony markets related to cable and internet have tended to change rapidly in recent years as a result of changes in technology and at the same time i think history has shown that large incumbents will at times take actions that are designed to protect their incumbency and sometimes when they do that tends to prevent or slow rapid changes in technology that might otherwise bring about a more robust competitive environment. there are those who've expressed concerns that this merger might have that effect and some of those who at this point will point to relatively new offerings such as netflix roku,
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amazon, fire tv. these are products that compete arguably with, cable video offering and those who have expressed this concern have been concerned that perhaps you know because some of the services that i mentioned can be accessed through high-speed internet. they are worried about the fact that that market the market for high-speed internet is a market in which emerging company would have a very significant share. so does that cause you any concern? >> it doesn't for reasons i'll explain. i want to make one comment about local advertising. cable represents 7% of the local advertising market. the concentration is -- >> 7% of the local? >> advertising rep on the on cable.
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if you are local advertiser 93% the money's going everywhere -- elsewhere in the 7% concentration level under any standard is irrelevant. there is a tendency to think of the internet taste video distribution world is just an extension of the cable world. we take the intuitions and knowledge we have for cable and just move them over. it's just not true. in the cable world the kinds of carriage agreements that the independent networks are trying to get going, if they don't get a cable of agreement they are just not cover. that's not the case. every internet provider maintains thousands of connections in thousands of ways comcast itself has a thousand transit arrangements. if one of those connections doesn't connect in relative
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terms the leverage is not yes or no. the leverages the difference in the price i get through this connection versus my next best connection. when you start looking at that way the amount of leverage they have over individual providers becomes very narrow. the only way they can stop it is by monitoring decide i'm going to hurt this provider and going to figure out where they are on monitoring all 8000 connections in figure out which is coming into traffic with thousands of feet of different kinds of streams. i'm going to pick out this content provider stream out of that stream and discriminate against that. >> you say that would not make sense as a business decision would be technologically difficult? >> and by law under, and the dash merger. technically very hard to do. a really bad idea from a business sense and in fact back many cablevision said publicly in "the wall street journal" they make it out of the programming business and carry people over the top players because the program costs are so
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high. why should they be squeezed in the middle? why not allow over-the-top providers on a much broader base is? that's part of the dynamic changing world we live in. >> thank you. my time has expired. thank you madam chair. >> senator blumenthal had one follow-up question and then senator franken and i will be my questions to the end. >> i think you and i appreciate that. a quick question for mr. kimmelman kimmelman. mr. cohen and i agreed that the cost of the sports programming are rising and in fact they are rising astronomically and should better reflect consumer demand. by question to you is our consumers the best judge of what a fair price for programming should be an wooden prices come down if they had more choice specifically the way to break the cycle of ever-increasing cost for sports programming instead of giving consumers some more choice through à la carte
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programming and i wonder if you could comment on the potential effects of disciplining the market and bringing down the cost of cable as a result of à la carte. >> i truly believe you are correct. one of the concerns that wasn't addressed earlier was that we have numerous studies that show with vertical integration wind up with higher prices on the regional sports channels that are integrated than the ones that are independent and one of the related concerns are that competitors who wants porch programming in the market had a very difficult time negotiating a reasonable price for that even if the price is higher than it should be. it seems to me one of the things to look at as you have for our recommended legislatively more broadly is to offer channels all a card and give consumers the choice as to whether they want to pay the price.
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>> thank you madam chairman. >> thank you very much. senator franken. >> thank you madam chairman and i have three questions to get through and i know you were cheering in that position. it's okay if i go over little bit. >> you would not be alone. >> mr. cohen i'm worried that this deal simply continues the trend of media consolidation a trend that has led to increasing prices for consumers who have seen their bills go up at more than twice the rate of inflation since the mid-1990s. earlier this week news broke out about a jpmorgan report in which wall street analysts apparently recommend the cable companies continue to raise prices on consumers and as he would have admitted prices might go up even faster and we have talked about your comment. mr. cohen don't you, don't your
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investors people investing comcast expect comcast to leverage its market share by getting as much money as they can out of consumers? >> i think our investors want us to have the best bulbs each channel video and broadband business in the country and i think it includes getting whatever prices the market will bear but it also includes providing an extraordinarily high-quality video and broadband experience. i think we have made and you can look at our analyst calls. we have made it a point of significant discussion not only for us but the entire cable industry about her need to continue to invest to be able to compete better against national and global competitors who are increasingly coming into this space. so yes to your question but i think also to be fair yes to the business reasoning underlying
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this transaction which is to provide us with the opportunity to create a better experience for consumers. >> my concern is that if comcast continues to get bigger it will have even more power to exercise that leverage, to squeeze consumers and part of the reason i'm concerned about this is because comcast owns cfo has told wall street that is what comcast does. during a fall 2012 conference call and analysts from goldman sachs noted a cable had a big share of the broadband market and asked comcast's cfo quote is there a way to exercise pricing leverage to a greater extent and comcast's cfo said quote i think that we have actually exercise some pricing leverage. we have increased the cost of the service by roughly $4 or $5
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per customer per month over the last few years and quote. it's understandable that, has a responsibility to look out for its investors but i am concerned that the bigger and more dominant the company becomes the less incentive they have to look out for consumers and the more power they have to squeeze them. mr. kimmelman, and i think this goes to bundling too because i know that in some of those talks right after the talk of this acquisition there was pledges to push bundling. to upsell your product.
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mr. kimmelman won't this give, more leverage? >> that is true senator. even those who are arguing about the competitors they are giving us examples that show the market is highly contrasted. there is enormous market power to be leveraged and on top of that there is a very popular and the seed programming that could be leveraged. that asked my sis bundling to charge as much as possible and the increasing trend for consumers is to buy at least two services broadband and video if not three. so they know they can drive up prices to competitors and benefit from raising their costs
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costs -- rivals costano some people want to drop those rival services it's most like he going to be this is going to them. that is where their financial center lies and we expect them to follow through on that. those are the kinds of concerns that on the public record that were in the fcc ruling on nbcu and, and in the doj and i imagine they will be relevant here as well. >> senator franken can i jump in on that? understand this is a complicated matter but if we boil it down the folks at home that bills keep going up are expecting more. and they're not getting more channels. and they are not getting more choice. mr. cohen pointed out that content costs are up 98% while the subscription fees are only a 50.
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that's an extreme pressure on the gross margins and any business owner would know that what is the incentive to add more product when it is the number one cost? so i think there has to be effective ways to encourage new competition in the marketplace. i mean the marketplace that we are going into is 170 billion-dollar marketplace. there are 60 networks that are fighting over that space in the sports area. the lifestyle the golf lifestyle market has one and the only channel is that of golf channel which is owned by mr. cohen. a good world world example that i think everybody ought to know how hard it is for original programs -- programmers is we understood that the golf channel is owned by comcast so we didn't start that.
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they didn't have a huge incentive to launch us but what we did is we started with time warner cable and some other folks and time warner cable from the ceo to the programming people could not have been more constructive in their help to help us get our programming on the air. i am here to say that there are time warner cable did a wonderful job trying to get more product to the consumer and since that time when this was announced it's become a lot more difficult for us pray the only thing i can think about is because they only only competitor in the space. >> thank you for your indulgence madam chair. you look surprised mr. kho and when i talk about up selling and bundling. neal smith the executive that comcast went on a phonecall with the wall street analysts and as i said i think the revenue
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synergies are greater than the cost synergies. on the revenue synergies site the first with in the residential area where he lives seek to bundle more and that this call center training. that is teaching people to sell another rtu on a service call fix the billing problem and upsell a third product. so just bundling better. that is what i was talking about and you look kind of puzzled when i brought it up. >> sorry, i wasn't sure what you are referring to but obviously for us and for others in the cable industry it's been a very effective strategy and one that consumers like to purchase multiple products. >> you were told by the fcc to actually stop that and to stop pushing bundles. but i have got other questions. >> i want to be very short and i
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know sometimes i go on too long but i will say the fcc did not tell us to stop bundling and pushing bundles. they simply asked us to have a stand-alone broadband offering which we did have and which we continue to have. >> the fcc sent you a letter saying that a consent decree imposed to detail compliance plan requiring comcast to undertake numerous activities training as customer service representatives in retail sales personnel to reinforce their awareness and familiarity with the performance starter service. >> the deal was we would create a new broadband service which was a stand-alone service six meg for 4599 -- $45.99 a month. the commission raised concerns about how we were marketing with their call center employees. we quickly resolve the matter. we may have had a difference of opinion. we quickly resolve the matter.
