"The Great Equalizer"
William E. Kennard
Chairman, Federal Communications Commission
The Supercomm 2000 International Dinner
Capital City Club
June 5, 2000
(As Prepared for Delivery)
Thank you, Matt (Flanigan), for that introduction.
It is an honor to address this group.
In this one room we have the key telecommunications decision-makers from around the world.
None of us are here by chance. We are here because we care about the nations we represent, and we are seeking ways to improve the lives of our people.
President Clinton has said thattelecommunications can "strengthen our economy, our society, our families, and our democracy."
And just a year ago, Nelson Mandela told an audience in Budapest, "Our people are our greatest asset, and there can be no better investment in our future than to build their skills and productivity." On the same journey, he addressed the Russian Academy of Sciences about "the need to unify science in the service of all our people."
That is what calls us here: the need to put technology to work for our people.
Third Great Revolution
We also are here at a very key moment in history, and I think we sense that. I feel that excitement in the air, and I know you do too.
You have to visit the Exhibit Hall almost hourly just to keep up with the change.
We are at the cusp of the third greatest revolution in mankind's history. There was the Agricultural Revolution, and the Industrial Revolution, and now we are at the very beginning of the Information Revolution.
This third revolution rewards those who control and process information. It gives them a competitive advantage, and a road to national affluence.
It is defined principally by its power to unlock the potential of markets, to transform retailing, to make businesses more profitable and to create unimaginable wealth for a privileged few.
But I believe that this latest economic revolution means much more. It should be defined, first and foremost, by its power to unlock the potential of all of our people -- by its power to educate our poorest children, to empower people with disabilities, to uplift impoverished rural and urban communities, and to repair and revitalize the fabric of our communities.
U.S. Vice President Al Gore had the same idea, and on an international scale. In 1994 he presented the best of what my country had learned during the early stages of the Information Revolution to the ITU Development Conference in Buenos Aires. Those recommendations were later incorporated into the World Trade Organization's Basic Telecommunications Agreement.
Vice President Gore laid out the principles for how each country can become part of a Global Information Infrastructure, or "GII," a worldwide network of networks - - and how each country can participate in the new information economy.
He said that the key organizing principle for the GII is competition - - multiple, privately-owned service providers that give consumers choices. In order to promote and police competition, there must be independent regulatory agencies with the power to bust up monopolies, and the discipline to deregulate when monopolies fall by the wayside. There also must be efficient spectrum management, cost-based interconnection, and widespread universal service.
These principles have worked in the U.S.
Domestic long-distance rates in the U.S. have dropped nearly 56 percent in real terms since competition was introduced in 1984. Some companies are offering services for as low as five-cents-a-minute.
Universal service subsidies have helped us to attain 94 percent telephone penetration.
Spectrum auctions have decreased by two-thirds the amount of time it takes to assign licenses, and ensure that the spectrum goes to those most eager to it use. Now seventy-five percent of Americans have a choice of five or more mobile carriers.
The equipment market has exploded with innovation. Instead of being tied up with burdensome technical requirements, equipment such as telephones and answering machines, and computers and modems, practically jumped off the shelves and into consumers' shopping baskets after we deregulated that industry in the mid-1970s. The policy was so effective that by the mid-1990s, the entire telecommunications equipment industry had moved from a negative to a positive trade balance.
These policies gave the Internet the launching pad it needed in the mid-1990s to get off to such a dramatic start in the U.S.
Competitive long-distance services provided the fiber-optic backbone needed for the Internet, and local competition provided alternative ways to reach that backbone. Today 50% of Americans reach the Internet through a carrier that is not their local telephone provider.
Our equipment and data information decisions provided the computers, modems and software needed to feed a hungry Internet.
Our flexible wireless policies have allowed the Internet to migrate from our desktops to the palms of our hands, setting the stage for lower cost broadband access.
Our universal service subsidies have been expanded to help connect over 1 million school classrooms to the Internet.
As a result, the number of Internet users in the U.S. has jumped from 27 million in 1996 to approximately 123.6 million today . . . a 350 % increase, or about 100 % a year.
