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JUNE 17, 1998

[as delivered]

I would like to thank Lloyd Hand, from whom I have learned many valuable lessons, for that generous introduction. I would also like to thank John Weinfurter and the Co-Chairs of CELI -- Members of the House and Senate -- for the invitation to speak to you today.

I know exactly why I was asked to address CELI today.

I figured it out the other day when I heard a story about the Chief Rabbi of Israel and the Pope.

Seems they're in a meeting in Rome. The Rabbi sees an unusually fancy phone on a side table in the Pope's private chambers.

"What is that phone for?" he asks the Pontiff.

"It's my direct line to the Lord! Would you like to give him a call?"

The Rabbi's pretty skeptical. But he tries, gets connected to the Lord, has a long talk.

When he hangs up he says, "This is great! But listen, I want to pay for my phone charges."

The Pope, of course refuses, but the Rabbi insists. Finally, the pontiff gives in. He checks the counter on the phone and says: "100,000 Lira." That's about $56.

The Chief Rabbi gladly directs his entourage to hand over a packet of bills.

A few months later, the Pope is in Jerusalem on an official visit. He's in the Chief Rabbi's chambers. And he sees the exact same phone! "I got the idea from you," the Rabbi says. "Here. Try it."

Well the Pope has an urgent matter requiring divine consultation. He calls the Lord. Talks. Offers to pay. Rabbi says: "One Shekel." That's about 50 cents. Pope says: "Why so cheap?"

Rabbi says: "Here, it's a local call!"

There are those who think the FCC can also call on divine intervention when it comes to rates.

I wish it were true.

The job would be much easier.

As it is, being FCC Chairman is quite a challenge.

It's an honor to be the Chairman of the Federal Communications Commission at such an interesting and challenging time in the communications industry. Having been a communications lawyer for over 15 years, I know there is something special about these times.

I hold this job with both a sense of humility and responsibility. Humility because this is one of the most dynamic sectors of our national economy. Together communications and information services comprise one sixth of our national economy. Revenues in the communications industry alone grew 43% between 1990 and 1996. Humility also because a government agency does not create or implement technological change -- that occurs only in the marketplace.

Responsibility because the tremendous technological changes that are occurring will revolutionize the way we live, work, play and learn.

Government can be an enabler and a catalyst for positive change, or it can be an obstacle.

We can choose to tap the power of technological change to forge a stronger society, reinforce our core societal and community values, and to create stronger economic opportunity for all Americans. Or we can choose not to do so.

We invented the telephone, the computer and the Internet. We can create competitive markets that will drive our entrepreneurs to lead the world, or we can lapse toward large, bureaucratic monopolies.

We can step up to the challenge of making sure that consumers can make clear, informed choices in communications and information markets, and that they always have the power to choose and to control their choices, or we can leave consumers to fend for themselves as technology and markets change.

I know which choices I want to make. My core vision, which is really embodied in the Telecommunications Act of 1996, is that the FCC must ensure that consumers have the power of choice; that communications technology serves to bring our nation together, to strengthen our core values, and to open doorways to economic opportunity for all Americans; and that consumers' right to choose and to make informed choices is protected against abusive marketing practices that subvert those choices. I call these the 3 Cs: Competition, Community and Consumer Protection.

I have an abiding and unabashed faith in the power of the free market to deliver the best, most innovative and cheapest communications services. We cannot legislate or regulate to stop technological change. And we cannot legislate or regulate the power of the market to drive change.

Our best communications policies seek to unleash the competitive market -- to open markets domestically and internationally, to move from a world of bureaucratic monopolies to a world of widespread and wide ranging choice among sellers of communications services, to eliminate bottlenecks that give one company or provider the power to control marketplace developments, and to be vigilant against the creation of new bottlenecks.

The Congress has given us wonderful tools to do this.

For example, last week the Commission -- as directed by provisions in the '96 Telecommunication Act sponsored by Representatives Bliley and Markey -- acted to promote robust competition in the market for next-generation set-top boxes, the devices that will allow consumers to access new choices for video programming and information services. This action prevents incumbent cable companies from leveraging their monopoly control of cable networks into dominance of the vital new market for navigational devices.

Our action last week echoes past FCC decisions which allowed multiple competitors to manufacture telephones that could connect to the public phone network. The result has been an explosion in consumer choices for phones. I remember well the days in which the Princess Phone was introduced into the marketplace.

Competition will also play a critical role in shaping the revolutionary changes now underway in telecommunications technology. When the Telecommunications Act was passed just a little over two years ago, the focus was on the fundamental tension between two providers of primarily analog, voice-oriented services: the local and long distance phone companies. Today, the exploding use of the Internet and other private data networks has introduced a new tension -- the shift from analog to digital, and the transition from circuit to packet-switched networks.