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extended the commitment for another year. >> you paid a fine. >> we did pay a fine but all i'm saying -- >> you you would tell your call center people to emphasize the stand-alone or not to upsell. it's very different. >> to offer it. there's nothing in the fcc order to prevent us from bundling. i just want to say that. we agreed in addition to our bundling strategy for somebody who called and said i only want to buy brought them to haven't stand-alone product band option. >> when you train people to upsell you are not training them to make people want to go for the stand-alone product and great something that you are fined for not doing. >> we were allowed to train people to upsell. all we have to do is when somebody says i want to buy broadband alone alone and call-center employees have to be aware of the stand-alone product and sell it to people. >> you seem like a pretty good
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salesman. i know how people in call centers can emphasize certain things over others. i think that's my theory here. i want to talk about two other things. i'm so sorry madam chair but mister kimmelman comcast is argued that this deal won't jeopardize the open nature of the internet and the public interest statement filed with the fcc yesterday comcast promised regulators that it has no incentive to interfere with internet traffic. i'm not convinced. if this deal goes through comcast will control about 40% of more of the broadband market and won't just own all of those pipes. it will also own a bunch of content because it bought nbc universal a few years ago and the 20 or so cable networks that came with it. mr. kimmelman does that give, both the power and the incentive
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to manipulate internet traffic in its favor and didn't we see a preview of that with the recent deal comcast truck with netflix? >> senator franken if you go back to the big numbers mr. cohen had in professor yoo that about the interconnections of the internet all around all at great in that space but when you get close to the home to the customer the last mile the ports that to bring in the video traffic one player, two players, sometimes more, hardly ever and one of them is, combining with time warner. so that part of the market is quite concentrated. there aren't as professors yoo says a lot of changes going on in the net in different interconnected relationships. what we also see her a lot more proposals for usage-based pricing that wasn't there befor.
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>> can explain what those are? >> instead of getting a flat fee for as much as you want for internet usage above a certain level you prices go up. but you pay per certain amount of usage. >> unless it's a comcast product >> there are some products that are dealt differently with by cable companies and under a different set of standards and arguably preferential to what a competitor has. there are dangers in the market is concentrated at that point of interconnection of ways to manipulate. this is where i go back to my analogy of an octopus that has all these tentacles out there. there is net neutrality and the last mile connection but then there are the different pricing schemes and the different interconnection arrangements. there are many ways in which a the number of tentacles could be used to favor one product over another if it is financially advantageous to that broadband provider with market power which
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would be comcast time warner. >> thank you. i have one last question. 's going to be sure to think. mr. cohen on page 30 for your testimony you have a section called promises made and promises kept and you say when comcast makes promises it keeps any talk about conditions that the fcc imposed on comcast when it acquired nbc universal and here's what i found puzzling. you say out of these conditions the fcc has only found it necessary to look at one issue and that was the issue we just talked about the stand-alone broadband. but isn't it true that the fcc had to look at a neighborhood thing condition? that's the condition that prohibited you from favoring nbc content. when cnbc you were neighborhood
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doing it with all the other 24-hour cable news channels with cnbc or cnbc with "msnbc", with fox, with cnn that you put bloomberg weighed out in the nosebleed seats so people couldn't find bloomberg. and because they couldn't find bloomberg they wouldn't go to bloomberg and bloomberg could charge less for its advertising and nbc would get more eyeballs from people who are interested in 24-hour business news and you could charge more. isn't that another condition that they looked at? >> generally speaking that characterization is just not accurate and that we had in the bloomberg neighborhood area was
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interpretive differences between bloomberg and comcast as to what the condition meant. i can throw -- through as much detail as you want. >> the fcc certainly looked at it did that? >> ultimately there was complaint filed and when we lost the complaint at the fcc we have for solvent matter with bloomberg. we are in compliance with that condition. >> but let me ask you is this true than that out of these conditions the fcc has found it necessary to look at one issue? is that still true that? >> it is true that we only had a compliance issue with one condition that bloomberg issue was not a compliance issue. it was an interpretive issue and when the interpretation was resolved we were able to resolve our differences and their partnership with bloomberg. we remained bloomberg's largest distributor. >> here is the fcc order. in this memorandum opinion and
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order we affirm media orders indirect contrast with bloomberg television news neighborhoods consistent with the condition of the, nbc universal order. dad is looking at that area in your testimony and you are sworn under oath here, you say out of these brackets conditions is what we are referring to the fcc has only found it necessary to look at one issue and you were saying they didn't look at this issue? >> what i'm saying is that wasn't a compliance issue. it was an interpretation issue. going back to the media bureau order, i will give you an example because the ultimate order of the media bureau was that we had to neighborhood bloomberg where i believe it was
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four or more or five or more other news channels. the fcc order didn't have that definitional issue. we didn't know what a news neighborhood was and we tend not to neighborhood their news channels the way you described in your question were all the news channels were together. one of the interpretive issues that we needed to have for salt was what was a news neighborhood and that is what the dispute in front of the commission was. >> i think and that i'm chair this is the end. my friend. >> and by the way if any witnesses have to use the restroom you really come come back and we'll take you back back. i know this has been going on a couple of hours. senator franken please continue. i really meant that. >> i was going to say that i think the interpretation here is on what the word look means and i think everyone knows what the word look means.
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>> manning chair if i can i will acknowledge that the word look may not have been the best chosen word. the point i was trying to get out was whether there were compliance issues. i don't think that was a compliance issue so i will acknowledge that we should have had a better use of words in the written testimony and i apologize for that. >> accepted. >> thank you. >> okay. i have a few more questions. i wanted to follow up on what some of the other senators have asked about and the first thing was about what senator graham was asking about the wireless competition and i guess i will start with you mr. kimmelman. in the antitrust subcommittee hearing that senator lee and i recently have been wireless competition witnesses agreed that wireless is out there but it is not a substitute for wireline so when there was discussion about what he can have these alternatives with
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wireless do you think that is true in a big way? >> i would like that to be the kassinger klobuchar. professor yoo indicated that the speeds are increasing and the services that are. the technology is better but when you look at the price for the major wireless providers with their data cap for wireless compared to comcast price for example the price for the same amount is about 10 times higher. that is not what i would usually think of as a good consumer savings. >> do you mean to get that high-speed? >> that's exactly so we are hopeful that will be the future but again as professor yoo has admonished in being more careful about what conditions we put in transactions with predictions to the future i would say we have to also be careful about pollyannaish predictions about levels of competition. 15 years ago well thought there would read video over energy company wires and we have a few
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rsn out there. some of the predictions can be wrong the other way as well and maybe this is the kind of wireless to be competitor. we have to wait and see if it develops that way. >> mr. sure when you have not been able to talk very much and you look like you want to say something. >> i do. first of almost of the discussion has been about programming and that's out of my area but when it comes to wireless that is in my area. the technology is such today that a fiber or any kind of fiber or some kind of -- were brought to a multifamily building than the resident can have speeds of an excess of 100 megabits per second wireless link. i think that's a very important point because what that says is that technology has caught up. it is not the cellular wireless as you know it and that is what professor yoo was referring to. it's it is wi-fi wireless and that's a big difference.
