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1997 Winter Meeting

Saturday, January 18, 1997


Thank you for inviting me to speak to you during your 1997 Winter Meeting.

It is a great pleasure and an honor to speak to you tonight at this important forum on telecommunications.

I have the greatest respect for the offices that you hold. In fact, the first political campaign I ever worked on was the successful effort to elect my college roommate John O'Leary to city council and then the mayor's office in Portland, Maine. I count many other mayors as friends and classmates and colleagues. Since I've been in this job I've worked with Kurt Schmoke of Baltimore, Richard Daley of Chicago, Bill Campbell of Atlanta, Susan Golding of San Diego, Norm Rice of Seattle, Mayor Guido of Dearborn, Rudi Giuliani of New York, and many others.

Over and over in our conversations the same theme returns: How can we make sure that the marvelous and mysterious communications revolution benefits all Americans? How can we make sure that the transformation of our economy and our society from an industrial age to an information age that includes all Americans and all cities and not just some? The FCC is, I suppose, the single federal agency with the largest role in the communications revolution. Our jurisdiction covers all five lanes of the information highway: broadcast, cable, satellite, telephone and wireless. Our actions are supposed to ensure competition, growth, and job creation in the one-sixth of our economy that is the information sector.

But beyond the Beltway you know that the information economy is built where you live. It is manifested in the satellite dishes that some apartment owners welcome and others abhor. It is built by the transmission towers that some community groups welcome and others find an eyesore and still others believe might be dangerous. It is provided by the telephone companies and cable companies that may or may not be competing in the marketplace, but that surely compete for the attention of mayors every day. And it is revealed in the new jobs that should be created in every community and surely are being generated in some: software programmers, wireless phone salespersons, tower siting engineers, satellite dish installers, local area network installers.

Many of the new jobs aren't even classified by the national statistical systems. Indeed, it's increasingly hard to analyze the effects of the information economy. Economists can't decide if productivity is increased by computers, or if so, to what degree. Indeed, we don't even know what the inflation rate really is, since consumption patterns are altering so quickly.

But I strongly suspect that every mayor here has a darn good idea whether their city is on the cutting edge of the communications revolution. Seattle knows very well that Microsoft is in Redmond, not Seattle, and on perhaps a slightly more modest scale every other city knows whether those software firms, those new telephone stores, those towers are inside or outside your jurisdictions. I am here to confirm your beliefs that over the next ten to twenty years you'll want to be in on the information action if you want your cities to survive.

So how can we help?

It is absolutely our goal to guarantee that the communications revolution benefits not just some but all.

We stand at the FCC for just two principles: We want competition in communications to drive growth, job creation and invention.

And we want public benefits from communications so that the information revolution serves everyone.

All else is implementation.

So thanks to the Telecommunications Act of 1996 we are in a tussle with monopolies and dominant firms in every state and in every market to make sure they share their scale economies, their networks, their monopolies with new entrants. Virtually every segment of the communications industry right now is a monopoly in fact, if no longer by law. I am told, for example, that the consumers in Ameritech's regions in Michigan pay almost 80% of their dollars spent on wirebased communications to Ameritech, and less than 15% to AT&T and MCI. These same consumers pay about 95% of their video dollars to the local cable franchisee, whoever that is. And they divide 95% of their wireless dollars among just two companies. That's Michigan, but every other city and state is roughly the same.

Now in Michigan I guess General Motors and Ford wish they had it so good. But limited choices and monopoly sellers are not good for the consumer or our economy. The only other more concentrated market is electricity.

By next year or the year after everyone will be pushing for competition in that area too. But that's another agency and when my term expires in 1998, I assure you I will be returning to the private sector instead of moving on to energy law. So we'll leave the electricity topic alone today.

We have to win the fight for competition in communications because that's the way to spread job growth and innovation to every city and town, state and region. And the future of our economy depends on success in innovating and building the best and biggest information sector of any economy in the world.

