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68–044 PDF 2011

POLICIES AFFECTING HIGH-TECH GROWTH AND

FEDERAL ADOPTION OF INDUSTRY BEST PRACTICES

HEARING

BEFORE THE

COMMITTEE ON OVERSIGHT

AND GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

APRIL 18, 2011

Serial No. 112–27

Printed for the use of the Committee on Oversight and Government Reform

(

Available via the World Wide Web: http://www.fdsys.gov

http://www.house.gov/reform

(II)

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

DARRELL E. ISSA, California, Chairman

DAN BURTON, Indiana

JOHN L. MICA, Florida

TODD RUSSELL PLATTS, Pennsylvania

MICHAEL R. TURNER, Ohio

PATRICK T. MCHENRY, North Carolina

JIM JORDAN, Ohio

JASON CHAFFETZ, Utah

CONNIE MACK, Florida

TIM WALBERG, Michigan

JAMES LANKFORD, Oklahoma

JUSTIN AMASH, Michigan

ANN MARIE BUERKLE, New York

PAUL A. GOSAR, Arizona

RAU ́ L R. LABRADOR, Idaho

PATRICK MEEHAN, Pennsylvania

SCOTT DESJARLAIS, Tennessee

JOE WALSH, Illinois

TREY GOWDY, South Carolina

DENNIS A. ROSS, Florida

FRANK C. GUINTA, New Hampshire

BLAKE FARENTHOLD, Texas

MIKE KELLY, Pennsylvania

ELIJAH E. CUMMINGS, Maryland, Ranking

Minority Member

EDOLPHUS TOWNS, New York

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, District of

Columbia

DENNIS J. KUCINICH, Ohio

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

STEPHEN F. LYNCH, Massachusetts

JIM COOPER, Tennessee

GERALD E. CONNOLLY, Virginia

MIKE QUIGLEY, Illinois

DANNY K. DAVIS, Illinois

BRUCE L. BRALEY, Iowa

PETER WELCH, Vermont

JOHN A. YARMUTH, Kentucky

CHRISTOPHER S. MURPHY, Connecticut

JACKIE SPEIER, California

LAWRENCE J. BRADY, Staff Director

JOHN D. CUADERES, Deputy Staff Director

ROBERT BORDEN, General Counsel

LINDA A. GOOD, Chief Clerk

DAVID RAPALLO, Minority Staff Director

(III)

C O N T E N T S

Page

Hearing held on April 18, 2011 .............................................................................. 1

Statement of:

Quinlan, Patrick, chief executive officer, Rivet Software; Milo Medin,

vice president for access services, Google, Inc.; and Stuart McKee,

national technology officer, U.S. Public Sector, Microsoft Corp. ............... 7

McKee, Stuart ............................................................................................ 24

Medin, Milo ................................................................................................ 16

Quinlan, Patrick ........................................................................................ 7

Letters, statements, etc., submitted for the record by:

Issa, Chairman Darrell E., a Representative in Congress from the State

of California, prepared statement of ........................................................... 3

McKee, Stuart, national technology officer, U.S. Public Sector, Microsoft

Corp., prepared statement of ....................................................................... 27

Medin, Milo, vice president for access services, Google, Inc., prepared

statement of ................................................................................................... 18

Quinlan, Patrick, chief executive officer, Rivet Software, prepared statement of ........................................................................................................... 9

(1)

POLICIES AFFECTING HIGH-TECH GROWTH

AND FEDERAL ADOPTION OF INDUSTRY

BEST PRACTICES

MONDAY, APRIL 18, 2011

HOUSE OF REPRESENTATIVES,

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM,

San Jose, CA.

The committee met, pursuant to notice, at 9 a.m., at the San

Jose City Hall and Mexican Heritage Plaza, 200 E. Santa Clara

Street, Suite T116a, San Jose, CA, Hon. Darrell E. Issa (chairman

of the committee) presiding.

Present: Representatives Issa and Chaffetz.

Staff present: John Cuaderes, deputy staff director; Linda Good,

chief clerk; Hudson T. Hollister, counsel; Seamus Kraft, director of

digital strategy/press secretary; Mark D. Marin, senior professional

staff member; and Brian Quinn, minority counsel.

Chairman ISSA. The committee will come to order.

The Oversight and Government Reform Committee’s mission, we

exist to secure two fundamental principles. First, Americans have

a right to know that money Washington takes from them is well

spent. And second, Americans deserve an efficient, effective government that works for them. Our duty on the Oversight and Government Reform Committee is to protect these rights.

Our solemn responsibility is to hold government accountable to

taxpayers, because taxpayers have a right to know that they get

from their government, work that is tirelessly in partner—I’m

doing well. They have a right to know that they get from their—

what they get from their government. We will work tirelessly in

partnership with citizen watchdogs to deliver the facts to the

American people and bring general reform to the bureaucracy.

I’d like to begin by apologizing for that opening statement.

No. I would like to thank the city council for making this wonderful room available to us. I also appreciate the witnesses for

being here. Field hearings are a way to allow us to come to you in

a setting of your choosing. Additionally, I think back in Washington we often talk about the Silicon Valley; we don’t think about

it. So for the Members and staff that will be here in the next few

days, touring here and the rest of California as part of a series of

field hearings, we hope that we will see Members get informed,

both by your testimony and by being in a community where innovation is not marked by the size of your handbag, your Gucci shoes,

your lobby effort, but, in fact, by your willingness to innovate, to

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bring people together to find new and exciting products often intangible and unthought of before they were invented here.

It wasn’t long ago that the nation’s research innovation and hightech industries were unequaled. That is no more. As the debate

shifts to how to repatriate dollars from around the world, every day

we’re reminded that revenues outside the United States are continuing to pile up looking for opportunities and often finding them

to invest in foreign lands.

Who are we to blame? Five years ago Bill Gates and many others

warned of the negative impact of strict caps on H–1B visas for

technology workers in the United States with the competitive environment around the world, if you can’t get your worker here, you’ll

go to where your worker is. Just last August, former HP CEO

Carly Fiorina said that it’s time to start acknowledging the reality

that companies go where they’re welcome, explaining that U.S.

Federal policies such as high corporate tax rates and the broken

immigration system, the failure to have a permanent R&D tax

credit for many years pushed jobs overseas instead of making U.S.

companies competitive against their international rivals.

At Intel, Paul Otellini said, I can tell you definitely that it cost

one billion dollars more to build a factory here and equipment than

it cost outside the United States, and I can tell you my stockholders are not going to ask or order me to spend one billion more

before attributing higher labor cost.

America’s cost of energy continues to be a concern to Intel and

other companies, along with other burdens and delays. I’ve heard

these concerns personally here in December and on other trips to

the Valley, and in my home in San Diego, the same is true. Telecommunications jobs once thought to be based out of San Diego as

a home of innovation, little by little are finding homes in other

countries with smart and innovative equal—innovating the next

generation, many of those new jobs, of course, will be in China.

On top of that, Federal agencies continue to have inoperable data

bases, data bases that cannot, in fact, be easily searched. It’s not

that we don’t spend money on them; we spend a fortune on them.

The real question is, will the Federal bureaucracy come to Silicon

Valley, ask what it can get from them, so that it can start acting

more like a cloud based Google search than, in fact, the often pretty Web site that deliver little or no information, have broken links

and seldom are searchable in a mass way.

This committee continues to—to explore waste, fraud and abuse

in government, but we also believe that the greatest waste is, in

fact, the job that does not get created in America, the opportunity

does not occur. That would be a bigger impact on America than the

undeniable waste in the Federal bureaucracy. With that, I recognize the gentleman from Utah for his opening statement.

[The prepared statement of Chairman Darrell E. Issa follows:]

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Mr. CHAFFETZ. Thank you, Chairman, and thank you for being

here. It’s a pleasure and honor for me to be here. I was actually

born in Los Gatos. I grew up in part in Saratoga. I remember when

Norman Mineta was the mayor, for goodness sakes. So I only lived

here until I was about 7 years old, but nevertheless, this is home.

This is where it all started for me. And following my dad, if he kept

that home in Saratoga and those rolling hills overlooking the vineyard, which are now scattered with these multimillion dollar

homes, but nevertheless, and that beach house in Santa Cruz, but

that’s another discussion.

Listen, I——

Mr. ISSA. By the way, there are plenty of opportunities to run

right here in this district.

Mr. CHAFFETZ. I kind of like the conservative voting power of

Utah’s Third Congressional District, but nevertheless, I fundamentally believe that our Federal Government right now is borrowing,

taxing and spending too much money. It’s startling to me that 25

cents out of every dollar spent in this economy is spent by the Federal Government. That is unsustainable, it is unacceptable and it

is far too much.

We need to recognize that it is the private sector that creates

jobs. The Federal Government doesn’t create jobs. The Federal Government is there to—there’s a proper role for the Federal Government. It is there to provide safety and security and do things that

are uniquely government. But if we’re going to grow our economy,

if we’re going to continue to be the world’s military and economic

superpower into the future, we’re going to have to change the way

we do business, and we’re going to have to recognize that until we

create an atmosphere that is conducive to the growth of jobs, we

will continue to struggle. And the tech sector has obviously been

wildly successful, particularly in this—in this area.

We need that to expand. We need that to grow. We need to remember that manufacturing is good. That we actually have to

make and develop things. And the United States is unique in that

it has such a talent and pension for creativity and for developing

things, and there’s nothing more proud than some of the companies

that are represented here that have become global brand names in

a very short amount time.

Nevertheless, I am worried about the Federal Government and

its policies moving forward. How do we propel and make sure that

these companies grow in their strength in everything from patent

reform, to cloud computing, to cyber security, to standardizing of

data, to shared services. These are all things that not only affect

how the Federal Government will operate, but will also have a dramatic affect on how business around the globe will operate.

