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Date:` ` May 20, 1999 0*oo     X` hp x (#%'0*,.8135@8:0*H&H&@@ that. But it's important that it continue to develop the tools to do that so it can see when deregulation is the right course. ` `  MS. BROWN: Jonathan? ` `  MR. SALLET: Yeah. I also want to I understood your question not to be asking us our view of statutory interpretation. ` `  MS. BROWN: Yeah, I didn't mean to do that. ` `  MR. SALLET: So I'm not going to refer to the statute, nor am I going to suggest I'm confined by whatever a statute might mean in answering your question. ` `  It seems to me in looking at whether there are competitive markets, there are a number of facts to look at. What percentage of a market is addressable by more than one competitor? Not which is won, because it shouldn't be a question of whether somebody actually gets a customer, but to turn it the other way. Do a large percentage of the customers in a marketplace have a choice? That's one indicia of competition. ` `  Another indicia, which seems to me important is our people in the marketplace engaged in the kind of profitpursuing behavior that one would expect in a competitive market? Let me give you an example. People who own facilities for all the talk about convergence, people who own facilities have two obvious means of making money off%?0*H&H&@@ those facilities: retailing and wholesaling. Now, it doesn't mean that everybody will pursue an openplatform model. In the computer industry, we saw quite a divergence in strategies between one computer company who decided to maintain a closed system, as it were, and another that pursued at the time a more open model. ` `  But it does seem to me that if one sees across an industry, not just in terms of a single company, a desire to not take the profits that are available from wholesaling one's facility, then that indicates that other competitors in the sector don't have much access to essential facilities necessary to reach goals. It's only one indicia, but it seems to me it's a particularly important one. ` `  We have seen, for example, in the long distance industry companies simultaneously acting as retailer and wholesaler. This is an issue that seems to me that ought to be looked at just as one of the factors in any market to see whether or not markets are competitive. ` `  As to your question about what kind of rules should survive? I think the word you used the adjective was the core rules that ought to exist even when a market is competitive. I would suggest that one all one can do is to note three broad categories is because they ought to change. But they, all three, I assert, will exist. ` `  There should always be a set of rules ready to%@0*H&H&@@ address or addressing, continuing vestiges of market power, either to guard against its formation, say, through merger review, or to look at manners in which while a market is still is competitive in many parts, nonetheless, still reliant on certain facilities for the delivery of services for their market power rules. ` `  Secondly, in any market, consumer protection rules, particularly those that go to information are appropriate. And third, the purchase of social goods is just one rubric for the term universal service and whatever policymakers wish to decide is appropriate for universal service. The purchase of social goods will, by definition, not be efficiently performed by even a competitive marketplace. ` `  So, it seems to me these are the three broad categories that one should pursue, although I note that you could probably go into some disagreement around the table about what particular rules should be enforced in each category. ` `  MS. BROWN: Jerry, I'm going to go to you for the broadcast side on this. ` `  MR. FRITZ: Let me answer it by talking about the implications on the Commission in both its structure and its activities, because I think that's what this is all about. Why are you changing this agency you want to react to the%A0*H&H&@@ changed circumstances? ` `  It's going to differ, as you say, from industry to industry. It is set by statute in certain cases. For example, in broadcasting, you have to review the ownership rules every two years. ` `  What is it you're looking at? Basically, it's four essential criteria across all industries. Number one, the number of players. Number two, the number of choices. Number three, the market power, whether it's the LEC's, the broadcast networks, or as Preston Padden said, the gatekeepers, the resulting gatekeepers. And number four, access to offerings, whether it's how many people have digital television sets, what the Internet penetration is, but access to the offerings of communications. ` `  You have to look at those four criteria in relation to the numbers when the rules were adopted. And that's the job of the policy divisions of the bureaus, however they are reconfigured, and I have some thoughts on how you can reconfigure those. But it gets it analyzed. ` `  Once it's analyzed, you have to do something with it if it's changed. And that I think is the frustration of many people in all the industries that you have the information but you're not doing anything with it. ` `  The implications on your structure and activities are critical because it fundamentally results in a sliding%B0*H&H&@@ scale of waivers. You can come up with a general waiver. You can own one or two broadcast stations in a market. There is going to be a necessity for a waiver because things change over time. ` `  I know Roy Stewart doesn't like waivers, but essentially, that's what you're going to end up unless you adopt wholesale duopoly, for example, you're going to have a set of waiver criteria. That's harder for you because it requires more manpower. It requires on a case by case analysis, unless their presumptive waivers are automatic waivers or things like that. ` `  But to analyze competition, because it's not one day it's a monopoly, the next day it's competition. It's a sliding scale. So, you're going to have to adopt a regime of granting waivers, information that's analyzed by the policy division, and then a criteria of waivers so that you can move along toward a deregulatory environment. ` `  MS. BROWN: Thank you, Jerry. Michael, do you want to add? ` `  MR. ROBERTS: I have to jump between my wireless hat and my broadcast hat. My broadcast hat is on at the moment. ` `  When I first went on the air with my very first television station in 1989, we had permission as a result of the FCC to be carried by all cable companies. Shortly%C0*H&H&@@ thereafter, the courts took it away. And what we noticed around the country, a number of independent stations like mine, small stations, were, in fact, taken off of the local cable operators. And it wasn't until the mustcarry provisions came back that we were able to get past the gatekeepers again and come back on. ` `  Actually I have to qualify that. My station was not taken off due to some relationships we had with the local people. But many were. And we lobbied hard to protect the mustcarry provisions during that year with Mr. Donovan and also NAB, and of course, Jim Winston, to make that happen. ` `  Now, let's look down the road a moment. We have DVD coming or DTV coming along. And our spectrum may be more than one signal. We may have several opportunities there. And the question becomes now as we plan in the future if we have six signals, if you will, or two, more than one, will we have mustcarry protection? How should we plan our companies today as they come on the air through a digital system five years from now? ` `  Should we be aggressive and 5assume that we're going to be carried over cable, or should we not? ` `  MS. BROWN: What kind of things do you need from a regulatory agency or not need from a regulatory agency to start to make those business kind of decisions?%D0*H&H&@@Ԍ` `  MR. ROBERTS: We need clarification that all of our DTV signals will be carried through a mustcarry provision. ` `  MS. BROWN: So you want a rule? ` `  MR. ROBERTS: Yes. ` `  MS. BROWN: Okay. ` `  MR. ROBERTS: Thank you. ` `  MS. BROWN: Tom? ` `  MR. TAUKE: Well, I if we can change hats, I'm trying to think of this not as a Bell Atlantic guy, but I'm thinking of it in terms of the way I tried to think about it when we focused, and when I was in public life looked at railroads and trucking and natural gas pipelines and a variety of other industries. And what kind of common rules can you look toward? ` `  I think the first question you asked I'm going to address three areas. The first was, how do you know when markets are open? And I think it's tough to say that there is a clear standard in knowing when markets are open, but the first and most important test is, can somebody else do business in the market? Can somebody else get in? hhChhCAnd I think that when you are looking at market entry, you have to be able to say that somebody else can get in. ` `  Now the question that then faces the regulatory agency is, did you try to establish the path by which%E0*H&H&@@ somebody gets in, or do you simply try to ensure that individuals have the or entities have the ability to enter that market? And that gives you a direction as to what kind of regulation you are going to impose, whether you are more trying to resolve disputes, or whether you are going to try to have proactive, if you will, definitional regulation of this is the way it has to occur? But I think market entry is the big key to knowing when markets are open. ` `  The second thing that I think you need to look at when you are looking at regulation is, are customers empowered? And when I say customer empowerment, I'm not talking about, do they have enough information to make the right choice, although that is important. What I'm talking about, are customers empowered to make choices? Or, put another way, is somebody using their position in the market to deny customers choice? ` `  So, putting it in our industry for a moment, am I as a the guy has the wire to the home, am I prohibiting customers from choosing different long distance carriers? Am I, as the person who has the pipeline prohibiting people from getting their gasoline for their filling station from various sellers of gasoline? Am I trying to control what goes in and what comes out at either end? ` `  And I'd suggest in our industry, and there are%F0*H&H&@@ different rules for different industries, but in our industry, ensuring that we have standard interfaces so any CPE can plug in, and ensuring that anybody can put their content in on the other end in simplistic terms is essential to ensuring that I'm not leveraging control of one segment of the market in order to eliminate customer choice in another segment. So I think those two things are essential for open markets. ` `  The third point I wanted to make is relating to regulation. And that is, there are different kinds of regulations. We talk about deregulation, open markets, deregulation. But I think that is far too simplistic. I know of no industry, frankly, that is deregulated completely in the country. There is always some form of regulation. ` `  But, first, it seems to me, you have to have a bias against economic regulation. And that is, that you shouldn't be trying to control prices. You certainly shouldn't be getting into the internal mechanisms anymore of companies about how you establish your accounting systems. Get rid of a lot of that stuff, the internal stuff. And you should, instead, be looking at outcomes, the outcomes. So get rid of the economic regulation. ` `  And I think that if you focus instead