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Speech of Chairman William E. Kennard
CTIA Convention
New Orleans, LA
February 9, 1999
"Crossing Into The Wireless Century"
As Prepared for Delivery

Thank you, Tom, for that kind introduction.

As Lyndon Johnson was fond of saying, that was an introduction that my father would have been proud of, and my mother would have believed. I especially want to thank you for the spirit of cooperation and mutual respect that has characterized our relationship over the past year. You are a great advocate for your industry and for competition.

Before I begin, I want to introduce you to Tom Sugrue, the new chief of the Wireless Telecommunications Bureau at the FCC. I have known Tom for many years now. A few years ago, Tom tried to convince me to leave private law practice and come work for him in government at the Department of Commerce. Well, the timing was bad, so I declined.

This year, the tables were turned, and I was able to convince Tom to leave private law practice and come serve his country at the FCC.

I couldn't be happier about this. Tom is a very well respected lawyer and policymaker with many years of experience both in government and in the private sector.

I am happy to have him on board.

Standing here looking out at this crowd, I can't help but remember how people have underestimated your industry . . . even from the very beginning.

In 1907, Frank Fayant, a muckraking journalist for Success magazine wrote an in-depth investigation entitled, "The Wireless Telegraph Bubble."

To let you know his take on the nascent wireless industry, I should tell you that this was a two-part installment in his series, "Fools and Their Money."

"Wireless has been a bad investment," he wrote. "Millions of dollars of wireless stock manufactured in the past eight years is today worth no more than the paper on which it is printed." Fayant predicted, for example, that there would never be a wireless connection between New York and San Francisco.

But even after your industry proved that wireless could connect the Nation, people still underestimated what you could do. There is that now-infamous McKinsey report of the early 1980s, which predicted that by the year 2000, nine hundred thousand Americans would be cellular subscribers.

Well, now there are over 68 million Americans who own a mobile phone. Last year, they made calls on a service that cost 40 percent less than it did three years ago. And over the next five years, some say that the price will drop yet another 40 percent.

Last year's wireless revenues were $30 billion. You have invested a total of $50 billion in infrastructure that have added 100,000 American jobs in the past five years.

So the next time someone asks me for a prediction about where wireless is going, I'm not going to talk to journalists or management consultants. I'm going to talk to Craig McCaw, Sam Ginn, and John Stanton.

These are the folks who made their vision of the wireless industry a reality. And they, and all of you, are giving us a glimpse of the next century, a century that will be the wireless century. An era in which mobile communications will become a part of the life of every American. An era in which phone lines will deliver movies, cable lines will carry phone calls, and the airwaves will carry both.

We are poised to realize this potential for one reason. Because competition is now the driving force of our law and policy.

Competition is certainly the driving force in the wireless industry. Today, in many markets, there are five or six companies competing for wireless customers. Wireless is the poster child for competition.

When we met here last year, I said that I hoped that wireless phones would soon become a substitute for wireline service, because this would be good for competition in the local loop. I am proud to say that we are closer to this than ever before.

Flat-rate pricing plans have brought hundreds of thousands of new customers. With rates as low as 10 cents a minute, Americans now have a true choice in phone service. There are flat-rate plans that cover all calls whether they're made to the store around the corner or on another coast.

According to some analysts, in ten years, as much as one-quarter of all voice minutes will be spent on wireless phones. Consolidation and alliances are creating a national footprint. A footprint that is creating a path to more convenience and lower prices for all Americans.

This is good for competition. This is good for consumers. This is good for America.

Wireless has the promise to play a key role in bringing local competition to millions of Americans. Bypassing the local bottleneck, alternative wireless networks can use the airwaves to bring choice and low prices to everything from phone calls to high-speed Internet access.

And with third generation wireless, you have the promise of delivering even more bandwidth and a much faster Internet. With choice as our touchstone, we have gone toe-to-toe with the Europeans so that American standards will be part of the wireless future. When it comes to bringing innovation and choice to American families, you and I are allies. And I thank you for that.

Naturally, there are those who fear this competition. Twenty years ago, when the long-distance marketplace began to open up, some decided that instead of competing, they would literally just shut companies out of the business.

We didn't tolerate anticompetitive behavior then, and we surely won't tolerate it now.

A few weeks ago, a wireline company in North Dakota decided to cut Western Wireless's connection to its customers. The FCC, with the North Dakota Public Utilities Commission, took action immediately.

We put the case on our new "rocket" docket, to speed it to resolution. Since then, service has been restored and Western Wireless can once again market to potential customers.

As long as I am FCC Chairman, I will do everything in my power to ensure that no company will shut out a competitor, wireless or otherwise. True competition requires that everyone play by the rules. And we will make sure that happens.

In addition to fighting anti-competitive behavior in the marketplace, I am committed to cutting regulations that prevent the marketplace from working.

The best answer to a business problem is a business solution. In competitive markets it's the consumer that should call the shots. Like Congress, I believe that in a competitive marketplace, excessive regulation can only handcuff the invisible hand.

Congress gave us the authority to forbear from regulation. Yesterday we did that. We extended to November 2002 the timetable for wireless number portability. While we believe that number portability is a good thing, we recognized that current costs may impede wireless buildout and actually hurt competition. This is just common sense, isn't it?

We learned a lot about wireless competition in this process. And I want to engage your industry in a robust dialogue about other areas where forbearance is appropriate.

And let's talk about ways that we can use regulation to accelerate competition. I've had some very interesting conversations recently with my counterparts in Europe, and believe that it's time for us to find a way to implement a calling party pays system in this country.

