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Remarks of
FCC Commissioner Susan Ness
Before the
Consumer Electronics Show
Las Vegas, Nevada
January 7, 2000

(As prepared for delivery)

Creating the Spectrum of Opportunity

I am delighted to be in Las Vegas to address the first Consumer Electronics Show of the new millennium. On such an occasion, it is always tempting to reflect on the past and contemplate the future. I will unabashedly yield to that temptation here this afternoon.

Gary, you showed a terrific opening session video yesterday, highlighting breakthrough consumer electronic products throughout the century. It prompted me to think about the large number of products and services we see here that were once considered almost solely the province of the business user. Now, these items are hot consumer commodities.

Probably the best example of this is the cellular telephone. It was not that many years ago - in the pre-cellular, pre-PCS days -- mobile telephones in the United States numbered only a few tens of thousands. In a city like Las Vegas, the limited number of radio channels available permitted only ten to twenty mobile phone calls to occur at one time. Today, you have more than that in use by consumers in the taxi line in front of the Hilton!

The waiting list to get a mobile telephone sometimes stretched into years. In fact, state regulators established priority schemes to allocate the limited number of subscriptions available to persons with a high public interest need, like medical doctors.

Have times changed! On a worldwide basis, new mobile connections now far outpace new fixed-line connections. In the United States alone, there were an estimated 15 million cellular/PCS subscribers added in 1999.

Competitive pressures have driven down both the cost of the handsets and the airtime. Today, consumers can choose designer cell phone covers and assign a special musical ring to each caller.

There are a host of other familiar examples of one-time business products striking it rich in the consumer marketplace. Satellite dishes were once huge - and expensive. Now DBS dishes are a hot consumer item small enough to be installed by any reasonably handy consumer. I wonder - like cell phones, will we soon have designer dishes?

Similarly, Global Positioning System -- GPS -- receivers once were expensive and limited to military and commercial uses. Now these systems are used by recreational boaters and backpackers and built into cell phones.

I could go on, but the point I want to make is this: Two forces have driven the impressive movement of many products and services from business users to the average consumer: You have generated developments in technology that produce new high-tech goods and services. And we at the FCC have allocated and assigned the necessary radio spectrum resources to deploy that technology.

Without appropriate allocations, there would be no cellular, no PCS, no DBS, no cordless phones, and no over-the-air digital television.

This shift in telecommunications from business users to the consumer market bodes well for the firms that comprise the consumer electronics industry.

Contemplating the future, however, it is clear to me that if this impressive growth is to be sustained, we need to redouble our efforts to find more effective ways of managing and using that precious natural resource - the radio spectrum.

Let me illustrate this through an example that relates to the subject of this afternoon's forum -- the Internet. Besides the huge shift in demand for cell phones, the other almost seismic shift in demand is in access to the Internet/World Wide Web.

Over the past few years, there has been an extraordinary increase in the penetration of personal computers in the home and office. And the percentage of those PCs connected to the Internet and to internal data networks has increased exponentially. The increased data transmission rates on wired networks providing such connections is raising the public's expectations of acceptable data rates for wireless transmission.

And at the same time, we are seeing a proliferation of portable devices such as laptop and palm-sized computers, Personal Digital Assistants, and Internet-enabled cell phones.

This growth in sheer numbers of devices and desired data rates translates directly into pressure for additional spectrum - especially for spectrum in the range below 3 GHz, which is so ideally suited for mobile systems.

In addition to supporting Internet access on a wireless basis in mobile, portable, and nomadic applications, we are seeing the emergence of entrepreneurial companies who want to provide competition to Digital Subscriber Line (DSL) and cable modems using fixed wireless access systems.

And because of its desirable propagation characteristics - including longer range and good building penetration - these potential providers would also like to have access to spectrum in the range below 3 GHZ.

From a public policy perspective, I love the notion of more wireless alternatives. I love it because increased competition between and among wired and wireless systems is the key to more rapid innovation and faster and more complete deregulation - just as the Telecommunications Act of 1996 intended.

Competition in high-speed wired and wireless Internet access is a crucial factor in keeping the Internet-driven growth in the economy on track. With greater growth will come the avalanche of even newer products and services -- at lower prices --for the consumer.

However, if this impressive growth is to be sustained, and if the promise of these wireless competitive alternatives is to be fully realized, we must ensure that adequate spectrum is available.