on ensuring that the regulation is designed to make certain that markets are open in the two ways I described, that then you will%G0*H&H&@@ have the right kind of regulation, and then there'll probably be some consumer protection things besides, which we'll get into. ` `  MS. BROWN: Thank you, Tom. John? ` `  MR. ROSE: The gentleman two down from me mentioned four criteria: number of players, number of choices, market power and access to offerings. I would like to add a fifth choice to that. And that would be the size of the player in the market or the size of the company. ` `  And the reason for that, if a small company has the same level and same cost of regulation as the large player does, then that translates in increasing costs to the consumer. And I'd like to add to that the size of the player should have some sort of streamline regulation or less regulation. ` `  MS. BROWN: Zeke? ` `  MR. ROBERTSON: Thank you, Kathy. My assumption is that virtually everyone around this table here is searching for a way to how to move from where we are to something closer to a competitive market in virtually every area allowing everyone the same opportunity or as close to the same opportunity as possible. And that's what I want to talk about as an idea. ` `  You asked the question of how do you deregulate? I would suggest to you in all cases, you don't have to%H0*H&H&@@ deregulate to have a competitive market. If everyone plays by the rules, notwithstanding the gentleman here from OPASTCO, I'm not suggesting that a large company and a small company all across the world may be in exactly the same position, but certainly in a given market area where similarly situated companies of equal size and capability are offering a similar service, that's where I think you at the FCC have an opportunity to not have one set of rules for one particular company, and another set of rules for another particular provider. ` `  I know you're restrained by Title II and Title VI of the Communications Act. And all I'm suggesting is that as a goal, as an objective in this process in your retooling, you try to use a series of thinking to get in areas, in situations, by service, by geographic area as close to parity. When no regulation is necessary for either one of them, then let all of it go, but you don't have to go all the way to deregulation. But make the rules the same such that the consumer has an opportunity to have more than one capable provider by service, by geographic territory or whatever. ` `  The tools, I believe, you already have, Kathy. It includes 706, Section 706 of the Act. I think you have the ability to use Section 10, forbearance. I think you have the ability of your binding of review, which is technically%I0*H&H&@@ a part of Section 10. ` `  So my suggestion to you is, and we have talked about this, you and I before. One of the things that you can do that doesn't necessarily require any legislative control or whatever, I'm saying if we concentrate on finding the areas where the rules can be leveled, let the market work. That's the best way to get "a competitive market". Then, deregulation will be easier. ` `  MS. BROWN: Mike? ` `  MR. CALI: I thought I'd make two points. The first brings us back to the issue of certainty. The Commission has a long history in dealing with assessing market power. The indicia for doing so include market share movements of market share over time. They also include alternatives and a wide variety of issues. The Commission has addressed this in the past, and they know how to address it going forward. ` `  The important thing for the marketplace is to ensure all participants know what the rules are. No one carrier is going to receive flexibility. Is it going to be based on a set of rules even absent competitive entry or absent market share shifts? Or is it going to be after there's some demonstration that market share has eroded? ` `  Secondly, this concept of parity in a converting environment, and there may be restrictions on what you can%J0*H&H&@@ do and what you can't do. I think again you go back to the fundamental point is less, to whether cable companies and wireless companies and wireline companies are being regulated the same and by the same bureau, as to whether each is being regulated least consistent with its market position and market power in the public interest. And that can be done. ` `  The Commission can move forward in that way, but again, it needs that standard or rule by which it will assess. Does this company have market power? Do I still need to regulate? If I do, what are the right regulations? Is there actual demonstrated need for regulation? ` `  MS. BROWN: Let me try I know. Let me try to ask yet another question to see if we can broaden this, and let's go to this notion of rules. And we talked a little bit about I used the word core rules. But, what are the rules that have to remain? And Tom's point that almost every industry has rules of the road. And so, what does that look like? ` `  But then let's juxtapose that with this enforcement notion and talk a little bit about, well, do you make policy an enforcement, or are you enforcing rules that are clear and understood and best made in a rulemaking, and thus, you're enforcing them? Or is there something else that happens in your enforcement process? %K0*H&H&@@Ԍ` `  And then I'd like a little discussion on this notion of, should it be adjudicatory? Should we look at this ALJ process again, and/or should we think of what and you have to remember, I'm from New York. Don't cringe. But a collaborative a more collaborative kind of approach, where the industry really sits down and tries to work out some things in perhaps a less informal manner to try and get to resolution. ` `  And we've seen this here on any number of standards issues, broadcast issues, and you know, even some pricing issues that we tried to do a little bit here/ and I'm going to hold this for a minute because all those issues go to the speed question, which I think we want to raise in the second part of our discussion, and what you do about notice and opportunity and input. But hold those notions and just talk a little bit more theoretically about this enforcement rule thing. ` `  Anybody? ` `  MR. WEINGARDT: Well, obviously, you have to support an ongoing enforcement role. And I'll just pick examples. I'm not going to I'm not here to promote one of them, but just as an example. I mean, Congress said in '96 that getting access to the networks is going to be a lot easier than it should have been. And that's called interconnection. It's no longer you have a right to%L0*H&H&@@ interconnect, not if FCC says so and the states say so, and you go through that process. They reversed the paradigm. ` `  And yet, a paging company in Tuscaloosa, Alabama and a PCS in WallaWalla, Washington, and you name it, ask for interconnection from a BOC or whoever the ILEC is in that community. And the answer is "No" or, "We'll get back to you," or "We have a backlog and we can't respond to you." ` `  The theoretical concept of whether you sit down, work it out first, go to the states or whatever is, I think, irrelevant, because we're just no policemen. There's just I mean, I know Michele faces that in her particular area, and I'm not picking on you, Michele, but what do you do? You know, we think clear rule, violation. They said, "No to interconnection," or they said, "See us next year," or, "You have to follow this 38page document." ` `  There's nowhere to turn for a relatively quick response, whether it's an ALJ or a Commission employee empowered as an ALJ, a factfinding person who will not be overturned unless there is clear evidence of corruption or incompetence, I think is irrelevant to that person in Tuscaloosa, Alabama. ` `  MS. BROWN: Well, let me throw this into the mix. What if contracts I've said this before and gotten in trouble once or twice. What if contracts looked much more like supply contracts that had liquidated damages and self%M0*H&H&@@ԫenforcing provisions, and that the role of government perhaps is not to set those, but to make sure they are set before they're approved, for instance? Just a thought. ` `  Who was up? The end of the table. Sorry. ` `  MR. KOUTSKY: I just have a you posed earlier the difference between a collaborative or a litigationtype process. I actually think they really serve two different purposes. The collaborative and we've been involved in both of them one way or another. 11Collaboratives are really good means of it's a different approach to rulemaking, in essence, to take what would be a rule and to really clarify what particularly needs to be done. That's why we see in this whole plethora of collaboratives on OSS. ` `  You know, the Commission originally ordered electronic bonding on December 31, 1996, I think was the deadline, and we're still kind of in this whole process. So I think the collaboratives really make a lot more sense as an adjunct to the rulemaking process. ` `  In terms of resolving disputes, I don't think they ever will work to resolve disputes, in principal part because not everyone can go to collaboratives all the time. And the point about what does the paging company in Tuscaloosa do? I doubt if they're going to be at even the state capital to participate in the collaborative about the interconnection negotiation process and how can we fix it. %N0*H&H&@@ And I don't think that's going to help, either. ` `  This is where I touched on the more adjudicatory role, whereas, that's really more of a factfinding, truthseeking type mission. How do we find out those facts? That, you know, in our grand AngloAmerican tradition is discovery, subpoenas, motions to compel, testimony, even sometimes. ` `  MS. BROWN: Well, let me ask you this. In a commercial environment, would you want a quicker means of dispute resolution? ` `  MR. KOUTSKY: Well, that actually can be quick, too. One of the things that the Commission or that the statute did in the common carrier context was to talk about interconnection arbitrations and having states deal with that process. And most states probably when they saw the Act, probably figured, "How am I going to do this in nine months?" Right? ` `  And most states have actually stepped up to the plate and not all. And some have done different types of processes. But I think that you can actually manage and this doesn't have to be before a judge. It can be before a AAA arbitration panel, too. It doesn't have to necessarily be before in a grand scheme. And I think the very basic doctrines that we were all taught in law school probably, more than half of us are lawyers here about how you find%O0*H&H&@@ evidence and how you prove a point and getting access. ` `  You know, what is exactly somebody's procedure for installing an unbundled loop? There's a written document that's somewhere. That doesn't necessarily come out in collaborative process, and you can't actually require that I'll defer to Melissa on this. But how are you going to get to the bottom of what I call the truthseeking function? ` `  MS. BROWN: Brian? ` `  MR. FONTES: Brian Fontes I certainly think the core responsibilities includes spectrum management, allocation, licensing and maintaining the integrity of the spectrum that's been licensed. In other words, preventing interference. ` `  In terms of how to deal with enforcement, in looking at the ALJ approach, for those of us who are old enough to remember, the old ALJ processes here, you know, this can be a multiyear activity. And frequently was a multiyear activity, to be quite truthful about it. So that's