Right now that's what we've got. But not everyone in the country is benefitting yet. Indeed, not all the benefits of competition have been received by anyone. Prices for DBS and wireless services are dropping but choice in telephone service has hardly begun. AT&T has only had an agreement to connect its network to Ameritech's in Michigan for about three weeks now.

If the Telecom Act of 1996 was Independence Day for competition and deregulation in communications, then it's not Christmas yet. The presents haven't really arrived. It's only July 5.

Now I am mindful of the hit Fox movie Independence Day. Indeed, it's very common for crowds of lobbyists to gather over the Commission, like the alien spaceship in the movie, and threaten to vaporize us if we don't do what they want. If life imitated art, then our best move would be, like the characters in the movie, leave town, go to an underground hideaway, and chill out until the war is over.

But here I am, and here are the other 2000 members of the FCC, outnumbered five to one just by communications lobbyists (really!), with no visible means of escape, but with a stubborn willingness to stick in this fight for competition. The reasons are that Congress gave us this job and we will therefore do it to the best of our ability; and also that I know if we do the job right we will be bringing literally millions of new jobs to all Americans and new economic growth for the country.

But we can't do our job right without working well and closely with you. So I want to discuss the details of our cooperation later.

Let me next turn to the second point of our two part agenda: guaranteeing public benefits from communications for all Americans.

Communications technology should be available in every classroom and in every library and in every health care clinic in the country. This will not solve every problem in education and health care but it will be part of solution for all problems.

Modern communications gives through the Internet a modern library to every child in every school, even if there's not a penny in the budget for new books.

Modern communications brings every academic expertise to every school through distance learning, even if there's not a penny in the budget for a new teacher.

Modern communications brings every parent in e-mail finger tip touch with every teacher, even if there's no way hardworking parents can take time off from work to go to meet with a teacher who needs every minute to plan lessons and grade papers.

Modern communications trims down the need for administrative bureaucracies and permits more funding of classroom teachers, even if there's not a single new penny possible for more expenditures on reducing classroom size.

And modern communications will put every health care clinic in every urban or rural area in direct contact with the Mayo Clinic or Johns Hopkins or every academic hospital in the country. There's no reason that geography and inability to pay for a plane ticket should deny anyone access to the highest level of medical care available in our great country. And modern communications will make HBOs simpler to administer and will free up money to spend on care instead of paperwork. It will bring doctors and other caregivers into close contact so that they can develop new ways of caring for our young and our old, for our sick and for those at risk. Modern communications can help us develop new ways to share preventive medical guidance so that serious illness is decreased.

The FCC has the specific charter from Congress to write the rules to help pay for these changes. We need your help and advice and support in taking on these jobs.

Now let me talk about some of the specific problems of competition.

Public Rights-of-Way. Cities have an important role to play in this new competitive environment: they must oversee the use of rights-of-way for the construction of facilities by new entrants and incumbents alike. Indeed, Congress, reaffirmed your responsibility and right to manage the public rights-of-way. However, it acknowledged this responsibility with the understanding that you do so fairly by requiring "fair and reasonable" compensation from telecommunications providers on a "competitively neutral and nondiscriminatory basis." Access to the public rights-of-way is essential to the ability of new entrants to enter the communications marketplace. We are concerned, however, that the establishment of hundreds or even thousands of municipal telecommunications regulatory bodies would be inconsistent with the "procompetitive, deregulatory national policy framework" embodied in the 1996 Act.

Preemption. Several provisions in the 1996 Act provide for preemption by the FCC. Under Section 253 of the Communications Act, Congress grants the Commission authority to preempt the enforcement of any state or local government action that may inhibit the ability of an entity to compete effectively in providing telecommunications services. The Commission is currently evaluating a number of petitions that ask the FCC to preempt state or local regulations that impose undue burdens or excessive costs on telecommunications carriers, inhibiting their ability to compete effectively. We will evaluate these issues case-by-case but our decisions will establish a procompetitive framework for local regulation of telecommunications services.