And so I think one of the—one of the core challenges and I hope

we have a discussion today, Chairman, about is this—this idea of

the Federal Government and its unilateral rulemaking authority

through the executive branch, as opposed to going through the congressional—through the process of the U.S. Congress.

Mr. Chairman, if you recall, when the House Republicans are

gathered, George Will, one of my favorites, he came and spoke to

us. And he said his—his perception was the challenge before the

112th Congress was whether or not Congress was going to stand

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up for itself. Were we going to allow the president and the executive branch—and I’m not trying to be overly partisan here, it certainly was true in other administrations, is the executive branch

going to unilaterally be able to—to use its rulemaking authority to

have the effective law, or, is it going to be the Congressional

Record that will be most pertinent. We have to go through a deliberative process of openness and transparency, bipartisan in the nature—the way Congress is configurated to actually develop those

rules and put them into law. And there is a difference between

rules and the law. And yet, I feel like in sometimes not only in the

tech sector, but also in everything from the ag sector, to the EPA,

to the FDA, as we were talking about earlier, this is obviously—

all Americans are affected by what is done through this unilateral

rulemaking authority without the public’s input.

So nevertheless, a long-winded way of saying, the tech sector is

one of the things this country can be proud of. It is providing real,

tangible jobs. It will provide the income that is needed not only for

the Federal Government so it can offer its services, but provide the

type of growth that will allow us to continue to be the world’s economic and military superpower.

And so that’s the notion of the hearing today is to understand

how we can help by getting out of the way. What are the impediments that the Federal Government is putting up so that you can

continue to grow and expand in the tech sector.

And then, how do we learn in the Federal Government, you have

one department that just got off DOS, for goodness sake. And so

we’re——

Mr. ISSA. Which version is it?

Mr. CHAFFETZ. 3.3, an all green screen.

And so nevertheless, we appreciate your participation today and

look forward to a healthy dialog.

Mr. ISSA. I thank the gentleman.

All Members will have 7 days to submit opening statements and

extraneous material for the record.

The chair now recognizes our panel of witnesses. Mr. Patrick

Quinlan is chief executive officer of Rivet Software. Mr. Milo Medin

is vice president for access services at Google. And Mr. Stuart

McKee is the national technology officer for Microsoft’s U.S. public

sector organization.

Pursuant to the rules of the committee, all witnesses will be

sworn in. Would you please rise to take the oath.

Please raise your right hands.

[Witnesses sworn.]

Mr. ISSA. Let the record should reflect that all witnesses answered in the affirmative and please be seated.

Now, the next part of the script, I actually get to go off of.

Although your time is limited and we want to be respectful of it,

and we have other appointments for the day, these are comparatively informal opportunities to express back and forth a dialog. So

I’d—I’d like to have each of you make an opening statement, approximately 5 minutes. No one’s going to cut you off, particularly

if you’re speaking rather than reading from a script, that will be

placed in the record in its entirety, and then we’ll begin alternating

with a group of questions.

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And, Brian, if you have specific questions on behalf of the minority, we’re certainly going to include you in the questioning, again,

allowed by the rules but not often done back in Washington.

And with that, Mr. Quinlan.

STATEMENTS OF PATRICK QUINLAN, CHIEF EXECUTIVE OFFICER, RIVET SOFTWARE; MILO MEDIN, VICE PRESIDENT FOR

ACCESS SERVICES, GOOGLE, INC.; AND STUART MCKEE, NATIONAL TECHNOLOGY OFFICER, U.S. PUBLIC SECTOR,

MICROSOFT CORP

STATEMENT OF PATRICK QUINLAN

Mr. QUINLAN. Thank you very much, Congressman Issa, Congressman Chaffetz, and distinguished members of the committee.

Mr. ISSA. OK, when I botch all of the names, and I do it all the

time, I apologize, but Mr. Chaffetz.

Mr. QUINLAN. Mr. Chaffetz, I apologize.

Mr. ISSA. He has a record for the fact that the previous chairman

actually never got it right once. Thank you.

Mr. QUINLAN. Well, Mr. Chaffetz, as a resident of Colorado, I certainly don’t mean to demean my neighbor in Utah, much less point

out that we actually have better snow than the fine state of Utah.

Mr. CHAFFETZ. Reclaiming my time.

Mr. QUINLAN. My name is Patrick Quinlan. I’m the CEO of Rivet

Software. We have 570 talented members of our team, which has

been a tremendous growth. A year ago we had less than 50.

We currently serve over 1,250 of the top public companies in the

United States, including Microsoft, sitting here to my left.

We are very passionate about data transparency, and what the

power of information can do in allowing Main Street to get the

same access to information as Wall Street gets today.

You asked how Federal regulations and policies impede the creation of high-tech jobs and how government agencies can instead

leverage new technology to achieve greater efficiencies, reduce

waste, fraud, abuse and mismanagement of Federal agencies.

Today the Federal Government is constraining innovation, wasting

funds and obscuring information all in the name of data transparency.

Data transparency initiatives such as data.gov, recovery.org and

USAspending.gov gives the impression that the government has

made data available and accessible.

The U.S. Government has funded these tools to provide answers

to the public questions, but they don’t suffice. In fact, they’ve created a guise that constrains innovation, wastes money and resources, and actually reduces transparency. Until data reporting

standards are set and the public has access to the underlying data,

the data that really matters, it remains nearly impossible to provide answers to the public’s questions.

But we don’t have to rely on these government programs. Private

companies can compete to provide data in a standardized format

delivering increasingly high value to the public. A new self-funded

industry will be formed, high-tech jobs will be created and true

transparency and accountability will be achieved.

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Setting standards leads to lower cost, increased sharing and enhanced communication. Sometimes standards evolve gradually.

Let’s think about Betamax and VHS. But this takes times and increases cost and waste. Mandated standards can be more effective

and efficient. Take, for example, the recent SEC mandate around

XBRL. XBRL is eXtensible Business Reporting Language. A language that makes document contact machine readable and, therefore, instantly available for research. The FCC’s visionary mandate

for XBRL has so far created at least 15 companies and 1,500 jobs. At an average salary of $68,000 a year, that means over $100 million in salaries and approximately $30 million in taxes per year.

What can the Federal Government do to create true transparency? First, take a look at the SEC for best practices. They have

set and enforced a standard that developed a self-funding industry.

Our government must find more opportunities to mandate data

standards.

Use of standardized data will let the government manage by exception, focusing on the outliers. Imagine asking for every purchase

order exceeding budget by 20 percent and having the answer instantly. With this kind of data, we’ll no longer attempt to predict

questions. Instead, we can enable innovation and let the entrepreneurial spirit that drives Rivet, as well as so many of the other

companies in my industry, through their growth.

Let’s consider GPS for a second, which was originally created for

military use. And look at the—and look at the many applications

that have been created by leveraging this data. How many businesses have been created? How many jobs? How much revenue?

How many tax dollars have been returned to the government as a

result of industry’s access to GPS? In this time of massive deficits,

let’s stop dealing with fuzzy numbers and start tracking where and

how our money is being spent.

With access to standardized and structured data, we can use

facts, not spin, to make decisions and determine if our money is

being wasted.

In conclusion, please trust us to work with you and the Commission to bring the benefits of true data transparency to the American people. If we do it right, we will start a whole new industry,

creating tens of thousands of high-quality, high-paying jobs, while

answering the need to reduce spending and waste in our government at the same time.

On behalf of my company in Denver, the thousands employed by

our industry and the millions of Americans we serve, I thank you

for the opportunity to be a part of this discussion.

[The prepared statement of Mr. Quinlan follows:]

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Mr. ISSA. Thank you, sir.

Mr. Medin.

STATEMENT OF MILO MEDIN

Mr. MEDIN. ‘‘Medin’’ is right. Thank you, Chairman Issa and

Chaffetz, for this opportunity to discuss the ways in which government regulation can sometimes hold back innovation and investment.

My name is Milo Medin. I’m Google’s vice president for access

services. In that role, one of the things I’m responsible for is leading the Google Fiber team in the build-out of an ultra high-speed

network in Kansas City, Kansas.

Prior to joining Google, I cofounded M2Z Networks in 2005, and

served as its chairman and chief technology officer. Before then, I

cofounded At Home Corp. in 1995, and served in a number of senior positions there.

In my view, there’s a demonstrated need for the Federal Government to revisit some of its foundational processes and procedures

to ensure that we are creating an environment that is friendly to

both investment and innovation, and the corresponding economic

growth and job creation. At Google we also see a need to modernize

government by updating our patent system and by taking other

steps to ensure that companies continue to invest and create jobs.

I’ll start, though, with some of the experiences I’ve had and the

interplay between business investment and regulation. Google

Fiber recently announced that we will work with Kansas City,

Kansas to deploy a large-scale, ultra high-speed network at speeds

up to one gigabit a second. Our goal in Kansas City is to provide,

at a competitive price, Internet access that is more than 100 times

faster than what most Americans have available to them today.

But my experience deciding where to make our investment highlighted for me just how regulation can sometimes get in the way

of innovation. My written testimony discusses a number of areas,

but in my statement today I’ll talk about rights of way.

Governments across the country control access to rights of way

that private companies need in order to lay fiber, and government

regulation of these rights of way often resulted in unreasonable

fees, anti-investment terms and conditions, and long and unpredictable build-out timeframes. The expense and complexity of obtaining

access to public rights of way in many jurisdictions increases the

cost and slows the pace of broadband network investment and deployment.

Reducing red tape, overly restrictive regulations and delay associated with access to rights of way would make a big difference.

