00:00welcome to the a 16z podcast I'm Michael
00:03Copeland regulation always lags
00:05technology but by 80 plus years in this
00:09episode of the pod sonal and I sit down
00:11with US representatives fred Upton and
00:13Greg Walden to discuss the
00:15Telecommunications Act originally passed
00:17in 1934 and revised in 1996 and we also
00:22talked about what government can do to
00:24help or hurt innovation both men sit on
00:27the Energy and Commerce Committee Upton
00:30is the overall chairman and Walden
00:31chairs the Subcommittee on
00:33communications and technology in this
00:36segment of the pod we also dig into
00:38healthcare and the 21st century cures
00:40Act which the house recently passed in a
00:43rare bipartisan vote what are the
00:45implications of the act for patients
00:48health care professionals and
00:49researchers looking for the next
00:50breakthrough in medicine chairman Upton
00:53welcome to the a 16z podcast maybe we
00:56can start by you guys giving us a quick
00:58summary of what you oversee in the
01:00energy and commerce committee first of
01:02all you got to call us Fred and Greg
01:04Greg yeah remember the Congress we're at
01:07we serve on the Energy and Commerce
01:08Committee we're from Gregg's from Oregon
01:10I'm from Michigan but the Energy and
01:12Commerce Committee of which I'm the
01:14chairman of the overall committee really
01:16has jurisdiction over lots of things
01:17we'd like to say two words the world
01:20includes telecommunications commerce
01:22manufacturing trade health care
01:26environment and energy so it's it's
01:30pretty much the world yeah it's all the
01:32areas are started with innovating for
01:33sure so we definitely care about that
01:35and I know our audience really cares
01:36about that as well well one of the
01:38things I think that's most interesting
01:39is that you have been in government for
01:43a long time and it's actually kind of
01:45funny because if you think about the
01:47fact that the Telecommunications Act was
01:48passed in 1996 and it only mentions the
01:51word Internet six times is that true by
01:52the way does it only mention the
01:53internet but you have to realize it
01:56actually was passed in 1934 oh and
01:58amended in 1996 and why ange much there
02:02after my dad got his ham radio license
02:05in 1934 and so I mean there's a lot
02:09that's changed and what we tried to do
02:12is figure out how to
02:13get legacy regulations out of the way of
02:16innovation so tell us a little bit more
02:18about how that's evolved for you we have
02:20mobile phones now like computers we
02:22carry round in our pockets every day and
02:23remember the spectrum is owned by the by
02:27the taxpayer and it used to be that that
02:30analog spectrum was taking up almost
02:32entirely with with the broadcaster's and
02:34in fact we had the foresight then to
02:36change things to digital right you love
02:38that conversion and it was actually the
02:40Upton bill way back then and the
02:43broadcaster's I got to say they were
02:44tooth and nail fighting it for many
02:46years they never thought it was gonna
02:47happen we had you know it's bipartisan
02:49at the end of the day for sure but that
02:52then allowed the digital broadcasting of
02:54which is today was so as you know much
02:55better picture and all the different
02:57things that we want but it also then
03:00freed up that space so that we can have
03:02the iPhones and then we came back just a
03:05few years ago and expanded on that by
03:08putting in place the first reverse and
03:11forward auction of spectrum the world's
03:13ever seen not hasn't happened yet it's
03:15going to happen next year probably in
03:16the first quarter of 2016 but it's
03:18designed to even squeeze more efficiency
03:21out of the really valuable beachfront
03:23spectrum we call it the kind that we use
03:26for our devices and it could generate
03:29literally thirty five to seventy billion
03:32dollars for tax payers we already had a
03:34little shot at this with some government
03:36spectrum we were able to get cleared in
03:38what's called a ws3 and that spectrum
03:41the green eyeshade folks in washington
03:43said would never sell government never
03:45clear and there's no revenue potential
03:47it sold this year for forty one point
03:50nine billion dollars it will fully pay
03:53for an interoperable broadband public
03:55safety network now that came out of the
03:589/11 Commission because yeah as we
04:01remember that that our first responders
04:04were not able to communicate with each
04:05other and that was the number one
04:07recommendation by the 9/11 Commission
04:09back then on what we ought to do and we
04:12that spectrums been cleared we made
04:13money and it pays for these things too
04:16through the result yeah so there's a way
04:17for a win for taxpayers a way for
04:19innovation a way to deal with the
04:21country's problems as we go forward
04:23great but what's challenging now is that
