[ Text | Word97 | News Release ]

Remarks of
William E. Kennard, Chairman
Federal Communications Commission
before the
National Cable Television Association
Chicago, Illinois
June 15, 1999

(as prepared for delivery)

"The Road Not Taken: Building a Broadband Future for America"

Thank you, Decker, for that kind introduction. And thank you for inviting me to your convention.

When I took this job, I was told that I can tell what a group thinks about me by what speaking spot I'm given. If it's the keynote, consider it an honor, they really want to hear from you. If it's the luncheon address, they are really pleased with your work. If it's a dinner talk, they must really enjoy hearing you speak.

I am not sure what to make of the 8:00 AM breakfast slot? Maybe you find my speeches so electrifying that they get you going in the morning . . . or so boring that they allow you a few extra minutes of sleep. Well, considering that they're only serving decaf coffee, I'll take it that you love my speeches.

As you know, this is the last National Cable Television Association (NCTA) convention that Decker Anstrom will be overseeing as president of NCTA. Over the years, Decker has been a tireless advocate for the cable industry. Under his leadership, he has helped guide the industry from an era of regulation to de-regulation, from an era of video to an era of data.

But that is not what is so special about Decker. When he announced his resignation, I told Decker that I could not recall a trade association leader receiving the accolades that we have all been hearing about Decker. And the reason, in my opinion, is simple. He is the consummate straight-shooter. If he says he's going to do something, he does it. If he can't, he tells you that too.

In a town where too often press releases pass as policymaking, and too many trade executives think that the way to influence policy is to demonize the policymaker, Decker never played those games.

He did wonders in rebuilding your industry's relationship with the FCC. And I will miss him very much. Decker, thank you.

Although I'm sad to see Decker go, I understand. He may have thought he had power as head of NCTA, but in his new job, he'll have real power -- he'll be programming the weather.

But, of course, as this crowd knows better than most, the real power to shape the prospects of a town, a nation, or a region no longer relies on the weather. It relies on access to the networks of commerce and information. Think back to how the networks of another era shaped the prospects of hundreds of small towns around the country.

About 150 years ago in this country there was a frontier town of about 30,000 people. This town had a good location. It was mildly prosperous. But by no means was it significant to the country or the world.

At the beginning of 1850, this town had one rail line. It had one vital connection to the railroad -- the 19th century network that was transforming the nation and the world. By 1852, it had five. By 1856, it had ten.

The cost of shipping the staples of the economy plummeted. Businesses and hotels were springing up as quickly as the wheat filled the town's warehouses. People and capital flowed in. And by 1860, this town, Chicago, Illinois, had tripled in size, and by 1870, it tripled again. The rest as we see today -- is history.

Chicago became an industrial powerhouse because it had the 19th century equivalent of broadband access: railroads. The "broad shoulders" of Chicago were built by its connections to the railroad network. Industrial America was built on the strength and ubiquity of the railroad network.

As we leave the Industrial Age and enter the Information Age, it's clear that despite all the technical advances and globalization, the formula for economic success has remained the same: economic prosperity relies on high-speed access to the critical network of information and commerce. That network is the Internet, and the type of access needed is broadband.

Already, our nation's leadership in the Internet and communications field has placed us in an extraordinary position. Technological advances that our scientists, engineers, and businesses have spearheaded are transforming the world. Technology that was once found only in our science fiction can now be found on our desktops, in our cars, and in our pockets.

But this is only part of the story. The fertile fields of innovation across these industries and around the country are blooming because Congress made a fundamental decision about our communications policy when drafting the Telecom Act of 1996.

By placing competition at the foundation of our communications policy, Congress set the stage for the explosive growth of the Internet, the digital economy, and the entire communications industry. Congress drafted a competitive blueprint that allowed thousands of entrepreneurs from across the country to build a communications industry for the 21st century.

It is the technical advances unleashed by these competitive forces that is fueling our current economic boom the longest peacetime expansion of our economy in history.

As Federal Reserve Chairman Alan Greenspan noted earlier this month, our leadership of the revolution in how we process and send information has made the United States an "oasis of prosperity" in the world.

And the spring at the center of this oasis is the communications sector of our economy. Over the past 3 years alone, revenues in the communications sector have grown by $140 billion, climbing to a revenue level of $500 billion in 1998. With these profits, business has expanded and over 200,000 jobs have been created over the past five years.

It is the FCC's job to implement and cultivate this competitive environment; to open up previously-closed marketplaces to competitors; and to set the framework for a vigorous competition. And that's what we've done.