Congress established a framework in which we all must work together to promote, not impede competition. The FCC will start from the presumption that state and local officials around the country share Congress' pro-competitive, deregulatory vision and will seek to do the right thing for competition and for our country. But Congress gave us the job of removing all state and local rules, decisions or processes that create operational and economic barriers to competition. This is similar to the mandate Congress gave us with respect to the wireless industry and pursuant to which we preempted a few state retail price regulations of wireless telecommunications services.

We have been asked and will continue to be asked by private parties to explore the full extent of Section 253. These Section 253 cases will not be easy, but we will read this law and we will follow its spirit and meaning. I've asked the local and state governments to help us determine how to apply Section 253. The results will be critical to the development of competition, and to the evolution of a clear view of the federal-state-local government partnership that we must have as we all proceed to implement Congress' pro-competitive, deregulatory vision.

Wireless Facilities Siting. The expansion of wireless facilities will provide one of the most important new sources of competition. The FCC has auctioned thousands of new licenses to provide wireless services. These auctions have raised over $23 billion dollars for the U.S. Treasury and will ensure the entry of at least three new competitors in every market. These new wireless competitors are in the process of building out their networks in order to rapidly deliver on their competitive promise. In order to be successful wireless carriers must identify sites for thousands of small antennas.

Section 704 of the Telecom Act establishes a national policy for resolving wireless facilities siting issues. The law expressly preserves the authority of state and local governments to decide land use issues, such as the placement, construction and modification of personal wireless facilities. State and local governments are barred from unreasonably discriminating among providers of equivalent services, and may not take actions that prohibit or have the effect of prohibiting the provision of personal wireless services. The FCC is directed to provide support to the states to encourage them to make property available to wireless carriers for the placement wireless facilities.

The FCC's Wireless Telecommunications Bureau Chief formed an agency task force early last year, headed by Roz Allen, to serve as an information resource to state and local governments, industry and public about issues raised by Section 704. The Task Force has made extensive outreach efforts and held meetings with the U.S. Conference of Mayors, National Association of Counties, National League of Cities and American Planning Association and with industry groups. For example, we were asked by the City of San Diego to assist the city in implementing Section 704. Mayor Susan Golding graciously permitted us to offer her our assistance. We can work together with each of you; there's no reason to be at cross purposes or to let lawyers and lobbyists come between us.

Fact Sheets to help state and local governments as they deal with complex issues of facilities siting in their local communities are available on the Bureau's home page. http:\\www.fcc.gov. Use them, correct them, or call us for free at 1 888 CALL FCC if you want to hear a human voice instead. But let's perfect and not reinvent the wheel in every town and city.

OTARD. The Act told us to write rules prohibiting local government and nongovernment restrictions that impair a viewer's ability to receive video programming through the use of broadcast, DBS or MMDS antennas. The goal of the rules is to eliminate unnecessary restrictions on antennae placement and use while minimizing any interference caused to local governments and associations. This is a tough balance. But the purpose is to promote competition among video programming providers and enhance consumer choice and assure wider access to alternative communications technologies.

In the first quarter of next year we will determine whether and how these provisions should apply to viewers who do not have exclusive use or control of and a direct ownership interest in the property where they wish to place an antenna.

How have we done? We need your comment. We are open to input and change if we've made mistakes. But you have to let us know.

PSWAC. Another issue of enormous importance to state and local governments is the availability of resources to assist public safety agencies in developing advanced, interoperable communications networks. Over the last year the Nation's public safety community has united in an effort to outline their wireless communications needs into the next century. The Public Safety Wireless Advisory Committee (PSWAC), established by NTIA and the FCC, met over the last year in a monumental effort to develop a collective recommendation on the operational, spectrum and interoperability requirements of Federal, State and local public safety agencies. The effort culminated in the first-ever overall evaluation of these needs. Among the most important of these needs is the immediate need for spectrum to support current growth as well as emerging public safety communications services. The PSWAC report recommended that a portion of the UHF TV channels 60-69 be reallocated for use by public safety agencies. This spectrum is immediately contiguous to the 800 Mhz spectrum currently used by the public safety agencies which should facilitate the development of affordable equipment to upgrade existing networks.

