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William E. Kennard
Federal Communications Commission
Personal Communication Industry Association of America
Orlando, Florida

September 23, 1998

(as prepared for delivery)

Thank you Jay for that great introduction.

I would like to acknowledge my colleagues from the FCC who are here this week: Commissioners Susan Ness, Michael Powell, and Harold Furchtgott-Roth. I would also like to acknowledge my Chief of Staff, John Nakahata.

I'd like to start by telling you a story. It's a bit of military history -- about a problem that our military faced in 1907.

In that age before motorized travel, when the cavalry was out on patrol, the soldiers needed a way to communicate back to headquarters. So, in those days, one soldier would ride behind the troops unreeling wire along the ground. When they needed to send a message, the soldier would jump off his horse, set up his equipment, plant a metal stake in the ground, and send a message.

Of course, this slowed everybody down. But then some turn-of-the-century military engineers came up with a brilliant solution.

They put a copper patch on the horse's skin. This is a true story. Since a horse always has at least one foot on the ground, the circuit was complete. And the scouts could send messages while riding.

That's how the first mobile messages were sent -- in Morse Code.

So, even a hundred years ago, people saw the limits of having to string wire to send messages. That's why they embraced the idea that Marconi developed: messages sent through the air, wireless technology.

Today, I want to talk to you about my view of how far we've come, and where we still need to go. Even a century after Marconi, we have only begun to see the impact that wireless will have both here in the United States and around the world.

My vision contains three components. It's what I call the three Cs: competition, community and common sense.

First, competition. We are seeing increasing competition between wireless carriers. But that shouldn't be the limit of our vision. Wireless can and will be a head-to-head competitor against all telecom providers: wireless and wireline.

Second, community. Communications must help to build communities. When a wireless customer dials 911 for help, that call should go through and pinpoint the customer's location. When Congress calls on this industry to assist law enforcement in protecting communities, wireless must meet the challenge. And wireless should help the 54 million Americans with disabilities cross the digital divide.

Third, common sense. The relationship between industry and government must be firmly grounded in common sense. This means streamlining our procedures and eliminating rules when competition renders them obsolete or counterproductive.

Competition, Community and Common Sense.

First, let's talk about competition. You all know how fast telecommunications markets are changing today -- revolutionary change brought about by technology. The centerpiece of this change must be competition. We must bring real competition to the local loop, not just for telephony and low speed data, but for broadband applications as well. Wireless should be a key driver of this revolution, and I am excited that you, as an organization, have recognized the broadband opportunity by welcoming fixed wireless providers into your ranks.

Wireless has the potential to bring the best of the Information Age to every home and business, to not only complement wireline services, but to bring more services. To be something more and better than wireline. I envision a day when new technologies will enable consumers to use wireless to transport information, entertainment and educational services anywhere in America, and indeed the world. A day when wireless is responsible for providing many of the services that are now only provided by wired networks, and some completely new applications that can only be provided with wireless.

Wireless local loop is the first step toward that vision. But wireless local loop is many things to many people. Whether it's people cutting the cord of their wireline phones -- as reported this week in the Wall Street Journal -- or wireless companies providing second lines for computers and fax machines, integrated mobile and fixed services, or even new high-speed data for businesses, wireless services are poised to break open the wireline monopoly to competition.

How can the FCC make this vision a reality? How can we create the environment that makes it possible for you to be a cornerstone of these pro-competitive policies?

Well, spectrum is the lifeblood of your business. So we need to get spectrum licensed and working for competition as fast as we can. That's why we have abandoned the comparative hearing and lottery processes for auctions. Auctions are faster, fairer and more efficient. But auctions will remain a fast and efficient tool for licensing only if we maintain clear rules for bidding that will be understood by all.

The LMDS auction held earlier this year put a huge amount of spectrum on the street quickly. It was the largest contiguous block of spectrum licensed at one time. Most licenses were awarded within a few months. Those few licenses not purchased will be auctioned in March of next year. This spectrum can be used to provide cutting edge broadband services, like Internet access and full motion video.

And we've got other high bandwidth auctions coming up: 39 GHz and 47 GHz, to name just two. We will soon allocate more spectrum that can be used for wireless local loop.

Interconnection. We must work hard to ensure cost-based interconnection. This helps consumers by pushing prices down and making you more competitive to wireline. We need tough interconnection enforcement, and a technology-neutral universal service policy.

We must work with state and local governments to remove the impediments to wireless providers offering local loop services. Just last month, we successfully brought local and state governments together with PCIA and other industry groups to craft a method of fairly resolving antenna siting disputes. This voluntary agreement shows that, when industry and state and local governments see their mutual interests in promoting wireless technology, many of these impediments can be overcome. And I thank PCIA for working with me and the state and local governments to make that historic agreement happen.

