Washington, DC - On the fourth anniversary of the adoption of the Telecommunications Act of 1996, William E. Kennard, chairman of the Federal Communications Commission (FCC), said "The
American telecommunications consumer today has more choice of providers and services, at faster speeds and at lower prices than ever before. This is truly the beginning of a new era in which high-speed,
broadband access will be as ubiquitous as the dial tone is today."
Declaring that we are witnessing the launch of the Broadband Internet Age, Kennard outlined the evidence as presented in a new FCC staff report on the status of the U.S. telecommunications industry,
"Telecommunications @ the Millennium -- The Telecom Act Turns Four." The Chairman made these remarks and released the report during a speech delivered today at the National Press Club in
Among the findings of the report are the following:
- PRICES ARE FALLING AS DEMAND IS INCREASING
- Long distance prices have fallen by 34 percent since 1993 and, for residential consumers, domestic long distance prices relative to other goods and services have fallen by 10 percent since 1993.
- Since 1993 long distance traffic has increased 42 percent.
- International long distance prices have fallen by more than half since 1993.
- Wireless phone prices have fallen by 35 percent since 1993, as average monthly local bills have dropped by $30 - from $70 in 1993 to $40 in 1999.
- INDUSTRY IS INVESTING AND INNOVATING
- In 1999 companies invested about $25 billion more in their networks than they did the year before the Telecom Act was passed.
- Companies have nearly doubled the nation's fiber system from under 100,000 miles in 1993 to about 225,000 miles today.
- By 2001 there is expected to be roughly 140 times as much trans-oceanic capacity as in 1996.
- New entrants are building new networks. Investments of Competitive Local Exchange Carriers (regional Bell competitors) tripled between 1997 and 1999.
- New wireless operators have created truly nationwide wireless networks, with plans that eliminate long distance fees and roaming fees.
- Cable companies invested nearly twice as much in 1999 as in 1995. They are upgrading their cable systems to advanced two-way systems that can deliver not only more video channels, but high-speed Internet access and telephone service. Investment by incumbent local exchange carriers (regional Bell companies), flat in the early 1990s, grew by 16 percent between 1995 and 1998.
- The industry is becoming more innovative. As one measure of this, the number of telecommunications patents granted annually by the U.S. Patent Office grew from 3,744 in 1994 to 7,674 in 1998.
- COMPETITION IS THE DRIVING FORCE
- In 1994 most Americans could choose between, at most, two competitors for their wireless service. Today 94 percent of Americans have three or more providers in their home market and over 75
percent have at least five operators competing for their business.
- Local competitors have been particularly successful in the business market, where competitors have taken 65 percent of all new lines deployed in the third quarter of 1999.
- In the video marketplace, competition means that satellite companies are taking two out of every three new multi-channel video subscribers.
- In 1995 wireless voice minutes represented one or two percent of all voice traffic. By 1999 this had increased to more than seven percent and by the end of this year it is expected that wireless will
account for over 10 percent of all voice traffic.
After outlining the enormous potential of the new telecommunications economy, Chairman Kennard asked, "What will communications leaders say from this podium a hundred years from now?
- AS A RESULT OF ALL THIS, THE TELECOMMUNICATIONS INDUSTRY IS BOOMING
- Since 1996 the telecom industry has created 170,000 new jobs and generated $57 billion more revenue.
- The "digital economy" is changing the way we do business, carry out our day-to-day lives, and interact with each other. In one study, the Department of Commerce estimated that information
technology producing industries (the producers of computer hardware and software, data services, and communications equipment and services) directly contributed, on average, over one-third of the
real economic growth between 1995 and 1998.
- The benefits of the digital age are being extended to all Americans. By 2006 it is estimated that half of the private workforce will be employed in industries closely linked to information
- Nearly three times as many public schools were connected to the Internet in 1998 (89 percent) as were connected in 1994 (35 percent).
- The Schools and Libraries Universal Service program (E-rate) established in the 1996 legislation provided affordable telecommunications services for schools and libraries, especially those in rural
and economically disadvantaged areas.
"They will say that at the end of the twentieth century, a corner had been turned.
"That the dream of a network of competing networks became a reality.
"That high-speed connections to every American home were on the advance.
"And that the web of networks became a support system that lifted the American people to new levels of opportunity and openness.
"They also will say that late in the 20th century a sleepy, backwater agency, called the Federal Communications Commission, described by some as a hold-over from the 1930s, came to life, reinvented itself, engaged the future and helped to launch our nation into the Broadband Internet Age."
Copies of the report "Telecommunications @ the Millennium - The Telecom Act Turns Four" are available on the FCC's website -- www.fcc.gov. For more information on the report, contact Quindi Franco, FCC Office of Plans and Policy, at (202) 418-2036.