Luckily, some local governments get it right, and are good examples for others to follow. In fact, part of the reason we selected

Kansas City for the Google Fiber project was because of the City’s

leadership and the—and their utility move with efficiency and creativity in working with us to create an agreement.

I’ll step back a little bit from Google Fiber to discuss my views

on the impact of regulation innovating more broadly. Specifically,

I’ll touch about some regulatory issues that concern me personally,

that relate to the FCC and government in general.

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First off, the government generally must strive to be more efficient in its decisionmaking processes and recognize that time is in

many ways the most valuable thing we invest here—we invest in

Silicon Valley.

Starting a regulatory process that may affect specific sectors in

a market, either in a positive or negative way, creates ambiguity

that can often freeze investment. It’s important that such processes

are optimized for speed and not—so that the ambiguity involved

can be removed as quickly as possible.

I once heard Colin Powell say that all good decisions are made

between 40 percent and 70 percent of information. He said if you

have less than 40 percent, you really don’t know what you’re doing.

But if you have more than 70 percent, you’ve waited too long.

If—Silicon Valley companies like Google fully embrace this sort

of thinking, and it’s essential to our ability to deliver innovative

products that compete worldwide. But investment disincentives are

created when we have to wait on government processes that are

not time bound, and materially impact what products we can develop.

Agencies like the FCC all too often open up rulemaking dockets

soliciting formal comments, receive a flood of documents from interested parties and then fail to act for months or years, if they act

at all.

The result is uncertainty, which is bad for business, bad for innovation and bad for investment.

Fixing the patent system is critical to the technology industry.

And while I have not had as many patents issued to me as you

have, Pat, issued to you, I do have a few.

And probably like you, I have seen the patent process work well,

and have seen it work not so well.

Simply stated, the American technology industry success depends

on a functioning patent system that produces and protects quality

of patents. In recent years the system’s become difficult to navigate, frivolous lawsuits built around patents of dubious validity

and targeting the profits of true invention. Companies often settle

rather than risk losing millions of dollars in front of a jury, and

consumers’ innovation and the economy suffer for it.

I know that you understand this, Mr. Chairman, and want to

thank you for your support in—of a supplemental examination

amendment issued by Chairman Goodlatte during the markup last

week.

I’ll close with this, if regulations create disincentives for large,

well-established companies like Google, just imagine the impact on

small- and medium-sized companies who include the next generation of entrepreneurs who are just getting starting.

Thank you, and I look forward to working with you.

[The prepared statement of Mr. Medin follows:]

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Chairman ISSA. Thank you. You’re more up-to-date probably

than most of my colleagues in Congress. Let’s just hope that becomes law this time.

Interesting that you quoted Colin Powell and not Michael Powell.

Hopefully he lived up to his father’s 40/70 during his time this

year.

Mr. MEDIN. Indeed.

Chairman ISSA. Mr. McKee.

STATEMENT OF STUART MCKEE

Mr. MCKEE. Thank you so much. Thank you, Congressman

Chaffetz and the distinguished members of the panel. I appreciate

the opportunity to testify today on behalf of Microsoft Corp.

My name is Stuart McKee, and I’m the national technology officer for the U.S. Public Sector business at Microsoft and it’s a position I’ve held since 2004. In this role, I do work with governments

across the country of all sizes on the—on working on effective technology policy. We thank the committee for convening today’s hearing, and at a time when our country is facing significant economic

challenges, it is essential that our government take advantage of

information technology best practices. And it is imperative that we

pursue policies that support innovation and growth.

In my testimony I’ll focus on four areas in which government and

industry each has a role to play in driving progress for its policies

that can promote IT innovation: One, information security in the

new FedRAMP program. Two, a policy framework facilitated responsible move to cloud computing. Three, international trade and

respect for intellectual property. And four, the H–1B visa program.

Let me begin with the important topic of information security

and share our experience.

Microsoft is proud to be a world leader in information technology

security. At Microsoft, trustworthy computing is a core value, and

the Microsoft security development life cycle, which the company

originated and follows, has been widely praised, published and

practiced by governments and companies around the world.

It is noteworthy Microsoft has security programs and trusted

partnerships in place specifically for governments, including the

government security program, which provides national governments with information to help evaluate the security of Microsoft

products.

Two, the security cooperation program, which focuses on computer incident response, attack mitigation and citizen outreach.

And the U.S. Government configuration baseline, which continues

to be one of the most successful IT programs in the Federal Government to help increase security, reduce cost and accelerate the

adoption of new technologies.

Technology continues to advance rapidly and it’s no surprise that

stagnant information security standards and protocols are not acceptable. The Office of Management and Budget and the General

Services Administration are driving a new effort known as the Federal Risk and Authorization Management Program [FedRAMP],

that aims to streamline, strengthen and secure cloud implementations across the Federal Government. Microsoft welcomes this effort, but we urge Congress to oversee the process to ensure that it

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meets the policy objectives established by the Congress in the Federal Information Security Management Act of 2002.

In particular, FedRAMP must be consistent and fair, with a process that is repeatable, adaptable and immune from preferences or

bias for particular vendors or technology. There are challenges

posed by the program that’s proposed that warrant deeper discussion. We look forward to working with OMB, GSA, Federal agencies and other stakeholders, as related issues are considered.

Moving to my next topic, looking beyond government use of cloud

computing services and to facilitate a responsible transition for all

customers. Policy makers should examine emerging issues related

to privacy and security, including those arising outside the United

States with regard to information that crosses national borders.

In this context, we urge Congress to consider legislation that

would, one, require cloud service providers to make their privacy

and security practices transparent to customers.

Two, insure rigor and Federal Government procurement of cloud

services by requiring agencies to evaluate provider security practices.

Three, enhance criminal enforcement of computer crimes, such as

malicious hacking, and allow cloud providers to bring suit against

violators directly.

And four, encourage the Federal Government to engage in international efforts to promote consistency and national laws governing

access to and security of cloud data.

A comprehensive approach to cloud policy will help ensure that

consumers and enterprises fully realize the exciting benefits of new

computing technology.

That brings me to international trade.

While IT technology is evolving rapidly, so is the global marketplace for U.S. IT products and services. With 95 percent of the

world’s consumers living outside U.S. borders, international trade

is becoming an increasingly important element of a U.S. pro-growth

economic and trade strategy. Microsoft advocates using existing

trade agreements, including the World Trade Organization and free

trade agreements to enforce intellectual property rights, expand

trade and ensure that the U.S. IT industry remains competitive.

Looking to the future, we urge one swift passage of the U.S.-Korea,

U.S.-Colombia and U.S.-Panama Free Trade Agreements.

Two, negotiation of the Trans-Pacific Partnership.

And three, maintaining a strong focus on stemming IT theft outside our borders.

Microsoft faces a significant challenge in the rampant piracy we

face in China and emerging markets. In spite of these challenges,

we strongly believe the best option is to continue to advocate for

the opening of new markets, and strengthening the rules of disciplines of trade, particularly with regard to intellectual property

rights.

Finally, I would like to turn briefly to the ongoing debate regarding the H–1B visa program that is critical to our success.

Throughout its history, our country has operated on the principle

that the more brain power we can attract from around the world,

the more creativity, invention and growth we can achieve here at

home. There seems to be a reemerging and bipartisan consensus

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that we need to stick to this principle, and we welcome it. We

strongly support efforts that will facilitate the ability of information technology companies like Microsoft to attract, hire and retain

the best and brightest innovators from around the world. If we are

not allowed to do so, our international competitors will.

Again, many thanks to you, Chairman Issa, Congressman

Chaffetz and the committee for the opportunity to testify before you

today. We look forward to working with you to address these issues

and confronting the IT industry, and I look forward to your questions.

[The prepared statement of Mr. McKee follows:]

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Chairman ISSA. Thank you. As promised, we’ll be a little less formal, but I’m going to start in reverse order. Isn’t the H–1B program essentially a failed program because it—it brings people in on

a temporary nonimmigration status, and the truth is, that if these

people work out, we really need them to be able to remain permanently.

Mr. MCKEE. Yes. I assume you’re directing the question at me

in reverse order.

Chairman ISSA. Yes.

Mr. MCKEE. Yeah. I can speak specifically for my own personal

experience in some small startup companies as well as the Walt

Disney Co. and Microsoft. Attracting the best and brightest from

around the world has been incredibly important to us. And the

ability for those individuals to come to the United States and create businesses and stay here, to be clear, these are people that

show up and pay taxes and help us fund roads and schools and the

other things that contribute to our economy significantly.

So I would agree with that statement, that having people stay

here is very important.

Chairman ISSA. Mr. Medin, would you say that realistically we

should be giving a green card application to every graduate with

a master’s or Ph.D. from our major universities, and particularly

in science and math.

Mr. MEDIN. It’s funny you ask me that question, I talked to——

Chairman ISSA. I didn’t invent it. I actually took it from Thomas

Freedman.

Mr. MEDIN. It’s a—it’s a great idea. I brought it up with the

House leadership when I was back in Washington in March for

TechNet Day.

I think if you—if we are really serious about competition, the last

thing we want to do is encourage people to come from all over the

world, learn at the beat of the best—the best—the best innovation

apparatus in the world and then send them back to their countries

to form companies that compete with ours. It is just ridiculous. And

coupling it to the boiling the ocean problem of comprehensive immigration reform is a big problem in our mind.

Chairman ISSA. It’s what I came to Congress for 11 years ago,

but I have to stay until we solve it or until I die.