clearly a process that if you want to use it as an option, go ahead and use it, and I wish you luck in a competitive environment. So there's got to be other ways to resolve conflict or disputes. ` `  I think the enforcement activities, you know, if I visualize what's the role of the enforcement bureau I%P0*H&H&@@ don't see it getting mired down in interference problems or complaints with coordinating among local government agencies for antenna siting or anything else to that nature. I think that'll probably still remain or should remain the function of the bureau. ` `  I think the enforcement activities in the enforcement bureau should look at the broader issue in terms of the ability of competition to work, market failure, addressing those broader context issues that will determine the success or failure of a competitive market. So I think that there's a very real difference in the types of activities the enforcement bureau would be engaged in. And I also would hope, too, that certainly the opportunity to come in and to work together with all parties involved in any type of enforcement action short of an ALJ procedure, would be a real viable option. ` `  MS. BROWN: Alan? ` `  MR. CIAMPORCERO: I just wanted to say that I think the purpose of the Commission in enforcement ought to be the goal out to be, what can we do, or should we do that's different from what courts do? That the value in the Commission is that they don't have to do what courts do. We don't need more rules. The enforcement bureau ought to bring a suit like the Justice Department if it's got an you know, a problem that won't go away, a bad actor that%Q0*H&H&@@ won't go away. But, that's not what the Commission should do. No more rules. Don't make this thing any more like a court. Go the other way. Let the courts handle that. ` `  MS. BROWN: Andrew? ` `  MR. PAUL: I just wanted to add something to what Brian said because I think he's getting to a very important point, which is a question of how do you enforce a policy as a policy rather than making it more specific than an adjudicatory function? And I can't answer that question here or right now. ` `  But, I think we've got to go back again and say to ourselves now, this addresses the speed issue. If the consumer is the person who's going to benefit from all of this at the end we're all sitting here saying, "What is my company or what is my industry going to get out of this?" But if it's really in the end the consumer who's going to benefit from this, I think that speed or some kind of a facilitating mechanism that will enable the consumer to be the beneficiary is going to be the right way to do it. ` `  And also, secondarily, from a business perspective, if there is going to be a change made or there's going to be some kind of policy enforcement that's going to involve one company or an industry to do something different, that company has a right to know sooner rather than later how and when it's going to have to redesign a%R0*H&H&@@ particular business practice. ` `  MS. BROWN: Preston? ` `  MR. PADDEN: I would just echo you're going to be really challenged by the need to make decisions in an expeditious fashion. And I would stay as far away from ALJs and adjudications and lawyers as you possibly can. I mean, I was in the Commission room when the Commission voted to move from comparative hearings to lotteries for the major market cellular applications. And you could hear this groan go up from the communications bar in the room, but there is no question this Commission got service out to the American people infinitely faster because of that decision. And I would urge you to stay away from all that stuff. ` `  MS. BROWN: Michele? ` `  MS. FARQUHAR: I completely agree with Preston's point, and also, I want to argue and kind of building on what Andrew was saying that the FCC should not shy away from getting involved in an informal way before anybody even has to file a formal complaint or an informal complaint or a rocket docket complaint with respect to where the rules are clear, and they're being violated, and talking through that issue with the parties so we don't have a situation where parties are forced to file complaints when they really shouldn't have to in the first instance. And the Commission should just clarify the rules for all the parties involved. %S0*H&H&@@ The parties can hear that out and make their own decision whether they want to go forward. ` `  MS. BROWN: Let me just ask you, though, in a market that is largely unregulated and a supplier has a problem with his customer and vice versa, who do they go to and what do they do to solve the problem? And should we start thinking that way in this industry? Jerry? ` `  MR. FRITZ: You have an excellent example of how that's done in the mass media context today. During a political campaign, if a particular candidate, when Mr. Tauke was running, if he had a problem with one of my television stations and he couldn't access, he can call the political branch, and the political branch puts the two parties together and said, "Here's the rule. Do it." With the threat of Commission sanction behind it. So, there is ` `  MS. BROWN: But they would still be coming to the Commission, that example you're giving me. ` `  MR. FRITZ: And certain things will have to come to the Commission. Enforcement of spectrum interference, when pirates pirate radio people come up and our television stations are being interfered with, we have to come to some place. ` `  Enforcement bureau has two primary functions: a police function and a dispute resolution function. The%T0*H&H&@@ police function is to enforce the rules that exist, the interference rule and a spot check on compliance with rules, because the Commission has any number of dockets that said, "That we will deregulate, and we will spotcheck to make sure your public file is right or whatever." So, you have two functions from a police concept. ` `  The other one is dispute resolution. Preston is right. We don't need more lawyers, but you need a rocket docket. You do need fast dispute resolution. ` `  MS. BROWN: I want to move to some other questions, but I don't want to Jonathan? ` `  MR. SALLET: Can I take 10 seconds? ` `  MS. BROWN: Yes. ` `  MR. SALLET: Here's an advantage of an ALJ system. Just by views of Preston and Michele who know this area better than I do. It dedicates resources to enforcement. Whatever answer you come to about use of dispute resolution or ALJs or any other way of proceeding and I don't disagree about the dangers of ALJs you've got to focus on the resources that are available for enforcement and not just the process of enforcement, because right now we have circumstances where people have a lot of responsibilities for ongoing rulemaking for generalized policy and for specific enforcement actions. And I think I just would like to note the resource issue is a critical, practical%U0*H&H&@@ need in any avenue of enforcement. ` `  MS. BROWN: Len, I think I lost you. ` `  MR. CALI: Thank you. It's really just an aside, but a very important related aside. Increasingly, the Commission may find it wants to reassess its public policy positions which is critically important and apart from the enforcement context, but routine applications for authority, routine license transfers, even routine waivers that are consistent with prior practice should not be held up while the Commission reviews its public policy positions. ` `  It may well be warranted that public policy changes, but if a carrier cannot move and the market's moving, but the carrier cannot move because one of its requests, whether it be an application or a transfer or waiver, is being held up while the Commission reviews policy, there is a problem. ` `  MS. BROWN: Zeke? ` `  MR. ROBERTSON: Very briefly to answer your question on should you start moving more like other industries, how much of this should the FCC continue to do? My belief is that where there is a valid contract executable and could be handled by a court of law, there are other vehicles by which people could get relief. And therefore, I think that could take a great burden off of you. ` `  In situations where simply someone is claiming a%V0*H&H&@@ rule violation or whatever, you have to deal with it. You're the appropriate place. So I think I would suggest to you where there is a contract, where there is something to be executed by another agency or the courts, you should shed it. Get to the things that just deal with your rules. ` `  MS. BROWN: Robert? And this will be the last on this if oh, okay. Sorry, Tom. We'll get to you. ` `  MR. MCDOWELL: Just real briefly back to the resources argument. Tied into that is deadlines regardless of whether it's the ALJ model or something else, if you have tight, quick, rocket docketstyle deadlines, that's going to benefit everybody if the industry moves with great speed. But that's also going to benefit the entrepreneurs who don't necessarily have the resources to win long, drawn out wars of attrition against bigger entities. ` `  You can go quicker than a court of law. You're the expert agency. All you have to do is reform your process and you can get these things out the door a lot faster. ` `  MS. BROWN: Tom? The last on this, Tom. ` `  MR. TAUKE: You did ask the question about should the enforcement process be tied to a rulemaking process, and I think that it's important that enforcement not be rulemaking. That enforcement should be simply looking at outcomes, assessing penalties if outcomes are not achieved,%W0*H&H&@@ but it should not get into the business of defining the methodology by which the outcome is achieved. ` `  MS. BROWN: Thank you. I'd like to put another question out on this vision thing, take about 10 minutes with it, and then shift to this efficiency and structure question that we asked just to sort of finish up. ` `  But, I'd like to talk for a minute about this issue of how this economic revolution, this technology revolution, this telecommunications revolution reaches all Americans, both the customers throughout the United States, and those citizens who are receiving services now in a ubiquitous way, and how do we ensure that as this pie grows, that all of our people are able to participate as entrepreneurs, as new vendors, as new owners, as new workers in this revolution? And what, if anything, does the FCC have to say about that or do about it? ` `  Anyone? ` `  MR. CIAMPORCERO: I just wanted to say the first thing I think is that we ought to have is to approach this with a respect for the past. In this country, we've got the best communication system in the world. That was the result of a good policy, 40, 50, 60 years of a very good policy. I'm not going to get into the future because I would be prejudiced, but respect what has happened, and that we've done it right. And keep that in mind as we go%X0*H&H&@@ forward. ` `  MS. BROWN: Could you say a little more about what that policy is? ` `  MR. CIAMPORCERO: The policy of you know, moving hell or high water to have universal service at an affordable level for people. ` `  MS. BROWN: David? ` `  MR. DONOVAN: I think for us, some of the frustration has been that the Commission has done a superb job at promoting competitive services in other areas with different economic structures. In order to help competition in local phone companies, everyone celebrated cable clustering, which is terrific from that standpoint. Of course, it does have an impact on the broadcast model, as well, which I really don't think was given a whole lot of weight in those decisions. ` `  The bottom line