REMARKS OF COMMISSIONER MICHAEL
J. COPPS
FEDERAL COMMUNCIATIONS
COMMISSION
TO
NARUC SUMMER MEETING
COMMITTEE ON INTERNATIONAL RELATIONS
Thank you Commissioner Fred Butler,
and thanks to the whole Committee for inviting me to be here today. I join you in welcoming our distinguished
visitors from
I’m extremely pleased that NARUC
is showing what can only be described as strong leadership on global issues. I share your belief that in order for us to do
our job as regulators effectively, we need a heavy and sustained focus on
international issues. Anyone who didn’t
believe that before September 11 should be a believer by now, but talking the
talk and walking the walk are two different things. NARUC is walking. Before coming to the FCC, I spent eight years
at the Department of Commerce, during the Clinton Administration, working on a
wide range of international policies, including trade in telecoms and information
technologies. Now I’m trying to make
international telecom issues more central to our work at the FCC, because I am
convinced that these issues are critical for the world community. We will fall far short of the promise of the
Twenty first century if we cannot put these challenges front-and-center and
solve them, and in terms of the everyday lives of billions of people, that
would not be just unfortunate; it would be tragic.
A journey of a thousand miles
begins always with a single step, and my candidate for that first step in
global telecommunications is the kind of regulator-to-regulator contacts that I
see here today between our state and federal regulators from the
Why is regulator-to-regulator work
so important? Because, I believe, the
vast majority of regulators around the world share some common goals, just as
state and federal regulators share common goals. We share the struggle to
narrow the digital divide. We share the objective of bringing the best and most
cost effective communications technologies to our consumers. We share the
desire to encourage telecom investment. We want to protect consumers against
fraud and other unscrupulous practices. And we want to find ways to stimulate
innovation and growth through effective policies and through, very importantly,
enhanced public sector - private sector cooperation. No way can we meet the
challenges we face without public-private dialogue and cooperation.
To
reach these common goals we need to meet with international regulators and we
need to discuss openly and honestly our successes and our shortcomings. Each country
has successes to share; each country has its share of failures. And none of us
is in a position to preach. No one among us has yet created the smooth and
perfect road to competition or figured a painless way to transition from closed
to open systems. No one of us yet has a satisfactory strategy for dealing with
the challenges of technological and business convergence and how to regulate
and deregulate in a converged world. No one of us yet has consumer protection
down to a perfect science. So I think we should always go into our discussions
- bilateral and multilateral - with a healthy sense of humility, with a sense
of how far we still have to go, and with enough candor to cite our own
shortcomings even as we advise one another on what we should or should not be
doing.
I
believe that we are at the cusp of the most challenging - and most rewarding -
time ever for communications. I know that every analyst that you and I have
read over the past year has been darkly pessimistic about the state of the
telecom marketplace, and WorldCom’s news makes things even worse. But remember
that these are the very same "experts" who were predicting, just a
couple of years ago, that communications stocks would rise forevermore, and
that business cycles had been consigned to the ash heap of history. We need to
remember that business cycles, like all cycles, have ups and downs. When you’re on the way down, unless you can
get some perspective on the market, you may think that you’ll keep going down
forever. I believe the analysts'
previous irrational exuberance was just as misplaced as today's unwarranted
pessimism. Investment in international communications is going to come back,
and I believe sooner rather than later.
But
when investment does return, it won't be like it was. It will be of a much more
discerning sort. There will be significantly more competition for the
investment that becomes available. And that investment will flow to countries
that have worked to lay the foundation for economic success in telecom.
This
foundation has many parts, but, more and more, we all seem to agree that one
critically important part is the establishment of an independent regulator that
acts in the public interest. This surely does not mean one size fits all, or
that one regulatory model will work equally well everywhere. To say that is to
ignore history, culture, and the facts of life.
But
there do need to be some common elements within the different regulatory
regimes that different economies implement. I think most of us here agree that
for a regulatory system to be effective, it must be independent, transparent,
and capable of providing regulatory certainty. This is what builds trust, gives
investors the information and confidence they need to take risks, ensures fair
competition, manages scarce resources efficiently, and promotes the public
interest.
This
is where we in the
At
the end of the day, no matter what precise system of regulation a country may
elect, I believe that there are some fundamentals, some common elements that
need to be in place. Let me very briefly
note five critical characteristics of an effective regulator: (1) independence;
(2) clear authority and jurisdiction; (3) strong enforcement capabilities; (4)
openness and transparency; and (5) excellent, independent staff. There are
other elements that are important, but to me these are key, and I would offer
just a brief thought on each.
First,
to be effective, a regulator must be independent from the companies it
regulates and free from direct political pressure. This allows it to put the
public interest first. Additionally, a key part of independence is having
adequate funding. Good data, adequate staff and effective mechanisms don't come
cheaply.
The
second attribute of an effective regulatory system is clear jurisdiction and
authority. This means clear statutory authority and clear lines of division
within government. And we all agree, I hope, no matter what country we are
from, that a regulator's responsibility should be set forth publicly and
adhered to at all times. I also think that for a regulator's authority to be
accepted and be credible, its decisions should be appealable to the courts.
The
third attribute of an effective independent regulator is the ability to enforce
its rules. Even if a regulator has excellent rules, if it does not have the legal,
political, and practical ability to enforce these rules, those rules will not
be respected.
Now
the fourth attribute--openness and transparency. An effective regulator must
make transparent decisions. We are all finding that where a regulator publishes
all of its rules and decisions, opens them for comment from all stakeholders,
and everyone knows the rules and the reasons for decisions, the regulator does
its job better. This also means access
to decision-making should be easy.
The
last characteristic I'll highlight relates to staff - the regulatory
"team" we each entrust to implement our rules. Attracting the high
quality, independent staff we all need can be difficult. One positive trend
that I note is that regulators around the world are beginning to work with
universities in their countries to ensure that they produce high quality
graduates with the skills needed for demanding regulatory jobs.
NARUC
has shown real leadership here. Working
with Bill Gillis and the Center to Bridge the Digital divide, the
Telecommunications Regulatory Association of Southern Africa, and a group of
excellent African universities, NARUC is assisting in a human capacity
development project that we should all keep our eyes on. Chairman Tom Welsh from
When
you look at the power of communications technologies, and at the wide
disparities in access to these technologies around the world, you can’t help
but be struck... While these numbers, I
hope, are better now, the last studies I’ve seen showed that only one person in
five on this planet has ever used a telephone.
That’s according to the United Nations.
In
But the numbers are growing
recently.
The benefits of improving
telecom infrastructures extend farther than just the telecom sector itself. Countries around the world have already
recognized the positive effects that a robust telecom infrastructure has on
their overall economies. A telecom
infrastructure, like an energy or transportation infrastructure, is a great
enabler. It enables a whole
economy. Just as surely as energy and
basic transportation infrastructure provide the wherewithal for other sectors
to grow, so too is communications infrastructure a locomotive of growth in
other sectors. In fact, in this day and
age, when the old dividing lines between basic industries and high tech have
all but disappeared, I submit that these three basic infrastructures -- energy,
transportation and communications -- must go hand-in-hand if a country is to
have a balanced progression toward growth and prosperity. Better telecom infrastructures lead to
incredible new services. Conversely,
without a robust telecommunications network, a country’s entire economy is held
back.
You
know, sometimes when I mention the importance of telecom and broadband to
developing economies, people will say to me: “Wake up. Get serious. Don’t you know there is starvation in the
world? That people are struggling to
feed and clothe themselves and to develop true food security? How do you expect them to focus on telecom
when they are fighting just to subsist?”
We know that, right now, hunger stalks southern and eastern
But the connection between
those pervasive problems of poverty and the liberating force of modern
telecommunications became clear to me as I toured the villages, because some of
them now have rural health clinics enabled by telemedicine. I saw ramshackle schoolhouses that are now,
at last, beginning to have access to the Internet and are looking to distance
learning. I understand better than ever
the relevance – the direct connection – between telecom and basic human
development. So telecom is not one of
life’s little luxuries; it is our era’s basic tool to open the doors to decent
living, education, jobs and opportunity for all our citizens.
So, let’s stay focused on
international issues. Let’s learn from
regulators abroad who can offer us so much. Let’s make our experiences
available to international regulators who might find them useful. And let’s make the commitment of time and
resources to do this job the way it should be done – thoroughly, imaginatively,
and animated always by the realization that on this small planet, in the long
run we progress together or we progress not at all. We’ll all be proud of the results.
Thank
you.