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>> and it wouldn't be capable of carrying or would cost more? i understand the difference between wi-fi and cellular but are you saying it would have the same capabilities as the cable? >> i'm sorry. >> are you saying one of the points that mr. kimmelman made was that it's a lot more expensive if you were going to get that kind of data coverage? >> that is actually not the case. in most cases wireless is 30% less than wired in most cases. if the backhaul is reasonably priced to the building in a multifamily residential situation wireless is 30% less expensive than wired. that is number one. number two it offers much more capability much more functionality so not only is it less expensive it has greater functionality and there is no need for cap but the fact hall
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hall -- backhaul is done correctly. >> mr. kimmelman do you want to respond? >> i can't disagree with mr. sherwin for a specific set of circumstances he is describing and he's describing circumstances where he faces a bottleneck of being able to get the wholesale product to deliver that service at a lower cost. >> only in comcast areas. the other interesting issue if you go down this path with all the increased need for wi-fi downloading as the limits of spectrum all the wireless carriers ultimately very much need a wired service to connect themselves to get closer to the customer. many of those are owned by comcast and time warner or some of the phone companies. there are other choke points that need to be looked at in terms of cost. >> i agree with that. >> one follow up on the advertising questions that were asked because i know professor yoo talked about 80% -- 7% of the market was cable. there was a "wall street journal" article i'm quoting s&l
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kagan and they said a small local advertisers are worried about prices because they would have -- comcast would have half of the ad sales market. what is this about half compared to 8%? is a just a different market and are you including everything? >> i'm looking at the fcc video competition report. they do an assessment of the sectors on a local and national level. they have nationwide numbers and the total number of advertising projects for cable is 7%. now i don't know where this s&l kagan number comes from and as you know an advertising different advertisers want different segments because they want different characteristics. there possibly some markets that don't have as much choice. >> all i would add is our ad sales business tends to be about
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one third local, one third regional and one third national in terms of how we sell and clearly on the national front there are a number of competitors in on the local and regional front we have been the competitors who have gone and competed against broadcasts stations etc. and they are also on line with the ability to target lots of different akin -- avenues to reach customers from an advertising perspective. it makes it difficult when the quasi-public utility also has 50% of the ad market space and also controls the content. >> that will make for higher prices? >> higher prices, less competition, less choices. >> one thing professor on a different topic that in your testimony talked about how a merger doesn't pose competitive concerns because there is no
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geographic overlap to the discussion about this between the two cable systems. under this theory would all non overlapping systems into one or two companies be of concern to you if that happened in the country? >> to be specific in the testimony cable operators basically serve three purposes. they sign up subscribers to individual households. a contract with cable networks and sell advertising. the point about the lack of overlap refers to the transactions between cable companies and users and did not sense mergers do not have an impact. you do have to do this separate analysis of the markets which local advertising is the same that was back to programming fugate merge the monopoly would see an adverse competitive impact in that market. then you have to do the antitrust analysis to look at the various concentration levels. to pick up on the come -- conversation before what is
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competitor and cable broadband and we have heard this to find different ways. mr. kimmelman says we are not worried, we shouldn't speculate too much about the future. let's think about facts. one of the interesting facts as 10% of american citizens rely entirely on their wireless connection for broadband. what you are seeing in other countries they regard wireless and fixed line is the same market because there's so much substitution and if you look at the directions were all these are going in the bets the countries and companies are make in is quite likely that there is a world world out there that is not in the future. is today where wireless is for a lot of americans fixed wireless. >> comcast has experimented with data caps and usage-based and is reportedly testing testing new f base pricing in a few markets and for you mr. minson time
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warner cable tried using similar caps but abandoned them. why? >> the approach we have taken as it relates to usage-based pricing gives people the ability to reduce their bill if they will agree to a cap. we actually took the approach that it's an unlimited service unless it would reduce your bill by $5 a month if you agree to a cap. i think and i will let mr. cohen jump in but the market is very much a test of mentality right now without her usage base camps out there. for while a while we have seen uptake send them but where we have landed is giving people the ability to have unlimited tear with the right to reduce the bill if they agree to a cap. >> prior to the merger time warner cable also spoke positively about giving its consumers complete access to their channel lineup without
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requiring a set top ox rental. consumers would then have their choice to watch all the channels using either apple tv x-box or any of the other internet connected devices and it would create a far more competitive system. incorporated, chess -- contrast the set-top box creates a more closed ecosystem where only apps and content are allowed in. i thought it was interesting that you are willing to give up that cable box and what motivated it how does the decision that if the consumers in what is going to happen at the merger is approved? >> i think what you're seeing in the marketplace is lots of different approaches to delivering the video experience in the home. i think you always have this set top talks ox experience for that portion of the population who likes to have the two-way interactivity of the set-top box and there are certain features
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like the next generation guides that work best or only work in some instances on the new set-top box. that ding said we do wrecking ace. >> you announce you are going to require it. >> as the home involves there often possible tv rooms and a home. what we have been comfortable with is allowing our customers to bring their own device whether to your point of a roku or similar device and let them consume their content on the device. what we have found is often there's one room in the house that has a set top talks two-way interactivity and then you may have another room where people are fine with running the video experience for example off of roku. again this is a portion that continues to evolve with new devices coming out. it feels almost monthly at this point.
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>> senator just two sentences. just to be clear comcast is offering the same experience may be on different devices so part of the x-1 platform is the ability to watch in the home the content that is available and the content that is available all although i've channels anywhere in the home. >> but is it more of a kobo system? >> i think it's the same system and a lot of this is programming rights issues. i think we are actually doing the same thing just on different devices. >> we will have follow-up questions on the record later on. comcast and netflix mr. cohen recently announced a page peering agreement earlier this year for where for the first time netflix will pay for direct connection to comcast network that provides more reliable delivery of netflix. content to, prescribers. i know netflix called and arbitrated toll that the company was forced to pay in comcast
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call it a commercially necessarily -- necessary agreement. why charge both for the servers and then i want to ask mr. kimmelman about the page peering. >> your statement is 100% correct. for the first time netflix is paying for connection to her internet to us but netflix has always paid for connection to our internet back bob. all edge providers pay for connection to the back fun. this is not net neutrality. doesn't deal with the part of our service that goes the last mile. since the internet was born those are paid transit relationships and as professor yoo said the comcast case comcast has agreements with 40 companies for settlement free peering.
