tv Politics and Public Policy Today CSPAN November 10, 2015 1:00pm-3:01pm EST
that's a hard approach because there's great distances involved. or you can take a polar approach where you go over the north pole. there is less distance involved with that in the aerial domain, that's inhospitable in the land domain but our aerial domain threat over the pole is an existential threat. so for over five decades we have cultivated a very close relationship with canada to address the existential threat that exists coming from over the poles that has served north america very well. in fact, our chairman recently articulated four nation state threats to north america and of those four three of them can reach us in the aerial domain over that polar approach. so we've learned of the absolute necessity of a close relationship with canada. we learned that that was in our national interest.
and that relationship that we have with canada has enabled us to truly be able to provide aerospace control and maritime warning. that relationship is critical to the security of the united states and canada. both our countries benefit from that against existential threats. that relationship that we have with canada is a model that is worthy of emulating. but a -- an aerial threat over the poles is not the only threat that north america faces. the security landscape is evolving. and north america faces a threat from the south. now our threat from the south is not presently an existential threat but it is a security threat nonetheless and this threat that is transnational in nature exploits seams between countries. it's an organized threat. it is a networked threat. it is agile. it's adaptive and it can reach the point to where it actually
destabilizes regions and it can also challenge sovereignty. so we broadly describe that threat as transnational organized crime. now this threat enters the united states through the land domain transiting through mexico and through the maritime domain coming up through the caribbean. and like i said, while that threat is not as of yet existential, it is a national security matter and mexico is postured to play every bit an important role against that kind of threat that canada plays against the aerial domain threat that we face from the poles. so these kinds of threats include such things as special interest aliens, the potential smuggling of weapons of mass destruction, the trafficking of drugs and persons moving north or weapons and money moving out of the united states and south. and from a safety or a human
rights perspective, the migration of unaccompanied children. so supporting mexico's southern border strategy is in our national interest in the united states because the threats that mexico sees on their south herb border, if not checked, we see on our southwest border. so we're working with mexico to provide a cooperative plan that supports the implementation of their strategy. and in the near term, we're focusing on providing them with needed capabilities with biomeck tricks or tactical communications and in the long term we're working on helping build sustainable capacities that will improve what we're terming as regional interoperability. enhancing equipment commonalty between our forces so they can work together. there's a leadership role mexico can play in the region to address this kind of a threat and that is something we are seeking to foster.
and what we consider to be a very historical event, we've had the leaders and the staffs from the trilateral meeting of north american defense ministers, so that's our defense minuter? the united states, the canadian defense minister, mexico's defense minister. they all got together in the meeting and acknowledged that they share many of the same threats and they've been actively developing what's being term it had continental threat assessment. that collates all of the common shared threats that are facing north america as a continent. so we're already moving closer to recognizing a shared responsibility and collective security and we're working with mexico in the development of an externally focused security cooperation -- capeablity in our partner capacity development work that we're doing with them. so right now i'm very pleased to say from north com's perspective
we have an unprecedented level of security cooperation with mexico and it continues to increase annually in kind of the four main areas that are necessary for interoperability -- training, exercises, engagement and equipment. this really began a number of years ago with president calderon's mexico's former president's decision to begin fighting transnational criminal organizations and it's really evolved holistically since then. now as we interact with the leadership of sedena, mexico's army and air force and samar, mexico's navy and marine force, their leadership is actively voicing an interest to be interconnected with the united states and they routinely talk of collective defense of north america and these are good words to be saying so we're routinely
interfacing at the tactical and senior levels. mexico has requested in our work that we interface with them at the operational level and this kind of capacity development that we're working with them from north com's perspective promotes interoperability and that's our objective. the cooperative defense of north america against all threats in all demains. and if we can attain unto mexico, the united states, and canada all working together in an integrated and cooperative defense of north america we will increase security on our continent and we'll decrease risk in all domains against both existential threats and national security threats so from our perspective it's not inconceivable that we'll one day be able to reach the kind of bilateral structure with mexico that we enjoy with canada. our cooperation on our southwest
border and with -- on the mexican southern border has been expanding. north com sponsors two exercises with mexico that focus on cooperative defense. one is called amalgam eagle and it concentrates on cross border air interdiction and the other is called ardent century which focuses on defense support to civil authority and humanitarian assistance. we have information sharing agreements in place. we're working on acquisition cross-service agreements and we're also working toward commonality of equipment, radar, everything we need to be able to work together interactively and our cooperative efforts with mexico on regional security are increasing so from the perspective of the united states northern command a security partnership with mexico is necessary given our security
situation and it's possible and the timing is right to make the investment now with mexico just like we did with canada over 50 years ago. i look forward to your questions. >> hello, everyone, thank you for letting me come. appreciate it. so i'm talking about from -- i'm going to talk about the u.s./mexico relationship with from a homeland security relationship. we're relatively new players having been just around from over a decade and we're still learning who we are and the concept of homeland security as a framework for engagement is still maturing. if you look at the difference between the original quadrennial homeland security review done in 2004 and the more recent one you'll see there's been growth and we anticipate the next homeland security review out in a couple years will continue to reflect the and a half ration of
our department. we're also fortunate to have as our head now a man who comes out of the department of defense and brings a significant amount of expertise and has been working very hard to help dhs, the department of defense and our partners abroad more closely collaborate but i'll get to that in a moment. i want to start by saying the story of the u.s./mexico relationship is in many ways a story about a border. it's a border story. it started roughly you might want to suggest in 1848 with the treaty of guadalupe hidalgo where we delineated the line that separates -- the current line that separates our two countries. and for a long time that line was viewed with all -- it carried all sorts of baggage. from the north it was the dividing line between us and them. from the south it was the invaders from the north. this was the line that kept us apart and despite the
asymmetrical differences, the border was the location where all of those asymmetries disappeared. it was at the boarder where national sovereignty could be asserted in its most pure form. so as a result the border became a symbol of division in some ways. particularly from the national perspectives the border looked that way but in the border region, the people who lived there understood that the border itself didn't actually matter. it didn't really exist so the border region became known as the third country. and so we have this very difficult time from a national policy perspective, then you go down to state and community perspective, trying to reconcile how the border played in the u.s./mexico bilateral relationship and for a long time like i said it was a source of gentian. there are two things, though, that really forced us to deal with the border at the national level. the first is there was an
obvious economic imperative and this was thrust into the limelight through the nafta process. our countries can't survive economically if we're not integrated. i think at this point that's almost beyond question. our economies depend on each other in a way that is critical to our economic security. and secondly -- and 9/11 forced this one -- we began to recognize that our national security is integrally connected as well so the two sort of things that nation states in a sense are most concerned about -- economic and national security -- it became very clear that in the u.s./mexico bilateral relationship both of those things were sort of omnipresent. we had to figure out how to make that work. the real sort of break -- i would -- there was a long history of cooling -- a long
history of warming, of a warming relationship but really i think it became sort of put on hyperdrive during the calderon administration when he for the first time sort of stood up and came to the u.s. and said "we want to work with you to tackle the transnational criminal groups that are responsible for so much crime and violence." and president bush then stood up and said "yes, and we own some responsibility for the consumption of drugs and the availability of weapons and we're going to do our best to fight that." so beginning then in the early stages of the merida initiative, we created a framework that allowed us to work together. on a parallel track, the department of homeland security was created. and the department of homeland security did something that i think is critical to the evolution of the u.s./mexico relationship. what it was able to do was take
challenges that were previously intractable, like what the border was, and redefine the challenge in a way that was mutually beneficial for both countries. so a good example is the dichotomy between security and facilitation. for a long time we used to believe that a secure border meant we had to limit the things that came through and that to facilitate, to allow a person or piece of cargo to move rapidly across the border meant we were giving up security. and from the department of homeland security perspective we were able to break that dichotomy down and say actually the more we know about a person or piece of cargo the more rapidly it can cross the border. so what happens then is we were able to say no, no, the boarder is a place of cooperation. it's a place where the u.s. and mexican counterparts can work to rapidly facilitate the movement of legitimate goods and cargo between our countries.
