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A. 1. a.(1)(a) i) a)#)a [ PcQ)P# ## b, oT9 !#)^ `> XidQ)X#Advanced Legal WordPerfect Learning Guide   u I. A. 1. a.(1)(a) i) a)#)a [ PeQ)P# ## b, oT9 !#)^ `> XifQ)X#   Copyright  Portola Systems, Inc. 1987, 1988`e%APage   I. A. 1. a.(1)(a) i) a)#)a [ PgQ)P# ## b, oT9 !#)^ `> XihQ)X#   Page ``e%)Copyright  Portola Systems, Inc. 1987, 1988 Style 87=@6FInitial Codes for BeginningF*'Ç.7=.EV IJ#)a [ PiQ)P# dn  ## b, oT9  [  I. A. 1. a.(1)(a) i) a)#)a [ PjQ)P# ## b, oT9 #)^ `> XikQ)X#`^e%)Beginning Legal WordPerfect Learning Guide   v I. A. 1. a.(1)(a) i) a)#)a [ PlQ)P# ## b, oT9 #)^ `> XimQ)X#Beginning Legal WordPerfect Learning Guide   v I. A. 1. a.(1)(a) i) a)#)a [ PnQ)P# ## b, oT9 #)^ `> XioQ)X#   Copyright  Portola Systems, Inc. 1987, 1988`e%APage   I. A. 1. a.(1)(a) i) a)#)a [ PpQ)P# ## b, oT9 #)^ `> XiqQ)X#   Page ``e%)Copyright  Portola Systems, Inc. 1987, 1988 Style 97=@6FInitial Codes for Intermediate*'Ç.7=.ET KL#)a [ PrQ)P# dn  ## b, oT9 Њ [  I. 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Kennard, Chairman  Federal Communications Commission    b(Before the <mUnited States Senate  Committee on Commerce, Science, and Transportation   on  7 Federal Communications Commission Oversight Hearing \ YMay 26, 1999  Ye4 "e0*0*0* "  x/  Mr. Chairman and Members of the Subcommittee, thank you for the opportunity to review with  x"you today the FCC's performance during the last eighteen months and how we have fulfilled our  xRstatutory obligations. Much of our work over the last eighteen months has continued to focus  xon implementing and enforcing the Telecommunications Act of 1996. Because so much of that  xEAct was focused on promoting competition in local telecommunications services, encouraging  xdeployment of advanced services, and deregulating where possible, I will focus my remarks today on these subjects.  X4 Overview  xI am pleased to report that the Act is working: competition is growing in a wide range of  xtelecommunications markets we see increased competition among long distance providers and  x"consumers are beginning to have competitive choices for many local telecommunications services  xfor the first time. The competitive deployment of advanced broadband services is spreading  xrapidly, and we are removing large amounts of historical regulation, particularly through the biennial review process and the forbearance authority granted in the Act.  xyToday, we see tantalizing glimpses of this competitive, deregulated future. Many markets, such  xas wireless and long distance markets are quite competitive and many but not all of the  x+fundamental prerequisites for fully competitive, deregulated local telecommunications markets  xare now in place as the result of Congressional mandates in the Act, and the rapid implementation of the Act by the FCC and our colleagues in the State Public Utility Commissions.":&0*((B$"Ԍ x'ԙThis is not to say that fully competitive markets are inevitable and that we can now declare  xNvictory and simply walk away. Vigorous enforcement of the fundamental prerequisites for  xcompetitive markets and active, intelligent dispute resolution will remain necessary for some  xyyears to come, particularly if we are to avoid the kind of lengthy antitrust litigation that plagued  xthe development of long distance competition. Indeed, today we are at that very delicate  xR tipping point: with just a little more time and probably a lot more effort we'll be "over  x_the top" and competition will gain a firm foothold. But if we are unable or unwilling to make  xthis effort, the momentum toward competitive markets will slow, the balance will tip the other way and just as inevitably send us back to 1996 and even 1990.  xThe coming year promises to hold breakthroughs in many telecommunications markets. The  xmarketopening process in the Act has worked in tandem with the incentives and protections of  x'Section 271 of the Act. I am encouraged by the progress being made by some of the Bell  x<Operating Companies toward meeting the checklist requirements of Section 271. I look forward  xto the day that I can join my fellow Commissioners in granting a meritorious application for  xentry into interLATA telecommunications markets and seeing that decision withstand judicial scrutiny in the D.C. Circuit.  xI also anticipate substantial developments in the coming year with respect to the rapid  xEdeployment of advanced telecommunications services, including increased deployment in rural  x_areas. In particular, broadband services delivered over DSL or cable modems should increase  xdramatically in residential markets throughout the country. Wireless competition also will":&0*((B$"  x=continue to grow, and it is not unreasonable to begin looking to the day where wireless  x8telephony services will be viewed by some consumers as a substitute for wireline services. We  xshould also see increased progress towards open markets internationally, and it should be a good year for the development of exciting new satellite services.  xNIn sum, we are on the right track. Our implementation of the Congressional framework is  xworking and we will have competitive, deregulated telecommunications markets in all sectors  xof the industry, and in all parts of the country, if we stay on course. It will take diligence and  xhard work by the FCC and our partners in the State Public Utility Commissions before fully  xRcompetitive local markets are the norm, but I know that the dedicated women and men at the  xFCC and the State Commissions are ready and willing to undertake this hard work. I hope that  xall the members of the Commerce Committee, the Senate and the entire Congress will support us in this effort.  Y|4 Good News: The Telecommunications Sector Is Thriving  xBy every measure, the telecommunications industry is thriving. Onefourth of our country's  xErecent economic growth has come from the information technology sector. Since the passage  xRof the Telecommunications Act, revenues of the communications sector of our economy have  xgrown by over $140 billion. For 1998, it is estimated that the communications sector of our  xeconomy will have revenues in excess of $500 billion dollars. The market values of most  xcompanies in the telecommunications sector have increased substantially, indicating that Wall"<&0*((B$"  xStreet anticipates that the overall growth from competition will exceed lost market shares. In  xother words, telecommunications is like a rapidly enlarging pie that is big enough for many new participants; it is not a "zero sum" game.  xThis growth has not happened by accident. It is the direct result of sound Congressional policies  xthat have been implemented and enforced by the FCC and the states. The old regulatory  xstructure guaranteed that telecommunications markets would display the attributes of monopoly  x+lack of choice, consumer dissatisfaction, delays in deploying new services, excessive regulation,  x_and slow growth. As we replace this structure with a framework for competitive, deregulated  xmarkets and begin to change attitudes through vigorous enforcement of the new framework, we  xAare experiencing a blossoming in telecommunications that touches the lives of almost every  xAmerican. Now, a growing number of American families across this nation have a choice of  xa vast array of hightech communications services, and those services offer far greater capabilities, with far greater quality, and often at lower prices.  x"This growth comes not only from established providers but, since the passage of the Act, we can  xRnow clearly see benefits flowing from the new competitors that are emerging as a result of the  xlimplementation of the Act by the FCC and the states. As barriers to entry have been removed  x_and the fundamental rights that are necessary for competitive provision of telecommunications  xEhave been established, new firms have been showing up all over the country to take advantage  xof the pentup demand for choices, new services, and lower prices. For example, the revenues"h$0*((""  xof new local service providers more than doubled in 1997, and they increased substantially again in 1998. And this growth has meant new jobs for thousands of Americans.  xIn the wireless industry, Congress and the FCC have created the conditions for substantial  xgrowth. The FCC has auctioned off large amounts of spectrum, making it possible for new  xcfirms to enter markets, and we have worked hard to address some of the fundamental conditions  x8for vigorous competition, such as interconnection. As a result, annual capital investment more  xthan tripled between 1993 and 1998, with more than $50 billion of cumulative investment  xthrough 1998. Similarly, the wireless industry generated almost three times as many jobs last  xyear as in 1993. The industry did all this while the cost of service to the consumer dropped.  xA wireless telephone is no longer a luxury for the privileged. Instead, with the advances in  x cellular service, the advent of PCS and digital services, and most importantly, increased  x+competitionchoices of providers offering comparable servicemobile telephones are now a common communications tool for over seventy million people.  xTogether with Congress and the Executive Branch, we have also promoted open entry and pro xcompetitive polices throughout the world, ranging from FCC policies to reduce international  xsettlement rates to the adoption of the landmark World Trade Organization (WTO) agreement  x4on telecommunications services. Together with the growth in our domestic markets, these  xpolicies will help ensure that companies such as AT&T, BellSouth, MCI Worldcom, Ameritech,  xhSprint, SBC, Bell Atlantic and U S West have the opportunity to stay among the top twenty  xtelecommunications companies, by revenue, worldwide. Similarly, GE Americom, Hughes,":&0*((B$"  xLoral and PanAmSat are among the top twenty satellite service providers, by revenue,  xworldwide. And US satellite manufacturers such as Hughes, Lockheed Martin, Loral, Motorola  xand Orbital Sciences maintain a strong lead in contracting and subcontracting satellite systems worldwide.  