Thank you very much for inviting me to speak here today.
At the time I accepted the opportunity to speak to you, I did not know that I would have
created news of my own. Tuesday, I sent a letter to President Clinton asking him to begin the
process of selecting my successor as chair of the FCC. I told him that I intend to remain in my
post until he has completed that process. I told him it was a high honor to serve as chairman of
the Federal Communications Commission, but that it is high time for me to spend more time
with my family. My children are growing up fast, and I cannot afford to miss any more of their
It has been the thrill of my professional life to spend the last three and half years at the
center of the communications revolution fighting for the lofty goals of the American Dream:
opportunity and prosperity for all.
In the past three and a half years, communications has delivered huge benefits for
families and for the economy. We have been able to pursue the twin goals of vigorous economic
growth and ensuring the benefits of this new competition are spread throughout our society. We
have delivered huge benefits to businesses such as yours. The competition for communications
services are already providing lower prices and more advanced services to meet your demands in
a variety of ways.
In addition to making sure that firms have appropriate incentives to compete for your
business, we have guaranteed that every family in America will have education over the air and
down the pipe at home and in every classroom. People of low income, people who do not have
English as a first language, people with disabilities, people with medical problems, people in
urban and people in remote rural areas all will have access to the information highway, the
information economy, the information age.
The FCC has done more for K-12 education than the federal government has ever done
before, with the sole exception of the school lunch program. This will help to ensure an ample
supply of qualified workers for your businesses long into the future.
The FCC has done more to provide resources to libraries and to health care clinics than
the federal government has ever done before.
The information sector represents one-seventh of the U.S. economy. It is the single
fastest growing sector with a growth rate twice that of the overall economy. Job growth in the
communications sector is 65% higher than in the overall economy. Investment in this sector is
up 11% per year. The astonishing success of PCS demonstrates the wisdom of our spectrum
policies. Wireless investment has increased more than 250% since 1993 and over the next ten
years will total more than $50 billion. It is the largest single investment in a new, non-military
technology in American history.
Since President Clinton was elected in 1992, 12 million new jobs have been created.
Eight million of those jobs are in the information sector. The economic success of our country is
directly attributable in substantial part to the policies that we have put in place.
We have completely rewritten the rules for all five lanes of the information highway:
telephony, wireless, satellite, cable and broadcasting.
We produced policies and rules that work not only for Wall Street, but for Main Street.
We adopted an overarching philosophy appropriate for the Age of Communications
Competition. Our philosophy is neither conservative nor liberal. It is a third way for
communications policy that will serve the country well in the 21st century.
Our digital era philosophy relies on markets to allocate goods efficiently and to produce
innovation, consumer choice, lower prices and better services; but where the market does not
generate goods the public rightly insists on, we respond with clear and enforceable rules directly
tailored to the public interest and necessity.
This is a trust-but-verify philosophy. Government should trust markets, but verify that they are truly serving the interests of communities, citizens, children. Where they are not, government should intervene with laser-like precision to promote public needs. This targeted approach can serve the public interest by minimally affecting business interests while providing the services that the public needs.
It is a philosophy that embraces both market values and family values.
It is a philosophy that will produce the greatest levels of investment, job creation and
economic growth, while ensuring that no one is left behind and that important social needs are
not compromised or ignored.
It is a philosophy that reverses most of the previous approach. It is a philosophy that
rejects micromanagement of communications markets or a laissez faire approach to the public
Whatever virtue the old approach may have had when the FCC existed primarily to
monitor monopolies, we were right to discard it as the Commission's fundamental mission
changed to causing competition.
That mission of creating competition throughout all aspects of the communications
marketplace is one that we began pursuing in 1993 and 1994, and that became the law of the land
in the Telecommunications Act of 1996. The Act's fundamental goal is to establish a
"procompetitive, deregulatory" national communications policy. That is a mantra we had been
chanting for many months and years before the Act was passed and that we were ready and eager
to pursue immediately upon enactment. It is one of the reasons we have been able to defy the
oddsmakers and beat each of the impossibly aggressive deadlines in the Act.
How have we implemented our private competition/public benefits philosophy?
Never has the Commission done more to foster market-based, procompetitive and deregulatory policies.
Opening Local Telephone Monopolies: We opened the local telephone market to
competition. Our interconnection policies are being copied around the world, and
while three judges on the Eighth Circuit disagreed with our approach, virtually
every state in the union has adopted our policies.