is, is that if you want to have an advertiserbased free system, you have to also understand that we are competing day to day with someone that has two revenue streams that is pulling away eyeballs, pulling away advertising and revenues. And if you want to keep the free system going forward, which I think really solves a lot of problems for you all, is you go forward with universal service, you have to recognize that we do compete with these people. %Y0*H&H&@@Ԍ` `  And some of the broadcast specific rules that you now have really have to be not only reexamined, but frankly, relaxed. In particular, you know, I'm looking at the local ownership rules, which I think most a lot of efficiencies can be harnessed if you permitted common ownership in the same market. ` `  At the same time, I think we all have to be sympathetic to Jim's concerns, as well. Participation is important. The policy such as the tax certificates and what have you worked very well in this country, and frankly, should be brought back. I don't think there's any dispute among that. ` `  But I am very much afraid that if we don't permit sort of relaxation of the economic aspects of this industry, the service, which really comes to the core of what people need in this country, the ability to access top quality information and programming, will suffer on a goingforward basis, not to mention the ability to take this industry to the next digital step, because there are a lot of entities out there that right now the economics just aren't there to do it, particularly among the smaller broadcasters. ` `  And so, I wish you would in a goingforward basis, look at your broadcast industry specific rules and work very hard, frankly, to relax them so we can compete in the multichannel environment. Mr. Pepper knows this. He wrote%Z0*H&H&@@ an article in '91 about this whole issue. ` `  MS. BROWN: Jim? ` `  MR. WINSTON: If you look at the broadcast industry, as I mentioned before and as David pointed out, there were policies in place to promote minority ownership. And those were policies adopted by the Commission after extensive consideration of the industry that was before it in the late '70s. ` `  What was recognized was that specifically in the broadcast industry, and as industries converge, it's going to be interesting to see how whether someone will look at the converging industries in the same manner. But the whole concept in broadcasting was that the broadcast industry is the mechanism by which the American public asserts its First Amendment rights, and that if we are going to have a free and open exchange of ideas in this country, then the broadcast industry has to reflect the American population in terms of who controls the airwaves. ` `  That concept has fallen in disfavor among some in Washington now, and we've seen those policies falling apart. So I guess the question is, is the Commission in a position to be able to influence reopening that debate? I know the Chairman has been trying to, and he's been meeting a lot of stiff opposition in trying to do so. ` `  I guess the question here is, is there any%[0*H&H&@@ possibility for the people in this room see some reason for including that in the debate as we talk about convergence, as we talk about all these industries competing with one another? Is there a recognition that the American public is not a monolith, and that technology is in the control of those who have access to capital to take control of that technology? ` `  So if we're going to talk about this industry in that fashion, then there should be something in this discussion that says for those who don't have access to capital, for those who don't have the ability to take an idea from the initial stages to business fruition, is there some role for the Commission in that process? Is there some ability for the Commission to influence the access to capital? ` `  Right now, the Commission has a telecommunication development fund, which is a nice idea, which has yet to move beyond the idea stage in terms of producing some results. So it seems to me that that's one of the issues, the tax certificate that David talked about, which, of course, requires congressional action to bring back, is another that had some ability to bring diversity, a viewpoint of diversity of voices to the industry. I would think that's another area that this group should look at. ` `  And specifically because we're talking about%\0*H&H&@@ convergence, it seems to me that it's time to talk about a tax certificate in a context broader than broadcasting because the delivery of information to the home is now becoming a business much broader than broadcasting. ` `  MS. BROWN: Thank you. John? ` `  MR. ROBERTS: I'd like to echo what the gentleman said about universal services. Policies of the Commission in the past have worked really well for universal service and rural areas. And we believe that the Commission should continue to take that care. And one way of taking that care is to make sure all the policies of the Commission, not just those directly with the universal service or the universal service fund, that they're coordinated together to make a really coherent policy that works well. ` `  MS. BROWN: Thank you. Michael? ` `  MR. ROBERTS: Thank you. I think Jim and Dave brought up some issues that are dear to my heart. And I think we have to put it's a structure. It's a skeleton, but let's put a little meat on it and apply the reality. ` `  The reality is, are there television stations and radio stations available to even be purchased? Number one. You have DTV licenses that are going out, but eventually analog licenses that'll be returned that may subsequently may be sold again or used again in some way. How might you approach those licenses in a more aggressive way to allow%]0*H&H&@@ for the diversity that we're looking for here? ` `  Clearly, we have a disproportionate impact going on. There are many less folk owning broadcast stations than watching broadcast stations, from that standpoint. ` `  You have rules today that have allowed for one radio station company to dominate a market, just literally dominate a market. And I'm on Jim's board of directors, and I've watched a number of those radio blackowned radio stations look to potentially either going out of business because the competition's just too great, or they had to sell in order just to survive financially. ` `  In the television industry, you have the duopoly issue that's before you. You were seeing LMAs all over the United States, and fellas who were out getting around the rules and owning more than one station in the market. And if you change the duopoly laws and allow them to own more than one, that's going yet again to dry up the opportunities for minorities to own television stations. ` `  So, I think you have to look at the real meat here and determine, what are we talking about? Are there licenses that are even available, and what would be the incentive to sell them since there is no more spectrum, per se, to sell them to minority individuals? What would be the benefits for the seller to sell to them? That's where you get into the tax credit issues and perhaps some others.%^0*H&H&@@Ԍ` `  I raise the question of foreign ownership. For example, what if a Canadian television company interested in coming in could team with a minority, we might allow them to move to say, 40 percent ownership. And they would back that minorityowned business person and allow them to own 60 percent. But we would have the financing necessary to buy a much larger, perhaps a network level operation in some of the larger markets. Little concepts that I'd like for you to bounce around, Kathy. ` `  MS. BROWN: David, did you want to ` `  MR. DONOVAN: I promise I'll be brief. I think there's a couple of things that are important. Broadcasting does not exist by itself. All of us here at this table know that. We're all competing against one another. ` `  If you're looking at a mechanism to enhance the diversity of the ownership structure, and that mechanism is to put an artificial restraint on the entire industry, in my particular instance, the ownership restriction, what you end up doing essentially is sending capital to other video industries. I don't think in the end that helps anybody. ` `  In today's free in the market of today's free overtheair television market, to have to pursue a policy to the nth degree where you have every single individual owner may be wonderful in a perfect world. It may be desirable. But what it means is is that the service%_0*H&H&@@ that's being provided to the consumer goes down. And the evidence of LMAs across this country, frankly, I think, proves it. Every single one of those LMAs has improved service to the communities that they are located in. ` `  MS. BROWN: And now, I'm going to ask you to make sure we don't argue ` `  MR. DONOVAN: Exactly. That's why I want to abstract this to a more general discussion. ` `  I think what it means, though, is that you have to if you're trying to promote a goal, whether it's diversity ownership or any other Commission goal, you have to look at where the capital is going to go. And imposing restrictions on one segment means money goes elsewhere. To impose rules on the ownership of two stations in the market means Jerry's boss, Mr. Allbritton, takes his resources and starts a cable channel, to which people have to pay to see. ` `  MS. BROWN: I'd be very interested in folks' reaction to Jim's notion that a tax certificate should go further than just one segment of the Patricia? ` `  MS. MAHONEY: Thank you. I, actually I wanted to respond to both of your original questions and first, to respond as Chair of the Satellite Industry Association and then secondly, to respond as a past national president of American Women in Radio and Television, if I could. ` `  How does the revolution reach all Americans? That%`0*H&H&@@ is happening. I don't believe that we have what you could call universal service with free overtheair television because geographically, not everybody can receive it. But with satellite, eventually, you will have the ability well, with satellite, for the first time, you do have the ability of all Americans to eventually become beneficiaries of the communications revolution, whether its DBS, DARS, wireless, voice data, and eventually, broadband Internet services. ` `  With respect to Jim's point, I think that on behalf of, or as former leader with an organization that fought for many years for tax certificates and preferences for female ownership, that I think it was generally known and accepted that the tax certificate program was the one that was really beneficial because that's where you had an opportunity to get potentially good stations. ` `  But I think when I spoke earlier that one of the roles of the FCC has beyond the regulatory role, providing leadership, expertise, resources, and support, I think this is an area where because access to capital is the issue, where the FCC can have a role. ` `  And I think back in the early '80s when especially Commissioner Dawson took a leadership role in convening and having conferences that brought together bankers such as Commissioner Ness and brought together program suppliers and%a0*H&H&@@ all different aspects of was primarily video and audio media, that it resulted in an information flow and inspiration and education that ultimately led to ownership opportunities. ` `  Maybe not everybody can own a station, but maybe they learned that they could own a program production company or some and they made good contacts through these conferences. So