and that sort of twist allowed us to engage in ways on the border that we had never been able to engage before and fostered a level of cooperation and collaboration that had been for centuries almost unheard of. and right now we're still in the beginning stages of that just today, in fact, secretary johnson is down in mexico city. he's meeting with secretary chong, he'll be meeting with secretary ruis as well as the president and with the secretary he'll sign a memorandum of understanding and signing a cargo pre-inspection program which will allow us to have officers on both sides of the border pre-inspecting cargo moving between our countries. just even five years ago that was almost unthinkable. so i think this this perspective of homeland security has played an integral role in helping to develop the u.s./mexico
relationship. i'll toss two things out as i conclude, where we think we're headed. the first, and the general mentioned this, north america is the vision for how we engage. we think in the end that the u.s., mexico and canada working together will be how we solve many of the challenges we all face independently. secondly -- and this has become more apparent, too -- dhs and dod have worked hard to cross the line between homeland security and homeland defense and i think our work with jtf north is one of the best examples of how we've been able to cross those bridges. the ability to take the civilian authorities in mexico and partner with the defense authorities in areas where there's appropriate overlap really is the next level of integration in terms of how we start to deal with the homeland security challenges. and i'll leave it at that. >> well, thank you, michael.
so we've really gone from strategic alignment piece as general taylor mentioned to sort of a framework of cooperation. let's go now into more of the detail within the countries. duncan? >> thank you. good afternoon everybody, great hobb nnor to be here and share stage with a distinguished panel. i'm going to try to make three points today, the first focusing on mexican military traditions so we understand what the reality is with the mexican military. secondly to look at some changes that are under by that the mexican military and thirdly to make some observations about mexico's southern border with guatemala and belize. a colleague and i have just returned from a week long tour of mexico's southern border crossing all the way through to the east and seeing the entire border along the way and i wanted to share with you what we observed while we were there.
general points about mexico's military that are worth mentioning so we're all on the same page. [ speaking spanish ] [ laughter ] first of all, i think it's very -- >> i should just mention. the general who is the defense attache of mexico is here and we just want to make sure that -- >> we have an autocorrect. first observation i would make about mexico's military that due to mexican political and military traditions, mexico's military has been focused on the homeland, on la patria, the nation state. it's been very much focused on territorial control within mexico. because of different doctrines of foreign policy and military doctrine such as the estrada doctrine then we see mexico's military has been prevented from projecting itself outside of mexican territory.
that means its perspective has been focused on what's happening within the nation's borders. for a large part of mexico's military's history it's been focused on dealing with political threats within the country, guerrilla movements, et cetera. so the transition on focusing on organized crime is a task that brings with it challenges and risks. there's no history of military coups in mexico, that's what makes it stand out when you look at the rest of latin america. mexico's military has maintained a distance from politics and there's a mutual respect between the political branch of the government and the military branch of the government. that's always a very fine balance that is struck there but it's a very, very important one. lastly i would say is that it's the second or third most trusted institution within the country. time after time in opinion polls across the country the mexican
military is one of the most trusted first there's the church, second is the army and third is the navy. and after that teachers, professors, weird academics like myself. you come ahead of us at least. now that is something that is a source of enormous pride for the mexican military and part of it, of course, comes from the fact that so many of mexico's citizens have either served in the military or, of course, have family members who have served in the military it's seen as being a very, very highly respected institution. let me move on to talk about changes i see under way in the mexican military right now that are relevant for this conversation about homeland security. first of all, the war on organized crime as i mentioned earlier on from focusing on political threat, guerrilla threats within the national territory to focusing on organized crime means there are a number of challenges that the mexican military has to deal with. one is the changing nature of
the threat moving from a lot of rural conflicts to now being present on the streets of cities. and that's a very, very different operational theater, obviously. secondly, because of the close contact with mexican citizens there's an enormous concern for questions of human rights and, of course, there have been high-profile cases where mexican military have been accused of human rights abuses and this is a very, very sensitive issue within the country. thirdly, mexico's military is being forced to take on a police function for which i would argue it's not particularly well prepared. i don't mean that in terms of equipment or training but i would say in terms of its legal basis. mexico's military does not have the legal function to be able to make arrests. it's there to sort of stop the illegal activities but it can't make an arrest, you have to wait for the police to do that. this puts the mexican millionaire a very, very difficult situation when it's operating on the streets of cities across the country.
second factor which is bringing about change is this cooperation with the united states. we've seen that through the merida initiative. there has been the sharing of training, sharing of intelligence and, of course, we've seen the donation of equipment from the u.s. to mexican military. we've moved very much into the face where the equipment side of things is much less important than the intelligence sharing and training under way. this is helping to shift perspectives, i would argue, within the mexican military. we've seen it much more -- we saw it much earlier on within the mexican navy and now we're seeing it very strongly within the mexican army. this process, as was mentioned earlier on, began under felipe calderon and his war on organized crime. the signing of the merida initiative. when we came to the government
of enrique pena nieto, there was a hard stop of the relationship with the united states. a lot of people within the government did not feel particularly comfortable with the level of interaction that had been reached between u.s. and mexican security agencies and there was an attempt on the part of the mexican government to try to centralize all control -- sorry, all coordination, all cooperation through what they called a single window for cooperation. that did pose a huge challenge to security cooperation between two countries in the first the 12 months of this administration. but since then we've seen a significant open up, a flexiblization if you will of security relations so that now there is a much higher level of trust and there is a much higher acceptance within the next can government that this is a necessary thing. now, of course, key events such as the arrest of el chapo guzman have played their role in that and of course the escape of el
chapo from prison has provided by another threat or challenge to the security relationship as u.s. security agencies are saying well who is it that we can trust? who are the competent counterparts on the mexican side? i mentioned a few times that we're talking about the mexican army and navy. i would mention that here that the fact the navy has been a more progressive, more open institution in mexican military history, recent history, is a very, very important factor. it's seen as being a more trusted institution by u.s. counterparts and increasingly has been seen so by this administration as it was by the calderon administration before it. i think this is something we're seeing forcing a change in attitude on the mexican army as well. the mexican army is beginning to see that there are certain changes, world views, that need to be adopted if they're going to keep up with the steps that have been taken by the mexican
navy. a generational shift within the mexican military we're seeing younger officers coming through and those officers have been educated in a different system than their predecessors, they have a much more open attitude to the world they've been raised in a mexico which is globalized and those attitudes are beginning to be seen as well. and lastly with a view to the future of peacekeeping. mexico says it will participate in international peacekeeping operations. this is something we need to focus on and understand what impact it will have upon the mentality of the military. i've gone horribly over time but let me say a couple points about mexico's southern border. as we were down there crossing from west to east it's extraordinary to see the massive investment undertaken by the mexican government in terms of building installations on the southern border and remote from the southern border as well in an attempt to get a handle on the scale of illicit traffic moving from guatemala in
particular north wards through mexico to the united states. a lot of focus in this country has been on immigration and undocumented migrants. i would argue far more interesting is what's happening in terms of expanding mexico's military difference in chiapas, tobasco. that's something that's remarkable. we're seeing fixed location bases that are credible and we're seeing mobile units moving around. one informal border crossing that we visited is just a river crossing. there's a ferry that goes back and forth across the two countries and people use it frequently for commerce what's interesting there is that there is no presence from mexican customs, from immigration, health, et cetera, but there are mexican military representatives there to try to stop the illicit flows of drugs and of weapons that come in from guatemala.
this may seem like a small step but, in fact, is revolutionary. the fact is that you now have the presence of the mexican state at a much higher level than you ever have seen before in mexican history along mexico's southern border. that provides a whole new area for cooperation both with their counterparts in guatemala and belize and, of course, with the united states. i'll leave it there. thank you. >> thanks, duncan. that was a great context for the tremendous transition that's been made over the last years in terms of how the military's role has played in mexican society and in the relationship with the united states. and, you know, that's a great context to offer the microphone to general wiggins who can really talk about how it's going on in the ground. >> sure, first i'd like to say thanks to my mexican friends who are here. i think this officially highlight where the relationship. is i've been, as you heard, a part of army north for the past
six years and have been working with my mexican counterparts throughout all of mexico. we talk about relationships and relationships are key general, to show you how important that is, in 2006 standing next to some water in the back of a room meeting with our mexican counterparts a tall one-star general at that time was standing up against a wall, struck up a conversation, literally now flash forward to 2009, run into this general, he is the tres dot commander. flash forward and now he's the chief of defense. i have the distinct honor and privilege to be a good close friend with general salvador sinfuegos who is the guy leading the transformation in the mexican army.
