CHAIRMAN REED E. HUNDT
                     FEDERAL COMMUNICATIONS COMMISSION
                         "RIGHT TIME, RIGHT PLACE"
                       NETWORKED ECONOMY CONFERENCE
                              Washington, DC

                            September 12, 1995



     Thank you, Dennis, for that kind introduction.

     I see a room filled with accomplishment and fame, and I know
that each of you has
often been asked, what is the secret of your success.  

     One answer people often give is, "I was in the right place
at the right time".  This is
more humble than you need to be, but I know you know it sounds
good on Larry King.

     And it's true.  Being in the right place at the right time
is a key determinant of
success in life.

     Some people say that my sitting next to Al Gore in 9th grade
English and Bill Clinton
in Admiralty class in law school are examples of being in the
right place at the right time.

     I am sure I was selected for my job for other reasons than
these coincidences.

     Such as the fact that I have the same birthday as Alexander
Graham Bell.

     Now that's a logical reason to be selected chairman of the
FCC.

     But I admit being at the right place at the right time is a
key determinant of success.

     If this technique had really worked for me it would have
happened in the summer of
1972.  I had a summer job in the Seattle area working at a law
firm.  At that very time and
in that very place there was formed a company called Traf-O-Data. 
Its function was to
monitor traffic flow by using computers:  building an information
highway literally on top of
the real highway. 

     There I was, wandering around Seattle.  I was at the right
place at the right time.

     But I didn't seize the moment.  I didn't call Traf-O-Data
and volunteer to do law
work for them for nothing for a decade if I could have a carried
interest in whatever they did
in the future.

     It would have been the smart play.

     The founders of Traf-O-Data were the sixteen-year-old Bill
Gates and his buddy Paul
Allen.  The company's name was later changed, of course, to
Microsoft.

     So there I was at the right place at the right time and I
flubbed it.

     And the maddening, tantalizing fact is that at this very
moment all of you, with your
farflung ventures, deep research and gimlet acumen, are smack dab
in the middle of the
communications revolution.  You are at the right place at the
right time, but who knows
which opportunity is Traf-O-Data; which 16-year-old is Bill
Gates.

     Right here in Washington, D.C., this is also the right time
and right place to select
the correct policies for the communications revolution. 

     I thought I would offer you a deal today.

     I will tell you about four possibly winning opportunities of
today that happen to have
come to my attention.  And in return you will let me share with
you the communications
policies that now is the right time and America is the right
place to adopt.

     I have just three criteria of selection.  None of these
technologies depends on playing
traditional FCC games in order to succeed; so our decisions are
not material to my selection. 
None of these opportunities has been captured by a major
incumbent.  And none has yet
given birth to a CEO invited to this conference.

     Don't you just hate the idea that someone not important
enough to be invited to this
conference might be the next Gates or Andreesen? 
     
     So here are my four winning opportunities:  LMDS, the NII
band,  Millimeter
Waves, and DTV.

     I see a guy over in the corner calling his broker on his
lapel phone.  But with my
track record is he going long or short?
     
     LMDS stands for Local Multipoint Distribution System.  It's
a cellular type wireless
service that digitally can provide hundreds of tv channels, as
well as high speed interactive
data or two-way voice and video.
     
     The NII band would be a high-speed, unlicensed wireless band
for local-area voice,
video and data at about 5 GHz.  Right now it is occupied by
government uses.  But if we can
convert it to private uses, this spectrum could be used for
low-power, communications
networks, one for each school, or each hospital or each
neighborhood. 

     Millimeter-wave technologies are up at 40 GHz.  This
spectrum has always been
considered beyond the beyond and is not currently occupied.  The
computer industry tells us
that it can be targeted for high throughput, short-distance
applications such as interoffice
LANs. 

     In DTV, or digital television, radical new developments in
technology over the past 3
years have created a tremendous new, flexible, capability:  20
megabits per second with
which you can broadcast a beautiful, crystal-clear widescreen
high definition picture or 4 or
5 simultaneous channels.  Burst transmissions of whole software
packages.  One whole
multimedia CD-ROM in 4 minutes.  A newspaper delivered in mere
seconds.  Yesterday's
newspapers carried announcements of two new patents that make DTV
an ideal way of
distributing voice, video and data over the air to portable
computers. 

     And I haven't even mentioned the Internet, only because you
all know already that the
Internet is spreading faster than kudzu.  As Vint Cerf said, "the
Internet has gone from near-
invisibility to near-ubiquity in little more than a year."  Since
1988, the size of the Net and
its traffic are both doubling yearly. 

     The Internet changes virtually all assumptions about
communication.  Billing is for
the most part indifferent to time and distance.  And within only
a couple of years there is a
likelihood that Internet telephony, Internet radio and Internet
television will all be starting to
take off.

     For all these possibilities you are all at the right place
and right time.  But you've got
to pick or build the next Traf-O-Data on your own.

     Being at the right place at the right time also applies to
politics and policies.

     This is the right time and place in communications policy to
back ten winners I've got
for you.  The first five are general axioms about which I propose
we agree.  The second five
are specific reforms the FCC should adopt.

     In Letterman style, I'm going to leave my favorite for last.

     No. 10.  Just as the printing press made the Reformation
inevitable, so the
combination of cheap communications and PCs -- let's call it the
networked society -- will
reshape all private and public institutions.  All countries
should accept this change at more or
less the same time, even though it so threatens the status quo. 
This is the core of the
American mission to convert the G-7 and all the UN nations to the
principles of the Buenos
Aires Declaration expressed by VP Gore in his famous speech a
year and a half ago;

     No. 9.  At least outside this room, the curse of the modern
age is that people do not
feel that they are in charge of their lives.  But computer
networks have the capability to
provide each human what the brilliant Yale computer scientist
David Gelernter calls
"topsight.'  By this he means the ability to manage the
astounding complexities of the
modern world.  Providing this "topsight" is crucial to solving
the crisis of alienation in the
21st century. 