Enhancing Wireless Competition: We also ended the local wireless duopoly. We
did this by unlocking the spectrum warehouse and auctioning large blocks of
spectrum for six new PCS licenses in every market in the country. In the last
three years, wireless phone users have doubled to 44 million. And where PCS
operators compete with cellular providers, wireless rates have dropped by 25% or
A recent Merrill Lynch report claims that the introduction of Sprint PCS service
in New York with 25% to 50% discounts "could add additional confusion to an
already confused market." On Wall Street "confusion" means "competition" or
lower prices for users. Anywhere else in America this is a good thing. The rest of
America is not at all confused by this.
Encouraging competition to cable: And we have promoted competition against
the former cable monopoly. Our DBS policies, for example, have seen the DBS
installation price drop from $1,000 in 1994 to as low as $99 today while
penetration has doubled in the past year alone. DBS is the fastest growing
consumer product in history. We expect that our auctions of MDS and LMDS
licenses will get those licenses in the hands of entrepreneurs who will also provide
competition (or "confusion").
The access reform, price cap and universal service orders that we recently adopted
reflect a complete overhaul of our telephone pricing policies. The economics and
the technology of the networks are complicated, but the fundamental idea is
straightforward: allow competition to determine pricing while preserving and
promoting access to basic service. What this means is that high long distance
prices paid by businesses will come down.
This fundamental idea empowered us to resist tremendous pressure to raise local
residential rates. Instead, as a result of these orders, the average long distance bill
will drop by 8%. These orders will bring about the single largest consumer
benefit in telecommunications to the American people -- about $25 billion over
five years. And these benefits are shared by both residences and business $11
billion for businesses and $14 billion for residences.
The number of internet users in this country is up 263% in the last nine months, to 50 million users. The Internet was almost unheard of outside academia when I got here. Now as millions log on every day we can be proud of two things. First, we didn't mess up this wonderful invention. We resisted efforts to adopt policies that would have discouraged internet use. Second, the policies we did adopt will help promote, in a competitively neutral way, the ongoing success of the internet.
Instead of lotteries or comparative hearings -- neither of which did work or could
work -- we used auctions to assign spectrum whenever we had the legal authority
to do so, netting billions of dollars for American taxpayers and, more important,
generating many times more than that in investment, job creation and economic
We have also moved steadily toward a policy of full spectrum flexibility. Instead
of having the government dictate what services spectrum licensees can provide,
we have increasingly allowed the market to make that judgment. Technical and
service flexibility promote innovation and investment in new technologies by
allowing the marketplace to determine success or failure.
But markets are imperfect and the FCC must act where necessary to ensure public
benefits from spectrum use and to prevent anticompetitive behavior in new
In implementing the digital television plan, our engineers devised a plan to
recover of a lot more spectrum a lot faster, a benefit worth billions of dollars to
the public in terms of job creation and economic growth, even before auction
proceeds are counted.
In adopting a digital television standard, we refused to dictate the format that
broadcasters would use because we did not want to pick winners. Instead, we
adopted a standard that would allow -- and already has allowed -- consumer
electronics and computer companies to compete.
The FCC was instrumental in the successful completion of the World Trade
Organization agreement on telecommunications. We proposed and adopted rules
here that made it clear to foreign countries that we would not tolerate the market-distorting effects of closed markets around the world.
Finally, this is the first Commission to take on the international telephone cartel
and insist on the lowering of outrageously high accounting rates. This fight is
ongoing, and we are starting to see the price of international calls fall.
Our policies have created the first private global satellite systems in history.
There are now competing multibillion dollar systems under development and
deployment -- including Teledesic, Iridium and Globalstar.
Our policies have created the PCS industry and other wireless industries. Our rules have allowed the cable industry to increase investment in new products like cable modems, increase investment in infrastructure, and increase investment in new programming ventures.
These pro-competition policies may not have endeared us to the former monopolies, but
they should have significant benefits for American consumers and for the rest of american
industry that take advantage of the new and innovative services that firms will offer to compete
in the newly "confused" telecommunications marketplace.
In addition, never has the Commission done more to foster the public interest when the market won't. And we need your support to ensure that these initiatives don't get left behind by the confusion because they are extremely important. And, if we do not accomplish them at the same time as the introduction of competition, there will be pressure to reduce the benefits of competition in order to promote these goals, a significantly less efficient way to achieve the overall benefits from the telecommunications sector.