We are now working to complete a proceeding to incorporate the PSWAC recommendations into a comprehensive plan to address the communications needs of the public safety agencies. We are also finalizing our allotment plan for the conversion to digital television. The DTV allotment item will be voted by the Commission no later then the April 1 deadline given to us by the congressional leadership. Your participation in this proceeding will be critical to resolving whether the spectrum now allocated to channels 60-69 can be reallocated for other uses including for public safety uses.

Schools/Libraries. To facilitate competition and build the information highway, we also need to make sure we encourage, and do not inhibit, innovation. All of you are central to meeting this goal. You can make technology a priority in school and library spending. And you can demand that Congress give you and the FCC the tools to build the information highway to every classroom. I encourage you to join me in a partnership to make that vision of the future, sparked by competition and innovation, a reality for everyone of our citizens and especially our nation s children.

Over the next several months, we will be working to write the specific rules to make this new vision of universal service an efficient, well-administered reality. In addition to the funding assistance provided to schools under the universal service proceeding, we are also examining ways that various technologies can benefit schools and libraries. Where necessary, the government should step in with precise rules that fine tune and redirect the powerful engine of the marketplace.

FCC, Local and State Government Partnership

Congress recognized the legitimate province of local governments to administer their police powers, but at the same time, it created new opportunities for competition by modifying the traditional relationship between the FCC and local and state governments. Essentially, Congress gave us a new blueprint, but not the working drawings. It's up to us to build this new and complex competitive structure. But the only way we can successfully complete the task at hand is to work together; and this we are doing.

Since implementation of the 1996 Act, it has been increasingly important for the Commission to understand how our rules impact local governments. All of the bureaus have worked hard to open up the process.

We've worked on improving our communications to the public and local governments by enhancing access via the Internet, to review proceedings, and to file and review comments. Our site hits per day are steadily growing from 30,000 in February 1996 to about 90,000 hits per day now. The number of hosts is up to more than 77,000 a month.

Of particular note, we've put our calendar or "implementation schedule" and all relevant documents about how we're implementing the Act on our web site. There have been approximately 50,000 visits to our Internet information pages on the Telecommunications Act alone. We also have created a special web page just for local and state governments. Since December, the page has received over 1600 hits.

We've also held numerous public forums on the various provisions of the Telecom Act and special roundtable discussions with local and state government representatives to facilitate their participation in proceedings under the law. The response has been tremendous and we've received feedback from the participants, including the U.S. Conference of Mayors, National Association of Counties, National League of Cities, National Governors Association, and others. We've also organized campaigns to provide information through a variety of methods to state and local governments with questions about making property, easements and rights-of-way available for the placement of spectrum-based facilities (tower siting) and FCC rules on RF emissions.

Last month we held a public forum on the use and management of public rights of way in the provision of telecommunications services. The U.S. Conference of Mayors and others participated in this half day forum. We heard your views on a number of issues including, the Troy case; the needs of local authorities in managing public rights-of-way; the role of the FCC in implementing Section 253; and how we should interpret Section 253.

We've expanded our outreach to local and state governments by announcing the establishment of a local and state advisory committee. Mayors Victor Ashe and Richard Daley and others wrote me last year asking for this advisory committee. Just this week, we released a Public Notice requesting nominations for membership on the advisory committee. With the help of my Chief of Staff, Blair Levin, General Counsel Bill Kennard and his office, and folks like Kevin McCarty and the U.S. Conference of Mayors, this new advisory committee will help facilitate intergovernmental communications between local and state governments and the Commission. It will ensure that the concerns of local and state governments will continue to be part of the deliberative process as the Commission works to implement the Act. We look forward to working with your representatives and others in the establishment of this new advisory committee.


We at the Commission know that in order bring real competition to this particular marketplace is going to take hard -- and coordinated -- work from all of us, federal, state and local governments alike. That is what you are here to discuss. I look forward to hearing what you have to say and to working with you and the local and state government advisory committee on these important and complex issues and on America's future.