I think that there are things that the FCC can do. As much as I hate to say it, I don't think that it's likely that there are going to be well, certainly there won't be comparative preferences anymore, and I don't think there'll be other programs that will benefit women. ` `  But educating the financial community will benefit, I think, everybody. All services, certainly in the satellite area where the financial community may not be as sophisticated as we are, and needs to hear the expertise of the Commission of the technology, of the risks involved and issues like that. ` `  MS. BROWN: Thank you. Michele? ` `  MS. FARQUHAR: The problem, as you know with bringing advance technologies to the rural areas is that there really only it's very expensive. And there really are only a few ways to make that work, including subsidies and the universal service program, in particular, or to encourage greater competition or some combination of the%b0*H&H&@@ two. And the problem is that at the moment, we really only have one incumbent being subsidized in these areas. And it's going to take even more subsidies to bring them up to a level of providing the advanced services that rural customers are beginning to demand and need. ` `  And so the Commission and the state commissions need to work more aggressively in finding new combinations to encourage subsidies and new entries for other technologies and providers who can bring more benefits to rural consumers. And that may require looking at other types of ways to subsidize. It could be grant programs. It could be tax certificates. There could be any number of tools out there that have not been looked at yet because people have been very caught up in the universal service debate in that one form. ` `  But the Commission should be open to looking at ways so that during this hiatus while the Commission has put the rural areas on hold in terms of universal service reform, there could be other ways to still encourage competitive entry and get that advance service out to the rural consumers. ` `  MS. BROWN: Thank you. And I think Preston, and then I'd like to move you to some more mundane things like process. ` `  MR. PADDEN: I just wanted to say I believe there%c0*H&H&@@ is widespread industry support for a broadly applicable tax certificate program. And I think everyone would agree that profit maximizing free market forces will achieve any goal, any goal infinitely faster than any bureaucratic attempt to make it happen. So I think the government ought to decide what it thinks the proper social goals are, and then arrange the economic rewards of private market activity to favor those results. And I think you'll achieve them faster than any attempt by the agency to force it to happen itself. ` `  MS. BROWN: Thank you. Go ahead. ` `  MR. SHARK: I've been searching for a way to get into this discussion, only the sense that as I said earlier in my one minute comment, we represent really the nonconsumer wireless areas, the small business carrier. But now we're in the nutsandbolts area, so maybe I can make a contribution there. ` `  If there is one thing that I heard throughout this discussion is this whole issue of timeliness of getting decisions made. And I think most of us would agree we'd rather deal with a bad decision than no decision. And at least that's something you can say and fight against or argue against or appeal. ` `  And so, I think the one thing that I would like to recommend that I think would go a long way in the next century, is to really have a system, maybe call it something%d0*H&H&@@ like universal filing and tracking system. And I'm sure some of your computer people are already thinking along those lines. But it would help all of us, I think, if we had a tracking system that when an item is filed, that we know where it is, who has ownership for it, what is the priority, and what is the path ` `  I can't think of anything more important than something like that on the nuts and bolts area, because things get lost. And when I look at some of the issues that you have raised in your paper about losing good staff when I talk to the good staff, and there's so many of them, they don't have ownership. They have a lack of incentive. It goes from one desk to another. When people from the outside call in, it's lost. It's gone. Or, it's at someone's desk. We have no response as to when. No accountability as to what the path is. No sense of what the priority is. "Well, it's a congressional mandate. We can't get to that right now." ` `  If that was something on the Internet, and I think the FCC has been terrific on getting more and more on the Net. If that's something that we could look at, then we would have a common point from which to see where we are at any given proceeding, see the path. In other words, how many desks does it have to go to? How many bureaus? How many people have to sign off on it? What priority is it? %e0*H&H&@@ Why is it given the lowest priority? At least then, somebody has an opportunity to argue for it or see why it isn't a higher priority. ` `  And what is the date? When is this thing going to come out? I mean, if I can track a package from Springfield, Virginia out to California on my Net on my computer, there's no reason why we can't do it in this building right here. ` `  MS. BROWN: Well, this is a great segue out of the wonderful conversation we could keep having about the vision of the future and the industry, to how can we do better. And so, let's take another 15, 20 minutes to talk about how can we do better. And I'll just say some of the things I've already heard you say, so that perhaps you don't have to repeat them. And then, maybe talk just for the last little bit of our time together about any structural kind of recommendations you might have. ` `  Here's what I've heard thus far. Speed is a huge issue. Speed. So I've heard suggestions that we ought to have more deadlines. And whether they be statutory deadlines or perhaps our own internal regulatory deadlines, I heard you say that was a good thing. ` `  I heard you say that the sunshine rule may be a barrier to discussion and thus resolution of an issue. I heard people say they would rather have a decision then not%f0*H&H&@@ have a decision. And that's very interesting since I've seen how decisions are sometimes not made by pressures that are not only internal, but sometimes external. And so, it'll be interesting to think about that. ` `  I also heard folks talk about our ex parte proceedings, and I guess I have a bias here. Is this one on one ex parte kind of regime that we have a helpful one? Is it one that causes more time because other parties don't know what the other party said, and so, how can they respond? Is that something we ought to look at? ` `  Then I heard someone raise issues about our remand proceedings. And I would be interested in hearing anything more about your view of what ought we be doing on remand. 8"8"ISo, that all went to speed. ` `  I then heard issues about and I think Alan just raised it about sort of process and tracking, and where are things? And what's the priority level? And who has them? ` `  Then I heard some folks talk about regulatory costs, which I would be very interested in hearing a little more about. Let's assume you do have to do filing or you have to do tracking. Is there a way to reduce costs around this? And one suggestion obviously is to do more on the Net. And you know, how could we actually effectuate that? ` `  And then I heard someone say, "Yeah, we hear all%g0*H&H&@@ this great talk about competition and deregulation, but basically, are you walking the walk?" You know, what are doing here to actually get that done? PP6PP6So, those are the process issues I heard. ` `  And then I heard some structural things, which I would hold except I know you're going to jump into this anyway, so I might as well tell you what I've heard already. I heard that the international bureau is a good thing. I heard that people need to walk and talk across bureaus. I'd be interested in hearing whether people really think that requires a total reorganization or whether it requires a different kind of process, because you can do things by process or by organization, structure process. And a lot of organizations flip back and forth, sometimes at a fantastic rate about how they try to get at those things. ` `  And I heard some thing on the mass media side that would suggest that there's some real relationships between the cable and mass media bureaus that ought to be explored. I would be interested in hearing similarly on the sort of telecom side. And then, for those of you at the table who don't want to be regulated at all, but sort of come into the convergence milieu, "What about you?" ` `  And then, finally, I heard people say that somehow the staff needs to feel more empowered to actually get things done for you. So that's the sort of things I've%h0*H&H&@@ already heard. Build on that or add more. I just wanted you to know that I've got that, and then ask you for any further discussion on this. ` `  Jerry? ` `  MR. FRITZ: Kathy, kudos to the staff and the organization that you've done so far. Mary Beth Richards and her people have moved the Commission significantly along toward a more efficient process, and I think the goal where you're heading is absolutely correct. ` `  You asked a question in the written questions, how would you prioritize the FCC's current workload? And I would give it these six priorities: number one, licensing, number two, licensing, number three, licensing, number four, interference protection, number five, elimination of regulatory artifacts, and finally, number six, promotion of your statutory goals, which frankly, you're not going to be changing. And those statutory goals include things like preserving universal free over the air television. ` `  That having been said, there are some other things, some specific suggestions that I'll make aside from the ones that you've already articulated like getting proposing to the Congress to get rid of the Sunshine Act. It's a terrible waste of Commission resources and time and decisionmaking. ` `  Engineering certification outsourcing. You can%i0*H&H&@@ save a substantial amount of time and license processing if you will go to a certification process for outside engineers, giving them the complete ability to give a certified engineering statement. That has to be coupled with enforcement so that if they're wrong, more than one or two times, they lose their certification, because that's your only check on getting accurate and complete information. It works in the CPA industry. It will work in the engineering industry, as well. That will substantially help in terms of your overall number of people employed at the Commission. ` `  Time limits on application, we have suggested for a long time bar codes for application processing so that we can monitor that on the Net. The same could be true for your agenda items, so that people wouldn't constantly call you and find out where their agenda items are. Once they're in the system, they can be coded and we could track which offices, especially on a circulation system. ` `  Number three, common integrated forms and a single point of contact. It makes no sense for us in the broadcasting business to have to go to the Mass Media Bureau to get our broadcast license, go to the Wireless Bureau to get our auxiliary license, go to the International Bureau to get our satellite uplinks, go to the Wireless Bureau to get OFS in a different bureaucracy, and go to OET in combination%j0*H&H&@@ with Mass Media for DTV or Part 68. There needs to be a common licensing bureau. ` `  And I know that's where Mary Beth is taking the agency. In terms of the Wireless Bureau, you need a licensing bureau. I don't care where you locate it, but there needs to be a common licensing bureau that has common integrated forms so that we can go to onestop shopping on everything from CARS applications to auxiliary applications. This is an extremely inefficient process the way it's being done crossbureau. ` `  Another suggestion, exemption from SES pay grade levels to attract competent managers. You can petition to the government to get that SES exemption to get competent people, and I would urge you to do so. 7Greater discretion for all managers to hire competent people would also go a long way to get you to people that you need. ` `  I will stop. I have a set of suggestions with respect to this licensing bureau, a streamline mass media bureau, a telecom bureau and adjunct offices, but I'll wait and give other people a chance. ` `  MS. BROWN: And I'll invite anyone at the end of this to give me in writing, frankly, anything else they'd like to. Brian? ` `  Let me just remind folks for your own time, it's about 20 to five. So, if you could keep your comments to a%k0*H&H&@@ time limit so that everybody gets an opportunity, I think that'd be good. Brian? ` `  MR. FONTES: I'll be very brief. I think yourself and Jerry both have articulated some very exciting, interesting concepts and streamlining. ` `  There's just a couple of other points I'd like to make. In a competitive industry, whenever there's information sought by that industry before the Commission, the industry has to go, in my case in parallel track, seeking confidentiality for the information, and then submitting the information that the Commission has requested. ` `  In a competitive environment, it's very important to recognize the nature of the confidentiality and the market sensitivity of the information that is submitted. And so, you may want to take a look at how you allow for confidentiality of information from those who represent competitive industries across the board. ` `  Then, a challenge. I think that Congress did give the FCC a great opportunity through the exercise or the ability to exercise forbearance. The challenge would be to have each of the operating or functioning bureaus identify at least three areas in which they believe that they can forbear. I think that in that process, you do a lot. ` `  First off, you, obviously, forbear from regulation%l0*H&H&@@ that no longer needs to be in place. But secondly, I think you begin the process of understanding the reliance on competitive markets and the opportunity to use your enforcement power to assure that the competitive markets are functioning. ` `  And like Jerry, I will also provide a list of other issues. ` `  MS. BROWN: Thank you, Brian. Brent? ` `  MR. WEINGARDT: I agree with Alan. No decision I mean, a bad decision is better than no decision. I think a second decision delayed is even worse. We would like a hard look at the recon process. Either doing away with it, which might sound extreme, or really shortening it. ` `  One, put yourself under a deadline or go up to Congress and suggest there should be a deadline. Two, don't have to respond to every matter. What's the term? Position denied is the term, because without that petition denied, courts won't act. We don't have final say. I mean, it's one thing to bust your butt to get the first report and order out. Your clients are happy. And then, two years later, say, "Oh, we just lost at recon," Or, "We got to modify at recon," or whatever. Then, the court case starts. ` `  And I've used the process, but I can't live with it. I mean, I think it's absurd that we have a recon process that really destroys all the hard work in the first%m0*H&H&@@ report and the second report and the third report. And I know it might require statutory change, but that's one really worth looking at. I'd like to hear what the other folks have to say, because it works both ways. ` `  MS. BROWN: I'd be interested as well if folks started getting, you know, no new issues raised. This has already been addressed, denied. You know, what the reaction would be. It'd be very interesting. ` `  Go ahead. ` `  MR. SEIFFERT: Sure. I was just going to build on the conformity assessment body and endorse that wholeheartedly. It would certainly improve the manufacturers' and vendors' lives if we could streamline the duplicative process. It's happening internationally. TIA's worked for MIA negotiation all over the world along with the FCC. We certainly would like to see the FCC allocate the proper resources to get FCC staff to these negotiations over in other parts of the world. It's certainly going to make get our product out the door a lot faster and tapping the market is critical to the industry if the life cycle is shortened every day. ` `  MS. BROWN: David? ` `  MR. ZESIGER: I'd just like to echo Brian's and Brent's comments and really reinforce the effectiveness that you can have in moving forward more quickly using tools like%n0*H&H&@@ the forbearance process. We've just been through that and it was a very successful process. And you know, I think that that's something as much as these larger issues are important and necessary to get the word out on, if we could take some time to have discussion on what kind of timeframe are you going to be able to keep up with the changes in the industry. ` `  There's some things you can do right now as almost a quick damage control kind of quick intervention to free things up and to move people into a more competitive posture as you did with some of our companies. And just to underscore the immediate effect of that or impact of that, I had a call today from one of my companies who commented on some of the things that were done earlier this week by the Commission in the forbearance issue refile. And he said to me somewhat puzzled, "Well, I've been up talking to my marketing and operational folks. And frankly, the ball's in their court now. We've got to move them. And we've called their bluff." ` `  And this is a real company with a real service they're going to be providing. And it moves it changed dynamics within a company. And that kind of thing you can do right now using the tools you already have, that's Section 10, Section 11, Section 706, which were cited earlier.%o0*H&H&@@Ԍ` `  MS. BROWN: Andy? ` `  MR. PAUL: I want to take what Jerry said about crossbureau process and just raise it to a little a slightly more "macro" level, if you will. And that is and, I want to be very careful how I say this because I don't want to be critical, but I do want to try to illustrate in a general fashion what I think is something that should be paid attention to. ` `  And that is, one bureau may decide that a particular action or a particular type of proceeding or a direction with regard to a industry would be a healthy one without consulting another bureau, which may have either the competitive responsibility or the developmental responsibility for that industry and without overlaying on its decision the policies that have already been decided for. ` `  And I don't want to get too specific because there are already some proceedings that implicate that, but I can give you an example of something that happened say, seven or eight years ago when microwave users were moved out of the 2 gigahertz band because they wanted to make way for LMDS. And there was a proposal to put them into the into a satellite downlink band because there was a conception that perhaps technologically that could be done.   <  < ` `  But no consideration was given to the competitive%p0*H&H&@@ policy with regard to the satellite users and downlinkers in that band, what effect it would have on subscribers to satellite television, and what impact it could have over what that kind of interference would have overall to the development of a competitor. And I'm just saying that is an example of I would say a lack of communication or say, lack of overlay of policies that have been established by the Commission which are very, very important. ` `  So, I just want to leave that out there as a potential for things to happen that I think you'd want to look at. ` `  MS. BROWN: As you're thinking about this in talking to me, if you could also just someone address this ex parte issue and also the very paperintensive processes of this Commission, which seem to me that all of you are writing paper. I can't imagine that you're all reading each other's paper. I know I don't read all of the paper that you're all filing, and so, I'm relying a lot on summaries of what your reading. ` `  And then, the question being, do you hear each other? So that in a situation just let's take this example that one part of the industry would understand and know that another part of the industry is being affected so that you get some dialogue on that. ` `  So if anybody has a view of that, I'd be also%q0*H&H&@@ interested. ` `  Michele? ` `  MS. FARQUHAR: Three quick points. One, with respect to time limits and deadlines, which Western had mentioned earlier. They should also have teeth so that one way to approach that is to say that something is granted unless the Commission acts within a certain amount of time. And I know that's very difficult to set up a process like that. But, in most cases, it would work. And in most cases where the Commission has dealt with processes like that in the past, they've met that goal. ` `  Second, is to cut off the ex parte process, going to the question you just asked, and maybe have fewer allow for fewer meetings after the papers have been filed and say that only you can have so many bites of the apple, and that's it. And I know, that too, is very difficult to implement, but that's one way. Or, have one or two big meetings that would bring all the parties together and invite all the relevant participants at the FCC to give them a chance to hear the parties. But, difficult as it is, it may not bias as much parties who are based outside of Washington who have less resources to lobby the FCC. ` `  And finally, one way to restructure the bureau is, if you are going to reorganize them, might be around their missions, as opposed to even their functions, so that you%r0*H&H&@@ might have a bureau that deals with competition and with universal service, with public safety, with spectrum planning, with enforcement, with licensing, et cetera. And within those bureaus, they can look at individual slices of the industry. ` `  But, one problem right now, it's only the Commissioners, the Office of Plans and Policy, the General Counsel and you, Kathy, who are looking at issues from an overarching, holistic context, taking into account convergence. And everybody else is looking at a slice of the industry here at the FCC. ` `  MS. BROWN: All right. I'm just going to try and go around. Patricia, I still see you, but I'm going to go this way. ` `  MR. WEINGARDT: I think I'd like today to extend an invitation to the Commission to perhaps come out with a notice for implementing deadlines on a variety of perhaps all of the kinds of proceedings. You have might have petition for declaratory ruling, petition for rulemakings, et cetera. ` `  And even in that, you could just sort of start the ball rolling, let's say, within 90 days after reply comments are received, "We will have an answer for you on such and such a date," and fix those. Obviously, there are going to be come exceptions where you're going to need more time in%s0*H&H&@@ compelling circumstances, but I invite you to do that perhaps as a result of this meeting, because that does seem to be one area where all the diversion interests here are in agreement. ` `  Secondly also, regarding tracking, we've heard a lot today about empowering consumers. Heck, let's empower your staff a little bit, too. Let's have one person who is the shepherd of various proceedings or a particular proceeding whom we can contact, someone who knows where it is. It can be electronically, as well, of course, on the Net, but one human being, as well. Empower that one employee as much as we want to empower consumers. ` `  MR. ROBERTSON: Kathy, very quickly, you have to understand that most of the people sitting around this table are lawyers, and they get paid for filing paper. And so, it goes to the gentleman from Disney. I mean, this is a reality we have to face. And so, if you're paid for it, and your client's willing to do it and can be convinced that your interests have to be protected, that will take place. ` `  The other thing that you need to know, and I think you recognize, is that I'll bet there's not a single person sitting around this table that hasn't been contacted by your staff and asked to file a position on those particular dockets. So it's not it's not necessarily something that we all want to do. And I'm not you know, I'm not dissing%t0*H&H&@@ the lawyers, but I'm just saying that's the way our world's set up. If we can figure out some way to move beyond that. ` `  MS. BROWN: Well, that goes to my other question, that if there's a decisionmaker who needs input, are there ways of getting input that are not onerous or are cumbersome or burdensome to you? The input is needed, so how's the best, most efficient way to get it? ` `  Larry, welcome. ` `  MR. SARGEANT: Thank you. On three points, first, efficiency. Part of being able to be more efficient is going to be dictated by where you can bring the resources and where you bring the focus. And so, I would suggest that instead of the Commission looking to do more, it should look to do less. And more and more decision are turning on, does the Commission have jurisdiction, or doesn't the Commission have jurisdiction? ` `  So rather then looking to expand your jurisdiction, and I would say never again use 4(i). Look to do those things that you must do, that the statute says you must do this, rather than looking for those things you might be able to do depending upon whether a court defers to the expertise of the agency. So that would be one. ` `  On the issue of cross bureau versus structural, I think it's inevitable because it is just human nature that as long as you have bureaus tied to particular segments of%u0*H&H&@@ the industry, people who work in those bureaus are going to have a certain ownership for what goes on in that industry. And there will be policy determinations related to that segment of the industry that they will have a bias towards. ` `  In a truly converged world where the whole goal is to bring in all the factors across multiple industries, I don't think crossindustry processes work as well as having people come to the table understanding that their mandate is to look across all industries and not have an ownership interest in any one industry. ` `  On the issue of ex parte, I don't know that we can avoid the paper. One of the things I was struck with when I first came to Washington in '86 and was a trial lawyer before that, this agency doesn't differentiate argument from evidence. And as long as you allow argument, you will have an inundation of paper. It's just unavoidable. I'm not arguing for going to evidentiary hearings because that is problematic in and of itself. But I do think we could be more diligent in differentiating real evidence from argument because there's an awful lot of argument but often very little evidence. ` `  MS. BROWN: Thank you, Larry. David? ` `  MR. TURETSKY: There are a couple management challenges in the questions that are out there as we talk about moving toward, you know, greater convergence or cross%v0*H&H&@@ bureau dealings and the rest. Let me just share with you one observation I made, in dealing with a situation where there was crossbureau responsibility a couple years ago. ` `  I was very surprised that the bureau that didn't seem to have the pen ultimately, but was charged with the responsibility for helping develop the item really didn't view it as serious a commitment as all the other work before them, because it didn't clear away the things that were on their plate. It didn't seem like that was what they were going to be evaluated on and the like. ` `  And so, as you try to cross lines and you don't dissolve the actual bureau lines, important management challenge is how to keep responsibility and accountability in the places that you want it so that all of the groups involved take it just as seriously as each other group. And that's not an easy thing. In business, you know, we struggle with that, as well. ` `  Second kind of management issue is this deadline issue. And it sounds great. We're all sitting here saying, "Boy, you got to get those decisions out. Pump it out. Set the deadlines." Well, what I learned in government was there are resource issues. Every time I told one of the sections that I wanted to get these two items out in a certain time, you know, I respected the managers who had the courage to come back to me and say, "Well, that means that%w0*H&H&@@ we won't get these other two things out." ` `  So it's a resource and priority issue, and we shouldn't pretend that it isn't. And so, if we want those decisions made pretty quickly, we either better come to grips with what you shouldn't be doing, and I know plenty of people around the table probably will argue what you shouldn't do, or we've got to support resources for the agency so they have enough resources to do that. ` `  So I want to speak to support the resources to do that, because it involves choices. It doesn't involve just do it. It involves choices, every one of those decisions. ` `  The last point on the paper and ex parte and the rest is, you know, it's a big industry, and there's going to be a lot of paper filed. I don't really see any way realistically around that. There are times that I have been disappointed because I realize that unless you follow up with a visit, it seems like your paper may have been read at one level, but never comes to the attention of any other level. And that's disappointing. ` `  And it's also disappointing when in a major proceeding, you're getting right near the time that everyone knows the decision is going to come, and you know, you get word back that you've got to get into the FCC to lobby about this particular issue, which wasn't even covered in the pleadings because there's now this compromise on the table%x0*H&H&@@ that looks nothing like anything that was proposed before. ` `  So there's this whole animal that's come to life that you got to go address at the last minute that's not reflected in those papers. And I'll admit just as a participant occasionally, that's a little bit frustrating because the smaller companies get the impression that something's gone on that doesn't have quite as much light of day on it as the papers that were filed. ` `  MS. BROWN: Thank you. Brian? ` `  MR. FONTES: This is on the ex parte issue. I absolutely agree with everything you just mentioned. ` `  One thing that may be helpful in the ex parte and just focusing the information that comes in to the Commission is when the staff has an opportunity to read the record, and if they do have specific questions, post those questions to the parties that filed in the record, so that the comments that come back, either in the form of ex parte or reply comments, whatever, is more focused to the information that's needed. ` `  MS. BROWN: Patricia? ` `  MS. MAHONEY: Yes, speed is the huge issue. It's most important in licensing and especially on transfers and assignments. And one thing I wanted to mention, that I was recently in a meeting that involved a bureau other than the International Bureau, and a bureau I hadn't had recent%y0*H&H&@@ experience with where the staff person expressed the opinion that a written decision would be required by the staff even in an uncontested situation. ` `  And from my broadcast days, I would say if it's uncontested, there's no need to have any decision, just get it done. Just grant it. The time's up. Time for recons or review past. Time to grant the application. That would definitely speed things up. ` `  I think reconsideration is important often to correct the record, but what happens is after the petitions for recon are filed, that it seems to be that there is a big rush to get the decision out, so the recons come. So that's something that starts on a new timeline and it'll be handled a couple years later. And so, like Brent says, you know, everybody's operating for a couple years on the premise of the rule is one thing, and then, all of a sudden it changes. ` `  In the situation of applications for review, it seems that, unless the rules have changed recently, that the rules were written to be almost like a petition for cert. That you would write a small application for review, and a cert. would be granted or denied. Review would granted or denied. If it was granted, then you would file a brief. We've gotten away from that, so there's a longer period of time to act on applications for review. ` `  If, for recon and review, if you got fast%z0*H&H&@@ decisions out, these are the only issues that were mentioned, review denied or recon denied, and that's it. Then that lets the parties know that a decision has been reached and they can move on from there. They can decide if they want to go to court. They can decide, if it's a staff decision, to take it to the Commission. ` `  And on the status on tracking, I don't think that you need to know all the details that have been suggested, but certainly need to know when you can expect action. Now we have this open proceedings report and the releases. That's great, but it doesn't really tell you anything other than that the proceedings are open. It would be good if it told you when you expect them to be closed. ` `  That's what people want to know. This is men, women, banks. Everybody wants to know. When can we expect this to happen? ` `  On ex parte contacts, we recently participated in a way of handling that that I thought was showed innovation, and everyone agreed that it was fruitful. And that was all the applicants were brought in. There was a meeting, discussed the things that the bureau was considering before it was going to release an NPRM. And then, it gave everybody essentially a week to come in and meet independently and discuss they didn't make anybody say what their opinion was on the record or at this meeting,%{0*H&H&@@ but come in and your ex parte meetings, and you had a week to do it. ` `  I think they should have the freedom to do things like that, that are innovative and should be encouraged to do things. ` `  I don't think there's talking across bureaus. Maybe there is on some things, but recently there was an issue where or there's a situation where two NPRMs came out on the same day. One bureau was common to the two, and then each one involved another bureau. And I think that people who have looked at the two and realized they both exist think that they are going in completely different directions. ` `  And then, finally, definitely interested resources are an issue. We don't understand why some bureaus have the ability to hire