so you've heard a lot here and in the interest of time so we can get to important questions i'll tell you what my perspective is of my friends in mexico, particularly the army. i have had the privilege to conduct many training sessions with both the army and the navy and i think one thing, i'm not countering your opinion but i think we have to be careful how we draw conclusions between simar and sedena and who we draw those conclusions from because i correlate it to teaching somebody to fish or providing them fish. there is a big difference the process and i will tell you we have worked very hard to work through really on the intelligence rain, for example, to talk about intel drives maneuvers and how you work, site exploitation and other things to drive on to that in order to execute an operation and i can tell you that both simar and
said dana have excelled. see mar. in some cases we have to be careful because some of the agencies in mexico and i won't mention who they are you have to release the controls. you have to do that. and so, you know, i have actually been throughout mexico, like i said. i've seen the programs general sinfuegos has put in place. a lot of people ask me, you know, southern border strategy, mexico's southern border strategy, that seems like a big country, how do you do that? when i asked them how big they think mexico's army is i get an answer back that, well, the army is 20,000. well, in fact, the army is about 202,000 strong. 106 infantry battalions, not including their parachute brigade nor their special forces. they've got 45,000 reserves in their army. they've got 13,000 or so in their air force and in their marine or simar they have 32,000
representatively. it's a sizable force, a capable force and a professional force and as you heard stated they are operating in one of the most complex environments in the world and that is your own home. they're operating against an adversary at this particular time that does not respect the rules of law and does not wear a uniform and so it is a very challenging and complex issue within their own nation and they have to do it, as you also heard, and maintain the trust of the people of mexico and that's a balance. that's a very, very difficult balance. so looking at the vision of general sinfuegos he established to get after human rights is a significant program. and i've been to san gertrudis, i've been on the ground on a number of occasions, i've watched u.s. army 82nd air born paratroopers train side by side.
they jumped into chihuahua, mexico, they went into the urban complex, they orchestrated operations side by side and within that the comment that came out of the after-action review was -- and the most beneficial training they got was the human rights training they conduct at that facility. so they are working very hard to make sure professionalization and those programs that general sinfuegos has put forth and gets after some of the things that you've heard about that they're taking care of, i can tell you, i've seen it personally, i've been on the ground with it and talked specifically with young soldiers who have been through the training and have been out there prosecuting the fight so for me it's a distinct honor when i take a look and meet with the human rights directorate that general sinfuegos has
established and i talk to those individuals and see what they're trying to strive. so a lot of people approach me, they say "we read about things in the paper." you have to realize there's an adversary within mexico right now that deals similar to what we had in afghanistan and iraq. they try to through information campaign and other measures try to make things seem certain places and ways but i can tell you from firsthand knowledge that i've seen them on the ground to get after these issues. it's a professional army, one i take great pride in being side by side with. i, too, have been to the southern border. i've trekked through the mountains and jungles side by side with t sedena soldiers. and once you get through that jungle and sharpen your machete for the seventh time in the first mile you have trekked you realize how difficult it is to operate in that environment and
how key it is and, by the way, you also realize that the adversary is adaptive, he's very cunging and in a lot of cases they just adjust their tactics, techniques and procedures when they go about smuggling whenever they're going to smuggle. so for me it's been a disopportunity pr-- distinct privilege to work side by side but i've seen a maturation process on both sides of the border. i've seen the u.s. military gain an appreciation for our counterparts and an understanding of the professionalism and competence of the mexican military and i've seen the mexican military on the other side compute that professional competent and increase in their capabilities and capacity to take on and i will tell you the threat to north america, although we talked about transnational trillion organizations, that's not the threat that i think we're focusing on or should be
focused on with that security piece. there's a threat on the horizon that we have yet to materialize or understand and that bilateral defense cooperative framework with build with our partners in mexico will be key to create a defense in-depth and that strategy, as general sinfuegos -- and i truly believe he's right -- needs to incorporate the stashlization of central america and tie itself into south america with countries like colombia and we've got to work that and make that come to fruition and make sure we'll off and make it difficult for an adversary of the future that's going to threaten both of our democracies that we take care of that and this is not transnational criminal organizations, although they pose a significant challenge and danger but i think there's a huge threat on the horizon that we have to prepare ourselves for and i think by working with our partners in mexico, making sure we stand side by side with them is the
only way we'll find a solution to this threat to north america, so thanks very much, look forward to your question. >> thank you, general wiggins. i think what you've heard is a very interesting array of perspectives. you've heard -- and let's not mince words. we have three representatives on this panel from the government, from u.s. northern command, from department of homeland security and from army north and i think we've heard very encouraging remarks regarding the relationship. duncan is and academic and not from -- he's kind of from the government but not really. he's an academic. he's given us a perspective that is encouraging. a little more analytical but he's raised the challenges that have -- and there are real difficulties in this relationship. mexico has, particularly after the change in government, there's -- there was this period
of about a year when things were difficult, things were changing from the close relationship during the felipe calderon administration to the point where once again we could work together but there are challenges within mexico regarding secured. the role of the military in this policing function, the police has not yet taken on that mission capability yet to address this issue there's a long way to go. but getting back to our topic of homeland security, the important of mexico for u.s. homeland security, i think you're seeing a very positive kind of collaboration and cooperation working forward but i'd very much like to hear your thoughts and your questions on these issues so i hope the moore from. i asked you to -- we have a
microphone on the side so if you -- serb, i think you have a microphone to hand to individuals? so if you would hand -- once you get the microphone if you would state your name and what organization or unit you are from and then ask your question, please. and while we're waiting for someone to get the courage to ask the first question, i'll ask -- oh, yes, we have one here bob, please. please join me -- this is bob pelligrine, the first question. how about a big round of applause for bob for taking the first question. >> thank you, sir. we go way back, we were lieutenants together in germany back in '72. with the advent of mexico contemplating the idea of
exporting security under the pko, peacekeeping operations, i guess which do you think will happen first? that or bringing all of the partner nations from the south together and sitting down together in a unified effort to quell the violence coming from the south? thank you. >> it's a really important question. i've seen how negotiations take place in central america before on less difficult questions than that and i can tell you that it takes decades so i think we're likely to see mexican military forces in peacekeeping operations before that actually happens and not that there isn't good cooperation. we were talking about the strength of military cooperation across the mexico/guatemalan
border. however, government-to-government cooperation is another issue. and there's an interesting contrast there with the belize case which is that government-to-government in the mexico/belize case is very, very positive but with the military not so much. another factor that's there which we have to remind ourselves of is that whilst the mexican military of a significant size has substantial resources and capacity, their counterparts in central america do not. is one conversation we had with a vice admiral in chiapas was about cooperation with their counterparts in guatemala and he said "these guys really want to do a good job, they want to cooperate but they don't have the resources. from the guatemalans themselves we heard a similar story. they said "god, we wish we had the resources our mexican counterparts have because we'd like to do more." then the follow-up comment to that was i think really
illuminating which was they said although we as guatemalan military don't have the resources the mexicans do, we are the only representatives of the gatt muatemalan state in th particular area of the country. they said there's nobody from the education ministry, nobody from the health ministry, the people turn to us for their concerns and that you are interests. that's something which is rad y radically different as well. so when you try to compare mexico to its central american counterparts you see a huge difference and that helps to explain why it will be so complicated to do that. >> the bottom line, i concur with every bit of that. one thing that's a little disconcerting to me when i go down to the southern border of mexico and i see the mexican military and the guatemalans patrolling mulsimultaneously us
harris radios and communicating and then i come to our southwest border and our cbp doesn't even have harris radios and can't communicate with the humvee across the border. so in some case what is mexico is doing with our partners to the south. particularly got malala and in a smaller case belize i applaud because it's something we're trying to mitigate the seam on our southwest border. so i truly believe the peacekeeping operations that sedena and simar are imbarking on will happen relatively sooner. is they've already sent out personnel that are observing and have embedded themselves in peacekeeping and they are training with some countries right now and they're going to look forward to the establishment of a peacekeeping center of excellent, per say, within mexico to train their officers and soldiers in peacekeeping operations, that
was initially identified to be established in year 19 and that's been pushed to the left not the right to hopefully get that accomplish sod they can start training their officers in peacekeeping operations so that's a good sign and a very capable military that i believe the world could absolutely use that type of partner doing peacekeeping operations with the capacity and capability the mexican army brings to the world. so thank you very much. >> just a couple of other data points that will illustrate both processes are happening in parallel so even though one may occur faster than the other they are both happening in parallel. in our partner capacity work with mexico we are -- we have programmed and we are interfacing with them on the peacekeeping initiatives at the pace they desire to go and also on the regional security matters
in a really ground breaking new initiative at the instigation of general sinfuegos. he, north com and south com are collaborating on a mess sew american self-defense forces where we ininvite them all together to address these security matters and threats from a regional perspective and that is also positive. so i think you'll see this is happening in parallel. >> one very quick point here we were asked do think of opportunities for mexico, scan da and the united states to work together and one of the ideas we came up with was for a north america brigade for peacekeepingment i may seem like something way out there but it's a very, very intriguing idea.