Y 4 x I can't finish a summary of the sector without mentioning the Internet. It goes without saying  xdthat the Internet is booming, creating new jobs, new and better means of education and  xcommerce. The Internet is a testament to a wise regulatory policy: don't regulate unless there  xis a clearly demonstrable need to do so. The FCC established a "hands off" policy three decades  xRago as evidenced by the original Computer Inquiry, and I can assure you that the FCC will not  xregulate Internet services. In fact, I believe that the unregulated, highly competitive Internet is  Y4 x_a useful model for the more traditional telecommunications sectors. Of course, the basic legal  xprerequisites for competitive markets such as property rights and laws governing contractual relations should be enforced by the appropriate authorities.  xThese are just a few examples of how the wise policies adopted by Congress and implemented  xby the FCC and the states have produced a telecommunications economy that is thriving, and are doing so in an increasingly competitive environment.   X"4 Status of Competition  Yj$4 "j$0*((""Ԍ xLet me take a few minutes to give you an idea of how competition is evolving, starting with  xEmarkets for long distance telecommunications services. There are now over 600 long distance  xEproviders offering services, some on their own facilities, some entirely by resale and still others  xEby a combination of owned facilities and resale. The vibrant competition between these firms  xAhas given customers a wide range of choices of providers and services, which has made an  xappreciable difference on the prices most consumers pay for long distance services. Long  xdistance prices have steadily dropped over the past few years. The average cost of domestic  xinterstate long distance dropped from 11.8 cents per minute to 10.3 cents per minute from 1996  xEto 1997. At the same time, the average rate per minute for an international call dropped from  xW$0.70 in 1996 to $0.64 in 1997. Consumers have responded to these rate reductions by  xRincreasing their use of these services. Interstate and international calling increased to 500 billion minutes in 1998.  xThe wireless industry is surging. Everything that is supposed to be up is up, everything that is  x+supposed to be down is down. Subscribership is up, jobs are up, investment is up, consumer  xRbills are down, and the wait for a license is down. What is important to remember is that this  xsurge of the wireless industry followed the elimination of the original duopoly structure and the  x[introduction of competition by making more spectrum available to more players. In other  xwords, Congressional and FCC policies to foster competition have worked for consumers'  x+benefit and we expect that our local competition policies will bring similar benefits to wireline services. ":&0*((B$"Ԍ xThe international market is also flourishing. With the adoption and implementation of the WTO  xAgreement countries representing 90% of the $600 billion global market for basic  xtelecommunications have pledged to open their markets to international competition. We have  xbeen successful in our negotiation of bilateral agreements with other governments to permit  xprovision of satellite service in their countries, such as Mexico and Argentina. We are also  xseeing substantial progress with international settlement rates as a result of the WTO Agreement  xuand FCC decisions such as the International Settlement Rate ("Benchmarks") Order recently affirmed by the D.C. Circuit.  xDomestically, local competition is still nascent, but it is making significant strides. The  xrevenues of local service competitors in 1998 were about $4 billion. It is estimated that new  xplocal competitors now provide, over their own networks or by reselling incumbent company lines  xand unbundled loops, service to between four and five million telephone lines to customersbetween two to three percent of the nation's total telephone lines.  xLocal competitors are taking an increasing share of nationwide local service revenues. Local  xcompetition is broadening: new competitors are reselling incumbent company lines in almost  Y4 xuevery state and about 40% of the incumbent lines they resell are connected to residences;  Y 4 xnew facilitiesbased competitors are active in almost every state. Local competitors continue to  xattract investment capital and deploy their networks. Industry sources report that 20 publicly  xtraded competitive local exchange carriers (CLECs) have a total market capitalization of $33  xEbillion compared to six such companies with $1.3 billion of total market capitalization prior">& 0*((B$"  xto the 1996 Act. And these new competitors are working faster and working smarter. They continue to build fiber opticbased networks at a faster rate than incumbents.   Xv4 Advanced Services / Broadband Deployment  x8I would like to speak briefly about the progress in the last three years in the area of "advanced telecommunications capability," or broadband as it is popularly known.  x<What is broadband? It is twoway communications of voice, data and images via any technology  xand, most importantly, at vastly higher speeds than most consumers have ever had in their  xhomes. In practical terms, broadband will make it possible to change web pages as fast as you  xcan flip through the pages of a book; will make possible twoway video conferencing in the  x_home so that family members can see each other instead of just talking; and can make possible the downloading of feature length movies in minutes.  xEBroadband can also greatly increase the possibilities of distance learning and medical treatment  xlat home; and its potential for persons with disabilities for increased communications via sign  xllanguage or speech reading with the advantage of facial expressions and other nuances, and the  Y 4possibility of textbased Internet pages converted into braille is enormous. xxX  "" 0*(( "Ԍ xSection 706 of the 1996 Act, of course, directs the Commission to encourage the deployment  xof broadband to all Americans on a reasonable and timely basis. We released a Report in January on our nation's progress towards that goal.  xOur Report is just a snapshot taken a few seconds after the starting gun of a very long race  x we and the runners in that race have a long way to go. In our Report, we concluded that  xadvanced telecommunications capabilities are being rolled out in this country at a rate that  x<outpaces the rollout of previous breakthrough products and services in the communications field.  x_So, by this objective measure, we are ahead of the curve. On a subjective level, however, I am  ximpatient. I want the Internet to go faster and farther for all Americans, and I am particularly  xconcerned about deployment in rural areas and inner cities. We must ensure that a geometric  x_increase in the deployment of advanced services is not accompanied by a geometric increase in the urbanrural disparity. At this early stage, the signs are encouraging. We see two things, in particular.  xFirst, since the 1996 Act, there has been an enormous amount of activity in the broadband area.  x_Investment in broadband facilities has been tens of billions of dollars large sums even by the  xstandards of this business. In what is usually the most difficult part of this business to enter  xthe socalled "last mile" to the home many companies are building last miles, or giving serious study to the idea. ":& 0*((B$"Ԍ Y4 MX` hp x (#%'0*,.8135@8:& 0*((B$"  xthe highest proportion of their customers for Direct Broadcast Satellite television services in  xrural areas. I would also like to thank those senators who joined with Senators Daschle and  x"Dorgan in their letter to me last week. They have made recommendations that hold promise for rural America, and I look forward to working with them.  xThe success of broadband so far is the result of many longstanding FCC policies. For example,  xthe FCC has sought to facilitate new competition in all phases of the telecommunications  xybusiness, enforcing unbundling requirements so that newcomers have fair access to elements of  xthe incumbent networks, and allocating large blocks of spectrum in ways that make them useable for any technically feasible service.  xBecause this is the very early stage in broadband's deployment, the nature of consumer demand  xis very unclear. Certainly, at present, it seems that many companies are entering broadband and  xRoffering it at consumerfriendly prices, and residential consumers are starting to find out about  Y|4 xlbroadband. The market seems to be working and the best role for government is to observe,  xmonitor and enforce our longstanding policies of promoting competition and providing the spectrum and access rights that are the building blocks for a competitive market. " X 4 x" Telecommunications Mergers and Acquisitions: Reconsolidation or Foundation for the Future?  Y#4  xA strong effort to firmly establish competition in local markets and your support of this goal is  xlall the more necessary since the telecommunications industry is experiencing a wave of mergers"<& 0*((B$"  xRand acquisitions. As this Committee is aware, smaller companies are bulking up by merging  xwith each other, and major name brand telecommunications companies are also merging with one another as well as acquiring smaller companies.  x+This activity could portend a reconsolidation of the telecommunications industry that prevents  xcompetition, to the publics detriment, or it could establish a strong foundation for aggressive competition and innovation that greatly benefits the public.  xWith the stakes so high, when formerly monopolized markets are being opened to competition,  xit is essential that we do as much as we can to prevent anything that will retard the development  xof competition. This means lowering entry barriers, ensuring efficient interconnection of  xNfacilities, and encouraging the development and deployment of new technologies. This also  xmeans that the Commission needs to be particularly careful in evaluating mergers during this  xytime of change and uncertainty, because a merger, once consummated, cannot easily be broken up. You can't unscramble an egg.  xN Good mergers can spur competition by creating merged entities that can compete more  xhaggressively and that can more quickly move into previously monopolized markets. If this  xcompetition develops, it will make it possible to substantially deregulate the local exchange  xmarkets, just as strong competition justified the substantial deregulation of the long distance and  xwireless markets. Similarly, a vertical merger between two firms that do not appear to be likely"h$0*((""  xsignificant competitors in each other's markets may generate public benefits without imposing anticompetitive costs.  