Mr. Quinlan, when you talked about XBRL, you’re trying to put

it—quantify it, is XBRL really the success or is it, in fact, that you

have metadata that is—that allows for data to be searched and

compared no matter how different it is if it uses that format? And

I guess my follow-on question is, shouldn’t this committee look at

mandating the kind of—of searchable, verifiable, this cell equals

this cell, this information equals this information, across the government, in some cases XBRL is appropriate, in some cases other

types of tagging would be appropriate. Isn’t that fundamentally

what the SEC is now doing that up until now you had to be basically able to take diversion data bases and compare them, and it

was an inexact science?

Mr. QUINLAN. That is correct. And actually, the example I’d like

to give on that is the difference between data availability and data

transparency. They seem very similar, but it’s a pretty tremendous

gulf between the two. Data availability, I’ll use the past SEC manVerDate 17-JUN-2003 11:22 Sep 22, 2011 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\68044.TXT KATIE PsN: KATIE
37

date which requires all companies to submit their financials in

HTML. HTML brings the smallest element down to the page. So

it essentially makes it so that when computers came out and became wildly available 20 years ago, that individual investors could

turn on a computer and read their financials by the page online.

So that was a—a progressive, intelligent mandate 20 years ago.

What XBRL—and that’s data availability, now it’s there. What

data transparency is, is when you allow individual numbers and

items to be compared across multiple companies, multiple industries, and you do that utilizing an open standard that is nonproprietary, such as XBRL.

What the SEC mandate requiring in XBRL now makes it possible for individual investors, grandma in Dubuque, Iowa to instantaneously access the filings of companies and compare that information across industries much the same as the largest companies

in the United States do today.

So we fully support the expansion of XBRL into MDNA and AKs

and all forms of public submissions into the SEC, as well as as progressive as HTML was in its original version 20 years ago, we actually think that the HTML mandate inhibits the growth of XBRL,

because there’s still this lingering connection to this documentbased system rather than a data-based system.

So we encourage, A, the expansion of XBRL throughout both the

SEC and the Federal Government, as well as the elimination of the

now obsolete HTML.

Chairman ISSA. Were you disappointed when—when you saw

Dodd-Frank basically have no data standards at all.

Mr. QUINLAN. Yes, sir.

Chairman ISSA. I was outright disturbed.

Mr. QUINLAN. First of all, we would like to thank you for your

constantly pushing this issue. You know, I was actually given an

example on data transparency just this morning. So imagine if you

have 100,000 buttons and those buttons are in a big drawer full of

cabinets, and they’re all different shapes and sizes, what data

availability does is it says, here’s 26 questions you can ask about

the buttons, which is what data is—which is what the recovery.org

Web site does today. It says, here are the 26 questions you’re allowed to ask and here are the specific answers to those 26 questions. That’s data availability. And trust us, all the information is

correct and it’s all about these 100,000 buttons.

Data transparency is giving everybody full access to those buttons, and allowing them to ask the questions that they want. And

so the disappointment we felt over that being stripped out of the

Dodd-Frank bill is we were going back to what we got with—with

recovery.org, where the government gets to ask the questions and

provide the answers that they think we want, rather than our ability as citizens to be able to go in and ask those questions.

So it was a disappointment. And we look forward to your leadership in being able to push that forward in the 112th Congress.

Chairman ISSA. Thank you. We will continue to push that in a

bipartisan basis.

And last question for this round, Mr. Medin, now, Google is pretty famous for the Google search. And if I—if I search on my name

or on Jason Chaffetz’s name, I first get a default of a whole bunch

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of stories about him and a whole bunch of Web sites, but if I click

over on the side and I do image, I get mostly Jason’s pretty face.

Not always, because it appears as though that the data tagged to

his face is taken out of the data of the articles in which it appeared.

How long before the private sector, Google and Microsoft and

other innovative companies have the face recognition which already

exists, tagged so that they can find Jason when he occurs in so

many different places, tag it and apply metadata that not only is

who he is, but who he was with, what the setting was, so that instead of looking at an article 50 times, 50 different articles from

the same appearance, if I tag—and I want that information, I can

find out who was at the forum with him, what—what occurred,

maybe who was there at the committee that day and what votes

they made.

And the reason I ask that is, when you have that data, if we embrace it, suddenly what we have is the ability to—and I’m using

face, even though sometimes that will worry people, government

doesn’t know who is cheating us. We don’t know that a vendor is

the same vendor that cheated us twice before. We don’t know that

a—a U-Store-it in Des Moines, Iowa is, in fact, not a major hospital

that suddenly started billing us millions of dollars.

How long before the industry on its own is going to be able to

collect, analyze and apply metadata to an awful lot of different occurrences that could be leveraged to, quite frankly, root out the

hundreds of billions of dollars in losses to the government?

Mr. MEDIN. That’s a really fascinating question.

Chairman ISSA. You can expand for the record.

Mr. MEDIN. No, I—I think that’s a great idea. I am—that’s a part

of Google that I actually can’t give you real good answers to. But

I think we will take that——

Chairman ISSA. Just an Internet quarters is all I wanted to ask

you.

Mr. MEDIN. Yeah, exactly.

We will—I will have folks come back and give you an answer to

that question in a couple weeks. We are pretty good at being able

to put the—put the smart people in front of problems and come up

with innovative solutions. I’m not—I’m not an expert to it—expert

on the metadata stuff.

Chairman ISSA. Excellent. Well—and we’ll continue to ask Google

and Microsoft and all the other—and Rivet those kinds of questions, because we don’t know how, today, to stop wasting your

money, because if we knew how, obviously we’d already be doing

it, right?

OK, we do—we do know some of the ways we’re not doing it.

Mr. Chaffetz.

Mr. CHAFFETZ. Thank you.

Back in 2009 the Obama administration put forth the Open Government Initiative, which the result was the development of this

data.gov, and one of the comments that Google had made is that

it wasn’t as scrollable as it should be. Can you give me your perspective on what’s happening or not happening with data.gov?

Mr. MEDIN. I—again, that’s an area where I’m not—I’m not really familiar with the core data, so we will—we will come back.

39

Mr. CHAFFETZ. Do either of you want to comment on what’s happening or not happening there.

Mr. MCKEE. Sure, Congressman, I’d be happy to comment. I’ve

actually been somewhat prolific in blogs in my personal appearances talking about data transparency, public records, and I’ve actually been a big proponent of public records in the digital age for

quite some time. The interesting issue is I think all too often we

focus on technology and we focus on shiny objects and technical solutions to problems, where unfortunately, some of the old adages

are still true today, garbage in, garbage out. All too often we don’t

take time thinking about the data or the information when it’s collected, and it’s really important that we do that.

I’ll speak specifically to the stimulus process. I helped to develop

and put together a system that we gave away to local governments

primarily called Stimulus 360, which was understanding my own

personal experience as a state CIO during the Homeland Security

cycle, how difficult it is for governments to try and deal with Federal money coming down the pike quickly.

And Stimulus 360 was just about putting tools in place so governments can collect data efficiently, then the reporting process on

the other side becomes much, much easier.

In the case of data.gov, the interesting thing for me personally

and I’ve written a lot about, data’s nice but if you organize it and

create information, it becomes meaningful. And all too often more

data, it’s my opinion, is not the answer. In fact, more data reminds

me of why we created the Paper Reduction Act, because we realized

the government was producing more and more reports and producing more and more paper that nobody was reading. I think unfortunately in some cases we’re producing more and more data for

the sake of data, and producing less information.

And I think it would be really important for Congress to take——

Mr. CHAFFETZ. Is that in contrast or compatible with what Mr.

Quinlan is saying.

Mr. MCKEE. I think it’s very much compatible, very compatible

with what he said. His argument was really about our ability to

actually organize information and produce it in a way that it’s

meaningful so that it can be organized into information. I don’t

want to put words in his mouth, but I would——

Mr. QUINLAN. It is also important to understand and I think

where we are in strong agreement is that we believe the user

should be given access to the data so that they can formulate the

question that they have. So this is building KPIs around information, this is building business rules, whether that’s on government

data, on—on—or on company GL data, if you give the user the ability to formulate the question, we believe they’ll get the answer that

they want.

But that only works if all the information is in an open standard,

so that everybody can access that information equally.

Mr. CHAFFETZ. Now, how difficult is it to make that sort of transition? Because every time we try to, you know, talk to some Federal agency it’s, oh, we’re going to need billions of dollars to—how

difficult in terms of time and dollars is it to make such a transition?

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Mr. MCKEE. You know, that’s a very broad question, how high

is up. It kind of depends. I think the reality is this is less a technical question and more about a process and procedure and demeanor of an organization. I think where everybody agrees that

we’re quickly transitioning from a, you know, produced paper reports kind of environment to capturing data and producing data

and allowing people with tools at their disposal to organize that

data into meaningful information.

Mr. CHAFFETZ. So is data.gov, is it worthless.

Mr. MCKEE. No.

Mr. CHAFFETZ. Is it moving in that direction?

Mr. MCKEE. Yes.

Mr. CHAFFETZ. It’s fast or as rapid or as——

Mr. MCKEE. Well, you know what, candidly, Congressman, you

know, I’m a taxpayer, I’m out here, I’m a private sector citizen. It

never moves as fast as I would like it to. And I think there’s opportunities for us to improve, and we have a lot of incredibly—my personal experience in government——

Mr. CHAFFETZ. What is it not doing right? Let me ask it in the

negative, then.

Mr. MCKEE. For me, I think we’re too focused on producing data.

Part of the—part of the agenda is let’s produce more data and it’s

less about producing quality information.

Mr. QUINLAN. I agree to that. Actually, specifically answer your

question, Congressman Chaffetz, is in the 2000 largest publicly

traded companies in the United States have converted their HTML

document based 10-Qs and 10-Ks into a data driven XBRL methodology for a subtotal of about $40 million. 2000 companies now provide that information for about $40 million, is the aggregate value

of that industry in its current life cycle, and that’s on an

annualized basis.

