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"Thinking Like a Consumer"

William E. Kennard
Chairman, Federal Communications Commission
1999 AARP National Legislative Council Meeting
Washington, D.C.
February 4, 1999

(As Prepared for Delivery)

Thank you, Grant, for that very generous introduction. Hearing your kind words, I am reminded of what Hubert Humphrey said, "Flattery is like smoking. It's O.K. as long as you don't inhale."

Over Christmas, I was down in South Carolina visiting with my wife's family. Now, she is from a small town and her father is a minister. So everyone knows everybody, and no one is shy to speak their mind.

After a dinner, I was talking with one of her uncles about all that was going on in Washington -- and I don't just mean telecom law. He said that the problem is that the younger generation just isn't involved. They don't read the newspapers. They don't vote. They don't write their congressman.

I said, "You're right. You've identified the two biggest problems in America today: ignorance and apathy. So what should we do about it." And he says, "I don't know and I don't care."

Americans -- young, old, black, white -- just don't care about our government and the issues of the day. They are turned off, tuned out, and dropped out from public affairs. For those of us in public service, it's often discouraging. But there are pockets of hope. Looking around this room and seeing all of you, I feel good. Because you are dedicated -- not just this week, but all year -- to tackling the important issues facing our nation. You work to make our country better not just for seniors, but for all Americans.

I want to thank Joseph Perkins, John McManus, and the entire National Legislative Council for your hard work, and for inviting me to participate in your policy discussions.

I come to you to report from the center of a whirlwind, the whirlwind of telecommunications. Over the past decade -- perhaps even less than that -- how we communicate with our friends, family, business colleagues, and elected officials has changed profoundly.

Last year, 61 million Americans had a mobile phone. They made calls on a service that cost 40 percent less than it did three years ago. Data traffic eclipsed voice traffic on phone lines, as more and more Americans of all ages, went on-line.

In fact, adults 50 and older are now the fastest growing group of on-line users. And once on-line, Americans are finding a virtual cyber-mall. In 1998, 26% of retailers had a web-site, over three times the amount in 1996, and it is estimated that they did over $10 billion in sales. In the next few years, electronic commerce is going to restructure the retailing world and fundamentally change our lives.

The pace of change is quick and at times frightening, especially for those of us who grew up with one phone company and wrote our term papers on a typewriter. In fact, every time my mother gets a call to switch her long distance company, she calls me for help. I try to download a brief from the Internet, and I have to call my nieces and nephews to walk me through it.

Every generation is more technologically savvy than the previous one. You know, sometimes, I think that the Y2K problem is just a sophisticated form of teenage rebellion.

In a world of increasing competition and rapid technological change, the promise for our country is unlimited. Already, one-third of our current economic growth -- the longest peacetime economic expansion in history -- is due to the information technology sector.

But the benefits to us all go beyond prosperity. With the Internet, any child anywhere can get everything written by Yeats or written on the Yankees. With mobile phones, we are able to call home when we are late or call for help in case of an emergency. As these technologies come to our living rooms, telecommuting and e-commerce becomes easier, making it possible to spend more time with our families instead of waiting in traffic or standing in line.

But with the promise comes two big risks. They are real. They are significant. But if we make the effort now, we can avoid them.

The first is that in a more competitive marketplace, there will be those who rather cheat than compete. There will be a handful of unscrupulous companies, so eager for quick profit that they will be willing deceive customers with false promises and marketing sleight of hand, rather than win business with better service at lower prices.

Unfortunately, we already are seeing this occur in the long-distance market. As competition heats up, some companies are slamming unsuspecting consumers, switching their long distance without their permission. Last year, the FCC received a record 20,000 slamming complaints, including this one handwritten letter from a woman from upstate New York that I want to share with you:

"I am writing this note to you because this company took advantage of my 82-year old hard-of-hearing husband to change our local phone provider. We did not authorize this to be changed. I am saddened to think these things can happen. I will not pay any of this bill and worry when my husband will answer the phone. I hope you can be of some help to me."

Well, the FCC is helping. We have adopted a new policy toward slammers. It's called: zero tolerance. Over the past year, we have dramatically stepped up our enforcement effort. We have hit slammers with $13 million in fines -- including the largest single fine in FCC history. And for the first time, we have pulled the plug on a slammer, putting him out of the phone business for good.

And in a few weeks, even tougher rules will take effect. We've adopted new rules that tell Americans who have had their phone company illegally switched that they won't get slammed with an unwarranted phone bill. After all, asking a customer to pay for being slammed is like asking a crime victim to pay the fine of the criminal. We are taking the profit out of slamming altogether.

We have also bolstered the verification procedures for those who want to switch carriers. In particular, we have banned "welcome packages," a ploy where you have to take steps to avoid having your phone service switched. And finally, we have launched a Consumer Network project that will make it easier for normal people to take action against slammers.

In a world of many choices, what is needed is clear information to make informed decisions about what services are right for you and your family. But if you have looked at your phone bill lately, it is about as easy to understand as hieroglyphics.

A few months ago, my wife was going over our bills, and she called me over. "Honey, can you give me hand with this phone bill. I just don't understand all these charges."

I walked over, ready to make good use of hours of reading, countless briefings, and years of practicing communications law. And you know what? I didn't understand them either.

Now, if the Chairman of the FCC can't understand his phone bill, then there's a problem.

In the next few years, these bills have the potential to get even more confusing as more and more of us will be buying more advanced services from a huge array of companies. That is why it is imperative that bills are clear and easy to read. It is imperative that nothing is crammed onto them that you don't want or don't understand. You should be able to read your bill and know what you're paying for.

