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Remarks Of
Michael K. Powell
Federal Communications Commission

North Dakota Telecommunications Technology Symposium
Fargo, North Dakota
May 5, 1999

Good afternoon, ladies and gentlemen. It is my pleasure to be here with you in Fargo to participate in this important telecommunications technology symposium. At the outset, I would like to commend Senator Byron Dorgan, someone with whom I have had the opportunity of working on important telecommunications issues, for hosting this conference, as well as North Dakota State University and the University of North Dakota.

It is rejuvenating to get out of Washington, D.C., and to be here in the Red River Valley area. I believe that the future of telecommunications in the relatively near term will have its most important and meaningful impact on rural and insular areas, like Fargo, that previously may have fallen victim to geographical, social, and cultural isolationism. The future may not be too far away, as I reflect on the fact that we are 240 days away from the January 1, 2000. Let me say a few introductory remarks about that before I present my views on the future of telecommunications.

The 20th century will certainly be remembered as a period of recorded history that was nearly unrivaled and was as Time magazine pronounced, at once, "inspiring, at times horrifying, always fascinating." As we approach the conclusion of the Millennium, we find ourselves standing at the leading edge of a new, wondrous and transforming economic moment (the so-called Digital Information Age), equal in its importance to that of the agricultural and industrial revolutions. It is the third economic revolution. Or, in the words of Alvin Toffler, the "Third Wave," that holds the promise of a "super symbolic economy where knowledge will equal assets." This economic revolution, as those that preceded it, is being fueled by dramatic advances in technology.


The current communications revolution is born of explosive changes in technology. The primary defining attributes include: (1) microprocessor power; (2) digitalization; (3) Internet protocols; and (4) bandwidth. And I will say briefly something about each.

Microprocessor Power (Speed & Memory)

The first defining attribute is microprocessor power. I imagine that most of you know of George Moore's Law. That is, the intense pace of the growth in microprocessor power is represented by Moore's Law, which holds that the speed of the microprocessor doubles every 18 months. Consider, for example, that microprocessors have only been around for 25 years and yet their performance has multiplied by at least a factor of 10,000. The most state-of-the-art microprocessors can literally process a billion instructions each second. (The first microprocessor, by comparison, could process approximately 400 instructions or calculations per second). Also consider that the typical American household now has more computer processing power than the entire Massachusetts Institute of Technology (one of the U.S. educational institutions that pioneered computer and information sciences) did 20 years ago.

Theoretically, the expansion in microprocessor power could continue infinitum. What does this bode for the future? Well, I was recently struck by very thought-provoking essay authored by Michael Malone for Forbes magazine. Mr. Malone wrote:

"It is a curious fact that every animal--from the torpid giant tortoise to the frantic housefly--is given as its birthright about 1 billion heartbeats. . . .It is as if every species would have his same threescore and ten, the same span of experiences, no matter how quickly or slowly it was forced to live them. But in the digital, solid-state world that is the new metronome of life, it is a different story. The modern integrated circuit chip will soon be able to perform approximately 1 billion operations per second. One gigahertz. A billion electronic heartbeats: the equivalent of a lifetime in a single second. And, of course, at the end of those billion beats, there won't be a tiny electronic death but another billion-beat second, and another. And since silicon is incredibly stable and invulnerable to almost everything. . . there will be a billion more of these digital lifetimes for each chip--more than all the generations of life on earth--before it goes dark. Producing whole cosmologies of change that are beyond human comprehension."

As a consequence, ever-smaller embedded microprocessors will burrow themselves into our daily lives. These machines and systems (no longer clumsy and intrusive like personal computers) will be invisible to the human eye, and will be tremendously autonomous and intelligent. However, they will also be ever-present and, more importantly, eternal (by our standards of life).

This should take your breath away!

Digitalization--The March Of The Zeros And Ones

The second attribute of the communications revolution is digitalization, or what I refer to as the "march of zeros and ones." Who would have imagined a few short years ago that the whole of human communication and the entirety of our senses could be reduced to two simple digits, zero and one? In essence, digital has become the Virtual Planet's common language. Simple binary code married with microprocessor power and intelligence allow nearly anything to be shared with anyone, at any time, unencumbered by distance, human languages, and perhaps even political or socio-economic barriers.