So if we can take 2000 disparate companies with many disparate

accounting systems, all have different accounting codes, create a

common taxonomy, and ask those companies to report against that

taxonomy, we have evidence of that cost.

Now, I am certain I was just handed a—a spreadsheet of apparently the reporting system within the U.S. Government and——

Chairman ISSA. Yeah, that was for my next round of questions.

Mr. QUINLAN. Right. And it’s potential to——

Chairman ISSA. It is not complete. I just—it’s a small page.

Mr. QUINLAN. But if you look at—and—and I think that’s what’s

important, these are 2000 separate companies that have done that

for that cost. So I think that to assume that the cost is even close

to equal to the benefit is a very short-sided view of this.

The amount of money we could save by providing correct information greatly outweighs the cost.

Mr. CHAFFETZ. In either of your—in any of your perceptions and

experiences, any Federal agency—we talked a lot about the SEC,

but above and beyond that, anyone doing it right? Anybody who’s

just the most frustrating Federal agency you can possibly imagine?

Your own personal experiences.

Mr. MCKEE. I would speak out loud——

Chairman ISSA. Name names.

Mr. CHAFFETZ. We need targets.

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Mr. MCKEE. You know, actually, I would like to say that, you

know, there is a lot of incredibly good work happening, and I—you

know, that—the move toward transparency I think is incredibly

important. I think citizens expect it. You know, we have access to

our investments, our 401(k)’s information. Maybe too much information coming at us every day people would argue. But I think the

Federal Government has made a lot of progress moving to a more

kind of transparent environment. And I would like to see, for me

personally, the—the pressure, if you will, continue, that the expectations that this is a journey, not a destination, continue, and, you

know, continuing to see that progress move forward.

How about that for an answer.

Mr. QUINLAN. Right. And I think to specifically answer is

data.gov, is it the correct solution. I think when you look at—the

Pony Express was a dramatic increase in the ability for people to

communicate over what came before it. You know, FedEx is a bit

better. So I think that we could view data.gov as kind of the Pony

Express. It’s good, it’s a start. But there is probably a better way

to do it.

Mr. MEDIN. Understanding that we’re still back in the Pony Express days, I go back to this round.

Chairman ISSA. Pony Express, you know, that was a ill-conceived

way of delivering mail quickly that only lasted a couple of years

and killed a lot of ponies.

Mr. QUINLAN. Again, the reason I chose the analogy.

Chairman ISSA. That’s the problem is we glorify things sometimes that don’t work out, but they seemed like a really great idea

at the time.

That—that chart I gave you, I gave you for a reason. We’re—

we’re looking—obviously a big part of the reason we’re out here

today is to talk about impediments to job creation, and I want to

get to a couple of them. But when I look inward at the government,

that reporting matrix, which looked actually like healthcare reform, it was so complicated, it—it’s a small part of what we’ve analyzed along with Earl Devaney, the chairman of the Recovery

Board, for how reporting presently happens. And then there were

three charts that on the other page, that are three visions, and

they’re really the only choices government has, other than the one

of doing nothing.

We can try to tie together these various divergent bases and reporting and—and hopefully not spend too much money asking people nicely from OMB and others to deliver information more and

more in a—in a usable format. And they’ll all tell us, as you can

imagine, that they have these legacy issues and they can’t do it.

The other two are either to simply start taking the data today

and saying, going forward we’re going to do this differently, which

is a single-point reporting concept, or obviously say, look, give us

your basis and we’re going to put them together.

The reason I put those in front of you is we can have data or,

if you will, metadata tagging that allows disparate data bases to

be moved together in some sort of a legitimate way where the data

can be compiled, but in the day of the cloud, shouldn’t we look at

our 2,500 plus—and what’s the actual number, guys? Oh, I’m sorry,

2,094 different data centers and ask the question of, if they’re not—

42

if they’re not designed to be interoperable, and if we’re looking at

reporting as not designed to be interoperable from the moment that

it begins, aren’t we inevitably going to be having this discussion 10

years from now?

Mr. QUINLAN. Yes.

Chairman ISSA. And I’ll take any nos, if you can figure out how

we would get there, except by essentially coming up with single—

a concept of single-point reporting. And when I say single-point reporting, they can go to dozens of data bases, but one standard setting element so that what—what is put into the flow of government

reporting is, in fact, thought of from the get-go to be interoperable.

Mr. QUINLAN. And I think—so what you just brought up is a key

and that’s creating—the starting point of that is actually not technology, but it’s creating a governmentwide taxonomy that takes

those disparate 2,094 technology systems and forces them into a

single reporting structure.

That taxonomy just as we’ve seen in the public sphere will inevitably have a certain amount of extensions, some companies have

extended up to 30 or 40 percent of all the numbers inside their financials. What you’re going to start to see, though, is a group thing

that pulls that back, because the last thing that a company wants

to be is an outlier. And I think that would happen in the government as well. You’re going to have some departments that will play

by the rules very well, they will fit their reporting structure into

that common taxonomy. You’re going to have other organizations

that tend to think that what we do is so incredibly special that we

have to extend a lot of things.

And when every extension begets 26 questions, you’re going to

start to see those extensions come down. So step one is a common

taxonomy.

Then using an open standard to—to meta—to tag with metadata

against that transparent—against that taxonomy is going to allow

this—you don’t have to go all the way back to the data source to

correct this if you can get it into that open standard.

Chairman ISSA. Other comments.

Mr. MCKEE. Yeah. I think I would just add that I really appreciate you bringing up the idea of interoperability and understanding. I mean, the reality is 20 years ago we made the best decisions we could, right, and the reason we implemented the technology we could. And the reality is we built large bureaucracies

and operations around those systems. And the real challenging

part is less about ripping out a water wheel and putting in an electric engine or a new technology, and more about reshaping that organization.

If I could also belabor the Pony Express analogy, the other interesting thing that I think you’ll find that we’re faced with, a great

example is our data networks. You talked about cloud computing.

You know, in the Federal Government, in particular, we have very

often redundant networks. We have data and voice networks. And

one of them happens to be incredibly expensive and—and somewhat dated, and there’s a significant opportunity for the Federal

Government to improve with the unified communications and—and

things like this, and understanding that, you know, what we traditionally bought this infrastructure for we’ve surpassed that ability.

43

And what that does for us, ultimately, is allows us to share information and data quickly and more efficiently.

So to your question, you said are we going to have this conversation in 10 or 20 years, the answer is yes because we’re increasingly

creating more and more information, and more and more data, and

certainly will have new challenges to face in the future.

But much like the conversation we had 10 years ago, we talked

about data dictionaries. And when we created these data bases you

used the word ‘‘taxonomy.’’ I’m a data base guy by my engineering

background, we talked about data dictionaries and using things

like FASB and GAAP and other accounting standards to create

uniform, you know—you know, vocabulary for how we described

the data information. That problem is going to be with us in 10 or

20 years because we’re going to have more and more data. But we

need to continue and we want to ask Congress to continue to put

the pressure on the Federal Government to adopting some of these

new technologies, taking redundancies out, like my, you know, data

and voice networks and looking at, you know, how do the new technologies allow us to take and create some more efficiencies to remove friction, if you will, moving information around the government.

Chairman ISSA. I’ll followup with a question to your comment. Is

there any reason that when we look at GAAP accounting and other

accounting, that government truly has to continue having its own

separate accounting system that does not port back and forth? Is

it a worthwhile goal to say that a good accounting core information

provided that can be remanipulated a hundred different ways is

really the goal, so that—and my point is this, the SEC does not report its operation in the way in which the corporations that it oversees report their operations. The only thing we know for sure,

though, is that the SEC actually does not have the internal controls because they failed their own audit and have now farmed it

out.

So sort of along that line, when we’re looking at source information, if you will, reporting that Mr. Quinlan can compile three different ways, he can compile it in a typical FASB type, you know,

OK, we’re going to expense everything, we’re not going to depreciate, we’re—we’re going to continue—we’re going to recognize revenue differently and so on.

Or, by simply saying, giving me the other way, couldn’t you and

shouldn’t you be able to say, well, where is the Federal Government if, in fact, you used GAAP accounting and you say, well, wait

a second here, what is the asset purchase? What is the useful life?

Obviously in government accounting, they don’t even need that

information. But isn’t—isn’t it, in a sense, all accounting simply

rolling up source material and shouldn’t we go to common source

material?

Mr. MCKEE. Yeah. So now I’m reaching way back in my history,

which isn’t in my oral testimony and I don’t think it’s on my—my

bio, my undergraduate degree’s in management accounting, before

I realized that, you know, running a 10 key during tax season was

not—was not my future.

Chairman ISSA. You’re showing your age talking 10 key.

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Mr. MCKEE. Well, you know, I was incredibly fortunate as well,

I could show more of my age that, you know, computers and PCs

were happening and I spent a lot of time in the computer lab and

I’m a geek and was exposed to computers and realized, you know

what, I would rather apply principles to computing and some of the

business knowledge I have. But anyway, it’s neither here nor there.

Chairman ISSA. So in other words, you don’t have a Friden adding machine with all those rows of buttons in your office.

Mr. MCKEE. No. And 10 keys are great, you know, and calculators are great, but the computing technology, you know, clearly

here is infinitely more powerful than anything I could have imagined.

But to your question, you know, business principles that have

been true for thousands of years are still true today. Technologies

evolve and change, but some of these core principles still matter

today. And I think your question was specifically, shouldn’t we

have consistent and common ways to report and account, and I

would say, yes.