x,But bad mergers are likely to slow the development of competition. Among the  xanticompetitive harms arising from a "bad" merger are: eliminating firms that would have  xentered markets; raising barriers to entry; discouraging investment; increasing the ability of the  xmerged entity to engage in anticompetitive conduct; and making it more difficult for the  xECommission and State Public Utility Commissions to monitor and implement procompetitive  xpolicies. What makes evaluation of telecommunications mergers so difficult is that regulatory  xlbarriers to entry have, until recently, prevented many of these companies from competing with  xeach other. Accordingly, it is not enough to simply consider whether existing rivalry between  x_the firms would suffer, which is the focus of most traditional antitrust merger analysis. Rather,  xone must consider whether, but for the merger, the companies would have entered each other's markets and spurred the development of competition in formerly monopolized markets.  xIn this time of great change and uncertainty, the FCC needs to be particularly vigilant to prevent  xany developments, including mergers, to slow the development of competition. That is why the  xFCC and, in some cases, State Public Utility Commissions, need to apply their unique knowledge, expertise and judgement in reviewing proposed mergers and acquisitions. In essence, there are three points to be asked regarding mergers: ":&0*((B$"Ԍ xDo we want a cartel or competition? The Department of Justice typically evaluates competition  xthat currently exists and, under existing antitrust precedent, it faces obstacles to challenging  x<mergers between companies that do not currently compete. In contrast, the FCC is charged with creating the conditions for competition called for by the 1996 Act.  xSecond, a merger, left un-reviewed by FCC, could violate the Communications Act. The FCC must enforce the telecommunications laws and ensure compliance with the Communications Act.  xFinally, we always use the same standard - the public interest test. Moreover, we always use  x8an open and transparent process that is fully consistent with the Administrative Procedure Act.  xdAll interested parties, including the applicants and members of the public, must have the  xopportunity to participate and be heard. The FCC also must respond to the concerns raised in  xdthe record and explain its decision in writing in its order, which may be reviewed by the appellate courts.  XN4 Barriers to Competition Remain  Y 4  xSome of the most crucial prerequisites for local competition take a considerable period of time  xto put in place, even under the best of circumstances. Unfortunately, but not surprisingly, the  xyavailability of some of the most important prerequisites have been delayed, sometimes through  xlitigation, sometimes through the intransigence of parties that are threatened by competition, and sometimes through the sheer scale and complexity of the task. ":&0*((B$"Ԍ x+ԙThis latter factor the sheer complexity of the task cannot be ignored: the development of  xlocal exchange competition is simply an order of magnitude more complicated, more laborintensive and more capitalintensive than was the development of long distance competition.  x[While the industry players actually have to do the work, regulators can play a critical role by  xgetting the players together, insisting that a solution be found, setting standards and deadlines,  xand resolving implementation disputes. For example, by facilitating the development of the  xtechnical solution and establishing a clear implementation schedule for Local Number Portability, the FCC played a catalytic role in eliminating one complex technical barrier to competition.  xAlthough some amount of litigation is inevitable, the Supreme Court's recent reaffirmation of  x"the FCC's fundamental responsibility to implement the Act has removed considerable uncertainty  xthat may have been slowing the development of local competition. Another major barrier to  xlocal competition will fall as soon as the FCC is able to complete the determination later this  xyear of what network elements should be unbundled in accordance with the Supreme Court's remand.  xTo keep markets open and the competitive momentum going, the FCC will act as the liaison  x0between the incumbent LECs and the CLECs to minimize disputes and avoid lengthy  xproceedings and litigation. Where the FCC's intervention cannot quickly resolve interconnection  xproblems informally, we are using our "rocket docket" to adjudicate these disagreements quickly, and to keep the market functioning smoothly.":&0*((B$"Ԍ X4ԙ Universal Service and Access Charge Reform  Y4  Y4 x8Another area that has direct implications for the state of competition in the local market is our  xsystem of universal service subsidies and our interrelated access charge system. The  xCommission is currently engaged in a monumental undertaking which is known as universal  xdservice reform. The efforts Congress undertook to make universal service a part of the  xTelecommunications Act of 1996 were Herculean. We are working to ensure that our  xRreformation of the universal service mechanisms embrace the vision you had when you passed  x_legislation codifying universal service. In fact, tomorrow the Commission will take yet another step toward the reforms we need to make in order to accomplish the goals you established.  xAs we move forward with universal service reform, we must be vigilant to balance caution and  xambition. Our goal, like yours, is to ensure we satisfy the Telecommunications Acts clear  xpolicy of ensuring the availability of affordable phone service to consumers in all regions of the  xnation. Overzealousness or inaction could undermine this very clear policy goal. As you know,  xthe FCC adopted a forward looking cost model last fall. Tomorrow I will recommend that my  xcolleagues adopt an order and a further notice on the Federal State Joint Board  xrecommendations and a further notice on the elements or "inputs" to be used within the model.  xVI will urge my fellow commissioners to adopt many of the recommendations of the Federal State  x+Joint Board, and put out for comment those recommendations that require further discussion  xamong interested parties. I will also recommend that we look for comment on the actual inputs  Y:&4 x we will use in the cost model in order to implement the new universal service mechanism that":&0*((B$"  xis specific, predictable and sufficient. We are working diligently to adopt a final mechanism for the nonrural companies in September, for implementation in January 2000.  xRecognizing that access to technology is essential for future jobs and an important step necessary  xqto close the digital divide, I have also consistently advocated the Congressionally-created  xEuniversal service support for service to classrooms and libraries -- the so-called E-rate. Under  xmy tenure, the Commission finalized implementation of the E-rate and prioritized assistance so  xthat the most needy would receive the biggest benefit. Moreover, the Commission ensured that  xstrong program controls were in place. According to one study, 87% of Americans support the  xe-rate. This past year, 32,000 school districts, schools, and libraries from across the nation  x4submitted applications for E-rate funding. At tomorrow's Commission meeting, I will be  xrecommending that we fully-fund the E-rate program so that we can meet this demand and  x~continue the work we've done this past year. With this funding, we'll be able to connect  x_one-third of public schools throughout rural America. We look forward to working with you as we bring your vision of a reformed universal service mechanism to fruition.  X 4 Consumer Initiatives  xThroughout my tenure, I have sought to stress the importance of promoting competition while  x_making sure it is not at the expense of consumers. Towards this end, we have taken a number of steps to ensure that consumers receive the benefits of the communications revolution. X` hp x (#%'0*,.8135@8: William E. Kennard, ă  Xx4 Chairman, Federal Communications Commission ă   Y 4 M #Xj\  P6G;WXP#sWe are standing at the threshold of a new century, a century that promises to be as  xrevolutionary in the technology that affects our daily lives and the future of our country as the  xinventions and innovations that so profoundly shaped the past 100 years. Just as the internal  xcombustion engine, the telephone, and the railroad brought about our country's transformation  xfrom an agricultural to an industrial society, the microchip, fiberoptic cables, digital technology,  xEand satellites are fueling our transition from an industrial to an informationage society. As the  xmarketplace changes, so must the Federal Communications Commission (FCC). The topdown  x4regulatory model of the Industrial Age is as out of place in this new economy as the rotary  xtelephone. As competition and convergence develop, the FCC must streamline its operations  x8and continue to eliminate regulatory burdens. Technology is no longer a barrier, but old ways of thinking are.  MsEnclosed is a Report entitled "A New Federal Communications Commission for the 21st  xCentury." This report is part of a continuing process of selfassessment that the Commission  xlhas been engaging in to transform itself to meet the challenges of an informationage economy  !hand an everchanging communications industry. The Report describes the communications"j$0*((""  !marketplace past, present, and future and the implications of those changes for the FCC's structure and regulatory framework.  L4|My vision for a "New FCC" is a bold one in five years, the FCC should be dramatically  !changed. In a world of fully competitive communications markets, the FCC should focus only  Y 4 !on those core functions that are not normally addressed by market forces. These core functions  !bwould revolve around: i) universal service, consumer protection and information; ii)  !C!enforcement and promotion of procompetition goals domestically and worldwide; and iii)  Y4spectrum management.  Y84 L|The steps we are taking to transition to this model include: 1)  Restructuring : We are  ! consolidating currently dispersed enforcement functions into an Enforcement Bureau, and  !dcurrently dispersed public information functions into a Public Information Bureau. The  !consolidation of these two key functions will improve efficiency and enhance the delivery of  Y4 !3these services to the general public and to industry. 