Today, there are 40 million American households with computers. I was reading a report the other day that projected data traffic growth at 300%, versus only 5% growth in traditional voice traffic. And one local phone company announced recently that it expects 99% of its traffic to be data by the year 2010.

Like its appetite for ever-increasing computing power, I believe our nation will have an ever more voracious appetite for data transmission capacity, sometimes called "bandwidth."

The key to satisfying this appetite will be to create real opportunities for companies to compete to deliver high bandwidth services over the "last mile" to all consumers, a vital bottleneck largely controlled today by local phone companies. Competition in our backbone networks today is driving increasing the capacity and speed of the backbones. We need to bring that competitive drive to expand capacity and improve service to the final links to consumers.

Many new technologies are starting to be deployed to win this race for bandwidth, including cable modems, new ways for sending high-speed data over the telephone network, and even satellite delivery systems.

And bandwidth is expanding on either end of the "last mile." Backbone network capacity is rapidly expanding, as is the internal data transmission speed of end-user devices like PCs. Unfortunately, the deployment of broadband access technologies has a long way to go. The result is like having a single lane, gravel road connecting two superhighways. For the millions of Americans who access the Internet at home, this results in what I call the World Wide Wait.

Big corporations already have high bandwidth connections to the Internet. But residential users, schools, libraries, rural health care facilities, and many small businesses often don't. Is this only about faster web surfing or e-mail access for consumers? Well that's part of it, but it also goes way beyond that. The last mile bottleneck effectively denies consumers access to advanced services such as: real time distance learning, telecommuting, participation in E-commerce, telemedicine, and community networking.

I want to see Gordon Moore's law applied to communications -- a market so vibrantly competitive that transmission speeds double every 18 months. I believe that bandwidth will be like computing power -- you can never have too much of it.

The bottom line for me is that the best way to ensure more bandwidth is to encourage local competition, by having as many providers as possible competing to deploy faster networks.

We in government, whether at the FCC or at state commissions, should examine our rules to make sure that we're not standing in the way of new investment in higher bandwidth networks.

This is a profound challenge for the FCC. And a profound opportunity for the FCC to promote the availability of more bandwidth to all Americans.

Which brings me to a different "C" -- Community. I firmly believe that communications has the power to reshape our lives, to strengthen our core values, and to create greater economic opportunity for all Americans.

The "v-chip" is a great example of how government should promote the use of technology to strengthen our core values. Parents are frustrated because they feel they are losing control over the influences television brings into their living rooms. Instead of applying the heavy hand of government censorship, Congress chose for the "v-chip" to put power in the hands of parents. Earlier this year, the FCC adopted technical specifications and approved the industry's voluntary rating system. The result is a new tool that lets parents monitor and control what their kids see.

Another way that we can harness the forces of technological change to improve our society is by ensuring that all of our nation's communities benefit from information technology.

Access to information technology is increasingly defining what each person can become. Everyone in this room probably has a home computer with Internet access. You all know the power of this technology -- to make you more valuable in your jobs, more aware of new employment opportunities, and more aware of the trends that shape our society.

But there is an increasingly wide digital divide in this country. 35% of White American students report using a computer at home, versus only 15% of Black American students. And while only 27% of our classrooms nationwide have Internet access, it's a dismal 13% in poor areas.

We can shrug our shoulders and let this digital divide widen or we can make the right choices. This moment is like other pivotal moments in the history of education. In the early part of this century reformers like Mann and Dewey fought for universal public education. In the middle of the century, during my parents' time, we made the right choice for racial equality in our public schools.

Today, we simply can't go down the path of creating a society of information haves and information have-nots.

I have seen the power of this technology. It is important to remember exactly what is at stake: today's kids and our country's future.

A few months ago I went to visit a school up in Newark, New Jersey. I sat for a while with a kid named John who was about nine. He'd never been on the Internet.

So I showed him how to do it. We found a Website about Martin Luther King, Jr. And afterward I asked him what he thought.

"It's more fun than books," he said.

Well, I don't want kids abandoning books. But I walked away thinking: that's what kids need. All kids.

And it's not just John. All you have to do is watch how much time kids spend playing video games to know that truly effective multimedia tools can revolutionize education.

I am committed to working with Congress to ensure that all of our nation's children share in the benefits of information technology. Our national economic interest demands it, and our shared commitment to our nation's values requires it.

I would like to thank John Weinfurter and the members of CELI for the invitation to speak today, and I'd be happy to take a few questions.