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they by the way court and sell access to the networks to connect to the internet. even though they're not paying us anything they are charging internet x. providers to be able to connect to our isp as well as everyone else's. we have over 8000 free peering and paid arrangements and that market is intensely intensely competitive. the netflix case, i hate to say this. this was netflix idea. netflix is responsible for 32% of the traffic on the internet and they woke up one day and they said wait a minute. we have 32% traffic on the internet. why do we have to pay a milkman to get access to comcast-time warner cable at&t verizon. why don't they cut out the middleman and have a direct relationship and potentially save ourselves some money. that is where the agreement came from. that is the netflix desire to pay us directly and cut out the
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middleman. as it turns out that was the smart thing for netflix to do and for us because having the direct relationship gives us a better ability to work together to manage the traffic and make sure netflix customers who are our customers are getting an optimal viewing experience. once again the customers are the winner here. you have this intensely competitive that if we talk about price a lot. pricing in that market which again has existed since the birth of the internet, the pricing has dropped 99% of the last 15 years. this is a market that is working it is not a market that is dysfunctional. it's not a market that is impacted by this transaction and i think consumers and a being the big winners when we let markets like this function the way they were intended to do. >> who's ever idea was mr. cohen does this exist in other parts
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of the world and how could it impacts innovation? >> is certainly has, peering is a form of interconnection. so barter exchange so these are forms of interconnection. some of them paid and just a barter because of traffic arrangements and the world is changing as more videostreaming is a crane. they don't seem to be too happy in the way mr. cohen is but leaving aside the companies here is the point that is important related to the transaction for the committee to consider longer-term. as you have vertically integrated companies you have your own programming your desire to bundle the channels and charge as much as possible. as others, and with internet delivered programming that could compete what are the ways in which they might want to advantage their own versus their competitors drive up their competitors cost and make it
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more complicated and reduce quality for their competitors? i'm not saying anyone arrangement necessarily does it but these are the competitive concerns we think oversight should look at. >> you are talking about what a i've referred to earlier is the net -- next netflix which is a dream and a grudge and we have a structure that works to create this kind of innovation. one last thing mr. minson i understand time warner has a business service called ethernet which offers wholesale competitors. we have said this many times because we believe it creates a market that provides best prices and services. a high-quality competitive internet services are especially important for small businesses in our economy. can you explain why offering wholesale access is good for time warner and good for consumers and i guess i would ask it comcast have a similar
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offering with the combined company continuing to offer this? >> powered ethernet service as part of our overall business services offering to date our business services we get the vast majority of our revenue from small businesses, businesses with less than 25 employees. as we have expended in the marketplace we have gone to a bit and organize market where you will see these either net type arrangements happening in the enterprise space. what it does is it allows competitors and pierced to come into the marketplace and have that product offering and it's certainly something that we find a return for our investors and something we continue to plan on doing. >> you senator actually if i can
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a few sentences just to to say it's a first-time small and medium-sized business that has come up in this hearing and we talk about the benefits of competition the benefits of this transaction the scale of the investment as mr. minson said in his opening statement the impact on the market for small and medium-size businesses to get telephone and high-speed data services will be substantial as a result of this transaction. it's one of the big procompetitive benefits that i want to underline and put a yellow highlighter. in terms of ethernet we have a term called metro ethernet that we have rolled out. it's a product we market through larger medium-size businesses. we are -- we also have within that product a managed service which does permit wholesaling of that service and we have a few dozen customers in that space. frankly it's a service we talked to spot on about about a year
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ago and never reach an agreement with them to be able to offer that service. it's a market that we are just beginning to be in. i don't know that we have as fully it developed opinion is time warner cable might have about this and this is not something we discussed during the pregnancy of the transaction. i think my answer to your question is that we don't have an answer yet about how extensively think a manage what we would call a managed service under her natural ethernet service would be something we would make available on the market. >> you mr. sherwin. >> we are a customer of time warner's metro ethernet service but we buy our services from time warner telecom. we buy at wholesale and bathe why almost all of our services from time warner wholesale. i think that may be largely due to the conditions that were placed on the al --
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aol-time warner commission back when it occurred. our big concern is that has been very advantageous for us and we think it's been advantageous for time warner but we are hopeful that when this merger occurs that there is a condition placed that the conditions will continue to be enforced and monitor because it's helpful to provide a competitive service and buildings where the bigger providers are. >> thank you and i was thinking when mr. cohen was referring to small business you consider yourself not a huge business mr. bosworth. there are a lot of independent contractors that are focus of this hearing. do you want to respond? >> thank you. we have raised $30 million from individuals and one of her only revenues right now is to go out and try to raise another 30 to
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litigate. patches shouldn't be the avenue in order for a that to provide consumers with a choice. i have heard litigation mentioned and i'm not an attorney but that doesn't seem like a fair competitive marketplace. another thing i wanted to address was in the nbc universal merger would none of the independent networks that were launched and we applaud the diversity angle bringing many more people into the game people that have been excluded in the past. we want to bring them in and we applaud that however none of the independent channels that were launched were in direct competition with any of the channels that they own. the last point i wanted to make is that the 160 independent networks that they referenced if you strip away all the different networks who either have affiliations with distributors, channels and/or media conglomerates it's less than 20.
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>> that's just simply untrue senator. >> you mr. cohen and mr. minson if you could respond. then we will send -- turn it over to senator senator lee. >> the a that mr. cohen referenced that we had two days ago, we were given nothing with zero promises and the only thing that went on would like to keep an eye on you for the next 24 months. potentially that is maybe our faults and maybe we do a good job but the constructive conversation we have had with distributors to give you specific feedback when you are market maker you get zero feed back as to how to be successful in the say let's keep an eye out niue. when you know for a fact but was called in the last i guess the last hearing a ripple effect
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they are essentially market maker so people look at you to see where the market leader goes so when you are given zero feed back and perhaps let's just keep an eye on you for small business that is raced independent dollars it puts you in a very tough spot. >> you mr. cohen? .. companies, et cetera. and, again, i'm going to stand by our record of support of independent programmers because i don't think there's a company -- i don't think there's a distributor in the industry that's done more to support the launch and ultimate growth of independent programmers than comcast has. as i mentioned, we've increased distribution for 120 independent programmers in the last three years alone. and by the way, i'm very proud of our networks, and i have a
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lot of respect for mr. bosworth, and, frankly, i don't participate in program affiliation negotiations. you'll all be pleased to hear. but my folks are telling me these are productive discussions. this is a network we might end up wanting to launch, might want to be part of our system. they, however, are not in competition with the golf channel. >> i'm going to let you negotiate after -- >> can i just mention -- >> i am going to just finish up here with mr. minson and i really appreciate your testimony and i think that if, in fact, the negotiations are productive or not, we'll see if we can get the channel, right, mr. lee? and i think you two should talk about it later. mr. minson. >> thank you. i just wanted to respond to a couple comments made by mr. sherman and mr. bosworth. in terms of us providing services to mr. sherwin's company, that is not -- that does not have to do anything with the merger.
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if it makes business sense to do it, we have done it. provided they are in compliance with our overall terms and conditions as a reseller. one point i just wanted to address, too, is mr. sherwin addressed buying services from time warner telecom. not to overly complicate things, but that's exactly a separate publicly traded company headquartered in denver. >> right. >> as relates to the back nine network, a couple things i just want to address. previously mr. bosworth indicated conversations stalled as a result of the comcast transaction. that couldn't be further from the truth. between signing and ultimate closing of the transaction, we are obviously acting on our own to make all of those such decisions. it would be inappropriate for us to be consulting at all with comcast. so any decisions we make, we will make on our own and it will be made on a price value
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relationship for our customers taking into consideration things like overall programming costs and bandwidth constraints that we have. >> all right. i'm going to let senator -- i'm sure we're going to have more questions here for the record, but i'll let senator lee say some closing comments. >> got about 30 or 40 questions that i'd like to ask. but given that the eighth amendment does have some application here, i'm going to forgo those. i want to thank our witnesses for coming today. neither chairwoman klobuchar nor i had any expectations by the end of this hearing we'd have everyone singing on the same page so that part is not surprising, but your testimony has been helpful and i appreciate your willingness to be here and to endure our questions. thank you very much and thank you, madam chair. >> thank you. and i think as all of the questions and the testimony has shown us, there are a lot of very important issues here. the issue of consumers and how