2)  Streamlining and Automation : We are  !investing in new technology to create a "paperless FCC" by processing applications, licenses,  !and consumer complaints faster, cheaper, and in a more consumer friendly way through  Y4 !electronic filing and universal licensing. 3)  Deregulation : We are completing 32 deregulation  !lproceedings covering multiple rule parts as a result of our 1998 Biennial Review of regulations,  !~and intend for the 2000 Biennial Review to produce even more deregulatory actions. 4)  Yr$4 ! Strategic Plan : We are preparing a fiveyear Strategic Plan that will outline our timetable for  !restructuring and streamlining FCC functions and management. As part of this process, we will"F&0*((B$"  !Ework with Congress, state and local governments, industry, consumer groups, and others on a critical assessment of what the "New FCC" should look like and how we should get there.  Yv4 FCC 1999 Proposed Restructuring and Streamlining Timetable*  YJ4  Y 4March` ` Submit House Reauthorization Testimony/Initial Report to Congress  Y 4 ( April/May ` ` Conduct preliminary meetings and discussions with Congress and other |Stakeholders on Strategic Plan  Y64May 20,` ` Conduct Public Forums with Industry, Consumers, State and Local  Y4June 2 & 11` ` Government Representatives, and Academics and Organizational Experts  Y4May 26` ` Submit Senate Oversight Testimony  YP4 ( June` ` Transmit Current Restructuring Plan to Commissioners (Enforcement Bureau  Y"4 |and Public Information Bureau)  Y 4 ( July ` ` Transmit Current Restructuring Plan to Congress and National Treasury |` ` Employees Union |Transmit Draft Strategic Plan to Congress, OMB, and Stakeholders |Organize 2000 Biennial Review Team"<&0*((B$"Ԍ Y4ԙSeptember` ` Transmit Final Strategic Plan to Congress, OMB, and Stakeholders  Y4October` ` Establish Enforcement Bureau and Public Information Bureau  YH4November` ` Begin Outreach on 2000 Biennial Review  Y 4FY 2000` ` Begin Implementing FiveYear Strategic Plan  X4 ! *Note: Many of these dates are subject to change and may need Commission or  Yb4Congressional approval. "60*((D"  X4     A NEW FEDERAL COMMUNICATIONS COMMISSION FOR THE 21ST CENTURY  X4 ! I. The Federal Communications Commission and the Changing Communications  Xv4Marketplace   X 4 A. Introduction  L|Congress enacted the Communications Act of 1934 to provide for the widest dissemination  !yof communications services to the public. Section 1 of the Communications Act states that the  !'purpose of the Act is to "make available . . . to all the people of the United States, without  !discrimination . . . a rapid, efficient, Nationwide, and worldwide wire and radio communication service . . . at reasonable charges."  L|This goal remains vibrant today. What has changed since 1934 is the means to get to this  !goal. With the passage of the Telecommunications Act of 1996 (Telecom Act), Congress  !recognized that competition should be the organizing principle of our communications law and  !policy and should replace micromanagement and monopoly regulation. The wisdom of this  ![approach has been proven in the long distance, wireless, and customer premises equipment  !}markets, where competition took hold and flourished, and consumers receive the benefit of lower prices, greater choices, and better service. "h$0*((""Ԍ L|The imperative to make the transition to fully competitive communications markets to  !promote the widest deployment of communications services is more important today than ever  !before. In 1934, electronic communications for most Americans meant AM radio and a  !+telephone, and sending the occasional Western Union telegram. Today, it means AM and FM  !radio, broadcast and cable TV, wireline and wireless telephones, faxes, pagers, satellite  !technology, and the Internet services and technologies that are central to our daily lives.  !Communications technology is increasingly defining how Americans individually, and  !collectively as a nation, will be competitive into the next century. It is increasingly defining the  !Epotential of every American child. So the goal of bringing communications services quickly to  !4all Americans, without discrimination, at reasonable charges, continues to be of paramount  !yimportance. Competition is the best way to achieve this goal, while continuing to preserve and protect universal service and consumer protection goals.  L'|To accomplish this goal, our vision for the future of communications must be a bold one.  !AWe must expect that in five years, there can be fully competitive domestic communications  ! markets with minimal or no regulation, including total deregulation of all rate regulation in  !competitive telephone services. In such a vibrant, competitive communications marketplace, the  !Federal Communications Commission (FCC) would focus only on those core functions that  !Acannot be accomplished by normal market forces. We believe those core functions would  !revolve around universal service, consumer protection and information; enforcement and  !Vpromotion of procompetition goals domestically and internationally; and spectrum management. "h$ 0*((""  !As a result, the traditional boundaries separating the FCC's current operating bureaus should no longer be relevant. In five years, the FCC should be dramatically changed.  Lz| We are working to transition the FCC to that model based on core functions in a  !competitive communications market now. We are writing the blueprint for it, beginning with  !this report describing the steps we are already taking. After receiving input from our key  !stakeholders, we plan to develop this report into a fiveyear Strategic Plan which will outline  !lprecisely our objectives and timetable year by year for achieving our restructuring, streamlining,  !and deregulatory objectives. We must work with Congress, state and local governments,  !industry, consumer groups, and others to ensure that we are on the right track, and that we have the right tools to achieve our vision of a fully competitive communications marketplace.  X4    B. The State of the Industry  Y4  L|In the Telecom Act, Congress directed the FCC to play a key role in creating and  !implementing fair rules for this new era of competition. Over the course of the past three years,  !the FCC has worked closely with Congress, the states, industry, and consumers on numerous proceedings to fulfill the mandates of the Telecom Act.  Lu|By many accounts, the Telecom Act is working. Many of the fundamental prerequisites for  ! a fully competitive communications industry are now in place, competitive deployment of"h$!0*((""  !advanced broadband services is underway, and the stage is set for continued deregulation as competition expands.  L|Furthermore, by many measures, the communications industry is thriving. Since the passage  !pof the Telecom Act, revenues of the communications sector of our economy have grown by over  !$100 billion. This growth comes not only from established providers, but also from new  !competitors, spurred by the marketopening provisions of the Telecom Act. (See Appendix A, Charts 1 and 2) This growth has meant new jobs for thousands of Americans.  L|In the wireless industry, capital investment has more than tripled since 1993, with more than  !$50 billion of cumulative investment through 1998. Mobile phones are now a common tool for  !Rover 60 million people every day, and the wireless industry has generated almost three times as many jobs as in 1993. (See Appendix A, Chart 3)  L|Consumers are beginning to benefit from the thriving communications sector through price  !reductions not only of wireless calls, but also of long distance and international calls. (See  !Appendix A, Charts 4 and 5) Consumers are also beginning to enjoy more video entertainment  !lchoices through direct broadcast satellites, which are becoming viable alternatives to cable. We  !are also at the dawn of digital TV, which offers exciting new benefits for consumers in terms  !of higher quality pictures and sound and innovative services. (See Appendix A, Charts 6 and  !7) As we enter this digital age, broadcast TV and radio is still healthy, ubiquitous, and"h$"0*((""  !Eproviding free, local news, entertainment, and information to millions of Americans across the country.  L|Beyond the traditional communications industries, the Internet has truly revolutionized all  !qof our lives. According to a recent study, at least 38% of American adults (79.4 million)  !_already are online and another 18.8 million are expected to go online in the next year. In 1998,  !u26% of retailers had a website, over three times the number in 1996, and it is estimated that  !they generated over $10 billion in sales. Online sales for 1999 are projected to be anywhere from $12 to $18 billion.  L|Communications markets are also becoming increasingly globalized as the Telecom Act's  !cprocompetitive policies are being emulated around the world. Other countries are modeling their  !new telecommunications authorities after the FCC. As other countries open their  !communications markets and increase their productivity, new services and business opportunities  !are created for U.S. consumers and companies, as well as for consumers and companies worldwide.  X4 C. Communications in the 21st Century  L|Even more change is expected in the telecommunications marketplace of tomorrow. In the  !+new millennium, millions of consumers and businesses will be able to choose from a range of  !services and technologies vastly different from those available today. Packetswitched networks,":&#0*((B$"  !running on advanced fiber optics and using open Internet Protocols to support seamless  !Einterconnection to transport immense amounts of information, will be ubiquitous. Millions of  !homes and businesses will be linked to this "network of networks " through "always on"  !Rbroadband connections. Outside the wired confines of the home or office, "third generation"  !uwireless technologies will provide highspeed access wherever a consumer may be. Satellite  !technology will increase the ability to transfer data and voice around the world and into every home.  L|Electronic commerce will play an even more central role in the economy of the 21st Century.  !hAmericans in the next century will be connected throughout the day and evening, relying on  !=advanced technologies not only to communicate with others, but also as a vital tool for  !performing daily tasks (such as shopping or banking), for interacting with government and other  !institutions (such as voting, tax filing, health, and education), and for entertainment (such as video, audio, and interactive games).  