On its own, the market won't ensure that all schools, libraries, and rural hospitals
have access to the opportunity-rich information highway.
Our universal service order turns that legislative dream into a reality, providing up
to $20 billion in federal,state and local funding over the next 5 years to link kids,
teachers and libraries to the information highway.
In exchange for use of the public's airwaves, the Communications Act requires broadcasters to serve the "public interest, convenience and necessity." For many years, the Commission implemented this requirement with vague rules that were unfair and unenforceable -- unfair because vague rules don't give broadcasters notice of what's required of them, and unenforceable because relying on vague rules to punish speakers is an offense to the First Amendment.
We took an historic step last year when we replaced vague children's educational
TV rules with a clear, enforceable 3-hour guideline. It proved that the
Commission can ensure that trustees of the public airwaves truly serve the public
interest, while being sensitive and deeply respectful of First Amendment values.
It also proved that modest but clear public interest guidelines can counter market
In our handling last year of the networks' request for approval to give free time to
candidates, we proved that we can address the issue of free time in a manner that
is faithful to the First Amendment, fair to all candidates, and fulfills our national
desire for elevated civic discourse.
We established the first ever, agency-wide effort to assure accessibility to the communications revolution for people with disabilities. Our disabilities task force has delivered many separate successes.
We adopted the largest telemedicine program in any nation's history. Our rules
will provide up to $2 billion over five years to ensure that rural American's have
reasonable access to health care available in metropolitan areas.
Experience shows that the market won't ensure that our police forces, ambulance
crews and firefighters get the spectrum they need for critical communications.
We set up a Public Safety Advisory Committee to make recommendations about
public safety needs, and thanks to the hard work and genius of the Commission's
engineers, we will be able to deliver on the most important of those
recommendations, additional spectrum on a nationwide basis for our public safety
Even as judicial decisions made it dramatically harder to pursue directly the statutory goal of encouraging ownership of spectrum licenses by minorities and women, we had extraordinary successes. We have awarded the largest number of licenses to women and minorities than at any other time in history -- indeed, than in the entire previous history of the FCC.
There is, of course, much work still to be done at the Commission. For example:
It must ensure that our local telephone and wireless competition rules are not
thwarted by courts, counties or incumbents. It must work with states and local governments to
prevent barriers to entry from arising in the first place, and to remove them when necessary.
It must complete the many rulemakings that will assure universal service, innovation and
true deregulation in telephone markets.
It must ensure that competition in the long-distance market is enhanced and not diminished by the entry of the Bell companies.
It must work to increase wired and wireless bandwidth available for the internet and other
It must ensure that spectrum is used as efficiently as possible, that neither government nor
private users are warehousing this precious public resource, and that all available spectrum is
assigned quickly by auction.
And it must implement the World Trade Organization agreement on telecommunications
in a way faithful to the vision of the negotiators, as originally expressed in the Vice President's
groundbreaking 1993 speech in Buenos Aires.
The Commission must ensure that digital television is launched rapidly and with rules
that guarantee that digital television programming will serve the public interest.
It must address the threat of liquor ads, the decline of public service announcements, and
the great potential of free TV time for candidates to help solve the problem of campaign
It must address the V-chip and ratings issues in a way that will truly give parents the
power to choose what their kids watch in the analog TV present and the digital TV future.
It must implement the children's educational TV rules in a way that will give parents
something to chose for their kids.
It must ensure that the money we have identified for wiring classrooms and libraries is
used wisely and effectively, with a way found to allow for needed equipment purchases and
Many of these challenges will be presented to the Commission in votes that we will hold
in June, July and August.
While I have asked the President to find my successor, it is clear that the agenda of the
FCC is overflowing and much remains to be done. During the remainder of my time here I am
committed to the goals set forth in all of the decisions by this commission -- promoting
competition and promoting the public interest. My current colleagues and I are all aware that
some, including some on Wall Street, are concerned that a new Commission will undue many of
the strides we have taken. However, not only will we continue in the same direction until a new
chairman is chosen, but I am also confident that the President will choose a new chairman who is
also committed to those same goals. The benefits of competition and public interest rulemakings
are significant to the economy and to the american public in general. You as the biggest
beneficiaries of all of these policies need to ensure that the benefits of the new approach to
competition policy are not lost by those who wish to turn the clock back to the days of