Michael K. Powell
Federal Communications Commission
June 6, 2001
Thank you, Matt, for that kind introduction, and it's really a pleasure to be here and to have an opportunity to see innovations firsthand.
You know, over the weekend, I had the rare opportunity to actually get a chance to catch up on my reading, and I read a few newspapers, business magazines, and the like, and it seemed that in every publication I read there was a gloom-and-doom story about the state of the telecommunications industry and the market. Failed companies, failed policies, failed promises, and disheartened consumers littered the headlines. The tone of the stories: dark, desperate, hopeless.
In the body of these pieces there were very few on record espousing a more hopeful picture. How dramatic a turn from just a year ago when this same chatty class competed to be the first to trumpet the new, new thing. It is now distinctly chic to be a doomsayer.
Now, I pondered this mortuary atmosphere and wondered, are the naysayers correct? Is the information revolution a popped bubble of hot air? Should we chalk it up as being too hard, too unrealistic, too complicated? Should we fold our cards, have a drink to our shattered dreams, and laugh at our gullibility?
I sat there trying to imagine the great telecom revolution flatlined, but it just wouldn't rest in peace. Something is very much still alive, something profound and unrelenting, something that will not be blown aside by the dark-clouded blustering of pundits or the disenchantment among some policy-makers or the bowed heads of defeated businesses.
I want to stand up here today in defense of optimism. The fundamentals of the information revolution are very much still alive and will drive us forward despite ourselves. Technological advances will continue to dazzle us. Consumers will demand the tools that they need for their lives and their children's lives, just as businesses will demand the tools of greater productivity. Determined innovators and entrepreneurs will find a way to profitably service this demand. The current downturn is, indeed, painful, but it cannot and will not deter the march forward toward change and a future defined by infinite, ubiquitous information in the hands of consumers.
We often talk about the Information Age in the language of revolutions. I looked it up, and a revolution is defined as a sudden and dramatic change. But this world was never going to change overnight, not in the least. I think it is better to conceptualize the period that we're in as a great migration. A migration is defined as "a movement from one place to another with a goal of making permanent settlement in that new location."
A migration leads to diffusion of culture, tools, habits, ideas, and forms of organization. But as has always been the case, migrations take time.
A migration is an apt analogy, for we are on a journey. We are pushed from the legacy systems and services that we've known for a century and pulled toward a world marked by dramatic technological advances, more efficient and dynamic infrastructures, and a wider range of goods and services that stem from computer power being married to communications technology, and all of it being pushed into the hands of individual users on the periphery of the network. But as is so often the case when a people strike out for the promised land, we underappreciated and underestimated the challenges of the journey.
Like the throngs standing around the back of a wagon listening to the prospector preach the benefits of the gold rush, we quickly jumped on that band-wagon, wanting to believe the new technology and the new economy would provide a quick path to riches. And in this techno-frenzy we accepted that somehow technology had eliminated business fundamentals.
Too many companies commanded their new competitive artillery not with the words "ready, aim, fire," but seemingly "ready, fire, aim." Columnists celebrated the new technology that had ended business cycles, insulating somehow the market from economic downturns. Investors shelved the strategies learned over centuries as if history really would never again repeat itself, and government policy, too, excited by the promise, pushed hard to hastily invent markets without regard to the conditions necessary to nurture efficient and long-term competitors.
But it's always true that massive migrations and explorations rarely are smooth and uneventful. Cold winter storms do descend on travelers. Seemingly impassable mountain ranges do rise up to block one path from another. Settlers and explorers are eaten by animals and robbed by highwaymen, and I'll leave to your imagination which one is which.
Without question, we are feeling the penetrating cold, and experiencing the exhausting frustration, of the first leg of this journey. The funding crisis is senselessly starving even the heartiest and most worthy of companies. A passable business route to profitability looks unreachable to so many, and consumers are losing hope, hassled by the frustrations and confusion of new services, and embittered by the overinflated promises of the prophets.