04:24in both of those cases you're able to be
04:26a little bit more proactive because you
04:27could see what was coming I mean
04:28obviously from analog digital was coming
04:30and you were able to stay get ahead of
04:32that and really help free things up but
04:34we're in a space right now where
04:35technology innovation is happening
04:37really fast and where the laws don't
04:39necessarily keep up and so how do you
04:42sort of navigate that and what are some
04:43of your thoughts for how that might
04:45affect the policy space I think the
04:49first thing is we come out to places
04:51like Silicon Valley and try and get a
04:53head start on what's coming see into the
04:55future by talking to the innovators the
04:57entrepreneurs and see what they're
04:58running into and what we can then go
05:01change does it change your approach when
05:03you talked about the last 10 14 years
05:05and and how you guys anticipated digital
05:08and and made way for innovation do you
05:11have to do that in a different way now
05:13given how innovation is happening and
05:15given how people you know your
05:16constituents everyone out there are
05:18using technology in different ways well
05:21one of the are sort of basic themes is
05:23let's get the regulator's out of the way
05:25because what happened this has all
05:27happened really from the private sector
05:28I mean you talked to the the big
05:31companies the xviii ease the Verizon's
05:33you took to you know obviously the
05:34googles and you know I mean look at the
05:37tens of thousands of jobs that have been
05:40created the technological skills the
05:42manufacturing jobs that have all
05:45happened without you know without the
05:47burden of regulation and their messages
05:50sort of like that old don't dates me a
05:52little bit here but the old frame oil
05:55filter a commercial pay me now or pay me
05:56later to get the regulator's out of the
05:58way get out of the way let us do our job
05:59and that's what our approaches tried to
06:02be we think about air B&B if they had to
06:06live by all the the laws of like they
06:08were a hotel I mean that doesn't make
06:11any sense or or lyft or uber having a
06:14you know be under the regulatory
06:15confines of the old taxi laws we would
06:19never have this competition innovation
06:21coming to consumers and that's what it's
06:23really all about and so there are lots
06:25of these issues I it's why I worry a
06:27little bit about where the FCC is going
06:29trying now to regulate the Internet as
06:31if it were the old telephone company and
06:33and it's so bad old being the old hard
06:36back in the 30s which is where they're
06:39taking and we can prevent the abuse we
06:41have we have draft legislation prevent
06:43any abuse of the you know the the
06:46companies but that's not what they're
06:48doing and they can go clear to an old
06:49section of communications law called 222
06:52where they have to treat your IP address
06:55as if it were a phone number now you're
06:57gonna get all the constraints of the old
07:00phone monopoly regulatory environment of
07:02Washington on top of the Internet really
07:05I don't think that's gonna help on
07:07innovation so we're trying to stop bad
07:09regulation try and move forward create
07:11more spectrum availability unlicensed
07:14licensed you know expand out you think
07:17what's happen with Wi-Fi you think about
07:18what's happening the unlicensed space
07:20we've made room for all of that to
07:22flourish what do you think about some of
07:24Google's moves in fiber and what they're
07:26doing what sort of doing some kind of
07:27regulatory arbitrage across different
07:29cities and figuring out which cities to
07:31go to first like what are some of your
07:32thoughts on what's happening there well
07:35they've identified a real need and
07:38Google's got a you know terrific name
07:40they got great workforce and they're
07:43taking me you look at you know all the
07:45different tool new innovative things
07:47that they've you know that that's on
07:49their discovery block they're moving
07:51forward and they're doing it without you
07:53know without regulation that's what
07:55America is all about I think it's great
07:56news competition is good now I represent
07:59a very rural district in Oregon so you
08:01do have some issues that come up about
08:03who's going to serve a very remote rural
08:05area in America where there isn't
08:08necessarily a business model so you do
08:10have to you know the there's part of
08:13this we've had a universal service fund
08:14there's a reason we got power and phone
08:16out into remote parts of our country
08:18because we as a country said everybody
08:20needs to be connected so we want
08:22competition as much as possible we also
08:24can't forget and leave behind some of
08:27these segments of our population who can
08:31easily be cut off from the digital age
08:33if we don't also plan how do we make
08:35sure that they don't get lost in this