L[|In the marketplace of tomorrow, it is expected that traditional industry structures will cease  !lto exist. The "local exchange" and "long distance" telephone markets will no longer be distinct  !0industry segments. Video and audio programming will be delivered by many different  !Rtransmission media. In a world of "always on" broadband telecommunications, narrowband  !applications ! such as our everyday phone calls ! will represent just a tiny fraction of daily  !traffic. Cable operators, satellite companies, and even broadcast television stations will compete  !with today's phone companies in the race to provide consumers a vast array of communications":&$0*((B$"  !0services. In addition, telephone and utility companies may be offering video and audio  !programming on a widescale basis. As crossindustry mergers, joint ventures, and promotional  !agreements are formed to meet users' demand, the traditional distinctions between these industry segments will blur and erode.  Y 4 D. Impact of Industry Convergence  Y 4 L | Convergence across communications industries is already taking place, and is likely to  !accelerate as competition develops further. Thus, in addition to refocusing our resources on our  !core functions for a world of fully competitive communications markets, the FCC must also  !Fassess, with the help of Congress and others, how to streamline and consolidate our  !policymaking functions for a future where convergence has blurred traditional regulatory  Y4definitions and jurisdictional boundaries.  Y4 Lu |The issues involved in thinking about convergence and consolidation are complex. Prior to  !the Telecom Act, the core of the Communications Act was actually three separate statutes: it  !incorporated portions of the 1887 Interstate Commerce Act (governing telephony), the 1927  !Federal Radio Act (governing broadcasting), and the 1984 Cable Communications Policy Act  !(governing cable television). Telephony is regulated one way, cable a second, terrestrial  !broadcast a third, satellite broadcast a fourth. As the historical, technological, and market  !boundaries distinguishing these industries blur, the statutory differences make less and less sense. "l$%0*((""  !JMaintaining them will likely result in inefficient rules that stifle promising innovation and increase opportunities for regulatory arbitrage.  L|Some argue for developing regulatory principles that cut across traditional industry  !boundaries. For example, the policies of interconnection, equal access, and open architecture  !Rhave served consumers well in the wireline context, a traditionally regulated industry. Similarly,  !Nconcepts of connectivity, interoperability, and openness are the lifeblood of the Internet, an  !+unregulated industry. While these similar principles appear to cut across these different media,  !uit is unclear whether and how the government should be involved, if at all, in applying these principles in a world where competition will largely replace regulation.  L|At the very least, as competition develops across what had been distinct industries, we should  !level the regulatory playing field by leveling regulation down to the least burdensome level  !necessary to protect the public interest. Our guiding principle should be to presume that new  !entrants and competitors should not be subjected to legacy regulation. This is not to say that  !different media, with different technologies, must be regulated identically. Rather, we need to  !make sure that the rules for different forms of media delivery, while respecting differences in  !technology, reflect a coherent and sensible overall approach. To the extent we cannot do that  !within the confines of the existing statute, we need to work with Congress and others to reform the statute.  Xh$4  ":&&0*((B$"Ԍ"'0*(("  X4II. The 21st Century: A New Role for the FCC   X4 A. The Transition Period  Yv4  L[|As history has shown, markets that have been highly monopolistic do not naturally become  !competitive. Strong incumbents still retain significant power in their traditional markets and  !Ehave significant financial incentives to delay the arrival of competition. Strong and enforceable  !'rules are needed initially so that new entrants have a chance to compete. At the same time,  !historical subsidy mechanisms for telecommunications services must be reformed to eliminate arbitrage opportunities by both incumbents and new entrants.  L |The technologies needed for the telecommunications marketplace of the future are still  !+evolving, and developing them fully requires significant time and investment. Moreover, there  !uis no guarantee that market forces will dictate that these new technologies will be universally  !deployed. The massive fixedcost investments required in some industries will mean that new  !4technologies initially will be targeted primarily at businesses and higherincome households.  !Even as deployment expands, the economics of these new networks may favor heavy users over lighter users, and in some areas of the country deployment may lag behind.  L|At the same time, consumer preferences will not change overnight. The expansion of  !communications choices is already leading to greater consumer confusion. Especially in a world  !yof robust competition, consumers will need clear and accurate information about their choices,":&(0*((B$"  !guarantees of basic privacy, and swift action if any company cheats rather than competes for their business.  L|While the opportunities for the United States and the world of a global village are enormous,  !8they can only be realized if other countries follow our lead in fostering competition in national  !land world markets. People all over the world benefit as more countries enter the Information  !Age and become trading partners.X01Í ÍX14ÍÍ Thus, as we continue on our own course of bringing  !competition to former domestic monopoly markets, we must also continue to promote open and competitive markets worldwide.  Lh|In sum, although the longterm future of the telecommunications marketplace looks bright,  !8the length and difficulty of the transition to that future is far from certain. To achieve the goal  !of fully competitive communications markets in five years, we must continue to work to ensure  !that all consumers have a choice of local telephone carriers and broadband service providers,  !and that companies are effectively deterred from unscrupulous behavior. We must also continue  !to promote competition between different media, promote the transition to digital technology,  !8and continue to ensure that all Americans have a wide and robust variety of entertainment and information sources.  X"4 "")0*(( " B. The FCC's Role During the Transition to Competition  Y4  L|During the transition to fully competitive communications markets, the FCC, working in  !conjunction with the states, Congress, other federal agencies, industry, and consumer groups,  YH4has six critical goals, all derived from the Communications Act and other applicable statutes :  Y 4 L|Promote Competition: Goal number one is to promote competition throughout the  !communications industry, particularly in the area of local telephony. The benefits of competition  !Nare well documented in many communications sectors long distance, wireless, customer !premises equipment, and information services. The benefits of local telephone competition are  !Aaccruing at this time to large and small companies, but not, for the most part, to residential  !Aconsumers. We must work to ensure that all communications markets are open, so that all consumers can enjoy the benefits of competition.  L|To meet this goal, we must continue our efforts to clarify the provisions of the Telecom Act  !Nrelating to interconnection and unbundled network elements, work with the Bell Operating  !Companies (BOCs), their competitors, states and consumer groups on meeting the requirements  !of the statute related to BOC entry into the long distance market, reform access charges, and,  !as required by Sections 214 and 310(d) of the Communications Act and section 7 of the Clayton  !+Act, continue to review mergers of telecommunications companies that raise significant public interest issues related to competition and consumers. ":&*0*((B$"Ԍ L|In the mass media area, we must continue the procompetitive deployment of new  !utechnologies, such as digital television and direct broadcast satellites, and the maintenance of  !robust competition in the marketplace of ideas. To meet these goals, we must continue rapid  !udeployment of new technologies and services and regular oversight of the structure of local  !markets to ensure multiple voices, all the while updating our rules to keep pace with the everchanging mass media marketplace.  Y 4 LF|Deregulate: Our second goal is to deregulate as competition develops. Consumers  !0ultimately pay the cost of unnecessary regulation, and we are committed to aggressively  !Aeliminating unnecessarily regulatory burdens or delays. We want to eliminate reporting and  !accounting requirements that no longer are necessary to serve the public interest. Also, where  !hcompetition is thriving, we intend to increase flexibility in the pricing of access services. We  !have already deregulated the domestic, long distance market as a result of increased competition,  !land we stand ready to do so for other communications markets as competition develops. We  !have also streamlined our rules and privatized some of the functions involved in the certification  !of telephones and other equipment. We are currently streamlining and automating our processes  !_to issue licenses faster, resolve complaints quicker, and be more responsive to competitors and consumers in the marketplace.  Y"4 LE|Protect Consumers: Our third goal is to empower consumers with the information they need  !to make wise choices in a robust and competitive marketplace, and to protect them from  !unscrupulous competitors. Consumer bills must be truthful, clear, and understandable. We will":&+0*((B$"  !have "zero tolerance" for perpetrators of consumer fraud such as slamming and cramming. We  !