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A New Federal Communications Commission for the 21st Century Report ]


Oral Testimony of William E. Kennard,
Chairman, Federal Communications Commission
Before the House Subcommittee on Telecommunications, Trade, and
Consumer Protection
March 17, 1999

Thank you Mr. Chairman, Ranking Member, and members of the subcommittee for the opportunity to appear before you today.

We meet here at an extraordinary time, a time full of promise and unlimited potential not just because our calendars say that we are approaching a new millennium, but because the revolution in communications has truly transformed our world. Technology that once was only found in our science fiction can now be found on our desktops, in our cars, and in our pockets.

And there is no question that the current economic boom the longest peacetime expansion of our economy in our history is being fueled in large part by these advances. Over the past 3 years alone, revenues in the communications sector have grown by over $100 billion. The revenue of new local service providers more than doubled in 1997, and jumped again in 1998. With these profits, business has expanded and over 200,000 jobs have been created over the past five years.

Take the wireless industry. Since 1993, capital investment has more than tripled, for a cumulative total of $50 billion. This has made service more reliable and affordable. Now, almost 70 million Americans have a mobile phone. And over that time, 40,000 Americans have gone to work in new jobs that this industry has created.

The credit for this growth lies with the men and women with the big ideas and bigger dreams who took the risk to build these companies. But, I believe, that credit also lies with you, the US Congress.

Often in our history, government has been a day late and a dollar short on some of the most revolutionary technological changes. But in this case, you were ahead of the curve. With a faith in the innovative spirit of the American people, Congress provided the blueprint for competition, passed the Telecom Act of 1996, and allowed these markets to explode.

In this atmosphere, where technology is like popcorn on a hot skillet, government's role is to stoke the coals and encourage growth, not try to mandate how or when these kernels will pop.

This competitive approach has worked. Our regulatory framework is the envy of the world. Other countries marvel at how we are able to create robust marketplaces brimming with innovation and are able to honor our shared commitment to equal opportunity. How we can both lead the Internet revolution while at the same time bring it into the heart of our communities, wiring 80,000 schools to the Internet in just one year.

With all this change around us, we at the FCC realize that we too must change. We are already seeing convergence of communications industries the start of an era in which phone lines will deliver movies, cable lines will carry phone calls, and the airwaves will carry both.

In such a world where old industry boundaries are no longer and competition is king, we need a New FCC. As detailed in my attached written testimony, a report entitled, "A New Federal Communications Commission for the 21st Century," we expect the FCC to focus on three core functions: consumer protection, including universal service; enforcement; and spectrum management. With these as our mission, the traditional boundaries delineating the FCC's current operating bureaus will cease to be relevant. Simply, in five years time, the FCC will be dramatically transformed.

Change is inevitable; it is necessary. But while we need change, we do not need chaos. We must re-organize the FCC in such a way that respects the integrity of our staff and protects the interest of the American people. And we can not use this process as a back-door way to re-open the Telecom Act. This not only would undermine the framework of this explosive growth. It would also roil the markets with uncertainty, threatening our current economic boom.

In the past, I have likened trying to reorganize the FCC during these revolutionary times to trying to rebuild a 747 while in flight. That does not mean that it's impossible. It means that while we undertake these reforms, it's important that the crucial business of the FCC business that is key to this transition to a fully competitive world is not jeopardized. It's important that the plane doesn't crash.

We have a lot of critical work in front of us: local competition rules, universal service, access reform, BOC entry into long distance, promoting the deployment of high-speed Internet access, consumer protection measures such as truth-in-billing, and opening up more spectrum for new services. to name just a few. I am committed and my staff is committed -- to taking this on as well as reinventing the FCC. Because, in the end, both will better serve our customers the American people.

The report that I submitted to the Committee is the first step in developing a five-year strategic plan for creating a New FCC. I hope to get your feedback today and over the coming weeks on our plan as well as hear the input of industry, consumers, and others on this transition. Then, by early this summer, we plan to submit to you and to the public our five-year plan for a New FCC.

The changes that we propose are not trivial. The FCC, in five years, will be unrecognizable to those of us who know it today. It will be re-made for a new century and for a rapidly changing industry. But no matter how much it changes, the FCC will remain committed to promoting competition, fostering the growth of new technology, and bringing the opportunities in these wires and web pages to all Americans.

And I mean all Americans. As I have reiterated time and time again, this Information Age must be the age of inclusion. No one should be left behind.

Thank you for your time. And I'd be happy to answer any questions.