But I want to submit, there is a case for optimism. No matter what we say, the journey will go on, no matter how hard the current conditions, for there is no real going back. The laws of physics and the technical advances that ushered in this era will not cease their unrelenting march. They are unmoved by our hand wringing and will continue to transform science fiction into reality for the masses. Costs will continue to be driven down, and powerful possibilities will continue to go up. This is unstoppable, and I assure you, someone will harness its promise.
The advanced architectures that have been emerging are unquestionably superior to the communications systems of our past. Packet-switched architecture, broadband, and the digital use of the air and skies to deliver services will not abate and will be the underpinnings of our future communications systems. Moreover, consumers, though wary, continue to demand the tools of the digital future. We remind ourselves that the power of technology is the empowerment of people. They will value the possibilities and continually search for valued applications at reasonable prices. Someone will provide them.
Opportunity thus remains. Nimble, fleet-footed entrepreneurs will harness this chance and find a path to success. It is the wise investor, I submit, that will see through the storm clouds, find these companies, and aid in their trek to the digital, broadband world.
My optimism and conviction that the revolution will continue guides how I've chosen to lead the Federal Communications Commission. We know that there is no turning back and that the agency will have to change and prepare itself for the migration to the digital, broadband environment.
Let me just share with you the cornerstones of our program, and I would like to begin with my view of competition policy. First, competition policy traditionally focuses on prices and discipline and market power. Yet it's perhaps more important today than ever to focus competition policy on the right regulatory framework for fostering innovation, and perhaps more importantly, to promote competition policy that encourages investment in advanced infrastructure and fosters and encourages experimentation with new communications systems like Internet telephony.
I'd submit that the communications space is filled with competitive innovation, all of which we need to promote: DSL; cable-modem service; fiber reaching deeper in the network and eventually the home; wireless, fixed, and mobile services, including Internet functionalities, satellite services, and perhaps even the electrical grid. They are all vying for research-and-development dollars. Innovation, investment and deployment of advanced architectures to deliver these services, in the minds of the FCC, have their place, and we are looking for ways to encourage the continued development of all of them.
I want to make this point plain: a commitment to markets at a time of experimentation is not a bow to big business. The market is not just a place where companies make money. It is also the chat room where producers and consumers engage in a great dialogue, negotiating to determine what services are valued and at what price. We need to continue to make sure that that chat room is alive and well.
The second plank of our competition policy is to be guided by the view that we will let the market pick winners and losers and hopefully not government policy. It is my view that government is at its worst when it attempts to pick competitive winners or losers, or worse, when it tries to pick a technology. It has the cloudiest crystal ball of all, and industrial policy is very dangerous in periods marked by experimentation. We must resist the temptation that is so often presented to us, sometimes by competitors, to shape evolving markets in some image that we preordain.
Third, the government must remain vigilant as well, to anticompetitive dangers in the marketplace. We must keep our eye on the rapid developments that could lead to unbridled market power that would harm consumers. Yet we must be clear and demand clear, demonstrable evidence of anticompetitive effects, and insist on seeing the emergence of persistent and dangerous trends, before intervening in the marketplace, so as not to distort efficient market development, and more importantly so as not to be used by companies attempting to gain competitive advantage because they lost out on some innovation.
Fourth, when the FCC, a state agency, and Congress do act, however, and promulgate rules and policies designed to govern actions and behavior, the Commission must swiftly enforce such rules and adequately punish willful disregard of their requirements. That's one of the reasons that one of the first things I did was to ask Congress for a dramatic increase in the fines and penalties to put teeth and meaning in our enforcement efforts.
And finally, the fifth component of a healthy competitive policy is understanding and respecting the need for regulatory stability and rationalization of the regulatory structure. You know, it's interesting, in the FCC's history of 70 years of regulation, we never had to worry about the interaction between regulatory policy and investment. When you had a regulated monopoly, they just swashed money from one bucket to the other. We didn't have to be cognizant of how our decisions would affect the marketplace.
But we increasingly recognize that uncertainty introduces risk. Our failure to act puts a cloud over a marketplace that can limit the ability to take advantage of business opportunities. So more and more we need to be guided by the important value of limiting that uncertainty. Right or wrong, whatever your perspective, we will make decisions, and we will try to make them very quickly to stabilize markets. I operate on the credo that indecision and inaction is not a legitimate government policy.