And very often in my own experience as a government CIO and

a public official, we complicate things significantly through the

budgeting process. And very often we say things like, well, that’s

how we do it, that’s how we do it, government’s different.

In many cases there are things that are unique about the government. Let’s be honest, sometimes the government is in businesses

that nobody else in their right mind would be in, right? People’s

lives depend very often on what we do and that’s understandable,

so, you know, issues, privacy, security, whatever are incredibly important. But when it comes down to basic fiscal accounting, I think

there’s a lot of improvement that could happen and a lot of consistency that could be created.

Chairman ISSA. And my last question—my last comment’s going

to be, candidly, if government needs to learn the difference between

spending and investment, they seem to be interchangeable in most

of the dialog that you hear. Mr. Medin, you—you did hit a point

that I want to hit one more time. The Federal Government ultimately has huge jurisdiction over right-of-way and can probably

clear an awful lot of right-of-way directly and through persuasion,

you know, because we regulate so much. But if the Federal Government did all it could do within the Federal powers, what would you

suggest for the states and the local, in order to clear what’s left?

You know, we—we do not historically take on purely private property, you know, the railroads, some of these other areas, we could

help with a lot, but assuming we do A, and answer what you think

we should do from a Federal standpoint, and then what would we

be asked to encourage our brethren at the state and local level to

do.

Mr. MEDIN. Well, Mr. Chairman, as you know, the—the rules

that the government imposes on Federal projects have all kinds of

requirements. Congresswoman Eshoo and Senator Klobuchar had

sponsored a conduit bill, which would have required on all Federal

highway projects that conduit be in place in those projects so that

at a later time, fiber could be pulled through those at substantially

lower cost, 95 percent lower cost.

45

Things like that, that basically create holes in infrastructure

when you’re building it, it costs almost nothing to install the conduit, and greatly removes the—reduces the price for actually installing telecom infrastructure in that later on.

Also, things like siding, all wireless base stations on Federal office buildings, how a GSA negotiates with commercial leaseholders,

right, so that when the GSA is leasing a space in a building, does

it also have the ability to put—allow third parties to put wireless

base stations, telecom infrastructure on those properties.

The U.S. Postal Service, right, has a lot of land, a lot of various

buildings.

Chairman ISSA. 35,000 of them.

Mr. MEDIN. Indeed. It would be nice if you could get easy ability

to put wireless base stations for cellular coverage in all of those installations. On the state and—and also, the SEC, in particular,

controls access for the rules for pole attachment and a whole set

of other criteria for telecom operators.

They did a recent—their recent preceding was a step in a good

direction, but it didn’t address, really, what it means for pure

broadband providers who don’t fit into narrow Title VI or Title II

labels to gain access to those poles.

And in terms of state and local, I sat on the California State

Broadband Task Force as well as a number of TechNet initiatives

on broadband and right-of-way. There’s a whole host of things that

you can do. Conduit everywhere is—so that when a municipality

rips open a road for a project, that they put conduit in at that

point. That when a telecom operator wants to open a road to lay

new fiber or new infrastructure, that be publicized so that others

could actually gain access to that same project so you don’t have

to rip the ground open multiple times.

Streamline processes so that you don’t have overlapping jurisdictions. The chart that you showed here in terms of the Federal day

reporting looks a lot like the flow chart for CEQA here in California, which is not a good thing.

Chairman ISSA. Actually, this one doesn’t have dead end so it is

different in that sense.

Mr. MEDIN. It is different in that way.

So there’s a whole set of things with regards to streamlining,

putting, you know, limits on timeframe for procedures, making

clear what the criteria are, and removing overlapping jurisdictions

that are really important to lower the cost of—of right-of-way access, and that improves the operators to get access—to make better

business cases for deployment and investment.

I would say one other thing on the data part, my experience

when I was at NASA is that NASA is an interesting agency because we take data, in some cases, science data, very seriously, and

we make that available to scientists, in an engineered product. The

business operations of the Federal agencies have never been

thought of as some—something that is kind of a main point and

not a side point. And if you have difficulty in getting good reporting

data at your level, what are—how—how opaque is that data inside

the agency itself? Because if you don’t have transparency inside the

agency, how can people propose to improve processes?

46

You know, inside Google, we do a lot in terms of making our

business metrics widely accessed inside of the company so that we

can get suggestions about how to improve those processes.

If those—if data sets of business processes where expenses are—

are being allocated, etc., are not transparent inside an agency, how

can that agency make its own process better?

You as a business owner, certainly, how would you like it, be

able to make decisions on where to invest, where to distribute if

you couldn’t get—if people inside your company didn’t have good

access to the GL, and know where people were stiffing you, where

sales were going? The government doesn’t think of these processes

in a strategic way, and that’s the real problem, in my opinion.

Chairman ISSA. I said it was the last comment but I will followup one for the record. My—my old company sold to Circuit City

and Best Buy and Walmart too, but the difference between Circuit

City and Best Buy—and now that Circuit City is gone it’s pretty

easy to tell the story. At Circuit City, it was against the rules to

show actually the vendor what the inventory on hand was. We

would get our orders and they would be added and subtracted and

held and expedited, but you’d have to go into Richmond and you’d

have to say, can you kind of show me on a piece—on a printout,

a paper printout, and they would kind of show you where the inventories were by warehouse and region and you’d write it down

feverishly, and sometimes they’d give you a little more information

but that was about it.

At Best Buy, and for that matter, Walmart, I could tell, or people

working for me daily could tell at any time how many units were

in each store, how many were in the warehouses, where they were

in the shipping process, and, you know, literally we could figure out

whether one store was selling and the store next to it wasn’t selling. We could deploy people in to find out why they weren’t selling,

perhaps they were sitting in the warehouse and never been put out

on the shelves. Best Buy’s here today, Circuit City’s gone.

Mr. Chaffetz.

Mr. CHAFFETZ. Just to followup on what Chairman Issa was saying. I concur, we have this challenge, governmentwide, because I

think there are a lot of agencies that don’t want to be held accountable, they don’t want somebody looking over their shoulder, they

won’t provide the very basic data.

You would think you could go to certain agencies and just be able

to extract data. You go to USAID and ask them, tell me the

projects where we spent these billions of dollars. They can’t even

give you an Excel spreadsheet to even show you what—what

projects they’re even working on.

And then you compound that, you look at, for instance, at the

Patent Office and the lack of data and information that they have

there, and it’s—it’s stunning, because this is what becomes a competitive advantage for the United States of America.

Let me go a little bit further, because I just—I need to understand the—the limitations on the technology itself. Because it

strikes me that Google’s going to great lengths to try to work on

broadband and even lay fiber and whatnot, but what are the limitations on wireless and satellite and those types of communication?

47

Why so much effort on actually laying actual cable as opposed

to——

Mr. MEDIN. Sure.

Mr. CHAFFETZ.—expanding it? I mean, wireless is—what are the

limitations there.

Mr. MEDIN. Sure.

It’s important to recognize that the wireless networks provide

connectivity to an underlying infrastructure that connects—that

trunks all these systems together. Today fiber can carry enormous

amounts of data, far more than wireless can. So basically wireless

is an extension of the fiber footprint, and so you think about it as

an integrated system.

In some cases, you know, it’s a cost benefit ratio. If I can get

spectrum at a low enough price or a wide enough amount, I can

generate an access capacity of, say, 20 megabits or 40 megabits,

etc. But the fiber itself can carry terabytes of data. So the issue is,

fundamentally, how—how—how close can you get to the fiber? Because the fiber is the thing that drives it.

Mr. CHAFFETZ. What are the limits in the bandwidth? I mean,

do you see us bumping up against these—what has been allocated

out in the public?

Mr. MEDIN. Well, this is a long complex story. You know, in the

United States, there’s government spectrum and there’s commercial spectrum. Two different agencies regulate these. They have

very different policies.

Spectrum has been allocated in a number of ways by user, by

type of use, so you have PMRS versus CMRS——

Mr. CHAFFETZ. I guess I’m trying to get to the bottom line.

Mr. MEDIN. I’m sorry.

Mr. CHAFFETZ. Are we not allocating enough spectrum space, I

guess is part of my question.

Mr. MEDIN. I think in general—sorry, simple answer is yes, more

commercial spectrum needs to be out there, more unlicensed spectrum needs to be out there. There is a ton of spectrum that is assigned but not been used.

Mr. CHAFFETZ. Can you quantify that? Can you—we have this

much—I’m looking for some numbers——

Mr. MEDIN. Sure.

Mr. CHAFFETZ.—ratios and percentages to help me understand.

Mr. MEDIN. Sure.

I think total amount of commercial allocated spectrum, ballpark,

is something in the order of 270 megahertz has been allocated for

commercial mobile radio service. If you compare that to the amount

of spectrum allocated for—for broadcast, TV, which is, you know,

a current discussion, it’s about the same, right? That is to say, the

total amount of broadcast spectrum is about the same amount that

we have allocated to CMRS.

And so there’s large pockets of this. Government is probably the

largest sector in terms of the total amount of spectrum it holds in

its inventory. A lot of that is important, right? You have radars,

you have air to ground communications, you have military requirements, so it’s not to say that, well, you can reclaim spectrum that’s

in use of this radar, right?

48

But I think if you look at the nature of the spectrum allocation

process, we have speculators, we have people who hold spectrum

but don’t build on it, we have—all of this spectrum is tied up in

ways that doesn’t allow it to be used by carriers and consumers

unlicensed——

Mr. CHAFFETZ. Do you see us now at the current usage rates

across the—across the country that we’re bumping up against these

ceilings? Are you—are you advocating that we expand those ceilings and look at reallocating the different channels by which we

use it.