I am convinced that this story can be replicated world-wide, to benefit consumers on every continent, so that the GII will be truly global, and include an African information infrastructure, a Latin American/Caribbean information infrastructure, an Eastern European, and an Asian information infrastructure.
But our task is great. Fifty percent of the people on this earth have never used a telephone.
So I think it is incumbent upon the privileged few of us in this room to work to change this forever.
Within the umbrella of these principles, I have launched an initiative to provide telecommunications policy and regulatory assistance to developing nations. The FCC does not have money, but it does have expertise. Through the Development Initiative it is sharing this expertise with key countries in Africa, Asia, Latin America, and Central Europe.
We have already signed agreements with South Africa, Uganda, Ghana, Argentina, Jamaica and Peru. Plans are underway for Brazil, and we hope to announce our agreements in Asia soon.
These agreements are two-way partnerships in which we share ideas on open markets, competition, spectrum management, and licensing. These partnerships allow us to demonstrate the critical links between privatization and investment, and competition and universal service.
We also have designed a set of courses that highlight the practical aspects of these topics, and we have made sure that we consult with our partners on a regular basis to ensure steady progress toward our goals.
Our challenge is to build on the success of these country agreements.
Hard Work Ahead
Our driving vision is an eventual network of networks, with multiple broadband platforms, giving the people of the world the option of many digital platforms, including cable, high-speed copper, wireless, satellite, and broadcast.
But achieving this goal requires a great deal of work.
We regulators have to make tough decisions that will be unpopular. I am reminded of John Rawls, the great political philosopher and his theory of distributive justice. Rawls argues that people in society advocate positions that advance their own economic self-interest. This is summed up in the old adage "where you stand depends on where you sit."
There is no reason to demonize this behavior. But in order to serve the people of our respective countries we must consistently take the stand that maximizes consumer welfare. And we must do so irrespective of the narrow economic interests that are argued before us.
Therefore, as we link arms there are certain universal truths we must advocate. We know that competition is better than monopoly; that universal service and competition are not mutually exclusive; and that our communications goals require the intervention of a strong, independent regulator empowered to pry open markets and keep them open.
So although we do face hard issues, we do not face them alone.
Internet: The Great Equalizer
The Internet has been called the great equalizer, because it can reduce economic isolation, and equalize economic opportunity.
Already, we see inspiring examples of this.
Some nations, such as India, look to become Internet incubators, seedbeds of innovation and knowledge. The Indian Institute of Technology in Bombay uses the Internet to seed companies for 5% of their equity. One quick result of this program is that many of the institute's highly trained graduates have started staying home, instead of going off to other countries to work.
In rural India, solar powered village computers are used to post nearby market prices, so that village farmers have better information with which to negotiate with distributors. A kind of honesty is imposed on the process, and the market works better.
The point is that with a small amount of resources, remote areas can leapfrog decades, and even centuries, into the knowledge revolution.
But they've got to have access. The Internet can either be the great equalizer, or just another missed opportunity. Access . . . access makes the difference.
And those of us in this room are in the access business. It is our job to get the telephone, computer, fax or pager to as many people as possible.
Plea for Action
Let me close with a plea for action.
In March I met in Argentina with that nation's minister responsible for telecommunications, Henoch Aguiar. He suggested to me that as new communications systems are put into place in South America, there ought to be a way to electronically link the major national universities on that continent at very little increased cost.
His point was that in combination, the resources of each university could be greatly multiplied, and that the window of opportunity for providing this link is in the design and installation phase of the new systems.
Without getting into the specifics tonight, I think he is right.
As communications systems are put into place, we ought to watch for voluntary opportunities to link our universities, schools, libraries, and our job markets . . . public institutions that can nurture the aspirations of our people.
President Clinton called these portions of our economies "the common good," much like the "village common" in our New England townships. As with the village common, it is fitting that we all contribute to, as well as use, the common good.
This, to me, is the real wealth we can generate from the Information Revolution.
As Nelson Mandela said, we can earn no better return than on the investment in our people.