Digital also brings "sameness" to communications. With digital technology, arrange the zeros and ones in a long string and you can transmit a telephone call. Arranged in another string of zeros and ones, you have a video picture. In another, you have data or some combination of all and more. As a consequence, telecommunications industries that have long been defined by their use of particular underlying technologies are finding their services, their markets and their customers converged. No longer is twisted-copper wire the hallmark of a phone company. No longer is coaxial cable the exclusive domain of those who bring us CNN and ESPN. And no longer are the airwaves the exclusive stuff of broadcasters. Each of these industries is finding that they have new competitive vulnerabilities as well as new opportunities. So are their customers.

IP and the Rise of the New Network Paradigm

To my mind, the third primary defining attribute is development of the Internet Protocol ("IP") and the introduction of the new network paradigm. I would submit, with the exception of the creation of the original public switched telephone network, we have not seen such an amazing technological break-through in telecommunications. IP and the Internet generally are radically altering the legal and regulatory landscape. Indeed, as Mitchell Waldrop described it, the Internet is at "the edge of chaos--where the components of a system never quite lock into place, and yet never quite dissolve into turbulence, either." This is a long way from the sophisticated tin cans and string we are accustomed to regulating.

From my perspective, IP and the Internet are also de-constructing competitive concepts. Innovation is no longer captured in the computers and switches of a few institutions, but instead, will rest in the hands and imaginations of millions who can easily stroll across all boundaries--physical, social, political and organization. Thus, the users rule!

The pressing of intelligence to the periphery of networks and to users turns existing networks on their heads and poses a real threat to incumbents. George Gilder aptly described this phenomenon in discussing what he called the new "microcosm":

"The law of the microcosm is a centrifuge, inexorably pushing intelligence to the edges of the network. Telecom equipment suppliers can no more trap it in the central switch than IBM could monopolize it in mainframes."

Bandwidth: The New Driver

And finally, the fourth attribute: bandwidth. Interestingly, Gordon Moore in Time magazine wrote that "Bill Gates rules today because early he acted on the assumption that computing power (speed and memory) would become nearly free, allowing him to write more and more lines of complex code to make use of the bounty. The law that will power the next few decades is that bandwidth will become nearly free."

Coupled with microprocessor power, digitalization, and the Internet Protocol, high-speed, high-capacity bandwidth will unleash the powers of users, and thus innovation will explode at blistering rates.


What is the significance of my foregoing remarks? Well, with the explosion of telecommunications and information technologies, today it is possible to surmount the limitations of geographical, social and cultural isolationism. We are literally able to shrink our world, and expand our reach beyond our current place and station in life. For example, it is no more difficult now to communicate or interact with a friend or colleague on the other side of the world than it would with your neighbor across the street. With the Internet on the World Wide Web, you and I are able to access resources and services from every corner of the world. Ranchers and farmers, for their part, use cellular phones, GPS, and on-line services to monitor commodities. There is something for everyone!

And no sector need be left out. No region need be left out. Technology has opened, and will continue to open, various enterprises and activities--communications, data and information services, education, entertainment, software, electronics, and financial services, just to name a few--to new interaction, consumption, trade, and investment. Let me briefly say a word or two about the enterprises that are being discussed at today's symposium.

Electronic Commerce

Electronic commerce is perhaps the most visible (and seemingly lucrative) manifestation of the current deployment of telecommunications and information technologies. In fact, worldwide e-commerce revenue has pierced the $20 billion mark, representing a 154% jump over the past calendar year. Major market studies forecast that in the first decade of the new Millennium the electronic sales of goods and services will charge past the $100 billion mark in the United States alone. The "Industry Standard," a trade periodical on the Internet economy, recently reported that e-commerce revenues could soar as high as $1 trillion by 2005.

Experts estimate e-commerce to invade all forms of traditional, "brick-and-mortar" enterprises and to take their market share. For example, by 2010 it is forecasted that e-commerce will account for:

Distance Learning and Education

Telecommunications and information services also make it possible for residents of North Dakota and elsewhere who are interested in educational fulfillment and professional advancement to take advantage of resources offered by the higher education institutions in the State and throughout the world.

For some students, this may happen at special learning centers, that are essentially high-tech conferencing facilities with audio/video/data capability, where students can see and speak with instructors who may be several hundred miles away. In other situations, armed with a computer, a modem, and the Internet, participants may be able to access the delivery of distance learning curriculum.