Effective management of spectrum as a resource is a core responsibility of the Federal Communications Commission -- one that I take very seriously. When I first joined the Commission over five years ago, I made spectrum management a personal priority. Early in my tenure, I requested that we hold an en banc hearing on spectrum management, to learn more about advanced techniques for improving the way we manage this resource.

I am generally pleased - indeed proud - of what we have accomplished in the spectrum management area since that time.

We successfully implemented auctions as a spectrum management tool thereby collapsing the time it takes to assign licenses;

We have emphasized flexible use and limited reliance on standard-setting, to enable licensees to adjust their services to the rapidly changing marketplace; and

We have given licensees the incentives and, through technical flexibility, the ability to deploy more spectrallly efficient technology.

For wireless Internet access, we gave existing licensees increased technical and service flexibility to address this emerging market. And we reallocated and assigned through auctions substantial blocks of spectrum that can be used for broadband fixed wireless access.

For example, in the Local Multipoint Distribution Service alone, the FCC made available 1.3 GHz of spectrum for broadband fixed wireless access services. And licensees of MMDS now have the flexibility to provide two way digital services. Finally, we have also expanded the amount of spectrum available for unlicensed systems through the creation of the Unlicensed National Information Infrastructure band.

Despite all of these efforts, there is still tremendous pressure for more spectrum, especially in the region below 3 GHz.

We have taken actions beyond those I mentioned a moment ago to address this pressure:

In the spring of last year, we held a second en banc hearing on spectrum management issues.

Just a few weeks ago, we released a Spectrum Policy Statement outlining guiding principles for spectrum management in the new millennium, including ideas gleaned from our en banc hearing.

At that time, we also announced the creation of a Spectrum Policy Executive Committee within the Commission to bring increased focus and policy direction to our spectrum management efforts.

Finally, we asked our Technical Advisory Council to assess the current state of software defined radios, cognitive radios and similar devices. We want them to suggest ways that such technology might facilitate more effective and intensive use of the spectrum.

And for more immediate action, the Spectrum Policy Paper identified slices of spectrum below 3 GHz that could be made available for meeting at least a portion of these emerging needs for wireless Internet access.

We are also in the midst of preparing for the World Radio Conference, to be held in Istanbul later this spring. We are working closely with our colleagues in the Department of State and the NTIA to find additional spectrum that could be used to support Third Generation (3G) cellular systems.

As most of you know, the focus of 3G is to overcome the limited abilities of older cellular networks to provide efficient, high-speed, packet-switched data services comparable to that delivered by wireline networks.

Finally, just yesterday, the Commission issued a decision allocating -- for assignment by auction -- a total of at least 30 MHz of spectrum in the 700 MHz band. This sweet frequency range is ideal for providing Internet access on a fixed, nomadic, or mobile basis. The service rules we adopted will allow such use.

Given the intense interest in this spectrum by the computer industry and other entrepreneurs, I have no doubt innovative, new approaches to Internet access will emerge in this band.

I am confident that these steps -- coupled with the creative energies in our computer and wireless industries -- will ultimately enable us to support the awesome growth in this technological playground.

However, I must warn you --- we are facing an increasingly difficult task in finding enough spectrum to accommodate all of our domestic needs.

We desperately need your help. As I indicated earlier, I have tremendous confidence that members of CEA will continue to develop desirable new products and services. I also am all too painfully aware that this industry is far too diverse to agree on the details of our individual spectrum management decisions.

But I urge you to set aside those differences to achieve the greater goal. We need your help in coming up with technological, marketplace and -- where appropriate -- administrative solutions to the problem of spectrum scarcity.

As you develop new products and services, I urge you to incorporate methods for adapting a product to congested spectrum. Can software be used to maximize a product's ability to operate in different bands? What about sharing techniques? How can interference inside and outside of bands be minimized?

As I stated earlier, since I joined the Commission, I have concentrated much of my energy on spectrum management issues. I invite you and your colleagues in this wonderful industry to meet with us. Help us to ensure a fully competitive, dynamic, innovative market in wireless Internet access.

For if high-speed wireless Internet access is to become as widely deployed as cellular telephones, DBS satellite dishes and cordless telephones, we need to work together to find spectrally-efficient ways to provide that service.

There simply is too much at stake to do otherwise.

Thank you very much