Similarly, we have to act quickly to rationalize regulations. The regulatory environment has been built over a century on clearly defined, technological buckets. Depending on the nature of the service you use, you will trigger a certain component in the statute; you will be regulated in a certain way. We increasingly see the distortions that can result in the marketplace by regulatory arbitrage as a consequence of the differences across these buckets. We have a duty to work hard to harmonize that regulatory environment so that one technology or one industry segment isn't unduly favored or burdened in a converged environment.
But competition policy alone isn't enough to make the FCC a meaningful institution during the migration. We have to turn inward as well, to our management and operations, to make sure that the agency is an efficient and effective and responsive organization.
I'm guided by a few simple principles, the first: We make the hard decisions first. I learned in the Army, as we used to say, "bad wine doesn't get better with age," and putting off the difficult decisions only delays the opportunity to make a difference. Not only will we make the hard decisions first; we are going to make them clearly. I have seen all too often the dangers of double-speak regulation, undue compromise, middling language that only leads to greater ambiguity and legal uncertainty. We need to do it once, not multiple times, as the failings of our drafts reveal, where the courts increasingly intervene.
And finally, we need to make those decisions quickly. I'm guided by the view that a decision made too late is no decision at all. We are undergoing a serious effort to build the organizational management and the procedures to meet this simple credo.
The second prong that I am immensely proud of, and I think has become critical, is that the agency has to build its own strong, independent, technical capability. It has to become fluent in technology. I have seen for too long the dangers of being involved in a regulatory action and being dependent on companies to not only give us the presentation of their own position, but teach us the underpinnings of their technology before we can make a legitimate decision.
In a world governed by technological giants, if the Commission is to maintain its independence and its viability, it has to have a strong technical and engineering component, and this is one of our highest priorities. We are facing a grave situation. In the engineering function at the FCC, within four years, 40 percent of our engineers will be eligible for retirement.
We have built a program called "Excellence in Engineering" that includes the opportunity to recruit more aggressively, create greater personnel-flexibility rules to allow us to compete effectively for engineering and technical talent. We have built an indigenous training program so that engineers and technologists can remain current in their fields, sponsoring programs and partnerships with laboratories and universities around the country.
We hope that this will stem the tide and turn it around, and I'm going to take this opportunity to make a pitch. Anyone looking for a job, contact us at, "www.fcc.gov/jobs." I assure you, we are hunting aggressively.
And I've also heard the cries of your industry about the slowness in our laboratory and our ability to get through the equipment-certification process. It's something we've been aggressively working on, and I'm proud of the strides we've made, but we know we need more. We have focused heavily on backlog reduction and have made a substantial contribution there.
I also want to announce that we have been well aware of the hangups associated with issues dealing with cellular and PCS technologies and RF-safety issues. The Commission is no longer waiting for the consensus to develop. Regardless of what the IEEE does, the Commission will issue measurement procedures for RF safety by the end of this month. Hopefully, at the completion of training and putting procedures in place, we will allow telecom-certification bodies to be able to handle certification of hand-held products no later than October 1st of this year.
And as I said, we are working to increase the Commission's engineering staff. Our goal is that, with very few exceptions, all equipment-authorization applications should be acted on within 30 days of receipt.
The final dimension to this technical fluency is we're building a FCC University. Not only do engineers need to gain grounding in technical concepts and technical fluency, but so do attorneys and so do economists. The Commission is actively building a curriculum, a system of formalized training.
We're inviting engineers and technologists and professors and scientists and companies to contribute to our educational effort. Employees are going to be graded in their performance reviews on their continuing development and commitment to technological principles. I hope this is a hallmark of our tenure and will make the Commission a more effective place.
So, in conclusion, as history has so often shown us, human progress, the march of science, cannot be indefinitely constrained. Someone is going to see the blue waters of the Pacific Ocean. Some Magellan will find the path through and circumnavigate the globe, and just like with those migrations, the world will be changed forever. Who exactly and how it will be done are still a mystery, but the inevitable truth of the accomplishment, to my mind, is unassailable. And so with that, I thank you for having me here. It's been a pleasure being with you.