+will make it easier for consumers to file complaints by phone or over the Internet, and reduce  !by 50 percent the time needed to process complaints. Further, we will remain vigilant in  !lprotecting consumer privacy. We will also continue to carry out our statutory mandates aimed  !at protecting the welfare of children, such as the laws governing obscene and indecent programming. |  Y 4 L|Bring Communications Services and Technology to Every American: Our fourth goal is to  !ensure that all Americans no matter where they live, what they look like, what their age, or  !what special needs they have should have access to new technologies created by the  !communications revolution. Toward this end, we must complete universal service reform to  !ensure that communications services in highcost areas of the nation are both available and  !affordable. We must also ensure that our support mechanisms and other tools to achieve  !universal service are compatible and consistent with competition. We must evaluate and if  !necessary, improve our support mechanisms for lowincome consumers, and in particular  !Native Americans, whose telephone penetration rates are some of the lowest in the country. We  ! must make certain that the support mechanisms for schools, libraries, and rural health care  !yproviders operate efficiently and effectively. We must make sure that the 54 million Americans  !with disabilities have access to communications networks, new technologies and services, and news and entertainment programming. "h$,0*((""Ԍ Y4 L|Foster Innovation: Our fifth goal is to foster innovation. We will promote the development  !'and deployment of highspeed Internet connections to all Americans. That means clearing  !Rregulatory hurdles so that innovation and new markets can flourish. We must continue to  !promote the compatibility of digital video technologies with existing equipment and services.  !Further, we will continue to encourage the more efficient use of the radio spectrum so that new  !and expanding uses can be accommodated within this limited resource. More generally, we will continue to promote competitive alternatives in all communications markets.  Y4 L|Advance Competitive Goals Worldwide: Our sixth goal is to advance global competition in  !communications markets. The procompetitive regulatory framework Congress set forth in the  !Telecom Act is being emulated around the world through the World Trade Organization  !_Agreement. We will continue to assist other nations in establishing conditions for deregulation,  !competition, and increased private investment in their communications infrastructure so that they  !can share in the promise of the Information Age and become our trading partners. We must  !ycontinue to intensify competition at home and create growth opportunities for U.S. companies abroad. We will continue to promote fair spectrum use by all countries.  X4 "-0*((Z"  X4C. The FCC's Core Functions in a Competitive Environment  L|As we accomplish our transition goals, we set the stage for a competitive environment in  !which communications markets look and function like other competitive industries. At that  !+point, the FCC must refocus our efforts on those functions that are appropriate for an age of  !competition and convergence. In particular, we must refocus our efforts from managing  ! monopolies to addressing issues that will not be solved by normal market forces. In a competitive environment, the FCC's core functions would focus on:  Yb4 L  | Universal Service, Consumer Protection and Information.  The FCC will continue to have  !la critical responsibility, as dictated by our governing statutes, to support and promote universal  !service and other public interest policies. The shared aspirations and values of the American  !Npeople are not entirely met by market forces. Equal access to opportunity as well as to the  !public sphere are quintessential American values upon which the communications sector will  !_have an increasingly large impact. We will be expected to continue to monitor the competitive  !landscape on behalf of the public interest and implement important policies such as universal service in ways compatible with competition.  L|In addition, as communications markets become more competitive and take on attributes of  !}other competitive markets, the need for increased information to consumers and strong consumer  !protection will increase. We must work to ensure that Americans are provided with clear  !_information so that they can make sense of new technologies and services and choose the ones":&.0*((B$"  !best for them. We must also continue to monitor the marketplace for illegal or questionable market practices.  X4  Yv4 L| Enforcement and Promotion of ProCompetition Communications Goals Domestically and  YH4 !Worldwide. As markets become more competitive, the focus of industry regulation will shift  !from protecting buyers of monopoly services to resolving disputes among competitors, whether  !"over interconnection terms and conditions, program access, equipment compatibility, or technical  !8interference. In the fastpaced world of competition, we must be able to respond swiftly and  !effectively to such disputes to ensure that companies do not take advantage of other companies or consumers.  L| The FCC is a model for other countries of a transparent and independent government body  !establishing and enforcing fair, procompetitive rules. This model is critical for continuing to  !foster fair competition domestically as well as to open markets in other countries, to the benefit  !of U.S. consumers and firms and consumers and firms worldwide. There always will be  !governmenttogovernment relations and the need to coordinate among nations as  !ycommunications systems become increasingly global. As other nations continue to move from  !cgovernmentowned monopolies to competitive, privatelyowned communications firms, they will increasingly look to the FCC's experience for guidance.  Yh$4 L|   Spectrum Management.  The need for setting ground rules for how people use the radio  !spectrum will not disappear. We need to make sure adequate spectrum exists to accommodate":&/0*((B$"  !the rapid growth in existing services as well as new applications of this national and international  !uresource. Even with new technologies such as softwaredefined radios and ultrawideband  !ymicrowave transmission, concerns about interference will continue (and perhaps grow) and the  !need for defining licensees and other users' rights will continue to be a critical function of the  !=government. We will thus continue to conduct auctions of available spectrum to speed  !Rintroduction of new services. In order to protect the safety of life and property, we must also  !/continue to consider public safety needs as new spectrumconsuming technologies and techniques are deployed.  Yb4     D. Coordination with State and Local Governments and other Federal Agencies  L|In order to fulfill our vision of a fully competitive communications marketplace in five years,  !8we need a national, procompetitive, proconsumer communications policy, supplemented by  !state and local government involvement aimed at achieving the same goal. The Telecom Act  !set the groundwork for this goal, and the Commission is fulfilling its role of establishing the  !#rules for opening communications markets across the country, in partnership with state  !regulators. The Commission must continue to work with state and local governments to promote  !ucompetition and protect consumers. Toward this end, we have instituted a Local and State  !Government Advisory Committee to share information and views on many critical communications issues. "j$00*((""Ԍ L|The importance of working and coordinating our efforts in the communications arena with  !other federal agencies will also continue. We work particularly closely with the Federal Trade  !4Commission on consumer and enforcement issues, and with the Department of Justice on  !_competition issues. We also work with other federal agencies on public safety, disability, Y2K,  !reliability, and spectrum issues, just to name a few. We see our role visavis other federal agencies as cooperative and reinforcing, where appropriate.  X 4  III. The 21st Century: A New Structure for the FCC   Xb4 A. The FCC's Evolving Structure  L_|The FCC must change its structure to match the fastpaced world of competition and to meet  !our evolving goals and functions, as derived from our authorizing statutes. Our transition goals  !=must be accomplished with minimal regulation or no regulation where appropriate in a  !competitive marketplace. Moreover, a restructured and streamlined FCC must be in place once  !=full competition arrives, so that we can focus on providing consumers information and protection, enforcing competition laws, and spectrum management.  LJ|In sum, we must be structured to react quickly to market developments, to work more  !efficiently in a competitive environment, and to focus on bottomline results for consumers. As  !+competition increases, we must place greater reliance on marketplace solutions, rather than the  !ytraditional regulation of entry, exit, and prices; and on surgical intervention rather than complex":&10*((B$"  !qrules in the case of marketplace failure. We must encourage private sector solutions and  !qcooperation where appropriate. But we also must quickly and effectively take necessary  !enforcement action to prevent abuses by communications companies who would rather cheat than  !compete for consumers. Ultimately, throughout the agency, we must be structured to render  !decisions quickly, predictably, and without imposing unnecessary costs on industry or consumers.  X 4 B. Current Restructuring Efforts  L9|The FCC is currently structured along the technology lines of wire, wireless, satellite,  !Rbroadcast, and cable communications. As the lines between these industries merge and blur as  !a result of technological convergence and the removal of artificial barriers to entry, the FCC  !needs to reorganize itself in a way that recognizes these changes and prepares for the future.  !yA reorganization of the agency, over time, along functional rather than technology lines will put  !=the FCC in a better position to carry out its core responsibilities more productively and efficiently.  L|As the first step in this process, in October 1998, Chairman Kennard announced plans to  !hconsolidate currently dispersed enforcement functions into a new Enforcement Bureau and  !dcurrently dispersed public information functions into a Public Information Bureau. The  !consolidation of these two key functions that are now spread across the agency will improve  !+efficiency and enhance the delivery of these services to the general public and to industry. The":&20*((B$"  !