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they will be protected going forward. we have the issue clearly of independent programmers and as the merger is considered and if it is considered for approval, what kind of conditions would be placed on that, and i think while this is one specific example, i think both senator lee and i are aware of other examples of people that wouldn't go public but are concerned about that, and it's not just about the independent programmers. it's about what the price then is and what that does to the market whether we're talking about that, whether we're talking about advertising, whether we're talking about the wholesale pricing that mr. sherwin has mentioned. and then, finally, of course, the issue of the internet and making sure that is done in a fair way so it's available to everyone. we're looking forward to getting more information. i know that mr. cohen, mr. minson, your companies filed their -- what is it, 180-page report yesterday, so we will he
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-- be reviewing that. the committee has raised a number of letters raising concerns about the merger which i will be placing in the record. the hearing record will remain open for one week for any additional submissions and questions from senators. thank you. you can go get some lunch. the aring isourned [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]
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[inaudible conversations] [inaudible conversations] >> u.s.s. is making its way toward completion of debate on the 2015 budget proposal. we are joined by eric what some of the hill. what has been the tone of the overall debate so far? >> i think you tend to see some very passionate debate on the budget. both parties priorities. certainly the democrats feel that the rise in budget which cut $5 trillion in dozen close a tax loopholes is wrong. whereas republicans, the
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democratic alternative. so i think you're seeing some pretty passionate debate on the floor. that's typical for every year. >> you are writing specifically about how this vote may go. in the end your on the money block in el as the headline, defector's rise on ryan budget. you read about a couple of potential republican members to potentially plan to vote against the conservative members. you are some of those? >> it's interesting. basically they can afford 17 defections. the number is 17. and because of the slim margin of error they have to line out all sorts of people who are a bit hard to whip. you have some core conservatives it typically vote against our
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priorities. very independent conservatives. they just don't really feel they go in a sort of debt. you also have people from last year he voted against it because they're concerned about cuts. david mckinley from west virginia did not like the medicare partial privatisation plan. some hon. members from nevada. just tell me he's undecided. last year and more cuts. very concerned saw. so basically at this point were saying 13 hours so really very likely nones. another seven or eight really in
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play. news a lot of last-minute to make sure this doesn't go. >> this level of uncertainty last year? >> i think that, you know, there might be a little bit more because it's an election year. one of the things that was a concern was the fact that ryan decided to stick with the ryan marie budget level. start finishing on the bills for the next fiscal year. and granted an keep changing and worst of the appropriations budget, what will keep that, sent to cut deeply below that for domestic social programs right after the next year. some conservatives has said that is not enough for them. notably the vice-presidential
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candidates. misguided in saying that. that would create some pressure to go against it. but it seems like most conservatives on board. they have a lot of faith in paul ryan, even if sometimes there are more dissatisfied. most concerns are going along. a core group tends to be very hard that they have to worry about. some of the people of facing primaries. this year the georgia delegation , three members are all running against each other for the senate seat. two of them voted no last year. just trying to shore up their conservative credentials ahead of the primary. >> to mention a couple of times some numbers and are hard to representative. the republican whip kevin mccarthy tweeted earlier the
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contrast between our party in there's never been more clear the lead or blueprint offers growth and opportunity. can you tell us of some of the behind-the-scenes lobbying efforts the republican leaders are trying? >> cc them walking the floors the last couple of days. yesterday was notable the see john mccarthy in deep conversation. still undecided. after that conversation. someone who was pretty upset by the maneuvers this month. a way to avoid a sudden cut. just kind of used as a trick played on the conservative rank and file. many of them have felt that they're going to retaliate or show their displeasure. their hero in many ways.
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he did not seem too concerned about it. he was in deep conversation with kevin mccarthy yesterday. the other people out there really working the floor the chief of staff, the majority leader, he was in deep conversation zero psst. is undecided over cuts to defense. and so you see a lot of action going on. they say they are competent. we have peter ross and the deputy majority whip. this one is essentially going to pass. you know, it's going to come down to the wire. >> i obviously keeping a very close eye on things on and off the floor. erik watts and what the hell. you can read is reporting upheld that, and also on twitter. thank you for that update. >> thank you so much.
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>> up next the head of usaid testifies about his agency's budget request for internationally pro grams. in an update on the chemical spill in west virginia. that's from washington journal. health secretary kathleen sibelius' will be on capitol hill to talk about the health and human services budget request for 2015. also expected to take questions on the health insurance and roman numbers and some of the implementation delays. live coverage from the senate finance committee starts tomorrow at 10:00 a.m. eastern on c-span three. later in the day officials from the state department and pentagon will testify about transatlantic security challenges in central and eastern europe. the senate foreign relations subcommittee hearing will begin at 3:00 p.m. eastern, also live on c-span three. ahead of the u.s. agency for
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international development faced criticism of the agency's so-called cuban twitter program and whether it was implemented to create social unrest in cuba. usaid administrator was also asked about the agency's work on global hundred, tv, and education programs rules. the house foreign affairs gray is chaired by congressman ed royce. [inaudible conversations] >> this hearing and the committee on foreign affairs will come to order. you will ask all members to take there seats at this time. today we welcome ambassador shock, administrator of the u.s. agency for a to national development who is responsible for managing roughly 60 percent of the total $32 billion foreign
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operations budget. a common refrain is that foreign aid accounts for less than 1 percent of the federal budget. as we will year, aid programs that are effectively executed can help create more stable societies american speed economic growth and advance u.s. national security interests. still, lobar for justifying the spending must be high given our unacceptable deficit. of course, the principal goal of u.s. foreign assistance must be to get the united states eventually out of the business of foreign assistance because to succeed in developing nations must on lock their own growth potential. to that end, i am pleased that the administration is committed to the goals of the electrify africa act, bipartisan legislation which recently passed this committee. targeted investments in power generation can help africans
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attract foreign investment and produce the goods to grow there economies. we look forward to continuing to work with u.s. aid on this important initiative. i am encouraged by the administration's commitment and by the minister's commitment to a new model of development that focuses on transparency, focuses on science and innovation and engagement with the private sector. dr. shaw has shown that he is not afraid of upsetting the status quo. i am also pleased that this budget builds upon the recent gains in the international food aid reform effort. last year are part closely with the ranking member, mr. eliot engel of new york and representatives marino and bass and u.s. aid on a broad coalition along with a broad coalition of advocacy groups and ultimately we succeeded in freeing of an additional
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$100 million from inefficient purchase and shipping regulations so that we can strengthen food markets, promote greater self-sufficiency, and save more lives more quickly and for less money. i have seen firsthand the need for a quick and efficient food aid program having recently visited talk to bonn in the philippines which, of course, was ravaged by the typhoon that struck the island. unfortunately, usaid we will have no shortage of challenges ahead. needs in syria and the region are growing. humanitarian space is shrinking. u.s. investments in afghanistan and pakistan must contend with debilitating corruption and waste and the withdrawal of u.s. forces from afghanistan will only place a greater risk. i'm disappointed that the administration's request for
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egypt failed once again to prioritize true economic reforms, including a focus on a clear title to property and property title transfer that would enable entrepreneurs to enter the formal economy. as explained to us in our committee here that we had on the focus of the importance of aid reform. usaid programs in haiti appear to be poorly planned and largely unsustainable. this committee passed it over sign legislation aimed at improving conditions in the value of our work on that troubled island. there are concerns about the demonstrations like a focus on democracy assistance. needless to say to my your challenges are great, it challenges are growing every day. your task is compounded by the fact that there are no quick fixes in in line of work.
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that will be the case even if you did not have to contend with a wave of extremism affecting many countries. with that in mind we should be looking to maximize every resource at our disposal. this includes better leveraging the support and investment of the many communities throughout the u.s. that are active in the same reasons that your. i look forward to address these important concerns while advancing and promoting a graduating more countries from foreign-aid. i will now turn to a ranking member eliot engel from new york for his opening statement. >> take you, mr. chairman. thank you for holding the support nearing. thank you for your service and for being here today to review your administration's foreign assistance budget request for fiscal year 2015.
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i would like to begin by reminding my colleagues the international affairs budget is only about 1 percent of the entire federal budget. and the foreign assistance funding that we will discuss today is only a fraction of that amount. i have constantly been saying that we should have more money in the budget for foreign aid. the american public thinks that we spend about 15 percent of our budget on foreign aid. in reality is just under 1%. having said that, it's important that every tax dollar is spent wisely. one of the key responsibilities of this committee is to conduct effective oversight of u.s. aid, the state department, and other foreign affairs agencies. let's not fool ourselves into believing that we can solve our larger budget issues by slashing foreign aid. uncertain of the case. what do we get for that tiny slice of the budget?