08:37right so sort of finding a balance
08:38between those two things I think that's
08:40that seems exactly right and I think it
08:42was you Greg who said regulators get
08:44paid to regulate they like to regulate
08:45what what do entrepreneurs here in the
08:48valley and that's who you're sort of
08:49speaking to on this pocket
08:50what do they need to be mindful of as
08:53they're out there with their ideas and
08:55building their companies you know I
08:57think everyone smile you got to pop your
08:58head up out of your company and I was in
09:00small business for twenty-one years the
09:02radio business and so you know you're
09:03working every day you're trying to keep
09:05the microphones wired and the
09:06transmitter running and sell advertising
09:08you know it's why you got to pop up and
09:09go is there somebody trying to shut me
09:11down and indeed when you look at some of
09:14the requirements the Affordable Care Act
09:15as they relate to medical devices and
09:18what is a medical device and what isn't
09:19we actually did a hearing on my
09:20subcommittee to force the FDA the
09:23regulator in this case to tell us is an
09:25iPad a medical device because it was
09:28uncertain is a computer or medical
09:30device or it was unser because if it is
09:32then it gets taxed and I fear that we
09:34are having regulation come in on top of
09:37innovation and it will you as as Marc
09:40Andreessen said you know the dog that
09:42never barks there will be things that
09:44never happened because innovators will
09:46pop their head up and go I'm not going
09:48down that path I'll go somewhere else we
09:50can't afford a dog in the fight exactly
09:53we can't afford to lose that innovation
09:56that incredible intellectual capacity
09:59can apply to approve human life because
10:00we've got some silly regulation out
10:02there now we want safety and deterrent
10:03nobody's talking about that
10:04and so I think it really is important
10:07for policy makers like fred Upton and
10:10Greg Walden to hear from innovators who
10:12say hey by the way I could do this but
10:14I'm afraid of that and then it's up to
10:17us to go is that a reality that needs to
10:19exist any longer or was that important
10:21in 1934 and not in 2015 that's a great
10:25point so keep your heads down build your
10:27build your business build your company
10:28pop up every once in a while look around
10:30like a periscope and say uh-oh incoming
10:32well I think it's also important to have
10:35everyone think differently about what
10:38those medical devices are like that
10:39question you say is super interesting
10:40like what constitutes a medical device
10:42and we have obvious examples I mean
10:44actually they're not that obvious iPad
10:45etc but when you think about software
10:48eating the world I mean one of the
10:49things that you'd think about is that
10:51some of those hardware devices are
10:53actually much more about the software
10:54and a perfect example is jawbone and the
10:57Fitbit that you're wearing on your wrist
10:58I mean that sort of a case where how do
11:02you regulate software is that even a
11:04but I think part of it is if that device
11:06is regulating the beat of my heart yeah
11:09I want a little more regulation there
11:11but if it's it's if it's Fred Upton's
11:14Fitbit or jawbone or whatever that's not
11:20controlling the flow of his insulin or
11:22regulating the beat of his heart and so
11:25I think I think we can come to a pretty
11:26clear line I think that's an interesting
11:28point but what I think we do have to
11:29also think about the fact that a lot of
11:31the times the innovations come from
11:32unexpected corners it may not have set
11:34out to say I'm gonna solve you know
11:37heart disease but if you have a digital
11:38therapeutic that is doing something in a
11:41non-toxic way to help change behavior or
11:44prevent disease and it's being regulated
11:46the way you regulate a pacemaker there
11:50is something to think about there when
11:51we say software's eating the world it's
11:53completely changing how we think about
11:54the regulations as well although it
11:56sounds like from what you're saying that
11:57the policies and the principles still
12:00apply markets also change it markets
12:03market forces and by the way there are
12:05always underlying laws about fraud or
12:08underlying law you know so if you have a
12:11device you fry gently marketed that law
12:13is still there applies exactly privacy
12:15same kind of exactly they don't work the
12:18consumers not gonna buy it
12:20one could argue the biggest law of all
12:22because as you say if the market is
12:24what's driving that and if people are
12:26upset like people are getting people
12:28more attention to that and think about
12:29the speed of light that's the speed of
12:32evaluation now in today's internet
12:35community because people go I just got a
12:38bad meal I'm never going back over there
12:41this device is a ripoff or this is