from the outside and other bureaus don't. And we think if there is a time when there's an ability to hire from the outside, it should apply to all bureaus. ` `  And I guess that's about it. ` `  MS. BROWN: Thank you. Does anybody go ahead. ` `  MR. SEIFFERT: Sure. I'd just like since we're talking about resources and we've talked about convergence and how technology is moving everything and converging everything together, I think something we haven't touched on, and I know Bob probably has certainly cares about%|0*H&H&@@ this and has tried to work in the Commission to hire more technologists, engineers, business savvy folks that have been out there. ` `  And I don't know we do a better job helping you all track people that can help. Maybe speed up the decisionmaking process because they know the industry. They're better educated. They understand the technical complexities. It certainly affects our folks when we work with the OET guys, and they do a wonderful job. But they're overworked. And it delays again the path to market. ` `  MS. BROWN: Is there anything that wasn't asked that's on your mind that you walked in here and wanted to say and didn't get to say? Jonathan? ` `  MR. SALLET: In the discussion about Commission process, paper, no paper, the evil of lawyers, the relative malevolence of lawyers I'll tell you what I think is the problem I see in the Commission decisionmaking. It's the difficulty in getting issues joined. Getting two sides or 14 sides to address the same question, whether it's factual, legal or policy at the same time in front of a group of decisionmakers who are all focused on the issue at that point. That is a major managerial challenge, I think. The Commission does the best it can, but it's a big challenge. ` `  I would suggest that whatever you do to restructure the agency, you keep that as a paramount%}0*H&H&@@ concern. Let me give you three examples it might be done without restructuring bureaus, although that might be a good idea in and of itself. ` `  The bureau the Commission, relatively rarely, brings different sides to a dispute into one room at one time. I've been part of processes where that's been done a couple of times in the last year. And in all of those instances, we have found it useful, because it inevitably forces issues to be joined because somebody across the table is making a point that you've got to respond to. ` `  Secondly, to deal with the issue that David Turetsky rightly raises, and this mostly occurs in sort of legislative type proceedings, rulemakings where there's a big issue on the table, and then someone comes up with a compromise down the road. Nothing illegitimate about that. ` `  I would personally like to see the Commission use more notice proceeding, but very short comment periods. In other words, if you're halfway down a process and somebody's coming with a suggestion that seems to have merit, but that really wasn't noticed and comment on it, put out a notice and give people 10 days to respond to it. It's a transparent process. It lets everybody come in and it just says, frankly, "Look, this is an idea we're not going to tell you would have been legally infirm to go forward." But, we are going to say, "We're going to put it out for%~0*H&H&@@ everybody." ` `  The third, I think is Brian's suggestion, which is very good and goes to the same point, which is, in a proceeding where there are just critical questions, post five questions. Give everybody a relatively short period of time on the Net. Set up a chat room for interested parties, so that lawyers who are running short of papers will still have something to do, perhaps. ` `  But this will also help join issues because it will tell people where the Commission or the bureau is heading. It will focus people's attention and in a relatively short document. I mean, you know, one way to do it is, for example, say you can't submit anything to the Commission that's not in Powerpoint. That's the way we talk internally in our companies anyway. What the heck? But, it would in short answers, actually get people to talk to each other. ` `  So these are just three suggestions, but they go to what I have seen to be really the central challenge to decisionmaking in the Commission. ` `  MS. BROWN: Anyone else? Yes, Alan. ` `  MR. CIAMPORCERO: I just wanted to agree with that. I think that the biggest problem is being ambushed by disputes by evidence or arguments that you don't even know are going on. And I think another way to address that%0*H&H&@@ is try to have something like this for every major docket, a few weeks before sunshine, so we all know what everyone else is arguing. But I absolutely agree. It's very hard to fight the phantom that goes in and out before you when you have very little idea what they say. ` `  And the ex parte notifications never work. They're never sufficiently detailed. ` `  MS. BROWN: Well ` `  MR. ROBERTS: Can I just say this hopefully in conclusion? Would you allow those of us lawyers around here who are interested in drafting other thoughts to be submitted as official record to this meeting at a subsequent date? ` `  MS. BROWN: Yes. But be careful! Let me go through my closing remarks and tell you what I hope will be followup here unless someone else has something more they want to add today. ` `  First of all, I just want to thank you all very much for the quality of the discussion. You know, when you embark on these things and we talk to staff, the question is always to put you, well, is this just for the record, or is it for real? And I just want to assure you that this is very much for real. I thought we heard a lot of things today that were actually very helpful to us and some frankly, new recommendations and thoughts that I think we're%0*H&H&@@ going to take back and look at right away. ` `  But beyond that, if we mean what we say and say what we mean, then we mean we want to be more responsive to the folks we serve, both consumers in general, the American public and also the American industry that we serve here in all the difference facets. And so, we really truly want to know how we can do better. ` `  We think I think that we probably have one of the most expert professional staffs in Washington. I don't know about all you, although I know about a bunch of you because you were here, but you know, when one recommends well, what federal agency would you ever want to go work for, the FCC is very, very high on the list because just as the level of expertise that's here, the level of professionalism, integrity, and really the heart of what we do here. ` `  So we come to this with a really deep appreciation for our own professionalism. And being professionals, our need to sort of meet the challenges of the future. And so, that's what this discussion is about. How can we best meet the challenges of the future and do better with what we have now? ` `  And we intend to take all of this input. We have today's forum. We will have a consumer forum, which I invite any and all of you to come and attend on June 2. We%0*H&H&@@ will then have another meeting with sort of the academics, sort of organizational types, you know. Given this kind of thing, how do you think about organization and efficiency? And then, we will have one more internal meeting, which we haven't noticed, but that I will hold with our folks internally to talk about how to think about the future, and how to put together what ultimately will be our own strategic plan that we will give to Congress. ` `  We do it both for ourselves and of course, for Congress in the whole reauthorization process, so that they have our best thinking on this. Certainly, the Congress is doing its own thinking on this and its own exploration. But we felt we should give them our best thinking. And our best thinking has to be informed by the people we serve. So, again, I really thank you very much for participating today. ` `  We had set up is it a Web site or an email address? ` `  MS. SOCKETT: It's a new FCC at FCC.gov. It's an email. ` `  MS. BROWN: So it's an email address, newfcc@fcc.gov to accept any other further remarks you would like to give us. We feel this is an open way for you to see it. Under the Government Performance Review Act, we are authorized to take input from all of our customers, if you will, all the folks who we serve, and it will be there for%0*H&H&@@ you to take a look at. So, we don't have to notice it, if you will. We can take that input, and you can have a good look at it. So please feel free to add to your remarks if you'd like. ` `  What you have given us today, there's a transcript of. I don't think it's fair to say you won't see your particular piece in our report. You know, such and such person from such and such said this. But I hope you will see that we will take the input and in our report try to be responsive to that. And we will also certainly say that you participated with us. ` `  There's some things that you mentioned that we obviously do not need to wait for a report to Congress to think about. And as some of you well know, we've been very busy trying to meet with various segments of the industry and consumer groups to see what we can get done now to use the tools we currently have to try and do the kinds of things that the Chairman, frankly, has told us to do. And that is to streamline, to think about convergence, to think about new and better ways to do things, to be innovative, to ensure that we have the widest possible input for our decisionmaking. ` `  So, even as we go through this process, I hope we can continue this dialogue. We will continue talking with you. All of the bureau chiefs, all of the offices are well%0*H&H&@@ involved in this process. We have met together. We will keep meeting together. We are collaboratively putting together our strategic plan. It is not Dr. Pepper and I sitting writing it, but rather rather, all of our bureau heads and offices who are together putting together a plan that we hope will reflect what we heard today, which is, frankly, an extraordinarily exciting future. ` `  So, again, I thank you all for being here and please make sure our phones, you know what they are. And it's fcc.gov. You can reach us anyway on email. So, thanks to each and all of you. ` `  (Whereupon, at 5:10 p.m., the hearing concluded.) // // // // // // // // // // // // //%0*H&H&@@  ? (!   ` X VƟHeritage Reporting Corporation &(202) 6284888V "REPORTER'S CERTIFICATE ă  ?X  FCC DOCKET NO. : N/A  ?  CASE TITLE : A NEW FCC FOR THE 21ST CENTURY  ?x  HEARING DATE : May 20, 1999  ?  LOCATION :  Washington, D.C.  I hereby certify that the proceedings and evidence are contained fully and accurately on the tapes and notes reported by me at the hearing in the above case before the Federal Communications Commission. Date: __52099_ ___Joel Rosenthal____________ Official Reporter Heritage Reporting Corporation 1220 "L" Street, N.W. Washington, D.C. 20005  ? <! TRANSCRIBER'S CERTIFICATE ă  I hereby certify that the proceedings and evidence were fully and accurately transcribed from the tapes and notes provided by the above named reporter in the above case before the Federal Communications Commission. Date: __52899_ ___Nancy McHugh_______________ Official Transcriber Heritage Reporting Corporation  ?  <!PROOFREADER'S CERTIFICATE ă  I hereby certify that the transcript of the proceedings and evidence in the above referenced case that was held before the Federal Communications Commission was proofread on the date specified below. Date: __6199__ __George McGrath______________ Official Proofreader Heritage Reporting Corporation