if you could see the military forces of three countries coming together in a peacekeeping operation somewhere around the world, there are enormous benefits that could come out of an operation or exercise like that. >> there's another question over her here. >> i'm colonel delarosa. you mentioned we had tactical engagement, strategic engagement but you identified in your comments there's an operational gap in between. can you expand on that and some of the techniques we can use to close those gaps you have identified? >> one of the -- as we seek to get granularity on that request one of the immediate things was to kind of move our level of training and participation up from the individual level. we have done an awful lot of is training with mexican mill
forforfo -- military forces but they have been small unit. in working with both the army and the navy then is to move that to larger-unit type operation train iing. that's probably the first area where we're focusing on. second is the staff functionality at larger unit operations and the specific application is peacekeeping operations. one of the requests that we recently received, for example, was technical english and battle staff training to allow for a mexican military individual to embed in to enlarging staffs that are conducting peacekeeping operations so we're seeing requests for larger type unit operational engage mement.
>> other questions? >> good afternoon, major figaroa, army north. sir, like dr. wood mentioned as he visited the southern border he's seen a lot of mexico is focusing also, a lot of facilities are being built up. have you seen any security cooperation with mexico with this southern border with guatemala and belize and what type of security cooperations they're doing with their southern partners? >> well, one of the things that was enlightening to me, and i didn't plant this question although he's from my organization. [ laughter ] one of the things that was enlightening to me is when i traveled to the southern border i saw theater security cooperation being done by mexico with our guatemalan partners to build partner capacity and capability within the guatemalan military which i thought was
absolutely stunning because they were doing manning training with the guatemalan army. and there was nobody else around. i saw the same thing going on with our belize partners as well and i thought to myself at that point in time, army vignette that took place when that was guy named chavez in venezuela. president chavez said some pretty nasty thing about the united states in an open forum where he had the stage and our president of the united states at the time went back at president chavez and basically countered his comments and i remember that a former president in mexico named fox stood up as well in mexico and chastised chavez for his comments and basically told him sort of the same things our president said, but the difference was not a lot
of people and not a lot of press -- because i read a lot of press down in central and south america -- really paid note to what we were saying as americans but when the former president of mexico said it it resonated throughout all the latin american press. i learned a very valuable lesson there that we have -- mexico can resonate with some countries and bring them the table where we can not. that's why i bring up guatemala, belize. i believe mexico is a key to the southern border as well because they have an incredible relationship with those countries that are key to establishing that secure and mitigate the gaps so the adversary can't be using it. what i found out as well in southern mexico that i thought was interesting was there are individuals, tribal indigenous in southern mexico that don't recognize mexico or guatemala as
their country and they don't speak spanish, they speak mayan. so when you deal and you have these individuals that don't recognize a border, that creates a complexity all of its own and therefore smugglers can take advantageover that and other people can take advantage of that and traffic a number of things across the border and we have to work together in order to seal that particular piece off. that's why i say the key is with our partners. by, with, and through. we learned that in the middle east. i think we can take that lesson and apply it as well and what's really neat, and i think perfect and we heard it mentioned here is it really is a north american solution. and if we don't address it and apply it like that and make it solely an american solution we will fail. security will not and the solution will not be as good as we can get to unless we do this as partners. >> thank you, i want to get a question from michael as well if i may.
michael, i know you want to chime in on this as well. duncan mentioned after the first year of the administration there was a single window andincome, somewhat brought us back from the high point. could you talk about from the perspective of homeland security, have we overcome that first year and gone beyond, or what's the homeland security perspective on that? >> so two things. the first is from a homeland security perspective, the change had almost no affect on our relationship. because the types of things that were challenging for the government of mexico at that time were primarily sort of the hard law enforcement types of activities, sort of the deas and the etfs, that that type of engagement was the stuff that was particularly challenging. what we were engaging on was facilitating commercial trade and travel, which is something that they had not only a desire
to continue at the current rate, but actually to expand. so at the beginning of the administration, there was largely a lull in the types of hard security engagement. that didn't touch the department of homeland security. so we were almost unscathed. that said, we've now sort of more broadly as the u.s. government, and i think duncan's characterization was correct, where we are at the place we were before. it doesn't look the same. the channels aren't exactly the same. the level of cooperation has certainly met, and in many cases surpassed what we were able to accomplish under the administration. >> in terms of intelligence, would you all agree with that as well? >> oh, absolutely. absolutely. >> and i'll be quick. the first is this notion of dealing with indigenous peoples is actually something that cvp deals with on a regular basis.
this is one of those areas where i think the cooperation between civilian and military expertise is actually highly valuable. from a homeland security perspective, we have a lot of experience in how do you deal with these regions of the border that aren't necessarily under the same sort of rules as everywhere else. and so that's one area where i think we can collaborate. sort of taking that down to the southern border. it's been not very highly publicized, but somewhat well-known that there's a large operation. it's 300 people. an operation that's being done by mexican immigration to apprehend -- using smuggling people. we expect they'll apprehend 100,000 more people than they did in 2013. in 2013, they apprehended around 87,000 people. they'll offer in 187, 190,000. just a remarkably huge number. and this is being largely done by 300 immigration officers, in
addition to the people that were already deployed. and highlights, i think, the importance of trying again to sort of cross this bridge between civilian and military activities, and certainly not advocating that the military should arrest people who are crossing the borders illegally, nor an am i indicating that it should try to undertake military activities. but certainly where there's places where there's overlap on developing intelligence passes, or using strategic communications to identify smuggling rounds. where there are overlaps, i think in the u.s. side, we've started to cross those bridges, and in many cases, do it quite well with the military where they provide direct support to civilians. i think that model, if we can help that model take root in a way that it hasn't quite yet, i think there's a lot of growth that could happen. >> well, thank you, michael. and thank you all. i hope you're all encouraged, as i am, with the kind of cooperation we've been hearing about.
unfortunately, the time to talk about it has passed. general, y had a question? well, if you don't mind, in terms of time, we passed our time. but we would love -- please, if you have a question or a comment, we'd love to hear it. >> i am the defense secretary of mexico. thank you. i appreciate your concepts of the mexican army. but this moment, the concept about to be the mexican soldiers don't have the culture to the human rights. and you know this concept in the mexican army, and the navy, and the air force.
do you think this -- against the drugs for the mexicans don't have the low against -- to permit mexico, of the mexican army, to criminals. do you think it's possible to the soldiers in mexico, have a big problem in this moment because the human rights is -- culture in the soldiers. but in media, maybe don't know what is exactly the problems and the schools in mexico. >> just a very quick answer to
that. i would say that the mexican government in general has done a poor job of sharing information with the mexican public and with the international media about exactly those kind of programs. a lot of people are unaware that those kind of training either national or cooperative with the united states, that those programs exist. i think that it is also very, very difficult when we're dealing with a huge institution, that is the mexican army, to make that transition overnight. it's a huge task to try to change the mentality, the way of thinking of your average soldier as well as their leaders within a short period of time. the education that has happened within mexico for some of the younger troops that are coming in, where human rights has been a standard issue within the education system. i think it's a lot easier. a lot of it is about changing the culture within an organization right now.