<consolidation of these functions will also encourage and foster cooperation between the two new  !bureaus, other bureaus and offices, and state and local governments and law enforcement  !agencies. The end result will be improvements in performance of both these functions through  !Nan improved outreach program, a better educated communications consumer, and a more efficient, coherent enforcement program.  L|The new Enforcement Bureau will replace the current Compliance and Information Bureau  !and, likewise, the new Public Information Bureau will include the current Office of Public  !'Affairs, except for a small separate Office of Communications that will be responsible for interacting with the news media and for managing the agency's Internet website.  L|The Commission is also investing in new technology to process applications, licenses, and  !8consumer complaints faster, cheaper, and in a more consumer friendly way through electronic  !filing and universal licensing. Our goal is to move to a "paperless FCC" that will result in  !improved service to the public. Examples of these efforts include universal licensing,  !streamlined application processes, revised and simplified licensing forms, blanket authorizations,  !,authorization for unlicensed services, and electronic filing of license applications and certifications.  X"4| 1. Enforcement Bureau "h$30*((""Ԍ L |Since the Telecom Act was passed, telephonerelated complaints have increased by almost  !100%. In 1996, the Common Carrier Bureau received over 28,000 complaints; in 1998, that  !number increased to over 53,000 complaints. With the increase in competition, we expect even  !more complaints to be filed as consumers grapple with changes in both service options and  !8providers. While we have been implementing streamlined, electronic processes to address this  !burgeoning workload, we have also determined that the consolidation of many widely dispersed  !penforcement functions into an Enforcement Bureau is an important step toward a more forward !Vlooking FCC organizational structure that will emphasize the importance of effective enforcement of the Communications Act.  L|The Commission currently has four organizational units dedicated principally or significantly  !pto enforcement the Compliance and Information Bureau, the Mass Media Bureau Enforcement  !Division, the Common Carrier Bureau Enforcement Division and the Wireless  !Telecommunications Bureau Enforcement and Consumer Information Division. Consolidating  !most enforcement responsibilities of these organizations into a unified Enforcement Bureau will  !result in more effective and efficient enforcement. The Enforcement Bureau will coordinate  !<enforcement priorities and efforts in a way that best uses limited Commission resources to ensure compliance with the important responsibilities assigned to the FCC by Congress.  LN|The consolidation of various FCC enforcement functions also responds to the fact that the  !Vneed for effective enforcement of the Communications Act and related requirements is becoming  !even more important as competition and deregulation increase. As communications markets":&40*((B$"  !become increasingly competitive, the pace of deregulation will intensify. Those statutory and  !Nrule provisions that remain in an increasingly competitive, deregulatory environment will be  !hthose that Congress and the Commission have determined remain of central importance to  !Rfurthering key statutory goals e.g., providing a structure for competition to flourish, assisting  !Acustomers and users of communications services in being able to benefit from competitive  !communications services, ensuring that spectrum is used in an efficient manner that does not create harmful interference, and promoting public safety.  L|As unnecessary regulation is eliminated and the demands of the marketplace increase, the  !Commission must focus its resources on effective and swift enforcement of the statutory and  !regulatory requirements that remain. The consolidation of our enforcement activities will allow us to do just that in a streamlined, centralized, and more effective way.  Y4    X4 |2. Public Information Bureau  L|Consumer inquiries at the Commission have increased dramatically since 1996. In 1998, we  !received over 460,000 phone calls to telephone service representatives, and over 600,000 calls  !to our automated response system. There were on average over 266,000 hits on the FCC's web  !site a day, totalling over 97 million in 1998 (up over 400% from 21 million in 1996). We  !expect these numbers to increase as more consumers seek information regarding the ever growing array of services and providers in the communications marketplace. ":&50*((B$"Ԍ Y4 LÙ|  Currently, consumer inquiries are handled by several different offices and bureaus throughout  !ythe Commission and the methods used to handle these inquiries vary widely. While each office  !has a small contingent of staff handling inquiries, they have had varying degrees of success in  !4meeting the ever increasing volume. Although the Commission established a National Call  !qCenter in June 1996, current processes still require a great number of consumers seeking information to contact other offices and bureaus directly to get their questions answered.  L|The creation of the Public Information Bureau allows the Commission to better serve the  !public by establishing a single source organization as a "onestop" shop or "FCC General Store"  Yb4 !for handling all inquiries and the general expression of views to the Commission, thereby better  Y44 !Nmeeting the public's information needs. Merging resources of the Office of Public Affairs,  !hwhich includes public service and inquiry staffs and the Commission's public reference files,  !with the FCC Call Center will provide a streamlined, more efficient, and consolidated  Y4 !information source for the publi c . Consumers would only have to contact one source, whether  !by telephone (1888CALLFCC) or by Email or the Internet (FCCINFO@FCC.GOV). The  !Public Information Bureau also plans to establish one source for mailing inquiries to the FCC  !(for example, P.O. FCC). The Public Information Bureau will also be responsible for  !facilitating resolution of informal consumer complaints, thereby strengthening the mission of the new Bureau to address most individual consumer needs in one place.  Yh$4 L'| The creation of the Public Information Bureau will encourage more public participation in  !Vthe work of the Commission. The staff of the Public Information Bureau will conduct consumer":&60*((B$"  !forums across the country to inform and solicit feedback from consumers about the  !8Commissions policies, goals, and objectives. This feedback will be shared with other bureaus  !'to help ensure that Commission rules are fair, effective, and sensible, and that they support  !competition while responding to consumer concerns. The Public Information Bureau also plans  !to share its databases with state and local governments as appropriate, to coordinate our  Y 4respective abilities to respond to consumer complaints and track and address industry abuses.  Lu|The creation of the Public Information Bureau supports the Commissions efforts to foster  !a procompetitive, deregulatory, and proconsumer approach to communications services. The  !qstaff of the Public Information Bureau will provide consumers with information so that  !consumers can make informed decisions regarding their communications needs. The staff of the  !Public Information Bureau will also work with other bureaus to issue consumer alerts and public  !service announcements to give consumers information about their rights and information to  Y4 !protect themselves from unscrupulous individuals and firms. Finally, the Public Information  !_Bureau will provide easy public access to FCC information as well as a convenient way for the  YN4 !public to make its views known, thus supporting the Commissions efforts to assist communities  !across America in dealing with complex communications issues and to provide opportunities for  Y4a wide range of voices to be expressed publicly.#XP\  P6QWXP#  Y 4  X"4 |3. Streamlining and Automating the FCC Licensing Process "h$70*((""Ԍ LN|The Commission's "authorization of service" activities cover the licensing and authorization  !through certification, and unlicensed approval, of radio stations and devices, telecommunications  !Iequipment and radio operators, as well as the authorization of common carrier and other services  !`and facilities. The Commission has already begun automating and reengineering our  !~authorization of service processes across the agency by reengineering and integrating our licensing databases and through the implementation of electronic filing.  Lz|The Universal Licensing System (ULS) project is fundamentally changing the way the  !Commission receives and processes wireless applications. ULS will combine all licensing and  !'spectrum auctions systems into a single, integrated system. It collapses 40 forms into four;  !allows licensees to modify online only those portions of the license that need to be modified  !without resubmitting a new application; and advises filers when they have filled out an  !application improperly by providing immediate electronic notification of the error. During the  !month of February 1999, 75% of receipts (916 applications) filed under the currently implemented portions of ULS were processed in one day.  L|Universal licensing is an example of how we are working to change the relationship between  !the Commission, spectrum licensees, and the public by increasing the accessibility of information  !and speeding the licensing process, and thus competitive entry, dramatically. Universal licensing is becoming the model for automated licensing for the entire agency. "h$80*((""Ԍ L~|In the Wireless Telecommunications Bureau, electronic filing has been fully implemented  !Nthroughout the Land Mobile Radio services, antenna registration, and amateur radio filings.  !More than 50% of the Wireless Telecommunications Bureau's filings are now accomplished  !electronically. Significant service improvements are evidenced by the fact that 99% of Amateur  !Radio service filings are now processed in less than five days, with most electronically filed  !applications being granted overnight. The Wireless Bureau also has an initiative to transfer the  !knowledge used by license examiners in manually reviewing applications to computer programs so that applications can be received, processed, and licenses granted in even less time.  