In the wireless industry, we introduced more competition by making more spectrum available. Now, in many markets, consumers have a choice of as many as five wireless providers, and can purchase service at prices that last year cost 40 percent less than it did three years ago.

In the long-distance arena, we now have over 600 providers competing for consumer minutes. Because of this, making a long-distance or international call is cheaper than the daily newspaper.

In the local phone market, we have opened up the local loops. We made it easier for competitors to get into the incumbent's central office, and established rules on spectrum compatibility so that many competitors can use the network to send voice and data. And we approved the AT&T-TCI merger to foster competition in the local telephone market through the cable plant.

Competition is our mantra. That's why I'm glad that Congress is considering local-into-local amendments to the Satellite Home Viewer Act, and I look forward to the passage of the final bill and implementing the Act's provisions some day soon.

Congress is doing the right thing, and you as an industry -- did the right thing. You did not oppose the Act, but just asked for provisions that would ensure fair competition between the cable and satellite industries. You and Congress both realized that the key to better serving American families is not through more regulations on the cable industry or more regulations on anyone but to make sure that there is real, vigorous competition in the video marketplace.

And you are doing the right thing on DTV. At our roundtable meeting in May, I challenged the different industry groups to deliver to me by July 1st, a detailed schedule for resolving compatibility issues. I want to thank you and Consumer Electronics Manufacturer's Association (CEMA) for notifying me that you will be sending me this schedule by this date.

Unfortunately, the Motion Picture Association of America (MPAA) has decided not to follow yours and CEMA's lead. Instead, they have chosen to delay. They have chosen to ignore the larger policy issues that concern consumers.

The American public needs these compatibility issues to be worked out. And the FCC has a responsibility to see that they get worked out. You don't want an army of FCC lawyers and engineers dictating DTV compatibility issues.

This competitive, market-driven approach is the same strategy that we should take in building the broadband networks of the next century.

We sometimes get so caught up in the policy debates about broadband -- the latest court case, the latest proposed legislation -- that we forget what we need to do to serve the American public.

Here is my vision for broadband in America. Multiple broadband pipes serving America's homes. At least four or five facilities-based competitors. Digital Subscriber Line (DSL), cable modem, terrestrial wireless, and satellite.

That's my vision for our broadband future. Because that is the best way to serve America's consumers. Multiple facilities-based carriers, competing robustly to bring all sorts of wonderful content to America's homes.

We've got a long way to go.

Around this time last year, less than 100,000 homes had cable Internet hook-ups. Now, close to a three-quarters of a million do, but this is but a fraction of the over 30 million American homes that are on the Internet.

The broadband market is fertile, but still undeveloped. The future is bright, but still glimmering in the distance. We are about 50 meters into a race that is sure to be a marathon.

Sometimes people talk about broadband as though it is a mature industry. But, the fact is that we don't have a duopoly in broadband. We don't even have a monopoly in broadband. We have a NO-opoly. Because, the fact is, most Americans don't even have broadband.

We have to get these pipes built.

But how do we do it? We let the marketplace do it.

If we've learned anything about the Internet in government over the last 15 years, it's that it thrived quite nicely without the intervention of government.

If fact, the best decision government ever made with respect to the Internet was the decision that the FCC made 15 years ago NOT to impose regulation on it. This was not a dodge; it was a decision NOT to act. It was intentional restraint born of humility. Humility that we can't predict where this market is going.

Who among us could have predicted the incredible advances of the past few years? Who at the beginning of this decade could have predicted the embrace of e-mail by all ages, the birth of the World Wide Web, the advances in communications technology?

In a market developing at these speeds, the FCC must follow a piece of advice as old as Western Civilization itself: first, do no harm. Call it a high-tech Hippocratic Oath.

So with competition and deregulation as our touchstones, the FCC has taken a hands-off, deregulatory approach to the broadband market. We approved the AT&T-TCI deal without imposing conditions that they open their network.

Now, the Baby Bells say that it's unfair that they have to open their networks, but cable doesn't; that there's a lack of parity. But let's look at the facts, we put a proposal on the table for the Baby Bells to operate advanced services in a de-regulated environment. The Bells have been given the roadmap to their liberation. All they need is the courage to compete.

We decided to let the market forces churn while we carefully monitor the situation, and the marketplace has responded. The amount of investment in broadband and the number of deals concerning it over the past four months have been staggering and not just in cable.