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with promote american generate jobs here now. we help impoverished men, women, children suffering from hunger and disease, prevent wars before they happen. through all of these activities mimic a critical investment in our own security. i would like to commend you personally for your lead on some many important issues. you and i work closely together, and i must say i am impressed for your hard work, dedication, and in part. the administration has made some very tough decisions on funding priorities, and i am impressed by usaid ability to accomplish some much on such a limited budget. as we have discussed, i'm disappointed by the proposed cuts to the bilateral tuberculosis program and the humanitarian accounts. the united states has held the world make tremendous gains,
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internal-the fight against tuberculosis, and after the reductions in these areas will make it difficult to sustain the progress we've made. likewise, concern that we will need more funding for humanitarian relief in the coming fiscal year to deal with famine and crises in south sudan, the central african republic and other countries. on food aid i am pleased that the budget request goes on the modest gains made in the farm bill seeking additional flexibility that will allow u.s. aid to reach about 2 million more people each year. you and i have had extensive discussions about why and needs to be food aid reform. we can get more food aid to people faster and cheaper. to me that is the bottom line. thank you for your lead on that as well because we have piggybacked on the proposals. a chairman and nine have made great progress and letting people know that this has to be done. i'm concerned about the gains
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made on food security being in perilous mountain aggressive effort to combat the effects of climate change. the budget will help developing countries reduced their greenhouse gas emissions and how vulnerable populations deal with the impact of global warming. doctor shot, your signature initiatives emphasize public public-private partnerships and harnessing innovation. the latest of for lunch just weeks ago in the u.s. global development lab. have high hopes for this initiative and been like you to describe some of the key parts and innovations. effectively preventing the transmission of hiv. it costs only $0.9, can be used anywhere and will make a big difference in our fight to create an aids free generation. with regard to haiti this committee has expanded over side of u.s. assistance provided to that country since the devastating 2010 an earthquake.
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i am pleased that u.s. construction and as a celebrated and that the usaid will focus more intensely on insuring our assistance encourages investment in the country. by cuba have closely followed the recent press reports about our democracy assistance programs and help fuel use this opportunity to discuss the purpose and effectiveness of these programs. in africa usa ideas leading the power african initiative which will increase access to affordable electricity for hundreds of millions of people in sub-saharan africa. this will help fuel greater economic growth and development across the come up -- continent. i have the electrify africa and the legislation that chairman lars and i often will bolster your efforts and exchange a life of the promising program to be in afghanistan and pakistan the u.s. has been billions of dollars on roads, agriculture, rule of law and capacity building. lp will focus on how usaid
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plants among the projects in afghanistan after the withdrawal of all u.s. combat troops of the end of 2014 and the continuing value of our aid to pakistan. the president recently signed a lot of bipartisan legislation to provide additional assistance with a focus on strengthening civil society, combating corruption, promoting energy efficiency and diversification and preparing the country for democratic elections. usaid will be a lead agency in implementing this assistance and i look forward to hearing your views on how best to manage these programs. the chairman and minor leading a trip to the ukraine in the very, very short time. finally, i regret that the budget request plans for a long road ahead. more than three years after the start of this run this conflict the regime continues to commit atrocities with impunity. the country is become a magnet for extremists, and the humanitarian crisis gets worse with each passing day. believe we should do more to
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help bring this conflict to an end. >> thank you. this morning we are joined by the administrator of usaid. the 16th administrator. previously served as undersecretary of research, education, and economics. and as chief scientist at the u.s. department of agriculture. we welcome him back to the committee. without objection the witnesses will prepared statement will be made part of the record. members will have five calendar days to submit any statements or questions or extraneous material for the record. we will ask administrator shaw if you would please summarize the marks. >> thank you, chairman.
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thank you, ranking member. two of the members of the committee and i am pleased and honored to be here to present justification for president obama's fy15 request for u.s. aid and for development assistance around the world. as the president has said on numerous occasions, our investments in development and health and humanitarian affairs and in supporting civil society and democratic governments our critical part where our national security strategy. thank you to all the members of the committee and in particular the chairman and ranking member. your support over the last years have helped us rebuild our staffing, rebuild our capacity to manage budgets, rebuild our policy and u.s. aid. you have helped us expand our partner base to include local organizations around the world, private companies, societe from
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organizations, indians could your focus to prioritize science and technology as a core driver of our american help accelerate the fight to and extreme poverty and support of the launch last week of the u.s. global development lab designed to bring universities, scientists from the businesses, and young people altogether to literally invent new tools and technologies that can accelerate the fight against disease, hunger, poverty. and you have supported our efforts to aggressively transform the way we evaluate our programs so that today all of our major programs are evaluated by third parties and those evaluations are conducted at a high level of quality and made public in full for. we have tried to pursue a new model of development that expands the partnership base and brings innovation and technology to the task of any extreme poverty. a think year seen in many
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instances the success of this effort. the president's feed the future program which operates in 19 countries now reaches 7 million small-scale farmers each year helping to move toward one half million children out of the condition of chronic hunger and malnutrition. this takes place in pressure but the private sectors made nearly $4 billion of private investment commitments along side u.s. and west. this is generating concrete specific results that are reducing extreme poverty in some of the most impoverished countries in the world. in child survival this budget calls for a two and half billion dollar commitment to a topic where america has traditionally led. from 1990 to today we effectively have helped save 5 million child lives every year throughout our collective efforts with partners.
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we have now set for ourselves an ambitious goal of taking down from six and half million to near elimination the remaining number of children who die every year unnecessarily, and we know with your ongoing commitment and support we can achieve that objective. similar outcomes are being seen in education, water, and energy where we really value the leaders of presented by the committee with respect to the left to sub electrify africa bill. disaster assistance, we have had unfortunately extra nearly active your. the response in the philippines to the typhoon has been seen as a global best practice. and i just gathered with secretary eglin the defense ministers to learn from an example. one of the reasons that was a successful was the ability to use flexibly purchased food locally to ensure that we could quickly and efficiently meet the needs of children who otherwise
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would have suffered from under. quickly scale program to reach 3 million people in the context of a natural disaster. we look forward to further discussions and support on the president's proposal to take food aid reform forward with their request for 25% flexibility in the program. we know that we are currently facing three level three emergencies around the world republic and sells saddam. given the pressure that will place we will appreciate the opportunity to work with the committee to continue to optimize our response. we do support democratic governments, some of society and human rights throughout the world in our programs but one manifestation of that was our support for the afghan elections this past weekend which i believe defied expectations in terms of turnout and in particular the turnout of women in the context of the vote. we look for discussing the
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democratic governor's programs in greater detail. and i would like to conclude just by noting that people often tell me that foreign assistance is difficult to justify a politically. i know that each of you spend time with your constituents and your community is doing the work. i want to thank you for that. i really believe that america stands at a unique time in our history when it comes to our efforts to address global poverty. relief for the first time we can credibly suggest that it is possible to end the extreme poverty, dollar a day poverty within the next two decades. it will require continued support from this committee, from businesses and scientists, members of the faith community, from ngos and civil society and governments around a world to achieve that goal. we appreciate your support to that end. thank you, mr. chairman. >> thank you very much to my
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ministers, the reid wanted to start with a few questions here. one on lane grabbing and a lack of enforcement programs rights and title transfer in developing nations. and that acts as a significant barrier to sustainable development and to long-term growth. we have seen this up close in terms of the results in tunisia and egypt. we have seen that shock waves created. a source of tremendous political and social instability. in december there was an insightful article, lessons from the past, securing land rights in the wake of typhoon 9m. the article quoted officials and unequal access to land is a central issue that cuts across both rural and urban sectors in the philippines. unequal access to land is a
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significant issue that occurs worldwide. we know of significant land grabbing that is occurring and does occur for some years now in cambodia and in china and in peru. administrator shock, what is usaid doing to urge the government of the philippines to address the issue of land grabbing and most importantly what about the rampant corruption that on a local level that allows land grabbing to record? her for over and over again that the philippines is making progress on fighting corruption. however, even philippine anti-corruption officials will limit the with corruption in this area in terms of land grabbing that is an ongoing tragedy. with all of the assistance, fun and we are providing to manila, is it true and isn't it time they usaid and your administration focused on this issue given what is a stake? and i have asked for three years
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now, try to work to make this a priority. with usaid have received in back support verbally. three years later after returning has seen no progress. so will this be the year where we finally make a difference? >> thanks you, mr. chairman. it well. we believe this is a critical issue. as i have seen personally in efforts where i handed out land titles to colombian farmers who were returning to their farm after conflict that has lasted, as you know, decades. the power of respecting property rights, providing titled, giving people the basis to seek financing to invest in their own future is an extraordinarily powerful strategy to reduce poverty and extreme poverty. in the philippines 46 percent of the 24 million parcels are entitled. and even among those the high
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degree of corruption and ineffective respect for those titles hampers the ability of many poor families to secure the future. i am thrilled that we have been working together on this. i want to say thank you for your specific visit to the country and work with our program. we can commit today to use the 414 resources to engage in efforts that will help both work with the government on corruption issues, enforcement, community policing and support for their land management office as well as with local communities to help address this challenge. >> thank you. the other question i was going to ask. last week this committee held hearings on women in education followed by a mark upon our legislation. and our debate, i think one drove, very important point.