as we see in large organizations across the world, it's very, very difficult to do that. you can change the organization. you can change the equipment. you can change the operations. but actually changing the culture and the way of thinking is a very difficult task to do, and it takes a long time. i think this is where i always come back to with mexico, which is that we have to celebrate a lot more about all the good things that have happened with mexico, whilst at the same time recognizing how far we have to go, on all of the issues that we've talked about today, i think that applies. i would say it's especially true for human rights. >> and very quickly, if i could just make a comment on that. the issues in mexico. the army in particular has been trying very hard to work on human rights issues. last year -- there are a couple of incidents, in which the mexican public became very concerned about human rights, and as duncan mentioned earlier, the use of the military in this role of a policing function has brought them into a different
role. to it has highlighted this issue of the military's ability to deal with the public in this manner. i call your attention to the examples from colombia. colombia literally had to change the culture and they did. one of the things -- the reason i want to highlight this is that bringing the media in is so important. because if they don't know, they can't talk about it. but if you bring them in, the other side of that is they're beginning to want to have an input, and shape how you do training. so there's a double edge to this. but changing the culture takes that. but i thank you for your question. i thank all of you. i'm sorry that we have gone way over our time. but this has been a fascinating panel. i appreciate all of our perspectives as well as your questions. will you please join me in thanking our panelist for a
wonderful job? [ applause ] we had planned to bring you live coverage of this event with american muslim leaders across the country. however, due to television signal problems, what we will do is record it and bring it to you later on our c-span networks. ahead of tomorrow's veterans day observance, tonight at 8:00 eastern, c-span will show you the hiring our heroes conference. speakers include laura bush and thomas perez. the former first lady talks about pressures that veterans' families face. here's a look at some of what
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and that's why it's so important to make sure that while our service men and women received the support they need, that we care for their families as well. as we've heard this morning, employment support is the perfect place to start. studies show that post-9/11 veterans face higher rates of unemployment than their civilian counterparts. and the consequences of that employment or underemployment aren't only financial. when one family member is suffering, the entire family suffers. >> also speak at this veterans day concert event, labor secretary thomas perez, and medal of honor recipient. c-span presents the chamber of commerce and hiring conference tonight on c-span. a signature feature of c-span2's book tv is our
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your questions. taking place at the st. regis aspen resort in aspen, colorado. so now we're moving into the universal service panel. and the conversation that we just heard was i think a good introduction to it. so as we know, the universal service fund was originally intended to subsidize voice communications for rural and low income consumers. it's steadily transitioning to focus on broadband.
in 2011, the high cost fund became the connect america fund and began to subsidize rural broadband. and this year, the white house announced the connect ed program, which increased funding for the schools and libraries' e-rate program. that was much of the discussion we just heard. and overall the fund collects and redistributes about $8 billion a year. the money comes from fees imposed on certain communication services. both mechanisms have been criticized as inefficient. we hope today to discuss some questions of whether there's a way to meet these societal goals of providing some level of broadband service to everyone in ways that are both equitable and efficient. so our panel will address these
panel -- we'll introduce them in alphabetical order. the executive vice president of the national cable telecommunications association. commissioner clyburn, fcc commissioner. and has a long history. she served as the representative of south carolina's sixth district on the public service commission of south carolina. he has also served as executive director of gig you. greg rosston is the director for economic policy research and director of the public policy program. and brad whimmer is professor of economics in las vegas where his research focuses on the regulation of market for telecommunications. before we start, i want to --
we'll ask questions at the end. also, i'll be following twitter, and i will respond to some things that come up there. when i last moderated, somebody pointed out a mistake i had made while speaking. it was actually really helpful. i'd like to start with commissioner clyburn to sort of expand on what she was talking about in the discussion with commissioner riley. you said you want to think about the universal service program more holistically, how to help the most people. if you could expand on that, that would be great. >> one of the things i chuckle about is when people talk about my focus on lifeline. they say lifeline and universal service. i said lifeline is a part of universal service and that's why it's so -- i'm glad you really teed that question up, because i think it's important for us to
look at the universal service program, each program as one leg in a four-legged stool. you mentioned the high cost now of connect america program. part of the push for reform is because the moneys that were flowing to those companies were being used very expolilicitly, n though didn't use it to support broadband infrastructure. so we said because this is the wave of now and in the future, that we will be more explicit about that and will affirm that in order to get money going forward, you will be required in a certain number of years to construct a framework that is in sync with the way the world is trending, the lifeline program that we talked about on e-rate,
and the program to help connect health care facilities. all of those are important and should be looked at in concert, because if there's one thing in that mix that is out of whack, then i believe that the entire stool is at risk. if we don't have connectivity, particularly to the least of these, then those who are in need or receiving assistance from those health care facilities will not have the ability for continual care. as great as we should be speaking about on e-rate, and the home initiative, from the e-rate perspective, schools close. libraries close. there should not be a continue washington mutual in terms of people being able to do their homework, or to continue their educational and business experiences if they can't afford it. which is why lifeline is so
important. so i look at it holistically. because again, we don't talk about -- not just infrastructure bill side. not just providing connectivity for rural health care clinics. not just ensuring they have state of the art connectivity to be effective in forward thinking learning centers. if there is not the ability for those most in need to be able to afford service, then we're going to have inefficiencies that will continue to manifest itself economically in a negative way on this society. so again, that's why i look at it as seamlessly as potential, because it's important for us to think about the adoption, affordability, the accessibility side of the equation and not separate this. >> so in the draft order, you've
expressed interest in moving this to -- i don't think you used the word voucher, but a system that is more focused on individuals rather than, for example, you don't have the companies certify them. does that -- is that something that you would prefer to see more throughout the system? >> i was pleased to speak with my colleague and those who are similarly calibrated, so to speak. for us, you know, to really discuss about, you know, how we bring -- in short, we keep talking about contributions. and the levels that are hovering around 17 points. i can't remember what it is this particular quarter. and what we can do to address that. the only way i know to do that is to be more efficient. and to really go back to where we begin in terms of rereading
with a purpose of universal service. what the purpose of the funding construct is. and that is to bridge a communications divide. that is for this to be a means or conduit to provide service where the marketplace is not flowing. i think it's important for us to reread and revisit that and to continue to calibrate these programs to be reflected. and yes, i think the only way to either arrest or address the issues as it relates to contributions is to remind ourselves that we need to make sure the money is flowing where it needed, because it is not doing that effectively. and i am, again, a proponent of looking at that and making the adjustments when necessary. >> okay. you and greg are probably responsible for three quarters
of the economics literature on universal service. what's your take on sort of the overall effectiveness of the program so far, especially with your 2011 paper where you looked at lifeline and link-up, and if possible, what you think the lessons are from that research to how we would reform the system? >> well, i agree with the commissioner. the most important thing is to be more efficient. and so to be more efficient, what we have to look at is what are we getting for our money? you know, what is being delivered, what are the outcomes? and so in research that greg and i have done, there's been a couple of things that have come forward. so this could help us design a program. the first thing is a lot of the money from the lifeline program goes to households that would subscribe a telephone service,
even if there were no subsidy. so the question is, what to we want to accomplish? do we want to try to transfer income from one group to another, or do we want to try to increase penetration rates? i think the bigger bang for your buck is to concentrate on the number of people who have access to the network. so that leads to kind of the second point, that low income households have a very difficult time with up front payments, which are probably going to be important when you're talking about the refurbished computers and these type of thing. and so the commission got rid of the link-up program, which is up front funding. and i think it was -- there was a number of different issues with it. but i think they're being addressed in this next round of rule making, to take care of the fraud and abuse. moving money from reducing the monthly charge to moving to the up front, will do two things. one, it addresses that issue of
the ability to fund up front payments, and two, it's better targeted. because it would be targeting people who don't have service. so we think that these moves could improve the efficiency of the system, reduce the costs, and be able to reduce that contribution factor. >> scott, i'm sorry to be so rude so early. but that's me. i said hello. >> that was very nice. >> so i take -- i do not argue with what you said about the efficiencies. i've got your paper right here. when it comes to the link-up program. and respectfully, that's where a lot of the savings from our reforms came from. so full disclosure from that point. but i do take issue with what you said about -- and my colleague and i have this conversation quite a bit. about those who would be signed up for it anyway.