Only five percent of phone calls are now made on mobile phones. I think that number would increase dramatically with a calling party pays system. This is not an easy matter. Your industry has been divided on this question in the past and there are some tough consumer protection issues to work through. But I believe that it's time to tackle these issues together.

I also want to work with you to make the FCC function better. Everyday, the marketplace demands that you operate more efficiently. You have every right to expect the same from the FCC.

We've been working hard to clear out backlogs and process applications more quickly. Already, over the past five years the waiting time for licenses has dropped 68 percent.

But we can do better. So this past year we implemented the universal licensing system, a new electronic filing system. We cut 40 different application forms to four. And I have asked our new Wireless Bureau chief to find more ways to speed service to the public and make the FCC work better for you.

This is one of my top priorities. But I need your help to make it happen.

And your careful input deserves careful attention. Later this Spring, the FCC will hold a meeting dedicated solely to wireless issues. On this "Wireless Day," we will focus on matters that are important to the growth of the wireless industry, and do so in a way that looks at the whole wireless picture.

I encourage you to give us your input. It will be a lot of work. But I know that you are up to the task.

As we look to the future, the opportunities before you are staggering. In a free market, the only limits to your success are the limits of your drive, your energy, and your skill.

But with these opportunities come responsibilities. The responsibility to help your fellow Americans where the invisible hand of the marketplace may be a weak hand. The responsibility to use your know-how to make our nation stronger and safer.

Last year, 8-year old David Duplantis was fishing here in Louisiana with his 12-year old cousin and his uncle when they noticed a leaking fuel pump.

While they were trying to fix the pump, the boat suddenly veered out of control, crashing into the bank of a canal. They hit the bank with such force that all the electrical equipment was destroyed, including the radio.

David's cousin was thrown to the front of the boat and was knocked unconscious, and David's uncle was seriously injured.

Falling in and out of consciousness, his uncle told David to grab his wireless phone and call 911. Rescue teams responded immediately, but the boat was so hidden that they were initially unable to see the wreck. Young David stayed on the phone for 45 minutes and eventually helped the rescuers locate the site.

His cousin ended up OK. And his uncle survived, after 2 weeks on life-support and a month in intensive care.

A few years ago, David's uncle would probably not have had a mobile phone, and this story would have turned out much differently.

This is but one story, but it illustrates so well how wireless has made a difference. There are so many other stories.

The expectant father waiting for that page to the hospital.

The teachers who can now talk to each other and interested parents because of phones given to them through CTIA's ClassLink program.

The 98,000 Americans who each day use their mobile phones to call 911.

Our responsibility is to make sure that these benefits --- the benefits of wireless technology-- are available to all Americans.

Two weeks ago, I visited some Indian reservations in New Mexico where over half of the people lacked basic phone service.

I talked to people who are awaiting organ transplants, but don't have a telephone to call the hospital. I talked to a family with two members suffering from cancer that doesn't have a phone to call the doctor.

The wireline companies say that it's too expensive to connect these homes. Wireless service may be the only answer to this problem. It may be the only way to link our land's most ancient people to the economic opportunities of the future. It's our responsibility to work with these tribes to find that solution.

I know that this industry can do it. Already, you are working on ways to make wireless accessible to the over 54 million Americans with disabilities. Companies like Pac Bell and Nokia have received input from the disabled community and developed products that they can use. Just last month, working with Lucent, we figured out a way for deaf people to use TTY service on digital phones. This will make a huge difference in the lives of many people.

CTIA, itself, plans to help this effort by acting as a clearinghouse for accessibility information and training. And I want to thank CTIA board member, Lowell McAdams, for his leadership on this issue. I look forward to continuing to work with you.

But there is much more that we must do together. I want to work with you so that those who have trouble seeing or are hard of hearing don't have a hard time using a mobile phone or pager. I want us to seek accessibility solutions that are also great for the general population.

We can do the same thing on public safety. Since the beginning of the wireless industry almost 100 years ago, safety has been one of the technology's most important and exciting applications.

Those who were rescued from the Titanic were only saved because a nearby ship happened to have its radio room open to hear the distress signal. Without wireless, there would have been no rescue . . . and no movie.

To tackle the difficult problem of interoperability, I have asked Kathy Wallman to head up a special advisory committee to make sure that our public safety agencies can work together. Never again should our citizens be put at risk because local police and federal law enforcement cannot communicate with each other.

There are other things we can do as well. Now, we have the ability to bring enhanced 911 service to the American public. This means that if you are stranded in a storm, attacked, or - like the Duplantis family -- injured in a remote location, all you have to do is turn on your mobile phone and dial 911 and emergency personnel will be able to track the signal and send help.

The deadline for launching "phase II E-911 location" is October 2001. I don't think we should wait until the next millennium to bring a service to Americans that they need today. My challenge to you is not just to meet, but to beat, that deadline.

We will do our part. Your part is simple: to step up to the plate and provide this lifesaving service to the American public.

Whether it was Frank Fayant 90 years ago or the guys at McKinsey 15 years ago, no one could have predicted the extraordinary success of the wireless industry. You have nurtured a technology that was once the province of James Bond and Maxwell Smart into one that is found wherever we go anywhere in the world. A technology that allows us to send e-mail while flying at 30,000 feet, show up at our kid's soccer game without worrying about missing that important message from the boss, and rest easier at night knowing that our teenagers have a way to call for help from the highway.

The opportunities laid before you are great. And so are the responsibilities. So, let's work together to ensure that the 21st century is indeed the "wireless" century. A century of freedom, untethered from the wires of the past. A time when opportunity and responsibility can coexist. An era when an industry that was underestimated in the past can come of age in a way that benefits all Americans. I am truly excited about what lies ahead for wireless, and I pledge to do what I can to work with you to make that golden age a reality.

Thank you.