After receiving thousands of complaints about companies cramming all these strange and hard-to-understand charges on bills, we have taken action. We have proposed new guidelines for phone companies on how they can make phone bills simpler and easier to understand. We want to make it so that the statement sent to you each month is as clear and easy to understand as the nutrition label on a box of Wheaties.

The second risk that we face in this period of revolutionary change is that some will be left behind. That as companies build the Information Superhighway, the on-ramps will go not only to the business districts, but to the barrios; not only to those with every advantage, but to those with special needs; not just to the young, but to the old; and not just to suburban homes, but to our rural heartland.

Last week, I was in New Mexico with tribal leaders visiting an Indian reservation. Nationally, 94 percent of all Americans have basic phone service, compared with less than half of households on Indian reservations. I talked with people there who were sick and couldn't call the doctor, who had had lost loved ones because they couldn't call an ambulance.

As a country committed to "equal opportunity to all and special privileges for none," it is our duty to make sure that the technologies that will shape the next century are available to all Americans.

President Clinton and Vice President Gore understand this. They know that in our New Economy what you earn is what you learn. They believe passionately in building a national community where all Americans have an equal opportunity at a better life.

Because of their vision and leadership, we now have the e-rate program. And, as we meet here today, the important work of wiring all of our schools and libraries to the Internet is underway. And, I can assure you, we are making a difference.

Last month, I went to Boston where the e-rate made it possible for that city to wire all of its schools to the Internet -- the first big city in our county to do so. But this was only the first step. We have more to do. We have to make this technology work. We have to unleash its potential.

In Boston, I went to Hi-Q, a computer company in the heart of Roxbury. There, in one of the city's poorest neighborhoods, this company has established a teacher training center to teach teachers how to use technology in their newly wired classrooms, and how to teach students the high-tech skills they need to get the high-paying jobs that this industry offers. Just by connecting schools and libraries with the e-rate, we have now connected thousands of children to the opportunities of the New Economy.

That is why we must not stop with only wiring schools and libraries. We need to make sure that community centers, Y's, senior centers, and all homes who want it can hook up to the Internet and can do so with the advanced, high-speed connections that businesses enjoy.

Now, changes in the marketplace are putting us closer than ever to the large-scale deployment of advanced, high-speed Internet access. It is a dynamic and rapidly changing environment where new technologies, mergers, and agreements are announced - it seems - almost daily.

I cannot speak directly about these mergers, but I can tell you this. I will scrutinize every merger that comes before the FCC to make sure that it does not harm the American people in any way. The job that we have - as government and consumer advocates alike - is to make sure that these changes bring more choices, better services, and lower prices to all Americans. That is our challenge.

Wide deployment of the technologies of tomorrow is just one side of this opportunity coin. The other is smart development. 54 million Americans have some sort of disability. And - I just learned this from AARP -- 50 percent of those over 65 have some condition that makes it difficult to use a phone.

If the hard of hearing and hard of sight have a hard time using the communications equipment upon which we all rely, we are denying a large part of our country the opportunity at a full life.

Interestingly, it doesn't take much to make a difference. It doesn't take much to change the lives and the life chances of our friends, family, and neighbors with disabilities.

Recently, Microsoft developed a new phone designed for those with disabilities. But, it seemed that those who have trouble with their hands and arms had problems handling it. The answer was simple: velcro. Now, there is a little patch of velcro on the back of the phone for those who need extra stabilization. It didn't cost a lot. All it took was smart input during the development stages of the product. But it helped many. Working together, we can devise solutions that will help millions unlock the potential of the Information Age.

When I think about the future and the possibilities of the 21st century, I can not help but to think back to a man from earlier in the 20th century. A man who lived during an era when the "Information Age" meant Western Union and an afternoon newspaper.

Just as I spend most of my time working on the phone network, or the cable network, or the broadcast networks, my grandfather, James Kennard, worked on the network that shaped his age, the railroad.

But he wasn't a CEO or a government official. He was a Pullman porter, the best job that a black man could have in the railroad. Self-taught in everything from the Bible to Shakespeare, he could ride the rails for years but go nowhere. He could be a part of one of the nation's largest networks and industries, but only if he kept his place at the bottom as the guy who carried the bags.

Tired of life on the road, my grandfather moved his young family to Monrovia, California. Out on what was still the frontier of America, he believed that he could escape the prejudice that he faced on the railroad and during his entire life.

But then he came up against another impenetrable network, the public schools. In Monrovia, there wasn't Jim Crow, but there was an understanding: the black children would go to one school; the white children to another. The black school was across town. The white one was a few blocks away.

And so when his son -- my father -- was about five years old, James Kennard dressed the boy up and sent him off to the neighborhood school.

They sent my dad home. "You go to the Negro school," the principal said.

The next day, my grandfather dressed my dad up again -- and sent him to the white school. Again, they sent him home.

"This is where you belong," my grandfather said. So he took my dad back again. And again. And finally, that principal got so worn down he said, "Okay. We'll take the Kennard boy."

My grandfather knocked down the barriers to opportunity so that his son could have the opportunities that he didn't have. And my father took advantage of them, becoming an architect. Sending his son to college and then to law school. I am here today because my grandfather forced open the door to opportunity, when it appeared to be shut tight.

And I will not forget his lesson. The networks of opportunity of tomorrow are the networks of information being built today. And I assure you that I will make sure that they are open to all Americans. That advanced technologies and a choice of them reach every corner of our nation. And that in this competition, no American need to fear being cheated or overwhelmed by confusing information.

I know that I can count on all of you to join me in this fight. For if there is ever an ally of consumers and a friend of opportunity, it is the AARP. If there is ever an organization that should be a partner in our work at the Federal Communications Commission, it is you.

Thank you for the opportunity for me to be with you today. And I look forward to our work together.