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MARCH 31, 1998

Good morning, Mr. Chairman and other distinguished members of the Subcommittee. I am delighted to be here today, just five months into my term as an FCC Commissioner, to assist you as the Subcommittee deliberates the statutory reauthorization of the Federal Communications Commission. Because I know that you have specific questions that you want to ask this assembled panel, I will keep my opening remarks very brief.

In my short tenure at the FCC, I have come to appreciate personally that this agency is charged with doing a vitally important job at a truly historic time. The train you set in motion in the Telecommunications Act of 1996 is moving and we have been charged with keeping it on track. And while the trains might not be moving as swiftly as some would like, it is moving, nonetheless -- and gaining momentum daily.

As you directed in the 1996 Act, we at the FCC are working to alter forever the legal, economic and conceptual constructs that have governed the various communications industries for nearly a century. Moreover, we are striving to change a regulatory culture that is resistant to dramatic change -- a point often under-appreciated. The task is sobering, and I share the disappointment of many of the Subcommittee members that our implementation efforts have not yet yielded the full range of benefits promised to consumers in the Act. In assessing our progress in implementing the 1996 Act, however, all interested parties must focus on what is working, and what is not, striving always to make sure that if we inadvertently take one step backward in our efforts, we take at least two steps forward soon thereafter. As policymakers we must continue to press forward -- boldly, decisively, and persistently.

It is not time to look backward, for I believe that we have passed the point of no return in the transition to competitive markets. Even if we policymakers did nothing from this day forward, competition would develop, albeit, perhaps, less efficiently. As technology evolves, even the most entrenched monopolists will eventually find themselves under siege by a newcomer who can build a better or cheaper mousetrap.

This does not mean that regulation can be instantly cast aside, or that regulators have no role to play. State and Federal regulators can assist in tearing down the market barriers that law, economics or history have erected. However, I believe that we should not delude ourselves that our actions are more important than those of competitors in the marketplace. As we tackle the intellectually- and psychologically-draining task of setting the ground rules for fair and open competition, we need to muster both the courage and humility to yield our regulatory primacy to the market.

As this Subcommittee considers the future role of the FCC in continuing the work of the 1996 Act as well as the Communications Act, I believe you should look to promote an agency that can keep pace with deregulated markets driven by rapidly evolving advanced technology and services. I believe the Commission should be grounded in four fundamental tenets, which I personally embrace as I work to untangle the web of communications regulation:

The first tenet is a genuine faith in competition, and the courage to cede control to the marketplace. I believe devoutly that this great communications revolution demands much more committed and sincere faith in consumers and free markets. It is ironic that even with appropriate ground rules in place policymakers often seem reluctant to truly trust market forces and instead continue to make decisions and allocate services to which the market is best suited.

The second tenet of a regulatory agency focused on the future is one that values and promotes innovation. So often when people speak about competition they focus on lower prices and quality services. These things are quite important. I believe, however, that it is equally important to focus on innovation when dealing with industries that are driven by technology. Competition to provide new products and services should be recognized as a key driver of consumer benefit in telecommunications and information services. It will be new and innovative technologies that open up new markets, smash the advantages of incumbency, and deliver new, viable choices for consumers.

The third regulatory tenet is readiness and preparation for the imminent regulatory implosion of traditionally distinct technologies and services. Communications historically has been regulated (or not regulated) according to the method of transmission used: telephone companies are placed in one regulatory bucket, broadcast companies another, cable companies another, and so on. Such regulatory balkanization was sustainable in the era before digitalization, when services offered via one method of transmission could not, as a general matter, be offered via a second method of transmission in a manner that would lead customers to view the two services as substitutes for each other. However, as technology erases the differences between communications services, we must work to reconcile conflicting regulatory approaches in a way that reinforces forward-thinking, pro-competitive approaches.

Finally, the fourth tenet is to recognize the absolute demand for regulatory efficiency. Policymakers have come under increasing criticism because of the glacial pace that often characterizes the regulatory process. I dare say that consumers, industry players, and the capital markets all abhor uncertainty and demand timely responses. In unforgiving high technology markets, a good regulatory decision made too late, might as well not have been made at all. The Commission must make timely and clear decisions, in order to accommodate the realities of communications business, particularly the sensitivity of the capital markets. One important shift the Commission should make in order to operate more efficiently is to direct more of our efforts and resources to enforcement rather than prospective regulation.

Mr. Chairman, Winston Churchill once said, "[t]he optimist sees the opportunity in every difficulty." I am an optimist, and I will continue to be a full participant in one of the momentous and difficult policy campaigns in our history. I embark on this mission with a sober understanding of the Commission's obligations under the Communications Act of 1934, and the Telecommunications Act of 1996. I also recognize the fact that the Commission is an extension of Congressional power. As we at the FCC do our work, we must acknowledge that the Commission has only the authority which has been expressly delegated to it by this venerable body.

I look forward to continuing to work with Members of Congress and with my colleagues on the many challenges, and tremendous opportunities, that await us in implementing the 1996 Act. I trust that, by working collaboratively and by having faith in free markets, we will bring the benefits of competition, choice, and service to American consumers.

Thank you for your attention to these matters. I will be happy to answer any questions.