so people want to communicate all around the world. they're making incredible economic sacrifices to communicate. so i'm going to yield to you on that point. but should they be making the tradeoff that we know that they're making in order to communicate? and that's a question that i am proud to say that we are addressing and asking in this country. and another series of facts that was released by pew. it said yes, you might be right there, but 44% of those who are low-income, who have a smart phone because of economic hardships discontinue or disconnect their service over the course of a year. and those who rely on broadband only, mobile broadband connectivity, 48% of those are forced to shut off service because of economic hardships.
while they might sign up, almost 50% of them are disconnected because of hardships. when we talk about data, look at it from that perspective. if they sign up, do they stay signed up? that's part of the conversation that i hope we will continue to have. >> first off, when i talk about, i said move some of the -- in term of the weight, you might want more of the weight on the up front charges. reducing the up front charges. because that's where the difficulty is. they have difficulty funding those things. also, there's evidence that you may need to reduce the thing. i worry it becomes just a straight transfer program. the fcc is not in the way we collect the money is not the most efficient way to do that. because raising a dollar by increasing 15%, 17% tax costs
more than a dollar. we've got to collect the money. then you get what we call an economic for deadweight loss. the inefficiencies. the fact that you're taxing things is going to change the way people behave. so you want to impose coasts on one group to try to help another group with a fairly narrow base. i think that there's other programs that are better suited for income transfer. >> can i just offer an observation. when anyone talks about universal service, i find that there's a really big thing missing. we're talking about pennies and we should be talking about dollars. what i mean by that is it is absolutely certain that at some point in the program, we're using money inefficiently. private sector people do the same thing. it's very difficult to get everything totally efficient. when you get a government
program, you have to follow certain rules. due process requires a certain kind of economic inefficiency because you have to have rules that meet the medium and not necessarily every individual case. so i'm sympathetic to trying to be efficient, and certainly by the way, i want to commend scott for his great work on the national broadband plan, because there were a number of efficiencies in the program that other people talked about that really came out of his work at that time. that's not the only thing. and the big thing that everybody misses is how much more efficient would government be if it knew that everybody was online and everyone was digitally ready. the savings to the government in terms of its own role as enterprise is in the billions and billions if not tens of billions of dollars. there was a high-tech council study that talked about if governments switched to an i.p. platform. it's about a trillion dollars of savings and operations over a ten-year period. of course, not all of that is
simply getting everybody on. but my point is -- and this is true at the federal level, at the state level, at the local level, if governments knew that everybody had connectivity in the home, not only would the efficiency improve in terms of the effectiveness of being able to do the programs, but it would also save lots and lots of money. this is actually somewhat different with what we're talking about in terms of universal service, which is making sure that everyone had access to 911 and emergencies and things like that. this is about improving how we operate in an information age. and so while it's important to be as efficient as possible, let's not forget there's a huge upside to the country by getting everybody on and getting all the institutions connected and all of that. >> but i think there's a lot of money available to target in different ways if we concentrate on exactly that. let's get people connected and
make that the goal. and let's make that the measuring stick and put programs in place that achieve that. so we've got a number of ways to do it. >> let me follow up on that. try to help provide a structure for us to think about this. so e-rate was your baby. at some point. >> i think other people claimed it as their baby. but i would view it as victory has a thousand fathers and defeat is an orphan. it's a successful program and lots of people have claimed that. >> schools and libraries, it's usually talked about under one group. but they're different organizations. is it right that they're lumped together? especially given what you just said, given the importance of it. libraries are an important place of connection for where
people -- which is a little bit different from schools. should these be part of the same program? do they really have similar objectives? should we be looking at them the same way? >> well, i go back to what commissioner clyburn said. universal service basically does -- kind of three separate problems. they need to be solved similarly. one is a problem of what we think of as high cost areas. put that aside for right now. second is the problem of institutions. it's kind of part of the same bucket. the third is low-income individuals. or something they don't talk about, for example, hard of hearing individuals. it's perfectly fine to put together. it might be that you could more efficiently do it, if you broke out the programs, but i don't think so. at least i haven't seen compelling evidence of that. but i could be wrong about that. but again, i think there were
certain moments in time where you want to debate certain issues. i don't see that issue as being timely. let me quickly point out that in the previous panel, the commissioners were arguing about a cap and a budget. that's a really important debate in 2017. it's not a really important debate in 2015. the important debate, in my opinion, is how do we create a program platform for lifeline that allows people in 2017 to right size the program. the electorate will decide the right size of the program. it's just a practical reality. this will decide how to reform it and i'm completely on the side of commissioner clyburn in terms of taking the certification away from the carer ins moving to a benefits card, things that she outlined
in her speech. once you do that, then it's really -- the budget doesn't really go into effect until the program changes are done and that's not going to be done until after the elections. so i would hope that we could put aside for now the discussion of budgets and what i think of as right sizing the program. but really focus on how do we have an efficient program that serves carriers, helps eliminate waist, fraud, and abuse. and really helps serve them. >> i think it's a good lead. at least from what i read over his shoulders. he was scribbling things down. but sort of thinking about at least an economic framework of how we should address these issues. >> so scott was afraid that brad and i would say a lot of the same things. i think it's a good fear. if we have a subsidy, there should be a goal. and what the goal is, i think a
lot of it -- no one's going to say it should be an income transfer program. going from urban to rural people who don't necessarily need a subsi subsidy. ted turner bought a ranch in new mexico three quarters the state of rhode island. presumably he was getting rural universal service subsidies. it's not the kind of thing we should be thinking about. i was very encouraged to hear the two commissioners talk about having more of a target that this is trying to increase penetration and eliminate it an idea of being a transfer program to people who don't need it for sure. once you have a goal, the idea is let's minimize the cost of spending. we want to target this. that's part of that. the idea of a $10 million income
limit seems a little high to me. even though i am in silicon valley, that's still high. that was kind of high, but at least people can think that there are income limits on programs and also the subsidies in that. and also raising the money. what you want as an economist, you want to have a broad base. have a broad base tax. general government revenues rather than a tax in the communications sector or a tax on broadband. you want to do it as broad based as possible.
>> when congress said we shouldn't tax broadband, now i think it's probably more demanded. these are relatively demanded. what this says to me, we're talking about cents, not dollars. why not try and think about where it is, and the lifeline program transfers income to people who need it as opposed to the rural program, which costs three times as much, that transfers a lot of money as our research shows to people who don't need it. it taxes people who are in urban areas, who often are poor. their ideas of trying to improve this and to try to have program
that's more targeted. it seems to me that the logical conclusion of this is to try to institute a voucher program based on income. then you have the low-income rural people would get subsidies and firms would have an incentive to serve them. commissioner clyburn talked about competition and choice. vouchers give people the incentive to try to serve these areas, because they know that their customers are going to have the vouchers to provide them with their low income, and they'll have the money to provide it if they're not low income. or to pay for it. choice is also important. one of the things i noticed, how many of you are staying in this hotel and signed up for wi-fi in your room? can you raise your hands? keep your hand up. now, look around, see if there are probably 15 people who have their hands up. how many of you actually picked the premium service?
you could pick five megabits of service or ten. this is not a representative sample. >> these are all people whose expenses are going to be reimbursed. >> and they value technology. the fcc is defining broadband at 25 megabits a second. it seems to me that a voucher is also something that should give people a choice. would you rather have five or ten megabits a second mobile broadband or 25 fixed broadband? the fcc is saying it should be 25 megabits a second fixed, but it seems like competition and choice should allow consumers to push what kinds of services they want.