12:45although most word-of-mouth advertising
12:47is negative you know how you got ripped
12:49off or something so I think I think
12:51there's the ultimate consumer pushback
12:53with the Internet community
12:55that that helps govern bad behavior
13:00do you say that you took an uber lift
13:02from the airport last night and I think
13:03that makes me you know a smile because
13:05if you had a bad ride would you have it
13:07haven't even you ever called an 800
13:09number to report a bad ride or none of
13:11us have but it you can do an instant
13:13operating it's sort of like okay well we
13:15can kind of move on from there the
13:17world's changed for the good speaking on
13:19that note of the world changing for good
13:21let's actually talk really quickly about
13:24where you were able to pass the 21st
13:28century cures Act which is a really
13:31important move for biomedical innovation
13:33and I don't we don't wanna talk about
13:35the politics and nor do we even have the
13:37time to talk about it but the fact that
13:38it was something that you guys did in a
13:40very bipartisan way and we're able to
13:43pull this off is pretty incredible but
13:45what we really want to know about is why
13:46does it matter I mean cuz you actually
13:48put as part of that you earmarked an
13:51Innovation Fund well this was a huge
13:54bill as you said it passed in mid-july
13:56now by a very strong bipartisan vote
14:00we're waiting for action in the Senate
14:01we're hoping that that happens soon but
14:03you know every family is impacted by
14:05disease I look at my wife she's got
14:06lupus my mom's a cancer survivor my
14:09dad's got diabetes my uncle lived across
14:11the street Parkinson passed away I'm no
14:14different than anybody else we all have
14:16these diseases that just ravage every
14:18single family so this is a way this is a
14:22bipartisan bill where we really listened
14:24to all the different health stakeholders
14:25out there from the pharmaceutical
14:28industry to the disease patient groups
14:30to the health researchers our
14:32universities the administration very
14:34important the Food and Drug
14:35Administration the NIH what can they
14:38tell us to what we can write
14:41legislatively to expedite the approval
14:43of drugs and devices worked with a
14:45venture capitalist to make sure you know
14:46last five or six years by a 50% margin
14:49they've invested overseas instead of
14:52here and of course when that happens the
14:54approvals are there faster overseas
14:56they've been and of course then those
14:58products when they're approved overseas
15:00that's where they get manufactured as
15:02well so this is really a win-win we're
15:04gonna work that sorry I just interrupt
15:07you for a second so you're actually
15:08saying there's a u.s. competition angle
15:10here yeah absolutely
15:11there is but we also included an
15:14additional almost two billion dollars a
15:17year for the NIH which is you know
15:19there's not a new drug out there they
15:21didn't have NIH research so work with
15:23our universities or Stanford's our mi
15:25t--'s and others to streamline the the
15:28trials to work with folks at the end of
15:32the day we're gonna get those approvals
15:33faster that means you're gonna they'll
15:34be cheaper to the patients but to use
15:37the Internet to use the the the tools
15:40that we have so that we can identify
15:42with the genome model and everything
15:44else we can target what specific breast
15:47cancer you might have or Ayla I mean as
15:50cystic fibrosis I mean all those
15:52different things we are gonna find the
15:54cure much faster than ever before and it
15:56was be a great win for all of us Fred
15:59you mentioned there's some urgency to
16:00get it passed why is that the money for
16:02the NIH begins fiscal year 16 so every
16:06day that the Senate doesn't act and we
16:08don't get a bill to the president means
16:10that the money that the NIH can count on
16:12to prove those research grants gets
16:15slowed down more and just to back up I
16:17mean it's the 21st century it cures bill
16:20you guys are anticipating the future of
16:22health care and and what are some of the
16:24characteristics really that are built
16:25into this well we streamlined the
16:28approval process we allow universities
16:30to talk to each other we look at the
16:33involve the patient groups so patients
16:35are you know I and someone where the
16:39disease cancer they want you know they
16:41may not want their personal information
16:42no you know it's Greta Jones but they
16:44might say I want to be used here's my
16:46genome model you know what works for me
16:49hopefully is gonna work for somebody
16:50else and use that you know use your
16:52cells to combat some of these diseases I
16:56mean it's it's the promise is terrific
16:58congressman fred Upton and Congressman
17:01Greg weld and thank you guys so much for
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