     No. 8.  In this country the mass media threaten the
viability of representative
democracy for one specific reason:  the desperate imperative for
politicians to buy
advertising time to run for office.  The nearly impossible task
of doing TV politics has
greatly reduced the effectiveness of local, state, and federal
government.  For democracy to
survive and thrive worldwide, the power of modern communication
must be used to enhance
participation and reasoned debate, not frustrate it.

     No. 7.  We need to admit that in modern economies, modern
communications does
confront us with the real, chronic, and challenging problem of
job elimination. The
communications revolution destroys jobs.  And it creates jobs. 
And it creates a better
standard of living.  But we can't deny that if we are to have a
peaceful world those caught in
the transition to the information age must be helped, not
discarded.

     No. 6.  The communications revolution will permanently alter
the powers and
performance of government at all levels, from the county sheriff
to the United Nations.  That
is why there couldn't be a course of conduct more shortsighted
right now than a repudiation
of positive government.  Instead we should remember that
government, when it is smart and
responsive, is the way we act together to improve our common lot.


     And here are my top five reforms; actions I would like the
FCC take in the next year.

     To do these things we need to make sure the FCC is not
killed or crippled.  The
Senate Appropriations subcommittee vote to cut our budget by more
than one-third of what I
requested.  This would cripple the agency just when all the
businesses in the U.S. need us
the most as the writer of fair rules and the adjudicator of
disputes.  Don't let this happen.

     Here's the top 5 things the FCC should do: 

     No. 5.  The FCC should reform the access charge and
universal service schemes in
this country.  Neither can survive competition.  Each needs total
overhaul.  In particular we
need a tight focus for universal service and the elimination of
all subsidies that don't serve an
important national goal.  

     Similarly, we should continue the dozen steps we have taken
in the last year to treat
basic cable more as a universal service, lowering its price in
return for having the price of
enhanced basic go up. 

     No. 4.  We should move to spectrum auctions and flexible use
of the spectrum as the
twin paradigms for domestic use of the airwaves.

     No. 3.  We should continue to deregulate the business
dimension of commercial
broadcasting, such as by eliminating rules like fin/syn and PTAR.

     At the same time we should, at last, after 61 years, explain
the public interest
dimension of the communications revolution in terms of
unmistakable, specific, concrete real
duties imposed on industries in the sector.

     In 1973, FCC Chairman Dean Burch told a broadcast industry
group:  "If I were to
pose the question, what are the public interest guidelines that
are the basis of the FCC's
renewal policies, everyone in the room would be on equal footing. 
You couldn't tell me. 
I couldn't tell you -- and no one else at the Commission could do
any better.

     Twenty-two years later, it's time to end the era of
incoherence.

     It's in this connection that we should have a specific
number of hours of children's
educational television required of all TV licensees, so that they
know clearly what is
expected in return for their free licenses to use the airwaves.

     No. 2.  On the international front, we should continue to
press for harmonious rules
of competition in all countries.  Our reform of foreign ownership
rules will make effective
market access a key determinant of whether we allow foreign
ownership of our
communications properties.  It is a conscious attempt to use a
lever to create fair open
markets.

     No. 1.  Communications must revolutionize education in
America.  We spend $200
billion a year on educating 45 million kids without getting a
decent return on our investment.
The return should be this:  these kids are supposed to keep the
American Dream alive.  But
as of now: 

          Sixty percent of the new jobs in the year 2000 will
require skills
          possessed by only 22 percent of the young people
entering the labor
          market.  
     
          Workers' lack of information literacy now cost business
an estimated
          $25 billion annually in poor product quality, low
productivity and
          accident.  

     We need classrooms in which every child and every teacher
uses a networked
computer to learn, to communicate, to develop.  

     I have seen networked classrooms, and they work.  I've been
to test schools in
Washington. D.C.; Harlem, New York; Silicon Valley; Osaka, Japan;
Dallas, Texas. 
Networks engage children.  Attendance goes up, test scores go up,
failure rates go down.

      What a surprise:  the productivity gains achieved by the
private sectors because of
modern communications are entirely possible in the education
sector.

     A market for educational technology will allow businesses to
make money bringing
classrooms into the information age.  Companies like TCI, Time
Warner, Apple, AT&T and
others have great ideas on the drawing board.  But as of now only
1.4 percent of educational
spending is dedicated to technology.  And our kids are getting
further and further behind.  

     We need government action as a catalyst to create a
functioning market for
communication technology in education.  Public-private
partnerships should work to build
model schools.  The government should be a clearinghouse of new
ideas learned in these
models.    

     The government also must jumpstart the building of the
infrastructure -- by lowering
the cost -- and therefore the risk -- to schools of investing. 
The Senate telecommunications
reform bill contains provisions that would give schools a
discount in purchasing
telecommunications services -- to be reimbursed by all
telecommunications users.  This
provision must be included in the final version of the
legislation.

     Ross Perot said when he was running for President that there
were ideas lying around
in the street in Washington; you just had to pick the right one,
open the hood, stick it in, and
start the car.

     That's a paraphrase.

     But there was some truth to what he said.  This is the right
time and right place to
pick up and install the best ideas for communications policies in
this country and around the
world.  The idea of a networked economy is untested in history. 
If, for all its glories, it
displaces workers, alienates citizens, widens educational gaps,
it will ultimately fail.  So now
is also the right time and the right place to lay the foundation
for a networked society in
which the public interest as well as private interests can
prosper, and all can have the
opportunity to be winners.  

                                   -FCC-