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that is, education is a very powerful tool. we can advance u.s. national interest while creating more stable societies. for many years now i have expressed concerns about the rise of these schools. to make three trips in the package tenters the government to close them, they're really prey upon the disenfranchised. there are brilliant and radicalism. have business schools that have later been destroyed by the taliban and up in the northwest frontier. i think that the pakistan the american community here in the united states based on my work with them, they see how we can better coordinate efforts to promote education and private sector growth in pakistan. they have a very real interest in making certain that this radicalization is offset and that the education of girls is advanced. what can be done to better
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leverage and support investments by the pakistani passport in education and in private sector development in pakistan and how are you safeguarding u.s. assistance against corruption inside pakistan? >> well, thank you, mr. chairman. appreciate the lead the committee has shown especially in taking for the legacy that has been created by using her voice and the power of her moral example to advocate for this issue. u.s. aid and support of a large-scale program in pakistan on education with the specific focus on rules in early great learning and literacy of comes. we target reaching 3 million children. we have up to reconstruct more than 1400 schools. we have worked with federal and provincial governments in a number of the states to make sure that this issue is party, and we have engaged and teacher
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training, curriculum standards, and perhaps most importantly the measuring of literacy of comes through the early great reassessment which has been pioneered in tested. before to working with the pakistan the american community. we have new mechanisms to allow us to do that, and i think, you know, that ability to engage a desk or community which is something we have enhanced of less of a year's would be quite welcome to take this program to an even greater level of effectiveness. >> thank you, administrator. we will turn now to new york. >> thank you, mr. chairman. i have four questions. i'm going to try to do it quickly. something a mentioned in my opening statement, it's usually treatable with the course of an expensive drugs, but it is still leading the timing of 1 million lives per year.
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and the emergence of multi drug-resistant since and extensively drug-resistant will impose a direct threat to the public health of the u.s. this year's budget request for usaid tuberculosis program proposes a $45 million cut from a for 24 teams that level of 236. at a time of tight budgets can you elaborate on how the tuberculosis program could absorber are cut of this magnitude has to carry on its final mission? >> thank you. i appreciate your lead. think it has been very important. that is part of why we have seen a 50% reduction in mortality. projected to achieve its millennium development will target. we are very concerned about multi drug-resistant tuberculosis which largely has emerged in places like india, south africa, china, brazil, and russia.
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i would note a few things. first is in a difficult budget environment we have had to make some trade-offs. will we have tried to do here is recognize we have three pots of funding, the u.s. a bilateral program, the 180 plus million it coasted tb and the global fund commitment which has gone up over the last several years and where the united states recently encouraged and voted for the global fund spending more of its resources, i think 14 to 18 percent of tuberculosis in particular. in aggregate i think the united states commitment to tuberculosis remains at a consistent and strong level. second, we are engaging more and partnerships, especially in countries that can afford to pay for much of a response but require some technical partnership. i saw the specifically transpire in india where there are very focused on what they call xd are to be. and third, we look forward to working with you to continue to
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make sure we're optimizing our program. i think u.s. aid has had a very strong history of supporting the world health organization, cdc, and local country governments around the world the to ignore their own domestic responsibility for this issue. >> thank you. let me ask you a couple of middle east questions, the first on syria, the un security council as unanimously approved resolutions which demand all parties, particularly in the syrian authorities to allow rapid, safe, and humanitarian access. there are all kinds of questions about the leader of syria stealing the food, stealing the a, not letting it go to rebel areas that need the aid. can you just give us a quick overview about syrian humanitarian aid? >> thank you. as you know and as members of the committee have really worked hard highlight, this is an
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extraordinary crisis. nine and a half million people in need inside syria and two and a half million refugees, especially many in jordan and lebanon and are really taxing those countries' abilities to sustain social services for those mostly young syrian refugees. the united states is proud of the fact that our aid and assistance, more than $1 billion of the last few years has reached an continues to reach more than 4 million people inside of syria. more so than any of a country we reach effective communities even in opposition areas. surgeons and doctors release support and have provided more than 250,000 surgeries'. everyone of them are wrote in the context of being targeted and in many cases having staff the mr. lives. we continue to provide support, but i want to say a few things. the un security council resolution was reviewed by valerie in most just a week euro or two weeks ago.
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she reported to the security council that, in fact, the regime had not lived up to the term of the security council ruled -- resolution in terms of greatly expanding access. second, we know there are specific pockets and communities inside of syria that are held in besieged areas were literally that preventing food and water from reaching them is used as a tactic of war. that is in violation of every basic humanitarian principle. including how wars should be conducted. so in this context this is an extraordinarily difficult problem. the committee's work and your personal efforts to allow for more flexibility in food assistance have allowed us to reach some many more beneficiaries, women and children especially in jordan and lebanon that we simply could not trust american food to, but now they get a card that has the u.s. aid logo on it.
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it says from the american people. our humanitarian leader just sat with a group of women in iman he said thank you so much for this card. it is what gives us dignity and keeps us going. that is only happening because you have fought for greater flexibility in food assistance. i just want to say thank you for your lead. >> i'm just wondering if i can say in the middle east, one quick question about the israeli-palestinian negotiations the administration has requested over 400 million in at 415 funds from the palestinian authority. lastly palestinian president a boss announced the palestinians would be joining 15 international conventions semele in violation of the obligations under the agreement to negotiate. now they're calling for several new preconditions to talks. the only pathway to a palestinian state and a sustainable peace is through a negotiated settlement, not a unilateral declaration.
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so let me just simply say, how well our assistance strategy change of the palestinians pursuing unilateral pass? >> well, let me just say, secretary kerrey has, i think, ably articulated the administration's position and the extraordinary lee that he has taken to support negotiations and continues to moving forward. we play a part that the secretaries direction and providing support in the west bank, as you noted. none of the agreements that were signed last week in danger at this point that support right now. we will be looking very carefully to see how this transpires coordinating our efforts. and a few months ago when we launched high impact infrastructure initiatives in the west bank, i think the american people should take some pride in the fact that our assistance in the region helps
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to maintain stability and create some opportunities for dialogue and negotiation. but the secretary, of course, went into this and much more detail yesterday. >> thank you. thank you, mr. chairman. we now go to the chairman emeritus of this committee from florida. >> thank you very much, mr. chairman. thank you, doctor shot. i would like to give you an opportunity to clarify some press reports about the? twitter program. first, was the program covert and top-secret? >> no. >> second, does usaid implement similar programs aimed at increasing the free flow of affirmation throughout the world in closed societies? >> we supports of society. yes. >> third, will you as a id remain committed to reaching out to people suffering under closed societies and dictatorships? >> yes.