Wireless companies like Motorola and Nextel have announced partnerships with other firms; satellite companies like DirectTV, Lockheed Martin, and TRW have made moves to provide broadband through their technology; and DSL providers have entered into deals with Prodigy, AOL, and Microsoft.

And where cable modem service has been introduced, DSL is following. To spur on this competition, we gave fast-track approval to allow Bell Atlantic to offer bulk discounts on DSL service to large ISPs like Prodigy and AOL.

The competitive fires are burning. The market has a degree of certainty, and investment dollars have followed. Yet some local cable franchising authorities want to try a different approach. Instead of a national policy of de-regulation and competition, they want a local policy of regulation.

There are 30,000 local franchising authorities in the United States. If each and everyone of them decided on their own technical standards for two-way communications on the cable infrastructure, there would be chaos.

Imagine if we had a highway system where every town could set the parameters for the size of cars and the size of lanes. Or how to get onto on-ramps and off-ramps. We wouldn't be able to drive to the store, much less to another state.

Similarly, the Information Superhighway will not work if there are 30,000 different technical standards or 30,000 different regulatory structures for broadband.

The market would be rocked with uncertainty; investment would be stymied. Consumers would be hurt. That is why I've asked my general counsel for options in light of the recent Portland decision. In fact, that decision was released on June 3rd, and I'm surprised that I haven't yet received a petition for declaratory relief.

See, it is in the national interest that we have a national broadband policy. The FCC as I've said before has the authority to set one, and we have. We have taken a deregulatory approach, an approach that will let this nascent industry flourish.

At the same time, you cannot ignore the concerns of the local franchising authorities.

The ball is in your court. And if you act responsibly, consumers will get broadband and that broadband pipe will follow the open tradition of the Internet. I was glad to hear yesterday that Michael Armstrong said that he is committed to this open tradition, both with respect to conduit and content. We are not regulating. But we are watching.

If you do what you say you are going to do, and embrace the openness of the Internet, this marketplace will explode and the entire country will benefit from an Internet --- the engine driving our economy -- that goes faster.

But we don't just need an Internet that goes faster. We need one that goes farther that reaches all Americans, from the suburbs of Oak Park to the neighborhoods of Oakland, from the heights of Manhattan to the badlands of the Dakotas. We need to make sure that the opportunities that lie in this medium's wires and web pages are open to all Americans.

That's the promise of this technology.

That the over 54 million Americans with disabilities have access to the technologies that can help them lead fuller, richer lives.

That businesses large and small whether in a small town in the Midwest or in an office park in Silicon Valley -- can take advantage of the efficiencies that this technology offers and can reach the global markets that it brings to your doorstep.

That the skills needed to function in an Information Age economy are available to all of our children.

Last year, the e-rate brought the Internet to over 500,000 classrooms in America's schools. With the funding levels we approved last month, an additional 600,000 classrooms will be wired, touching 40 million schoolchildren in our country, many of them in our poorest and most rural schools. This industry supported the FCC in our efforts to make the e-rate happen, and I thank you for it.

That's the promise of this technology for America. Just imagine what we could do for those kids with broadband, streaming video into those classrooms all over America.

Last week, I met with Senate Minority Leader Daschle and a group of his colleagues from rural states. I have not met a group of public officials so excited about the promise of the Internet and so committed to making sure that it reaches the people living in the small towns and on the farms in their states.

I look forward to working with these Senators in bringing advanced services to the people of rural America, to knit them into our national network, to give them the opportunities to enjoy the promise of this technology.

I expect the cable industry to continue to play a leading role in our national effort to wire America. That is why as a condition to the AT&T-TCI merger, I asked and AT&T agreed to deploy its cable Internet service to poor and rural areas.

I eagerly await the day when I can join Michael Armstrong, Leo Hindery, and as many AT&T executives who want to come, in a poor inner-city apartment building or in a small rural town where we can watch with pride as the wires are laid and customers are hooked up.

I feel so passionately about wiring all of America because this technology has to the capacity to transform lives, rejuvenate communities, and open up worlds of opportunities for millions of Americans.

Over one hundred years ago in Chicago, we saw how important access to the networks of information and commerce were to the Industrial Age. Where the railroad went, it created cities and made fortunes; where it did not, it left isolation and despair.

We have the ability to bring the networks of the Information Age to all Americans wherever they live. With a national, competitive, de-regulatory telecommunications policy and with the hard work of people like you, we can make this happen. We can meet this challenge.

Thank you.