L|The Mass Media Bureau is implementing a similar electronic filing initiative. In October,  !the FCC issued rules that substantially revise the application process in 15 key areas, including  !sales and license renewals, in order to effectuate mandatory electronic filing for broadcasters.  !+When fully implemented, the new electronic filing system will reduce the resources required to  !'process authorizations, accelerate the grant of authorizations, and improve public access to information about broadcast licensees.  L|The Common Carrier Bureau has also implemented electronic filing of tariffs and associated  !documents via the Internet. The Electronic Tariff Filing System enables interested parties to  !access and download documents over the Internet, and to file petitions to reject, or suspend and  !4investigate tariff filings electronically. Since July 1, 1998, over 10,000 electronic tariff filings have been received, replacing approximately 750,000 pages of information. ":&90*((B$"Ԍ L|The results of all these streamlining efforts include a more economical use of FCC personnel  !lresources, improvement in processing times, the ability of our customers to file via the Internet  !or through other electronic filing mechanisms, and the ability to provide our customers with  !8immediate status reports on their applications as well as real time access to online documents.  ![It is estimated that our move toward a "paperless FCC" will save the public approximately 700,000 hours of paperwork in this fiscal year alone.  X 4 | 4. Budget and Workforce Impact  L|In anticipation of the expected increased efficiencies our restructuring plans and other  !streamlining and automation improvements will produce, the FCC is confronting the issue of  !how it should look and operate in FY 2000 and beyond. We expect that our re-engineering and  !restructuring efforts will yield increased efficiencies and streamlining opportunities, particularly  !in the area of authorization of service, due to automation and regulatory changes. However,  !ythese efforts will also result in the potential displacement of staff in certain locations and a need to retrain and reassign other staff.  L|Buyout authority is a tool that will enhance the Commission's ability to alter the skills mix  !lof its workforce to carry out its changing mission more effectively. Targeted buyouts for staff  !would facilitate our restructuring efforts in a costeffective manner. The Commission has  Yh$4requested buyout authority in its budget request for FY 2000. ":&:0*((B$"Ԍ LE|The Commission is dedicated to keeping staff informed and involved in our restructuring and  !streamlining efforts, and to minimizing workplace disruption that may result from these efforts  !through staff retraining, reassignment, and other methods. It is critical, as we consider ways  !to restructure and streamline Commission operations, that we continue to recognize and respect  !the hard work of our employees, many of whom have been with the Commission for many  !years. Change is always difficult, and it is imperative that our staff understands and supports  !Fthe necessary changes that are taking place and will continue to take place at the  !'Commission. Accordingly, we are working closely with the National Treasury Employees  !JUnion (NTEU) to ensure that staff is involved in all these issues and that their views are  Yb4incorporated into the Commission's planning process. pp  X4|5. Restructuring Process and Timeline  Y4 L  |Planning for the Public Information Bureau began in late November 1998 and for the  !Enforcement Bureau in midDecember 1998. A Task Force comprised of both managers and  !staff from relevant Bureaus and Offices, as well as NTEU representatives, has been meeting  !regularly since early January to consider such issues as the appropriate functions of each of the  !8Bureaus and their organization. Efforts have also been made on an informal basis both inside  !hand outside the Commission to ensure that a wide range of ideas are considered during the  !Wplanning process. A proposed reorganization plan should be formally submitted to the  !+Commission for its consideration in Spring, 1999. Upon approval by the Commission, it will be formally submitted to the NTEU and appropriate congressional committees.":&;0*((B$"Ԍ Y4ԙ C. Restructuring to Reflect Industry Convergence  Y4 L~ | As the traditional lines dividing communications industries blur and eventually erode, the  !traditional ways of regulating or monitoring these industries will also have to change. The FCC  !lmust think about the complex issues resulting from converging communications markets from  !yboth a policy and structural perspective. How the FCC should be structured to address issues  !arising from a more competitive, converged communications marketplace is inextricably tied up  !with the policy choices that will be made on how to address the blurring of regulatory  Y4distinctions.  Y84 L | From a structural perspective, as noted in our FY2000 budget submitted to Congress, there  Y 4 !_are a number of steps we are committed to take. We will continue to evaluate whether certain  !yregulations are no longer necessary in the public interest and should be repealed or modified as  !required by Section 11 of the Communications Act. We will continue to use our forbearance  !authority where appropriate. We will continue our efforts to reduce reporting requirements and  !8eliminate unnecessary rules, and to level regulation to the least burdensome possible, consistent  Y$4 !Rwith the public interest. In addition, in our FY 2000 budget, we have committed to reviewing our cable services and mass media functions.  LJ|We recognize that much additional analysis is needed to consider the impact of industry  !convergence on the FCC's policies and rules and on our structure. We will continue to meet  !with Congress, our state regulatory partners, industry, consumer groups, and others to solicit">&<0*((B$"  !input and feedback on our restructuring, streamlining and policy initiatives and the impact of industry convergence.  Xv4 IV. Substantive Deregulation Efforts  YH4  L|As telecommunications markets become more competitive, we must eliminate regulatory  !requirements that are no longer useful. We are already engaged in an ongoing process of  !reviewing our entire regulatory framework to see which rules should be eliminated or streamlined.  X44 A. FCC Biennial Review of Regulations  Y4  L[|In November 1997, the Commission initiated a review of the Commission's regulations, as  !required by Section 11 of the Telecom Act. Beginning in 1998 and in every evennumbered  !year thereafter, the FCC must conduct a review of its regulations regarding the provision of  !telecommunications service and the Commission's broadcast ownership rules. The Telecom Act  !charges the Commission with determining whether, because of increased competition, any regulation no longer serves the public interest.  Y"4 Lq |Chairman Kennard announced in November 1997 that the Commission's 1998 Biennial  !WReview would be even broader than mandated by the Telecom Act. In addition, at the  !Chairman's direction, the Commission accelerated the Congressionallymandated biennial review":&=0*((B$"  !requirement by beginning in 1997 rather than in 1998. As part of the 1998 Biennial Review,  !8each of the operating bureaus, together with the Office of General Counsel, hosted a series of  !public forums and participated in practice group sessions with the Federal Communications Bar  !8Association to solicit informal input from the public. The Commission also hosted a web site on the biennial review and asked for additional suggestions via email.  L|After input from the public, the Commission initiated 32 separate biennial review rulemaking  !proceedings, covering multiple rule parts, aimed at deregulating or streamlining Commission  !regulations. The Commission devoted substantial attention and resources to the biennial review.  !RRoughly twothirds of the proceedings involved common carrier deregulation or streamlining.  Yb4 !RThe Commission also instituted a broad review of its broadcast ownership rules. To date, the  !Commission has adopted orders in seventeen of the 1998 biennial review proceedings, with  Y4others to be forthcoming. (See Appendix B)  L|From the outset, the focus of the Biennial Review has been on regulating in a common sense  !manner and relying on competition as much as possible. The Chairman and the other  ! Commissioners have worked together to make the biennial review a meaningful force for  !deregulation and streamlining. The 1998 review was the Commission's first biennial review,  !and was being conducted while the Commission was still in the process of implementing the  !Telecom Act. The Chairman and the Commission intend to build on the 1998 review so that the 2000 review and future reviews will produce even more deregulatory actions.  X<&4 B. Continued FCC Deregulation Efforts "<&>0*((B$"Ԍ L[ԙ|As we move toward our goal of fully competitive communications markets, our efforts to  !streamline and eliminate unnecessary rules must be increased and expanded. Accordingly, the 2000 Biennial Review will be a top priority for the Commission.  L|As we did with the 1998 review, we plan to start the 2000 review early, by putting a team  !in place in 1999 to work with the Commissioners and the Bureaus and Offices on planning and  !ustructuring the review. We will also continue to keep our review broad in focus. The team  !Ewould evaluate the success of the 1998 review and consider whether changes are necessary for  !=the 2000 review. The team would also consider whether any changes are needed in the  !Rmethodology we have used to review our regulations. The team would again solicit input and  !8recommendations from state regulators, industry, consumer groups, and others, to ensure that the 2000 review is a major force for deregulation.  L|In short, we will be guided by one principle: the elimination of rules that impede competition and innovation and do not promote consumer welfare.  X 4   X4V. Strategic Planning Efforts   X"4 A. Background "h$?0*((""Ԍ L#|The Government Performance and Results Act of 1993 (Results Act) provides a useful  !'framework for a federal agency to develop a strategic plan. The Results Act recommends  !including as part of such a plan:  I. A. 1. a.(1)(a) i) a)(1)(1)(1)(1)(1)(1)(1)(1)X` hp x (#%'0*,.8135@8: