WPC 2BEJ Courier S#&a\  P6G;/&P#3|HPLAS5P.PRS5x  @\$~X@26%FKk Z3||Times New RomanTimes New Roman Bold"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+999999S9S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNI\\>>>\g0>03\\\\\\\\\\33gggQyyrg>Frgygrr>3>T\>Q\Q\Q>\\33\3\\\\>F3\\\\QX%Xc>0cT>>>0>>>>>>\>\3QQQQQwyQrQrQrQrQ>3>3>3>3\\\\\\\\\\Q\Z\\\g\QQQyQyQycyQtrQrQrQrQ\\\c\c\>3>\>>>\gcc\r3rIr>r>r3\l\\\\y>y>y>gFgFgFgcrMr3rT\\\\\\crQrQrQ\r>\gFr>\t0\\=!=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBT\>Q\\\\\3;\7;\7>>QQ\??n\\nBnnBmgg>Q\7"yyyy\njc\gnn\ S#&a\  P6G;u&P#HP LaserJet 5Si room 802itional)HPLAS5SI.PRSX\  P6G;\$QPy.X80,qX\  P6G;P2a=5,/&a\  P6G;&P&2e=5,&e4  pG;&RdW,?\  P6G;P\r>\gFr>\t0\\=!=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBT\>Q\\\\\3;\7;\7>>QQ\??n\\nBnnBmgg>Q\7"yyyy\njc\gnn\2'K t ZYt"i~'^5>g\\>>>\g0>03\\\\\\\\\\>>ggg\yyrF\yrgyy>3>j\>\gQgQ>\g3>g3g\ggQF>g\\\QI(I_>0_j>>>0>>>>>>\>g3\\\\\QyQyQyQyQD3D3D3D3g\\\\gggg\\g\\\\pg\\\QQ_QyQyQyQyQ\\\_\gjF3FgF>Fgg__gy3ySy>yIy3ggg\\QQQgFgFgFg_y^y>yjgggggg_yQyQyQgy>ggFy>\0\\=2=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBa\>\\\\\\7>\7>\7>>\\\??n\\nBnnBsgg>\\7"yyyy\nlc\gnn\",^WfxfffNfNTTTfrfTfffTTTfrT<fNfffNfffffffTfTfTfTfTfTffffTxffTfffrrr~TfrfNd6dWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNllf T`Z`Zff,gg,&,l,l,f,Z",,,&,y.X80,qX\  P6G;P2a=5,/&a\  P6G;&P&2e=5,&e4  pG;&RdW,?\  P6G;P&RdW,4  pG;@|ND,|\  P6G;P&@ND,tK4  pG;",^Wf,fffNfNTffr,fTfffTfTrfxBxfNfffNfffffffT,oToToToTrTrrfrTfxT)rrrf,frfNdQdWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNllf ZfZfZff,gg,,,l,l,f,Z",,,&,2KYK"i~'^DO]uuĶOOOu=O=AuuuuuuuuuuAAgרOYͨۨOAOkuOgugugOuuAAuAuuuuOYAuuuugp/p~O=~kOOO=OOOOOOuOuAggggg͘gggggOAOAOAOAuuuuuuuuuuguruuuuggggg~ggggguuu~u~uOAOuOOOu~~uA]OOAuuuuuͨOOOYYY~bAkuuuuuuۨ~ggguOuYOu=uuN*NWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNTTkuOguuuuuAKuFKuFOOgguPPuu匱T錌TOguF"u錇~u匌u"i~'^DOuuOOOu=O=AuuuuuuuuuuOOuۨYuۨ騨OAOuOuggOuAOAăugYOuuug]3]yO=yOOO=OOOOOOuOAuuuuu騨gggggVAVAVAVAuuuuuuuuuuuuuggyggggguuuyuYAYYOYyyAiO]Auu稨gggYYYywO騨ygggOYOu=uuN?NWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNTT|uOuuuuuuFOuFOuFOOuuuPPuu錱T錌TOuuF"u錊~u匌u  sXKL #\  P6G;?P# #\  P6G;?P# OPASTCO ' S 35TH ANNUAL SUMMER CONVENTION ă  sK #\  P6G;?P# WESTIN HARBOUR CASTLE HOTEL  sK TORONTO, CANADA  sK #|\  P6G;P# #\  P6G;?P# JULY 2529, 1998 T  sK "\(0*0*0*(J"Ԍ sK M Й#|\  P6G;P##\  P6G;?P#It is an honor to be here today to address OPASTCO. xThere is something noble about rural America. It defines this country. From our earliest times, we have been a nation of people seeking new frontiers. xWe have been a nation of people seeking to define themselves by their beliefs, their beliefs in God, their beliefs in hard work. xTheir beliefs in the individual and local governments not in distant governments. xAbout 250 years ago, Ben Franklin wrote that no one in America worked for anyone for very long. Unlike in Europe,"l$0*(($" where occupation was determined by birth and tenure was a  MM lifetime, in America, people would go off to work for themselves. xOPASTCO is living proof of Ben Franklin's observation today. You are the independent small business of the telephone world. No one above you, except your customers. xYet, you might be surprised how many times otherwise thoughtful people come into my office and tell me that the world will soon consist of 3 or 4 companies to provide all telecommunications, computer, information, and entertainment needs. xThe certainty, formality, and immediacy of these"l$0*(($" announcements are breathtaking. xBut I only smile. A certain smile of amusement, a gentle way of saying I don't believe you. xPartly, I don't believe them because big companies come and go.  %Ww  %W W %W ho would those companies have been 30 years ago, and who would they be today? Some of the biggest companies today Microsoft, Intel, Sysco Systems and others, did not exist a generation ago. xAnd it is hard to believe the future generation will not also have such new giants.  MM "l$0*(($"ԌxPerhaps more importantly, America has always been a canal of small companies as well as large. Generation %W  of %W  big companies does not mean that small companies vanish. xSome of you may. Some of you may sell out to a big company. But there will likely be as many new small telecos created as absorbed by bigger companies. xSmall rural telcos are, by law, a privileged class. OPASTCO has led the way. You have flexed your collective political muscle time and again. In the Omnibus Budget Act of 1993, you were successful in having small rural telcos included in the list of designated entities whose participation was to be ensured in Spectrum Auctions. "l$0*(($"ԌxIn the Telecommunications Act of 1996 you were successful again in looking after the interests of rural Telcos, particularly in Section  %W1  %W 2 %W 54 on Universal Service. xLet me describe in more detail what happened. xThe Telecommunications Act of 1996 was about competition and breaking down the barriers that for decades had placed regulators between consumers and businesses, in telephony, in video, in data, and a host of other services. Heretofore, businesses had to go to regulators for permission to offer new services, even if consumers desperately wanted those services. And consumers had to go to regulators to get new services even if businesses were desperate to provide those new services. All too often, the regulatory middle man"l$0*(($" was not needed, and only led to delay and higher prices. xCompetition and deregulation had transformed many other industries including trucking, rail, airlines, banking, insurance, and natural gas. xBut not everyone believed that the changes had been all for the better. Some believed that regulation had helped rural America and that deregulation had hurt. xSome believed that competition had come first and primarily to urban and suburban America. xSome believed that in telecommunications, competition and deregulation would be bad for rural America. That"l$0*(($" competition would come first and only to urban and suburban America, and that rural America would be left hopelessly behind. xI do not believe that view. I believed and continue to believe the competition is good for all Americans, whether urban, suburban or rural; and for all businesses, whether large or small. I believe and continue to believe that consumers and markets rather than governments should determine where competition will emerge. I believed and continue to believe that excessive regulation harms everyone. xIn my view, your success can not and should not be ascribed to regulatory protection. You succeed precisely because you are competitive and efficient. You succeed"l$0*(($" because of who you are, not because of government handouts. xYou succeed despite and not because of government regulations. You succeed because your customers know you perhaps all too well. They are your neighbors, your friends. You see them at PTA meetings, at church. xWhen your customers have a problem, they call you. In the middle of the night. In the middle of the day. In the middle of a storm. In the middle of a family picnic. xThey call you because they know you will help. You won't say sorry "check with corporate management."  %W y  %W  Y %W ou are corporate management. The buck stops with you, not some distant corporation."l$ 0*(($"ԌxThat is why you succeed and will continue to succeed, with or without additional government help. xBut what I believe about what policy should be does not matter. The FCC is not a policysetting body. We only implement the law. xLet me also note that, during drafting of the Telecommunications Act, representatives of other industries would come to me and tell me all sorts of very interesting things about rural telcos. Some good; some, well %W , %W  not so good. They said that you had a lot of political power in Washington, particularly in Congress. In my book, that is a good thing to have. "l$ 0*(($"ԌxThey also said and I don't' know how to put this politely, so I won't try some unflattering things. I am not sure exactly what they meant, but I am sure it was not entirely polite. xIt had the sound of envy. In a city filled with envy, you were a prime target. I didn't pay much attention to the disparaging remarks, but I did have to admire the political power in Congress. xWhat emerged in the Telecommunications Act of 1996 is a classic legislative compromise. Congress wanted competition and deregulation to proceed but with certain safeguards for rural America. Those safeguards were embodied in the language of Sections 254 on universal service"l$ 0*(($" and Section 216 on eligible carriers. xMake no mistake, the protection of rural America was part of the Telecommunications Act. Rural America, and small rural telcos in particular, were to be protected. Section %W216 and 254 w%Were %W as %W  written by and for rural America. Competition for all Americans, is predicated in protecting small rural telcos. xThe Telecommunications Act was a great political victory for rural telcos, for rural America, and OPASTCO. I am sure that you were proud. Of all industries, perhaps you did the best legislatively.  %W   %W  xIf I had come to speak to your convention two years ago,"l$ 0*(($" I suspect that my speech would have been much different. Perhaps I would have ended here and said:  %W " %W Congratulations! You won!" xBut a funny thing happened after 1996. It seems that you have started to lose. And to lose big. The powerful muscles you flexed in Congress don't seem to reach across town to the FCC. xAnd the folks who disparaged  %W you  %W with unkind remarks during the legislative process have not exactly come to your rescue. xHow have you lost? Let me see if I can describe it. If it is too painful, close your ears; I won't be offended. "l$ 0*(($"ԌxSection 254 was supposed to be for you. Universal Service was supposed to go to rural America and %Wvisual %W rural %W  telephone companies in particular. xIn 1996, you received perhaps about $1 billion from Federal Universal Service programs. The exact amount does not matter. You know the system worked. Others in the industry knew how the system worked. Perhaps as importantly, your banker knew how the system worked. xTwo years ago, you got the lion's share of Federal Universal Service input. xAnd all of these conditions seemed likely to stay in place. xUnder the FCC's interpretation of Section 254, you face a"l$0*(($" great deal of uncertainty. That is not what the law said. All of your issues, by statute, should have been resolved by now. xThey have not been. xYou don't know what is going to happen. Others in industry do not either. Nor does your banker. That doesn't make life easy for you or your customers. xYour customers say they want a new service. You go to your bank. And just why should they lend you more money. xThe FCC says "don't worry." xIt is easier said than done. xPerhaps you will be taken care of. Perhaps."l$0*(($"ԌxYou have no guarantee of it other than a promise. xPromises. xOh, and remember how you used to get the lion's share of Federal Universal Service? Yeah Federal Universal Service used to be about rural America. xNot any more. xIt seems Universal Service has a new meaning in Washington. Now it means schools and libraries.  s8K xThey now get more money fro %W m the FCC than you do.  %W  xIs that what Congress intended? I don't think so. "l$0*(($"ԌxIs that what the law requires? Certainly not.  MM xOh, and of course, the schools and libraries get tens of billions of dollars annually from other federal programs for infrastructure. Do you? And a lot more than that from state and local government and private industry. xDon't mistake me. I like schools and libraries. I have six children. They are my pride and joy. The more money the Federal government spends on schools and libraries means that I will personally benefit more than most Americans.  sKxThe problem is not simply optical. It is not merely the  s8Kappearance that schools and libraries are getting vastly more money than you, contrary to Congressional intent. It is not  sl$Kmerely the   appearance that the federal grants program with"l$0*(($" more than 30,000 applications seems to teeter out of control with little accountability. More fundamentally, the entire schools and libraries program seems to lack a legal foundation. xIt puts itself at risk. xIt puts rural high cost at risk. xAnd it puts all of us at risk. xWe as a Nation must have government agencies that abide by the law. When the government does not follow the law, we have no law, we have no government. xWe have anarchy. xAs I have stated repeatedly in speeches and dissents at the"l$0*(($" FCC, I believe the FCC's interpretation of Universal Service is not consistent with the law for Section 254. ^%W! xAnd no one has attempted to suggest to me why my position is incorrect. ^ xMake no mistake. Spending on Universal Service outside of high cost, smallcompany rural support is your problem. There is only a finite amount that can be spent on Universal Service. And I believe that Congress intended the lion's share to go to rural, high cost programs. xMoney must go only to telecommunications carriers as required by law. Otherwise this "fee" becomes a tax. xBut money is going hither thither and yon. Who comes in to lobby for schools and libraries?  %W#C  %W# Sometimes it is c %W# omputer companies. "l$0*(($"ԌxWhy? Because it is a billion dollar business for them. This isn't just about education. It's about corporate welfare for the computer industry. xNow as you may know, I believe all the money for internal connections is outside the law. $1.3 billion of the $2 billion requested for 1998. xBut to the extent internal connections can be subsidized by Federal Universal Service, the law is absolutely clear that it, under the paragraph for classroom access must go only to eligible carriers. xNow I suspect most of you are eligible carriers. How many of you have schools in your areas requesting Federal"l$0*(($" funds to give to someone other than you? xI suggest that you might want to call up these schools and tell them they may want to avoid breaking the law. xSome say: What is needed is some heroic action. Action to return Universal Service to its rightful direction. xSome say that there is no more heroic action to be had. But we see heroic action on Universal Service. But all of the heroics are for schools and libraries. xThere is a pattern of education issues resolved; rural issues not being resolved; a pattern of breaking the law to help schools and libraries;  %W) but a pattern of  %W) don't follow law for"l$0*(($" rural America. Just consider the following Xx1. Joint Board recommendations in 1997 solved education issues but not rural telephone company issues.(# Xx2. FCC Order, May 1997 solved education issues but not rural telephone company issues.(# Xx %WN4  %WN 3 %WN . FCC Order December 1997 solved education issues but not rural telephone company issues.(# Xx4. Public campaigns and email campaigns solved education issues but not rural telephone company issues.(# Xx %WP7  %WP 5 %WP . Western Governors Association letter solved education issues but not rural telephone company issues.(# Xx %WQ8  %WQ 6 %WQ . Bills in Congress solved education issues but not rural telephone company issues.(# Xx%WR10 %WR 7 %WR . "Promises" made to schools and libraries are honored;"l$0*(($" promises to rural telephone companies in the law are not.(# xIn the end, all of this is partly about envy. You won the battle for the law. The law is on your side. Only when the law changes will you lose your privileged status. xAs a Commissioner of the FCC, I am bound to follow the Communications Act as written by Congress, not reinvent as I see fit. And that is what I intend to do. xBut it may be of little comfort to you to know that the law is on your side when you are constantly losing the battle of implementation. xBut in my view, if you insist on the law being followed,"l$0*(($" it will be. I have faith in this great Nation. I have faith in its laws. Whether it takes a day, or a month, or a year, or a decade, or a century, the law will be implemented. xAs you go forward, you should not engage in policy debates or compromises. xSimply say: "Follow the Law." xThe Book of Genesis is filled with stories of rivalry and envy between and among brothers: xCain and Abel, x%WSIsaiah %WS Isaac %WS  and Ishmael, xJacob and Esau,"l$0*(($"ԌxJoseph and his brothers. xIn each case, being favored by circumstances or by a parent was not sufficient to ensure trouble %WU ԩ %WU free growth. Indeed, the presence of favoritism seems to bring out the worst in people. Envy seems universal. xSome of the famous Biblical characters triumphed. Some were killed. xBut Genesis is not a Book about heroic people who triumphed through heroic deeds. It is a book about ordinary people, fallible, who triumph more by faith and perseverance than by heroic deeds. "l$0*(($"ԌxIt is faith and perseverance that you need as much as anything today in dealing with the envy yo %WX u %WX  face. Faith is what you believe in, faith is your families and communities, faith in this great Nation, its People, and its law. I'll help where I can, but the perseverance is up to you. xI hope you have a good convention. xI'll be around today. x "l$0*(($"Ԍ "l$0*(($"Ԍ