Opening Remarks by FCC Commissioner Rachelle Chong APEC-OECD-PECC Symposium on the Information Infrastructure Plenary Session II: Responding to the Demands of the Information Society: Regulatory Trends and Potential Solutions Vancouver February 20, 1995 Throughout history, there always comes a moment in time when a door opens and the future comes in. The future is here, and I am very pleased on behalf of the FCC to greet my fellow architects of the Information Age. It is a great honor to take part in such a distinguished panel of telecommunications leaders. As an FCC Commissioner, I bring the perspective of a government regulator to this discussion. Three "E" words describe my reaction to this inspiring Symposium so far: exciting, encouraging and enlightening. I am excited because it is clear that we share the view that the Information Age is inevitable, and that it will greatly impact our societies and economies. As we enter the Information Age, technological advances in the information and telecommunications sectors will continue to bring us exciting new services that we can't even imagine now. Personal communicators, teleputers and distance learning for lifelong learn. And all countries -- big or small, developed or not -- stand to benefit. As my friend Richard Beaird of the Department of State once said in Singapore in 1993, "In earlier history, wealth was measured in land, in gold, in oil and in machines. Today, the principle measure of our wealth is information; its quality, its quantity and the speed with which we acquire it." I am encouraged because it is clear that we all intend to work together through established bodies like APEC, OECD, WTO, ISO and ITU to establish frameworks and policies that will facilitate the building of this global networks of networks. I am enlightened by our discussions this morning because it is only through the frank and candid exchange of ideas and concerns between member economies that we will reach mutual understanding of what it is we hope to achieve and the best way to get there. Many of us realize that the information and communications sectors are vital engines of development and economic growth in other sectors of our economies. The challenge that policymakers like myself face is how to adapt our traditional regulatory structures to this changing technology in order to achieve the vision of a GII. Our challenge is two-fold. First, we seek to ensure that innovative services are brought to as many people as possible, as quickly as possible, and at reasonable rates. Second, we seek to implement policies that will encourage investment in advanced infrastructure. However, one cannot generalize about the specific steps each member economy must take to meet these challenges. Member economies differ in how their telecom systems evolved, and in their regulatory regimes and ownership structures. Despite the differences, however, a consensus is building that private investment and competition are the most effective means of bringing innovative communications and information services to market. Thus, the key principle for the U.S. that we hope all global markets will agree to honor is that national markets should be internally competitive and open to foreign competition. My country promotes this principle based on our actual experience. The telecommunications and computer revolution of the past 25 years is traceable to the adoption of U.S.policies that promoted competition and private investment. Because building the GII will require significant capital, the United States sees the private sector and its resources as the driving force behind the Information Revolution. But in order to encourage capitalization, government officials of a member economy must assure investors of a stable regulatory environment in which to make prudent investments. It is a policymaker's challenge then to ensure that our new regulatory schemes are flexible enough to keep up with the pace of technology, to ensure open access and interoperability of systems, to encourage competition without stifling private investment, and to promote the broad availability of basic services to all, without sacrificing universal service. Right now, the U.S. government is actively working to accelerate the development of the Information Superhighway. Our Administration has put a top priority on the development of an advanced infrastructure. The FCC has been urged to continue to put in place forward-looking telecommunications policies. One problem the FCC faces, however, is outdated communications law. American telecommunications law was established in the 1930's -- an era when television, cellular phones and satellites were a futuristic fantasy. Our traditional regulatory scheme assumed clear, unchanging boundaries between industries and markets. This assumption sometimes led regulators to view and regulate firms in various industries differently, even when they offered similar services. Moreover, regulators of the past often addressed the threat of anticompetitive conduct by barring some firms from certain markets and industries. U.S. lawmakers recognize that our current laws are outdated, and that increased competition will accelerate the development of an advanced infrastructure. As I speak, our legislators are drafting comprehensive telecommunications reform packages that will encourage private enterprise to develop and fund the NII and GII. One legislative proposal would remove the existing barriers to full competition in the U.S. telecommunications market over the course of three years. Subject to certain safeguards, it would allow different types of companies -- such as telephone companies, cable companies, broadcasters and equipment manufacturers - - to compete in markets that are currently closed. While Congress does its work to reform our laws, the FCC -- whose duty it is to implement the law -- is increasing competition to the fullest extent possible under current law. However, our outdated law has at times constrained the Commission from going as far as we might like. As examples of procompetitive policies, the FCC has begun to license telephone companies to compete with cable companies in offering video services. The FCC is also introducing greater competition in the mobile telephone market with the recent licensing of our Personal Communications Services and global satellite systems. In addition, our regulatory regime for low-earth orbit satellite systems is structured to permit a number of competitors. On the international front, we have recently approved private line resale in the U.S.-United Kingdom and U.S.-Canada long distance markets. These decisions will increase competition in these international markets and result in lower rates. These examples give you a flavor of what the FCC is now doing under existing law. Of course, should a new telecommunications law go into effect, the FCC could take even more procompetitive steps. Here in Vancouver, we hope to engage in dialogue with our foreign partners about how best to provide a favorable regulatory and investment environment to develop the GII. But even as we talk with our foreign partners, the United States continues to set an example by working hard to achieve greater competition in our own domestic market. For example, Congress and the FCC are actively discussing relaxing foreign ownership restrictions on communications companies currently contained in our law. As these ownership restrictions date back to the World War I era, the issue has been raised as to whether they should stay on our lawbooks. We hope to set an example to show that countries have nothing to fear -- and much to gain -- from greater international investment. The United States also believes that information content will power the global Information Superhighway. To be successful, the GII must offer content which is useful and desirable, and the transmission of which is profitable for information providers. Network users must feel that their privacy is protected and their information secure. The U.S. believes that it is essential to ensure protection of intellectual property rights, and guarantee rightsholders control over the use of their creations. I believe that cooperation and collaboration among nations is critical to reach a goal as ambitious as the GII. We hope that this excellent symposium, the upcoming G-7 GII conference, and other international meetings will all be successful to this end. Just last Thursday, Vice President Gore and Secretary of Commerce Brown released a "GII: Agenda for Cooperation" in which the U.S. pledged to do the following: * First, to support pilot projects that demonstrate the benefits of the GII; * Second, to exchange electronic information to support global trade and commerce; * Third, to share public domain information with other countries on GII projects; * Fourth, to encourage new applications of information technology that will encourage use of the GII; * Fifth, to encourage private sector efforts to develop standards to ensure interoperability of applications, and, * Finally, to eliminate any barriers to GII development. This Agenda evidences the commitment of the U.S. to work cooperatively with our foreign partners to build this global network. This symposium and the enthusiasm here is a testament to the importance of GII issues. Policymakers around the world now view communications and information issues in a global context. As technologies and markets advance, I hope that we keep the vision of a global "network of networks" in mind. In closing, I would like to paraphrase Vice President Gore, whom I admire very much for advocating his vision of the GII. He urged us to build a global community in which the people of neighboring countries view each other not as potential enemies but as potential partners, as members of the same family in the vast, increasingly interconnected human family. As one who is ready to take up a hammer and build the GII, I look forward to working with you. Thank you very much.