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>> thank you, doctor shot. contrary to what the media have reported, the democracy programs for cuba are transparent. they are open. the cuban democracy program with its $20 million price tag, in fact, is one of the most scrutinized programs and our foreign a portfolio. the real question here is, why does the press and some in our congressional family demonize these programs? of freedom house has a report called freedom on the net. this report lists cuba as the world's second worst violator of internet freedom only iran is worse. does cuba is worse than countries like syria, bahrain, burma, belarus where no one in congress seems to have a problem promoting internet freedom and those countries. so why not cuba? some may have a political agenda geared toward supporting the castro dictatorship instead of supporting the people of cuba and wish to put an end to the
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successful programs. many of us on this committee have spent a lot of time and energy supporting human rights in russia, vietnam, egypt, tunisia, ukraine, bran, syria. one not cuba? why does our foreign policy agenda discriminate against the freedom seeking people in the western hemisphere? as you know, doctor shot my congratulate you for being so sensitive, the cuban people have been suffering under the castro dictatorship for more than 50 years, not because of u.s. policy, but because the castro brothers continue to harass, imprisoned, tortured, killed the opposition. i am a political refugee because my family emigrated to the united states when i was a years old. we were seeking democracy. i remember driving through havana. my father telling me, ducked down. gunshots were being fired all around us. my dear friend was 11 years old
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when his family came here from cuba. he can also shares some of these are pricking stories. but these tragedies continue today in the daily lives of the people of cuba. one pro-democracy leader is named, as you know, known by his nickname. he was in castro's jails over 17 years. now that he is free from one to a bigger jail he continues to fight for democracy and for respect of human life. fact, just two months ago he risked his life and went on under strike with no food and a liquid. why? all for the sake of freedom. another human rights advocate, the leader of an organization. the ladies in white. these brave women are comprised of the moms, sisters, the friends, the relatives of political prisoners, and they
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march every sunday in peace to mass wearing all white calling for freedom. the martian piece. mr. chairman, as you know, you have spoken about them. and these women are met with violence, beatings, imprisonment these pro-democracy advocates are the faces of the people that you and your and usaid have been trying to help with these programs. thank you for that, doctor shot. and a u.s. citizen as we know is on its fifth year of being unjustly incarcerated in cuba and has begun a hunger strike. according to the cuban commission for human rights and national reconciliation, there were over 1,000 arbitrary and politically motivated arrests in cuba just two months ago in february in one month over a thousand arrests. does this sound like paradise? if this was happening in any other country in the world u.s. would be engaged.
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why should you be an exception? there is no independent press. there is complete control over the cuban airwaves and programming on television, the press to promote the political propaganda spewed by this dictatorship. that is why our state department and you, doctor shot, with usaid democracy programs in cuba are so important to offer the other side of the story, the side that promotes american values, god-given values like freedom, justice, liberty. recognize that some in congress don't think that cuba is an national significance, but they are wrong. this issue goes well beyond cuba to read this issue that we are debating, mr. chairman, is whether or not usaid should be taking steps to promote human rights, the rule of law, and democratic governors throughout the world. i say yes. thank you, doctor shot. this is the cornerstone of our foreign policy to promote democratic ideals.
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i'm sorry. i'm out of time. thank you, mr. chairman. >> we now go to gregory meeks of new york. >> thank you, mr. chair, a doctor shot for your outstanding job in leading usaid. i'm going to try to read too quickly, for questions. hopefully you will get a chance to answer them. if not we will talk later. first, you know, usaid plays a significant role in providing trade related assistance. congress has appropriated funds for this purpose specifically targeting certain countries with which we have trade agreements. among strong supporter of trade capacity building. i would like to know more about what u.s. said he is doing to enhance trade capacity abroad and what else you think congress can do to help. that's question number one. number two, i also look for to of the agency has done and progress in disbursing aid funding in haiti.
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however, recently the congressional caucus was that the u.n. we were told that there could be a serious outbreak of clarion. of color emergency in haiti. so i want to know, do you think, is that so? is it under control. then, of course, i am also concerned in regard to funding in colombia, a great elan our spirit particular sense of the. the center of its african colombian population. over half of the inhabitants and over 90 percent of them are black. they're mired in a crime and poverty and over 80 percent live below the poverty line. 30 percent their unemployed and virtually none have access to reliable supplies of electricity, water, even basic infrastructure. so this violence that's going on, and as we phase out a plan
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columbia, we want to make sure the we are able to address the underlying social problems. finally along the lines of what ranking north eliot engel at best, he talked about tuberculosis. things in huge part to u.s. investment in global health the world was cut by 50 percent the number of children who died before mother it's the money, malaria, tuberculosis among the leading killers of children or line. on the verge of a setting breakthroughs and life-saving potential. for example, this controls the constraints. i was wondering how you would prioritize the global health needs to ensure we're filling the gaps of current global health and especially as it
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relates to helping children. >> thank you, mr. congressman. i just want to say thank you for your personal engagement and on so many of these issues as they pertain to summon the important parts of the world. on behalf of the world's most volatile. with respect to trade assistance and capacity building the fy15 request includes $170 million for precisely that activity will be in addition to that we have our feed the future program which is operational in 19 countries really focusing on improving the capacity of local businesses to engage in particular regional agricultural trade. and i would just not that we have done careful evaluations of programs like the east african trade have that have found that our efforts have helped to bring down customs blockages and transshipments across borders and to the accelerated the time and efficiency of regional trade in particular and have been --
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have generated $40 of economic value for every dollar we have invested in trade capacity building. what congress can do is support strongly the development assistance account which is part of the budget and is under a lot of pressure. second, with respect to haiti we have a strong community-based public health program that is focused on all child mortality and will include an does already include an integrated effort with the un to address. right now the fatality rate is under 1% which means the standards and goals the u.n. has said. we are working to make sure that caller is managed. as we make those investments that the clinics that are in rural communities are well-stocked ensued to serve all children whatever the cause of disease might be. building of the supply chain and health systems approach has been critical to our efforts to bring down child mortality in any
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which has been successful in the past two years. third, with respect to africa on the populations i had a chance to meet with our partners. we're trying to work with about 100 businesses, trained thousands of air for a colombian euphony get them placed in jobs. in that effort has been very successful. we expect to place 80% of the 4500 trainees in 2014 reaching 10,000 by 2016. a lot of support from business leaders. as part of our new approach to public-private partnerships. finally with respect to global health i just want to say thank you. you are raising that issue, so critical. america has a chance right now to lead the charge to in child debt. it will take it to dick a commitment from this committee. it will take resources. we have produced an fyi 15 request that as a small increase and it requires a new concerted businesslike approach in the 24
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countries that account for just over 70 percent of the six by 69 kids to die. we will be unveiling an investment plan for those 24 countries with a group of other partners later engine. we thank you for your support. ed think this is one area where america can accomplish something in partnership with others that is truly extraordinary. >> we go now to mr. chris smith, chairman of the subcommittee on african and global health. >> thank you very much. welcome and thank you for your. a me ask you a few questions. the focus on child survival is an extraordinarily important one. more than 30 years ago, reauthorize and expand than double the amount of money for child survival. we have been doing it as a country taking the lead through various administrations, therapy, nutrition, vaccines and the like. i am concerned.
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i was part of our round table discussion back in 2010. it focused on the first thousand days of life from the moment of conception. very important title and very important initiative. as we all know, you know it better than anyone, unicef estimates that one and four children are stunted due to lack of adequate nutrition. children who are chronically undernourished up to their second birthday haven't. -- impaired immune systems that are incapable of protecting them against life-threatening illness such as ammonia and malaria. others are malnourished a more likely to die during childbirth, experience debilitating complications like. [inaudible] we are still waiting for the nutrition initiative guidelines. i no there in the works. the sooner the better. had we expand the first thousand days of life? was in guatemala on the day that they signed a compact with the
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u.s. .. >> their other horrible diseases. once make women more likely to contract aids. yet at the 2015 budget cuts it, down to 86.5 million. there is other money that is coming in from a 14% cut that is something

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