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Federal Communications Commission
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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

August 6, 1998

Press Statement of Chairman Kennard on FCC's Actions to Promote Deployment of Advanced Telecommunications Services by All Providers

Today we set the stage for the delivery to the American consumer of a new generation of information, entertainment, and educational services that will change the way we live and work. Following the dictates of the Telecommunications Act of 1996, we are creating a competitive environment that will unleash all of the promise of broadband technology, and turn the trickle of high speed data delivery into a torrent.

We must expand bandwidth capacity to keep up with ever-burgeoning demand, which is now estimated to be doubling every few months. The packet-switched data business is growing at an annual clip of 300 percent. While electronic commerce is here today to the tune of about $20 billion per year, that number is expected to grow to $350 billion in four years.

Expanding bandwidth now helps us remain connected as a nation. There are currently 75 million e-mail users in the U.S. sending 225 billion messages each year. In three years the estimates are that there will be 135 million e-mail users sending 500 billion messages.

Video conferencing will be a reality for the average American consumer, so that when you call your family or friends on the other side of the country, you won't just talk to them, but you'll get to see them too. This especially will affect American Sign Language users who want to converse with others in their native language, free to add the facial expressions and ASL nuances that are impossible to translate into English when using a TTY.

The Internet will become an even more abundant and exciting source of news and entertainment, when we break open the last mile, with the capability of broadcasting captioning and video description.

Expanding bandwidth will give teachers greater tools to educate our kids, it will give residents of rural areas better access to health care, and it will make telecommuting by American workers of tomorrow as common as freeway commuting is today, with much more efficiency and much less stress.

And dependable and fast online service will transform the lives of the many Americans living with disabilities, for whom getting an education or pursuing a career can be difficult because of physical barriers that many of us overlook. Now is the time to help tear down those barriers and give Americans with disabilities the opportunity they deserve to maximize their productivity and their enjoyment of life.

If we do not move quickly to open up the pathways that will make the potential of broadband technology a reality, then we are not doing the job entrusted to us by Congress. Our obligation, as I see it, is to create the right environment for fair competition in accordance with the law laid down by Congress, and then to stand back and let the competitors try to outdo each other to earn the right to serve the American consumer, by offering new and better and faster and cheaper services. It should not matter to us who gets there first. The 1996 Act does not favor one competitor over the other.

What does matter, and what the Act requires, is that every provider have a fair opportunity to be the first and to be the best, and to ensure that there are no unnecessary regulatory hurdles, so that consumers can choose among as many providers as are able and willing to offer their services.

We know that the introduction of high-speed Internet access by cable companies has satisfied the demand of some consumers, while creating or expanding demand by others. The Notice of Proposed Rulemaking before us should ensure that xDSL technology brings similar benefits and opportunities for consumers and competitors.

As always, where the various stakeholders stand on these issues depends upon where they sit. The incumbent local phone companies want to compete in the advanced telecom market, but they claim that their incentive to do so is greatly diminished if they have to share the fruits of their investment and innovation with their competitors by complying with unbundling obligations. It's a fair point.

On the other hand, new entrants say they can compete only if they have access to the incumbent's facilities that already are in place and serving 95% of the homes in the country. And that's a fair point as well.

Fortunately for the Commission, in the Telecommunications Act of 1996 Congress laid out a blueprint for us to follow to ensure fairness for competitors and to provide the benefits of competition to consumers. Congress said that competition -- and the best interests of consumers -- requires that the facilities of the incumbent LEC operating company be open and available to competitors. While Section 706 evidences Congress's desire for rapid deployment of advanced telecommunications capability, it is not an independent grant of authority that would allow us to forebear from other provisions of the Act. Thus, where an incumbent integrates the electronics necessary to provide advanced services with the essential facilities used to provide standard voice service, the Act requires that those facilities be made available to the competitors, just as the incumbent's loops and collocation space must be made available to competing LECs, including providers of advanced services. The item before us affirms and strengthens our commitment with respect to this crucial aspect of the 1996 Act.

But the Act permits another way -- a deregulatory path -- to fair competition, and it is proposed in the item before us. And that is to allow the incumbent to set up a truly separate affiliate dedicated to the provision of advanced telecom services. If that affiliate is truly separate, and if it is willing to obtain access to the incumbent's underlying facilities, such as loops and collocation, on the same terms and conditions as all other competing providers of advanced services, then there is no reason or justification under the Act for imposing on the incumbent's affiliate the unbundling requirements that the incumbent itself faces.

With the separate affiliate approach, all providers of advanced telecommunications service begin at the same starting line and have a fair opportunity to bring consumers the best product at the best value, consistent with the pro-competitive, deregulatory intent of Congress in passing the 1996 Act. Incumbents and new entrants alike need and deserve the opportunity to make investment decisions with respect to new technology in accordance with the rules of market risk and reward, rather than regulatory risk and reward. And by creating a fair environment in which multiple providers have the opportunity to compete, we bring the American consumer the best in advanced telecommunications at the greatest value.

Today we also launch a broad inquiry into the current availability of advanced telecommunications to all Americans, including in particular elementary and secondary schools and classrooms, as directed by Section 706 of the 1996 Act. Wireline exchange carriers are far from the only source of advanced services. Cable, wireless, and satellite service providers have a crucial role to play here as well. If our inquiry demonstrates that advanced telecommunications capability is not being deployed in a reasonable and timely manner, we must take immediate action to remove barriers and promote competition, as Section 706 directs.

I am extremely grateful to Commission staff from all of the bureaus and offices that contributed so much to today's product, and to my fellow commissioners and their staffs for all of the hard work and dedication and inspiration that went into these items. I am very proud of the action we took today, and I am confident that the American consumer, including the consumer with a disability, is the real winner today.

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