Later this year, I will propose a series of proceedings to promote Alternative Wireless Networks to complement our ongoing broadband initiatives under Section 706 of the Telecom Act.

As we work through these issues, we will flesh out the market and regulatory obstacles faced by businesses that are pursuing wireless local loop strategies.

Fixed wireless providers need rooftop access to apartments and office buildings to place their antennas. They also need access to inside wiring and riser cables to reach their customers. This year's FCC report on CMRS competition noted that wireless providers encounter problems gaining access. You need to help us to identify the nature and extent of these problems so we can be part of the solution.

Now let's talk about building communities. I believe that this is the highest and best use of technology -- assisting people to live safer, healthier, fuller lives. Now what does this mean for the wireless industry? It means offering E-911 callback and location capabilities and providing law enforcement the tools it needs to safeguard the public. It means ensuring that persons with disabilities have access to technology so that they can be full participants in the Information Age. Let me be very clear about this. Congress made this a part of our national policy. It was a wise decision for the country. Our challenge is to work together to bring these benefits to the public in the fastest, most efficient and effective ways.

The Telecom Act -- Section 255 -- directs the FCC to write rules to ensure that all telecommunications services are accessible to the disability community. Some have been leaders in your industry -- taking this mandate seriously -- incorporating accessibility issues early in the product development process. That's great. But industry must do more to ensure access to people with disabilities, and I am committed to making this not just the industry exception, but the industry norm. Because that's what the law requires.

And this industry needs to make more progress in solving the TTY compatibility issues for digital wireless phones, as required by our E-911 rules. I know that these issues are not easy to solve, but we must find a way to ensure that people with disabilities have the same access to E-911 as everyone else.

A word about Y2K. We are 464 days away from January 1, 2000. Commissioner Michael Powell has done a terrific job in leading the FCC's efforts on Y2K. Please work with him to solve this problem for the country.

Now let's talk about common sense. I want to bring more common sense to the ways that we work together -- industry and government. From my perspective, this means that we in government must have the humility to trust in the marketplace. And I believe that industry should respect this limited role for government. Industry must recognize that government's role is not to confer regulatory advantage, or guarantee anyone success, but rather, to strive only to afford everyone an opportunity -- an opportunity to win or lose in the marketplace.

But common sense also means that government must have the fortitude to act when the market fails to deliver competition and opportunities for entrepreneurship. Or where the market fails to advance important public policy goals like universal E-911, access for persons with disabilities, or tools needed by law enforcement to protect our communities.

What are we doing to bring more common sense to our relationship?

We are identifying areas where we can streamline and eliminate regulation. We did this last week when we implemented the Universal Licensing System. Universal licensing will enable us to cut the number of forms we use from 40 to four and it will fundamentally change for the better the way that you interact with the FCC.

Common sense also means providing you more flexibility. Last week, for example, we allowed MDS and ITFS licensees to provide two-way wireless services. We've given PCS providers flexibility to provide fixed, as well as mobile, services.

We can do much more. And we will.

It may very well be true that some markets have enough competition and enough capacity to eliminate the CMRS resale obligation right away. The fact is that the competitive situation in Los Angeles is not the same as the competitive situation in Grand Rapids. So let's continue to have a dialogue on forbearance. Let's discuss ways that we might identify those markets where competition is flourishing and where forbearance may be appropriate.

The transition to competition does not lend itself to one-size-fits-all generalizations. So let's find ways to phase out regulation where competition allows.

I am always thinking about ways to streamline our regulation. I want to hear more from you on this. I hope you will help us identify ways that we can bring more common sense to the work we do together.

Your industry introduced wireless to the world. You defined its past, and you will define its future. And let's not forget that the world is watching what you do.

Not long ago, I was impressed by a story I read about a woman in the tiny village of Bora in Bangladesh. A year ago, she was out of work. Now, if you walk up to her house you'll see 50 people sitting in chairs, or on the floor, or lined up outside. They are her customers.

What changed her life? She secured a loan from Grameen Bank -- and bought a cell phone. Most of her neighbors had never seen a phone. Those who wanted to contact relatives had to walk 20 miles, then wait days for a pay phone. This woman had a vision, knew what her community needed, and had the courage to put her ideas into action.

Now she charges her neighbors ten cents a minute. At that rate, she can pay the phone bill, make a weekly loan payment for the phone, and keep enough profit to support her whole family. The point is that your industry gave this woman the tools to make a better life for herself, her family, her whole community.

And so today I ask you to think beyond the world of pagers and cell phones and next quarter's earnings to the world that lies ahead. After all, just the way we look back on those cavalry scouts of 90 years ago, someday people will look back on us. And when they do, I want them to know that in the waning days of this century, we had a vision for this industry -- a vision grounded in three fundamental principles: an unwavering commitment to competition; faith in the power of technology to support our communities; and a humble respect for common sense.

Thank you.