Mr. MEDIN. I believe that if you look at the timeframe it takes

for the government to take action on spectrum, it’s usually on the

order of a decade or so, right?

So if—if I basically—if you’re going to force me to say we can’t

make decisions on spectrum quicker than a decade, which goes

back to the earlier point I made, that, yeah, we’re in a—in a big

problem, right? Because——

Mr. CHAFFETZ. So you think we’re running out of spectrum in the

next 10 years, is that it.

Mr. MEDIN. I think—I think if you look at growth rates and data,

we need more spectrum, we need the ability to—to build more base

stations easily, because spectrum is not—you can actually get more

capacity out of spectrum by taking the spectrum that’s used by one

base station and actually splitting that into several base stations.

Also, the issue about offloading spectrum through—offloading

wireless traffic through femtocells and unlicensed communications,

today, right, if you look at how much data is offloaded on WiFi

from the commercial networks, right, our—the costs that consumers would have to bear by—by having all of that traffic be carried on commercial license spectrum would—would—it would just

not be in—in a reasonable way.

So it turns out it’s a combination of things that you need. There’s

no silver bullet, right? And one of the challenges is, how do you

look at how spectrum is used, what requirements? You know, spectrum is chopped up into different use rules. I can use broadcast

spectrum for one thing, I can use commercial mobile spectrum for

another set of uses. Private spectrum PMRS cannot be used for—

for mobile, so there’s all these rules that apply to different kinds

of spectrum that prevents it from being used from one purpose or

another.

Mr. CHAFFETZ. Thank you.

Do either of you others want to comment on that?

Mr. QUINLAN. I’m good on spectrum.

Mr. MCKEE. I’ll just briefly say we’ve been doing a lot of work

around white spaces and other things. We’d be happy to followup

with you and staff on some kind of innovative things. I’m an optimist and believe that our technologies will advance fairly rapidly.

But one of the points that I would say is—is hard line and wireless both matter, it’s not an answer of one or the other. I am very

confident that indeed we will be bumping up against capacity

issues. We currently are and will continue to be, because our desire

for data and information is continuing to grow. Moore’s law,

Metcalfe’s law is still happening, so I think I would answer your

question that way, that we need to continue to be very, very agVerDate 17-JUN-2003 11:22 Sep 22, 2011 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 C:\KATIES\DOCS\68044.TXT KATIE PsN: KATIE
49

gressive about capacity issues in our ability to move information.

Our future competitiveness depends upon it.

Mr. CHAFFETZ. And then maybe if each of you could just very

quickly touch on cloud computing because obviously the private

sector is still starting to come to grips with what this means, and

the Federal Government is trying to come to grips with what it

means. We—the Federal Government seems to operate in silos. Everybody has to have their own network, their own security, their

own—and I think there’s a great reluctance and a human nature

reluctance to want to move toward the cloud.

Can you touch on the positives and negatives on what the—what

the challenges that you see, not only from the government, but for

the private sector? And we’ll just go swiftly down the road, maybe

we can start with you, Mr. McKee.

Mr. MCKEE. Sure.

I mean, I’ll go back to I think some of the chairman’s opening

statements. He didn’t use the words ‘‘shiny object,’’ but I think we

do a big job in the computing industry of developing new technologies and often framing them. I’m very pragmatic. Cloud computing isn’t something that happened and fell from the sky recently. It’s been much more of an evolution than a revolution. In

fact, cloud computing, I would just frame as network enabled services.

What has changed is the depth of our networks and the quality

of the software and the reliability that’s allowed us to continue to

spread out and move the edge farther and farther out. I think that

will continue to happen. And we’ll urge Congress, there’s a lot of

data in my written testimony, about specific policies and issues we

think Congress should continue to look at, to accelerate an adoption of cloud computing technologies.

Mr. MEDIN. I would agree with—with that. I would also say that

if you look at the marketplace, entrepreneurs are some of the—

sorry, entrepreneurs are some of the early adopters of cloud computing technology, because it allows them to scale really rapidly,

and without a large scale investment initially. So if you look at

here in the Valley how many startups are using cloud computing

as their platform simply because their business model would not

work without it. And I think one of the interesting questions is, are

there opportunities where the traditional model in the government

for solving data processing elements, you wouldn’t even bother trying to do it in the old way, but would be empowered with this new

way. That allows government to move faster, quicker, with more

transparency, because the cloud also has at least the ability to

break down some of these silos in—in ways that these vertically integrated platforms do not.

Mr. QUINLAN. So as an entrepreneur that does gain great benefit

from the cloud, we are a stat model that allows our 1,250 clients

to keep their prerelease earnings information on a very secure network. So we live, eat and breathe this every day, and I feel that

certainly that the government should explore the opportunity and

benefits that come from cloud computing.

These gentlemen are in the world to provide the service that we

use, for which I thank you very much. What we believe, though,

is cloud computing is important, so is the information that resides

50

on that cloud computing. And we will constantly push to ensure

that data is accessible to each and all. And one of the things that

we live by is that we believe that data is—is—needs to be democratic to all users. And especially that is why we want to continue

to push the SEC to ensure that all public filings, not just Qs and

Ks are available in an XBRL format, so that all investors have the

ability to access that information.

Mr. CHAFFETZ. Thank you.

One last thing I have, Chairman, and I’ll be done with my questions, maybe we can go back in reverse order here.

All of this comes back and one of the integrated questions here

is obviously cyber security. I don’t know if you’re able to quantify

this, but one of the challenges we have in the Federal Government,

everybody operating on these different silos, there tends to be all

these different operating entities and every time you go to—you

know, hear about an appropriation and massive money for cyber

security, nobody quite knows exactly what that means. We also

looked at which agencies should be engaged and involved in the enforcement and the international nature of the cyber security and

how we fight back against that.

I don’t know if you have any comments or any perspective on

how bad and how difficult this situation is, because the access to

that data, surreptitious access to this data is obviously a massive

issue for the Federal Government.

Mr. QUINLAN. It is a very real threat. It is something that as we

look at the future of conflict in the world, traditionally has been armies marching across fields, and there will be battles over I think

water and over cyber security in the future that make—that will

be new when you look at past history.

You know, as a company, it is incredibly important to us because

of the information that we maintain. And so I’m going to leave my

comment at that, because I don’t want to raise any flags.

Mr. MEDIN. I would say one of the challenges is if the agency’s

business processes have really not been thought of in a strategic

way, it is very complicated to retrofit security in these kind of models. Security is really best thought of as when you’re building a system, right? And the problem is there are—the value of that information to enemies of the United States has gone up over time, but

the architecture of the system may not have recognized that.

And I think that’s a real challenge, because it goes back to it’s

not about, well, spend X dollars on this project and it will fix your

problem, right? It’s really about thinking about information in a

strategic way, thinking about systems in a strategic way.

And as long as an agency does not think about it that way,

you’re going to have vulnerabilities. The same way, in fact, some

of this—if you can’t get reporting data out of the system, one of the

interesting questions is, does that mean that the—that the access

to that information is so esoteric, right, that nobody can protect it

effectively either, or can you say it’s protected.

I mean, these are really interesting challenges when you architect IT systems that I think need to be thought of.

Mr. MCKEE. I’ll just say briefly that you’re absolutely right, in

today’s world that the reality is with the growth of networks and

information, that the attack vectors have increased significantly,

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and there are a whole new level. I would encourage you and Congress to continue to look at ways to encourage public, private partnerships and the ways for different entities to work together to

share information. The government security programs is a great

example. There’s a really great example out in New York, a gentleman named Will Pelgrin did the Multi-State ISAC where they

were sharing computer incident and response.

Part of the challenge with cyber security is our ability to respond

quickly, and when we see issues happening and being able to share

information.

So I would encourage Congress, and there’s quite a bit of detail

in my written testimony, and we’d be happy to followup with additional information on how we can ensure that we secure these absolutely critical assets.

Mr. CHAFFETZ. Thank you.

Chairman ISSA. Thank you.

I’m going to do one quick followup as a member of Energy and

Commerce on leave. I can’t help but—and I know you’ll followup

for the record, but are you proposing obviously freeing up bandwidth, but one thing that I’ve always been worried about is that

if we give more bandwidth—let me rephrase that. If we sell more

bandwidth, as we so often do, what we essentially do is we—we get

hooked on it as a revenue source and we lose track of—first of all,

the real goal is—is the public good. It’s not the temporary return

on—on some asset that is only intangibly belonging to the Federal

Government.

But the whole idea of going to microcell technology, the—and just

quickly, you all know that most of the major carriers all have

microcells that basically exist so that you could take your—your

Internet wired backbone and when you’re in a place that doesn’t

have a cell and you’re dissatisfied, you can have your—your den

have one of these units. And they’re in their infancy and they’re—

they’re one of the most crippled product I’ve ever seen.

They make them so they don’t work for your whole house or even

for your whole den, if you have a 24-by-24 den, and yet it would

seem like this is ultimately one of the things that we probably

ought to have is, if you will, a universal microcell-type concept that

is small, can be smaller if you come into signal so that it—it, in

fact, is a smart microcell, but that, in fact, if I go out to Wyoming

and there’s a signal, or I go out to Wyoming and there isn’t a signal, why wouldn’t I want to take this already allocated bandwidth

that exists for the purpose of cellular data and—and voice and get

it on to the land as soon as possible? If you will, isn’t it a public

service if we make sure that the FCC promotes these products so

that consumers get off of everyone else’s air waves, even though it’s

leased air waves as soon as possible.

And if you take that kind of concept and you spread it throughout a lot of technology, wouldn’t—wouldn’t we very quickly make

the same amount of bandwidth go further?

Mr. Medin.