>> i find myself in the odd position of defending rural companies in this regard. >> just cut your mic off. >> yeah, right. those who know me know i spend more time debating them. you're pointing out something that is problematic. i have no problem with vouchers, but part of the problem of universal service in the high cost areas is the -- and similar in e-rate, we are trying to find what is fundamentally a capital project. but we keep mixing up cap x and op x. i think the most efficient way to do universal service would be you take all the money that we're doing now, actually, you probably take half of the money and accomplish more. you basically allow the fcc to float a bond. you raise i think order of magnitude $100 billion over 20 years or something like that. and then you have a reverse
auction, and you just get fiber everywhere. you kind of have a reverse auction for the hardest places to get. and you see how far you get. and then you end the program. the problem of having vouchers in low-income areas is you can't rely on that over a long stream of time, to essentially up front put the fiber or whatever facilities you need to go in there. so i think as we focus on that as opposed to lifeline, which is fundamentally giving people the opportunity to buy networks that are already in place. economically it would be better to have it out of the tax base, but i also have to say rural companies could not finance the construction of companies if they said don't worry, congress will fund this every year. whereas the fcc is seen as
consistent enough that they can get various financing. we're essentially funding it on an operating basis, but we are funding what is mostly a capital cost. there are certain inefficiencies in that, but it's really challenging in the practical political realities. let me close by saying i also agree with you on contribution. kevin had a plan to do it with phone numbers. and phone numbers have grown. it would have been nice to do that. commissioner mcdowell killed it, and then spent the next five or seven years that he was on the commission complaining about the fact that we hadn't had contribution reform. i think that was a fortunate point, but it points out the political difficulty of changing that system. >> before we move on from rural,
if we do at all, this is a good place for james to talk about another effect of rural universal service, potential competitive effects representing the companies that basically don't get any of those subsidies. >> yeah. >> i found myself listening to greg and trying to write down quickly as i could the notes of his outline because it was so good. if we were all working off a blank sheet of paper, that's what we would work off. the problem is we're not on a blank sheet of paper and how do we get from a world where it was a compact with a monopoly to fund the goals that we all share today with the recognition of the competitive marketplace we live in today. and the fact of the matter is that the cable industry in particular, you know, we've built out to 93% of all
households in america. largely without any government financing. speeds are hitting a gigabit, so we're competing in the marketplace oftentimes with people who are receiving government subsidies. it just seems to me that while i think there are some signs that we are recognizing the competitive world that we're living in the glacial pace of our progress is something that is frustrating for an industry that continues to put private capital into building and improving its own network. i do want to commend them for the work they recently did in noting that we probably don't need to subsidize rural carriers who are covered by a competitor who reaches 100% of the homes in
that area without any type of subsidy. that is the tip of the iceberg when it comes to recognizing the distortions that can play into the current regime. the more that we can do to recognize the -- and unleash the power of private investment and to steer scarce government funds into the areas where you don't have a competitive alternative, i think we need to do. i fear that we're moving too slow on a lot of these areas, and we have areas with price carriers that have rights of first refusal to build dsl to over six years. it's not even broadband today from what i read. we need to take a more sobering
assessment and really redouble our efforts in that regard. >> let me ask a question that's really unfair, that you probably can't answer, but flows from greg's comments, so it's his fault. you can imagine a scenario where it's -- we have means tested vouchers for low-income people to apply to any carrier, but that we also tax broadband. is that a complete non-starter, and should it be? >> on the contribution side? >> exactly. >> i would certainly say it's not a preferred outcome at this point. at the time we want to promote broadband adoption, why do we want to impose additional costs on people's broadband bills, but
i think all of us kind of recognize these programs change over time. it's certainly a conversation that we want to be a part of. i do think one of the things that our industry has done a lot of work on, comcast probably at the lead of the pack with their own adoption programs, but certainly cox, unlike other carriers that have partnered with other groups such as connect to compete, and other non-profits, is to really try and work outside of the idea of a government program. because one of the things that we often focus on the cost because i think policymakers feel that's the one thing that they can control. but i think all the research shows us that that is really only one factor in the adoption conundrum and it's probably not even the most important factor when you're talking about issues
like is it relevant to my daily life, what is the cost of the computer. that sort of thing. so, you know, i think for these programs to really be successful, they need to, you know, focus on kind of a holistic approach to getting people to connect, showing that there is value in the broadband connection and to really, you know, moving the need until that regard. i think it also -- you know, to the extent and the order tees this up. it's just long overdue. we have to get more participation and we have these regulatory barnacles of requirements like you have to be eligible telecommunications carrier that really makes no sense, to me at least, in this modern age. i'm glad to see the commission recognizes the potential obstacles that it can create and is looking at ways to streamline that process. and the last point, in addition to participation, is that we
have to be fiscally prudent. i wasn't sure when blair was talking about the idea of a cap or a budget, whether he was saying we should fight about it or we shouldn't fight about it. >> we should fight about it later. >> we should fight about it later. when i was a kid, i always wanted dessert first. i told my mom i'll fight about the spinach later. i always am a little worried. it is always a disciplining factor. if we try to operate on a budget, it forces us to be more efficient in the choices we make. >> i think it's really important we create a platform that allows the consumers of lifeline to also know what other subsidies might be available like training programs or subsidies or things like that. that's part of creating the
platform. my only point about the budget, that's a very legitimate debate. i'm just saying we're going to spend a huge amount of political capital on an issue where it will be revisited in 2017 and hopefully by then we have a platform that actually gives us some data that will allow us to right side the program. >> so to further enlarge the targets of my back that i'm about to, you know, make more visible, the fact of the matter is, under the current universal service construct, we are subsidizing broadband enabled networks. when we talk about what i think will be -- should be an adult -- i keep using that word. part of the conversation, you know, debate. we need to talk about what that
means and whether or not that gb line or in sync with where the money is flowing anyway. disproportionately, those who are least benefiting are paying the most. and that part of it i don't think is enough of a part of the conversation. i don't think we're having that conversation much beyond sort of academic exchanges. i think that's unfortunate. >> to structure a system where you can actually have cable and wireless competitors, it's set up for a monopoly provider. we want to have it be set for competitors. there are lots of different
tiers of broadband service, so you might cause somebody -- you know, broadband connection may be inelastic, but the decision might change based on the elasticity between services. the third thing i wanted to talk about was price discrimination. it sounds bad, but one of things i think the low income programs that have been these voluntary conditions, in quotes, have been to provide low income broadband service. this to me is a price discrimination tool, that they're able to charge a lower price to people who might not otherwise sign up. if indeed that's the way it's working, this is actually a good thing where you charge a lower price to people who wouldn't otherwise sign up. that's the definition of how economists look at price
discrimination. this is a very efficient way of providing low income service. sort of almost to make it politically good, not just politically acceptable, politically good for a company to price discriminate. >> i wasn't sure where you were headed with that. i can't think of what it is right now. but if they were to take samples of fingerprints that are on some of those voluntary agreements, you might find fingerprints somewhere. >> that's good. i think that's great. the programs are there. >> just one thing, back to yesterday's conversation. he said the one thing about the act is it allowed competition to enter. what the competition did, is before the telecomact, the prices that we had didn't make a whole lot of sense. all kinds of different cross subsidies. 25 cents a minute long distance. and what the competition did is
forced all those prices to get rationalized. the high cost fund kind of impedes that whole process. one thing, there's really -- i think the benefits in terms of incentives for investment and those other things in the high cost area, is where people could come up with new ideas and new techniques to try to serve these people. i worry that the rules and the way they're put in place is not allowing that innovation and prices to work to try to provide service that will bring lower price, higher quality service to people in low cost areas. or high cost areas, rather. >> i want to talk about the innovations the fcc has done. i wanted to ask blair, you mentioned -- maybe it was james, the importance of non-governmental programs as
well. that's sort of what you've been involved in for a few years now. trying to bring new broadband networks. maybe the communities that we were involved with are too different from unserved university communities that probably have a fairly high willingness to pay for broadband. but are there he is sons that you learned from trying to bring in new networks that might be useful in the universal service contest? >> yes, because at the end of the day, what we're trying to do is fill in a big puzzle and there are lots of different pieces of that puzzle. it was very different when we regulated cable. these things keep changing. so how you solve this big puzzle of getting everybody positioning them to be a viable citizen in the information economy is
totally different. trying to explore experimentation in driving high bandwidth networks. affordable bandwidth was sort of the mantra that we kept on. but what's interesting is the way in which you see experimentation going on that i think is really good. it's too early to know how effective it is. one of the things that's impressive is that comcast has adjusted as they've seen data. we also see in kansas city, and in other places where google is doing a completely different experience. they're simply saying they'll have a general offering that is
basically free month by month. you just pay $300 for a one-time connection fee, but you can do that over time. at the end of the day, this is the part that i think is really important. we need to run a bunch of experiments. this is really the government's obligation. this is part of the commons of our time. so if we can get from 93% to 95% -- we want to get in that 96% of getting everybody on. i think the notion of a bunch of experiments at a certain point in time, and then figuring out how to most efficiently get to the finish line is something that's very important. how do we look at existing assets, lower the cost of deploying on top of them, lower the operating costs, increase revenues in certain ways to
change the math of upgrades. >> and i think that experimentation also is important and should be -- it's a bit risky for a regulator to talk about experiments. because we've got them, and then when the results are not necessarily in sync with certain expectations, and there's a headline or two or three or four. but those are risks that i think we need to increasingly be willing to take. if you do the forensics, you might see my fingerprints in a couple of place. to encourage the private sector to have different experiments of their own. i don't want internet essentials to look like what at&t is doing, to look like another. we all know in this ecosystem, one size fits all.