The full panoply of high-speed, broadband, real-time, and interactive capabilities make the idea of State, regional, national, or global "universities" a reality, wherein the importance of the proximate location of students and instructors is rendered almost meaningless. That should revolutionize the education.

Telemedicine and Health Care

Health care providers can surely benefit from this electronics revolution. In the United States, per capita spending on health care far surpasses expenditures made in any other industrialized nation, yet 50 million Americans do without medical coverage. From office efficiency to consumer education, the new electronic world can potentially reform health care service.

In the more practical form of "telemedicine," health care providers can harness the benefits of technology to offer better, more sophisticated, and timely care to all patients. The various multimedia applications and functionality that I have previously conveyed make it possible for patient records, x-rays and all related data and video information to be accessed and analyzed without geographic limitations.

Various medical groups are experimenting with the Internet systems to instantly confirm a patient's insurance, make referrals, and make claims, all at one web site. Others are constructing high-tech examination rooms featuring computer terminals and diagnostic systems linked to centralized electronic databases. Technology may also make it possible for remote medicine and surgery.

And more and more consumers are using the Internet to find health and medical information. For example, a December 1998 report by Cyber Dialogue reveals that more than 22 million Americans are doing just that! By accessing OnHealth, Mayo Health Oasis and other sites, millions of surfers are researching content databases on diseases, diet, and pharmaceuticals.


You may be asking yourself "How do governments cope with revolution?" To be blunt, not particularly well glancing back at history. They tend to stick with their old tried and true methods and modify only incrementally. In a billion-beat a second world, they do so futilely. Let me take a moment to reveal the issues.

Technological and Regulatory Convergence

Communications historically has been regulated (or not regulated) according to the method of transmission: telephone companies are regulated under Title II of the Act, radio companies are generally regulated under Title III, cable companies are regulated under Title VI, 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. Policymakers, however, are fast approaching moments of truth in which we will have to decide whether services similar to those traditionally offered over one medium should be regulated in the same manner as new services offered over another medium--or whether new services should be regulated at all.


I am convinced that innovation is a greater driver of this economy than any other factor, including prices and choices. It will produce those things if there are policies tuned to provide incentives for innovation without skewing the creative dynamic.


There must be a greater sensitivity to the timely demands of billion-beats a second world, where business opportunities are rich, but fleeting. Licenses and regulatory approvals that take months and years are anathema to the silicon world in which technological lifetimes pass in that amount of time. There must also be a corresponding sensitivity to capital markets.

Faith In The Competitive Market

The current communications revolution demands that we keep our crystal balls in the closet and allow the market dynamic to efficiently guide us to changes that our citizens value. History is filled with examples of failed predictions about technological innovation and progress. In fact, I always keep handy a list of failed predictions because there is no shortage of them. Here are a few of my favorites:

Well, as the economist Fredrick Hayek wrote, maybe "It is high time we take our ignorance more seriously."


Technology is evolving at a blinding rate and appears hell-bent to change every facet of our lives. It undoubtedly will, and the potential for that is exciting. And if you think Moore's Law is fast, just think about the fact that fiber-optics are doubling every 12 months, wireless every 9, and the Internet every 4.

There are tremendous opportunities for the residents of North Dakota, Virginia, my home state, and other locales. Virtually every sector of the industry can benefit. And important enterprises, like education and health care, can surely harness these potentialities.

But there are very formidable challenges as well. First, the broadband, advanced networks are not now fully deployed in rural and insular areas. In that regard, commentators often refer to the William Gibson's quotation that "The future is already here. It's just unevenly distributed." I will note, though, from what I have witnessed in my travels throughout the United States that there are energetic and enthusiastic public and private entities that are working to constructing these systems.

Second, as we all know, there is cultural shift that must take place in the hearts and minds of users of advanced technology. Not all doctors, educators, farmers, students, or businessmen are inclined to readily or immediately embrace the computer, the Internet and other implements of the electronic age. The same may be said of traditional, "brick-and-mortar" enterprises. As a consequence, we collectively need to be forward-thinking about the benefits of the technology, not just resign ourselves to the fact that the "tech-heads" will lead the way and usher in all the advantages of the Digital Age.

So in close, I am tired of hearing about thinking out of the box. Let's GET OUT OF THE BOX!

Thank you.