Mr. MEDIN. You’re right. Physics, in fact, is on your side. If you

look at many of the analysis, they say data growth will go up by

a factor of 30, right? Well, no one is proposing that spectrum can

grow by a factor of 30. So you have to do this kind of

52

cellularization, taking cells and offloading traffic, you know, at—in

smaller and finer areas. That’s the only way to grow the total capacity of the system.

So you’re exactly right about femtocells and microcell devices.

That, by the way, is another reason why unlicensed is really important. One of the things Google as a company is very concerned

about is in this move to reallocate spectrum, it’s being propelled almost with a giddiness about revenue that makes policy a second

fiddle, which the law actually says—the statutes actually say,

you’re not allowed to use revenue considerations in how you set

spectrum policy.

But yet——

Chairman ISSA. If Congress should just obey its own laws.

Mr. MEDIN. Well, there is that.

But I think that’s part of the issue. If you look at what WiFi has

done in terms of offloading traffic, your smart phone when you go

into your house, it’s now using the WiFi network for its data and

not the cellular system. If that wasn’t there, the kind of innovation

that we would see in terms of smart phones and the Internet and

access would really be dwarfed. So you have to—the physics drives

you. We cannot solve this problem just by allocating more spectrum. It is fundamentally about creating smaller and smaller pockets of wireless, and unlicensed is a huge driver of that, so I think

that’s exactly right.

And I just want to say, optimizing for revenue is not optimizing

for public interest benefit to consumers. And that’s a big challenge

in the way the spectrum process is run today.

Chairman ISSA. Thank you.

You know, we came here really as part of the committee’s activities on Americanjobcreators.com. We’re going to have—staff has a

couple of questions, I believe, for you, but you’ve been helpful here

today. Very clearly, we’re looking for places in which government

is in the way of the American job creator and getting the job done,

and you’ve given us some wonderful starting points.

One of the challenges is that Jason and I are going to have to

take this back, report it to the Members, who sit on a lot of other

committees, because as you can imagine, a lot of what needs to be

done needs to be done by ENC, the tax committees and so on, and

particularly the comments on H–1B and where we need to go on—

on real technology innovators, making sure we gather as many as

we can.

And with that, do you have some questions?

Mr. HOLLISTER. Thank you, sir.

Mr. ISSA. Go—go ahead and introduce yourself.

Mr. HOLLISTER. Hudson Hollister, counsel to the majority staff

where I’ve worked on data.

Chairman ISSA. XBRL.

Mr. HOLLISTER. XBRL is my job. I have a couple of followup

questions just for the record about data transparency.

Mr. Quinlan, you pointed out in your testimony that the SEC’s

XBRL mandate is for now the best example we have of imposing

data structure on a really complex and diverse set of financial data,

in this case, corporate financial statements in the U.S. GAAP.

53

What has the SEC’s XBRL mandate done for the quality of the

market’s analysis of corporate financial statements so far? And if

the mandate matures, what can we expect it will do for the quality

of the market’s analysis, financial statements in the future?

Mr. QUINLAN. Great. So we—we break the XBRL mandate into

essentially two macro segments, creation and consumption. On the

creation side, it is taking all of the information provided in Qs and

Ks today and turning that into an open standard or XBRL data.

That is the 1,250 clients that we have today. That’s what we’re

doing, we’re creating that information. The mandate has been out

now for about 18 months. You have about one-third of all publicly

traded companies providing information.

Just recently we were getting into the actual notes, rather than

just the front facing financial, so the data is extremely new.

The amount of data available is going to increase about five fold

from now to Q3 of this year. When that happens, as you get two

things, much more data, and then much mature data from the initial Fortune 500 companies, we expect the consumption side of the

business—now that the creation side of the business has had an

opportunity to mature, the consumption side, we believe, will take

off dramatically. There have been some of the largest data gathering companies in the world have been reaching out to Rivet recently, to understand how to take this metadata and start to incorporate it directly into their systems. So there is an increased inertia, and when I say increased inertia, maybe we got one phone call

a quarter three-quarters ago, now we’re getting many a week.

So this—I believe within the next 12 months the consumption

business will go through a dramatic revolution and how people consume this data. It is just at the forefront today.

Mr. HOLLISTER. There’s a bit of a philosophical difference about

how the government should collect financial information and how

the government should seek to prevent a future financial crisis.

What impact on the market’s ability to avoid a future financial

crisis do you think broad based collection of standardized financial

data might have if it were mandated?

Mr. QUINLAN. So there was a—a fairly well-read book out right

now called The Big Short, and in The Big Short there was a story

about a—and I apologize because I can’t remember his name, a

trader based here in Silicon Valley, actually, who did the ridiculous

thing of sitting down and reading the prospectuses of these CEOs,

and literally these things had been written—you know, this information had been created and these things have been written by

people, but nobody actually sat down and read it.

So what this individual did is he sat down and he read it and

he realized when he read it that there was really not a—that these

CEOs were junk. And the information, by the way, was available

to everybody. It was just this one individual that sat down and

read these pages upon pages upon pages of endless information, to

realize what was inside these.

What we believe is if you take what one exceptional human being

did and provide that information in a way where one doesn’t need

to be quite that exceptional or patient, to sit down and read these

endless prospectuses, that information will make—it will never

eliminate the ability of human beings to destroy a good system, but

54

it will certainly make it at least more visible, and, therefore, less

likely that the damage is as widespread.

So if you were able to go in and tag everything inside the CDO

with metadata to show exactly what types of mortgages—if you

could within a click of a button open up a CDO and see exactly the

credit scores of every individual inside that, when it’s parsed up in

many given forms and fashions, I think that the pricing of that

would be much more accurate to its future marketability rather

than hope.

So hope is not a good strategy, and I think that transparency

takes hope out of the equation.

Mr. HOLLISTER. Thanks.

And one other question for the whole panel. We’ve talked a little

bit about the impact for the quality of analysis on data structure

of financial statements, can we extrapolate that to what might happen if Congress were to mandate data structure for Federal spending?

Mr. QUINLAN. Absolutely.

To—and I want to, again, agree that data is—more data is not

just a solution, it’s data in a way that people can actually use it.

You know, if we think back to the 1980’s, I remember there was—

wasn’t it an $800 toilet seat or $800 wrench, there was some

big——

Chairman ISSA. I do believe it was a coffee pot.

Mr. QUINLAN. Was it a coffee pot? I apologize.

Chairman ISSA. There also was a wrench, yes, government accounting at work.

Mr. QUINLAN. Right. And so when you—when that information—

when that information starts to come out, it creates embarrassments, and embarrassments create people—I don’t think that—nobody was intentionally buying an $800 wrench. I think people just

weren’t paying attention to the invoices because they didn’t have

the information until after-the-fact. So I think that we can at the

Federal level create a standard that allows that information to be

accessible so that decisionmakers, before they make the decision,

understand what they’re deciding. I think by and large, the nature

of those in the Federal Government is to do the best that they can,

but here comes the important part, with the information that they

have.

And so I think we need to provide them the information prior to

making decisions. I was actually informed today of a process in the

Federal Government where there is a performance indicator that is

required by Congress 8 months before cabinets actually put together their budget, but the results aren’t released until 8 months

after the budget cycle for that previous year is complete. So, again,

it’s not that the performance metrics are a bad idea, but getting

the report card after you’ve already thrown your birthday party

based on what your grades were is not a good idea.

So——

Chairman ISSA. Thank you.

Mr. Quinn.

Mr. QUINN. Thank you, Chairman Issa, for this unique courtesy.

I really appreciate it.

55

My name is Brian Quinn. I’m counsel to the Democratic staff of

the Committee on Oversight and Government Reform. Unfortunately our Democratic members of the committee could not make

it today, but on behalf of those members I’d like to thank the witnesses for appearing. Thank you, Chairman Issa, for holding this

important field hearing.

We believe this is a very important issue and look forward to a

continuing dialog with the high-tech industry on how Federal policies and regulations can support job growth and global competitiveness.

We are also interested in seeing how the emerging technologies

can enhance the transparency and the accountability of the Federal

Government.

I have no questions at this time. But again, thank you for this

courtesy and for appearing today at this field hearing.

Chairman ISSA. Thank you.

And as we close, I—I will tell the story, since—Senator Boxer

was one of the people who was very big on the coffee pot, the

wrench, the mug and so on. The interesting thing is that it was

government accounting in some cases, because if you only want 10

coffee pots for 10 aircraft, and you want it designed to work on that

aircraft and you want it to meet FAA requirements, and you certainly don’t want it to explode in decompression, it could cost a few

nonrecurring costs. And when you burden the nonrecurring costs

into 10 devices, even if the device was free, you now have $8,000

worth of burden.

And it’s one of the challenges that—Mr. McKee, I really appreciated your response. We need to have a level of transparency so

that we can determine whether something is a reasonable value

based on the nature of the beast.

If every product that the government bought or didn’t buy, and

particularly when we look at a Cox product versus the development

of our own products, if we really looked at what the true cost was,

we would obviously get to a very different analysis, time and time

again.

So I want to thank all of you for helping not only talk to us about

where impediments of job creation lie, but also some of the necessary reforms in the government that will prevent the next global

meltdown by simply having those imperfections—unreported imperfections in the market, be well reported and well understood,

well before somebody who assures the market is proven right.

So with that, I want to thank you for your participation. The

record will remain open so that if you have thoughts and you want

to revise or extend in some of the items that you said you’d provide

for the record, would be made available.

And in this case we’ll make it 2 weeks, since we’re on district

work period and that will work very well with the end of these—

these hearings.

Thank you, we stand adjourned.

Thank you.

[Whereupon, at 10:34 a.m., the committee was adjourned.]

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