so these are very necessary to achieve. >> you just brought up the financing. >> why can't the rural carrier go in and say we'll show this area, but we somehow will make a commitment that you have to pay us over time. maybe a lean on the property. there are other ways of financing this big government grants. >> at some point, some economist will evaluate the following. would we as a country be better off if rus simply said we'll forgive all loans"jx for a commitment to not take any
universal service. because it's basically most of the country. i do think there are a variety of ways of addressing it and that might be one. but that's part of what the problem is, the confusion between cap x and op x. >> the fcc actually has been doing a fair amount of experimenting lately. they showed that it's possible to do a reverse auction with its mobility fund. there was a whole series of pilots. does anybody have any comment on whether we can draw any conclusions from the series of pilo pilots that the fcc did? >> the reverse auctions, where they've been trying to reduce the cost of serving high-cost areas, it was important -- the fcc worked a lot on the original
cost models, where the fcc figured out, what does it cost to show this area? when they ran reverse auctions, the results turned out to be about half the cost of these cost models. so that's where it to have some experience in pushing down, giving people incentives. so i commend the fcc a lot for moving towards a more market oriented solution. to use the power of people's incentives to try to do that. that was a great innovation. one of the things that we -- there was a group of 71 concerned economists i think scott was part of this that -- as part of the stimulus package, nta and rus had made huge infrastructure grants. $4.7 billion. and we -- in our submission, we said what you need to do is -- to select these on how cost effective they are. how many people, dollars per person, signed up. and the nta and rus kind looked
at us and go, that's really nice. we're going to pick the best one because they can evaluate these. >> i don't even think they said it looked really nice. >> i was asked to be on one of these selection committees. i looked at the stuff and said, i have no skill and ability to pick the best. you're only giving me two projects so i can't really evaluate it. but they did -- they ended up doing this. there's been a bunch of controversy over the programs. they haven't connected that many people relative to what they could have done. the fcc now is doing it based on dollars per connection or proposed connection. i think that's a much, much better way of doing it. trying to figure out how do you be more cost effective? as an economist, i don't care, if you want to try to connect more people, whether that person's in texas or alabama, i don't care, it's connecting a person. that's what you're trying to do, connect americans. you're going to be as cost effective as you can and use your budget as effectively as you can. do it in an efficient way.
the fcc is making progress in this. i think that's really good. >> that comes with as i mentioned earlier, with levels of pr risk. >> absolutely. >> which is probably why you see some people, you know, wanting to stay within a known quote/unquote measurable framework. and that's part of i think of what outside forces could help us with. because we will never get close to nirvana by doing things the same way that, you know, a -- work marginally. i will continue to push that even again that target grows. >> there's actually an interesting difference between -- because i was involved in both of these things. the part of the problem with rus in transition was they had to do things that were timely targeted and temporary. part of the changes at the fcc
reflect that we were a bell to step back with the plan. with the help of folks like scott and you and others actually build political capital. build an understanding of why reverse auctions would be better. part of the beauty of the plan, this isn't about our plan, this is about a planning process. part of the beauty of it is you get to step back and look five to ten years out and then build political capital towards a more rational system. when you're in a -- in there with the alligators, you're just wrestling the alligators. you're not thinking about draining the swamp. part of the political challenge i've seen in my two stints in the fellow government is how do you think long term when the pressures are all very short term. >> absolutely. >> the only thing i'd add maybe to what blair said is despite the pressure that r is under, this is in part an agency where we've seen continuing problems over time and that's not to denigrate the people who do
great work and are very vigilant but it really goes to underscore the problem of what is essentially in a competitive space deciding that you are going to provide a loan to one party and not another. we continually have these issues where we're just -- not only are we loaning to one carrier over another, but that essentially is going to prevent us from incenting more capital into that area because we're going to protect the loan value. then there's this vicious cycle that goes on between rus and ufs. i think if there's one thing we really ought to redouble our efforts on, it's trying to impose some discipline on rus to really try to get out the business to subsidize competition. >> i just want to talk a little bit about the random trials they did in terms of lifeline. i mean, if you take a look, you
talk about the policy and the way the press looks at it, if you look at the education literature, randomized trials is the state of the start. they try to see what works, what doesn't work.féñ this is -- randomized trials is kind of cutting edge of where we are in the fcc. having the randomized trials was a great idea. i've looked for some things. you got to make sure you do these things correctly. i think what we could do -- should we have more up front fees or reducing costs over time. i mean, the goal is, when we talk about efficiency with we want to maximize the number of people on the network.
but, you know, using these randomized trials shows the fcc is looking at data and wants to minimize the cost. understands there are distortions caused by taxing or using these subsidies. it's really important we get it right. let's find the best way to do it. >> absolutely. let's go to questions. i know there's a question here. the point the commissioner made about the pilots creating a bigger target. if every pilot showed success, that would mean we aren't taking enough risk. so i'd really like to come back to the point blair has mentioned twice.
there's been a great discussion of flexibility and options and flexibility on both sides. infrastructure and the kind of month to month getting users online. i really want to get some other answers to how would you do this. what are the things that we have to do to get this done. we are dealing with the recurring costs, as well as how we get these broader fiber infrastructures built. >> so -- so i think this is something that is, capital expenditures and operating expenditures are really important but something companies in the marketplace do every single day and they put up -- whether it's making iphones or doing all sorts of things, they make these
decisions and take the risks, invest and expect future revenue streams to cover their capital expenditures. that's exactly the kind of thing we want to push towards rather than saying, this company that's the wire line telephone company gets the capital expenditure funded and the wireless and cable company don't. that seems to be a silly thing. is give them -- have them take the risk knowing that they have a risky revenue stream, some people will pay a lot of money and they don't -- it doesn't have to be the case that rural people pay the same $45 a month that urban people pay for broadband. might pay $60 but a subsidy for low-income people. you know, the higher costs of serving rural areas are part of the cost of living in rural areas, to be honest. they pay, as roger knoll left but he's talked 20 years about the fact he's happy to subsidize rural people
if they subsidize his property taxes in palo alto. i'd be happy too. there are trade-offs. some are cheaper, some are more expensive. companies do this every day and make these risks in trade-offs. that's an important piece to think about. >> there's a question here about -- a question here. >> a good discussion. i'm glad to see that greg and brad are still hard at work on this issue, despite the resistance of the politics of the situation. simply shifting from operating costs to capital costs, to subsidize capital expand urs, isn't going to solve the problem. my guess in new mexico's ted turner's ranch would get faster broadband from this. what you want is the capital expenditure targeted to underserved or unserved areas. >> right. >> but the other, very little evidence that the high cost rural subsidies have had any
affect on penetration or rates over many, many years of research, unless there's something i haven't seen recently. in addition, blair and scott agreed that the e-rate program has been rather successful. i'm not sure brad and greg agree, but i don't know of any empirical evidence on them after the austan goolsbee study which said that while a marginally transfer of the communications and expanding communications in the school from the property taxpayer in local areas to the communications taxpayer at the federal level, any evidence they've had any effect on education. is there, has there been studies done to, to justify spending and even expanding this program to schools, libraries, et cetera? >> i did a little research and found the goolsby studies, i think i found a paper in the nbr series by ward i think, looked