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Remarks As Prepared for Delivery
by Deborah A. Lathen,
Chief, Cable Services Bureau
Federal Communications Commission


Town Hall, Los Angeles, CA
November 9, 1999


Good afternoon. Thank you for that kind introduction, and thank you, Town Hall, for inviting me to speak.

I have long been a fan of Town Hall. I have attended many of these forums. When I was invited to speak to you, my first reaction was one of great humility.

This organization has hosted some of the most interesting people of the late 20th century --- everyone from Kofi Anan to Mikhail Gorbachev, from Richard Nixon to my former Constitutional law professor, Archibald Cox. I am really pleased to be here.

I am thrilled to be back in Los Angeles. I lived here for over ten years, and everyday I miss it. I miss the roar of the ocean, the sound of seagulls. I miss the mountains. I miss driving along the Pacific Coast Highway in my convertible with the top down.

I also miss the warmth of Californians.

When I moved to Washington, I traded the Pacific for the Potomac and the mountains for monuments.

I have lived many places in my life, but California is my favorite. However, those that know me best know that at my core, I am a Southern woman.

I have deep Southern roots, going back to my great grandmother, who I called Little Granny, and my grandmother, who I called Big Granny. These were Mississippi women. Strong women. The women of the cotton fields of the Delta. These were the women of Sounder and Beloved.

Following World War Two, they left their Mississippi roots as part of the Great Migration of Americans from the agrarian South to the industrial Northóall looking for economic opportunity and a better life.

In 1971, I made my own personal migration from a small town in Illinois to attend college in upstate New York. When I told Big Granny about my plans, they did not bring her joy. Instead, they brought her concern.

Although I told her I was going to upstate New York, not New York City, it just didnít compute. New York was New York, and she had made up her mind that even though she had never been there, it was a big, bad and sinful place, and nothing good would come of her grandbaby if she went to New York.

She was not well enough to travel but she was so concerned about me that she insisted my grandfather, Granddaddy Dewitt, drive all the way from rural Missouri to upstate New York so that he could come back and tell her about my surroundings.

She said she would have no peace until she could see me in her mindís eye.

So Granddaddy Dewitt drove 20 hours, sleeping in his car on the way, and came to visit me in upstate New York just so he could paint a picture in my grandmotherís mind that assured her of my well being

He drove the twenty hours back and gave her his impressions of my surroundings and me, and my grandmother kept this picture in her mindís eye.

Today, Big Granny would be able to stroll my college campus without leaving the comfort of her own living room. Through the Internet, she could meet my friends. She could download messages from my college President. She could see schedules of campus activities. In a virtual sense, she could see me and my college surroundings anytime she wanted.

She would not have to rely on my grandfatherís interpretation of my well being. The Internet would have allowed her to see me with her own eyes.

It is that application, and more, that gets me excited about technology. Really, it is the promise of technology. It is the promise of a better world through the connectivity and information that technology brings into our homes.

Imagine a world where everything is connected.

Imagine the ability to log on to your computer and see live video of your children from anywhere in the world.

Imagine being able to communicate with anyone in the world at any time.

Imagine the improvements in health care in rural and remote areas when doctors there are connected to the best medical resources in the world and have access to experts in any medical field, regardless of geographic barriers.

Imagine the educational opportunities for our children. Virtual field trips to the Louvre, the Amazon, the Nile, and even the Pacific Ocean. The ability to read books from any library in the world. The ability to communicate with other children around the world, from Los Angeles to Lima, from California to China, from South-Central to South Africa.

Imagine the ability to turn on your computer in your car, and having that computer tell you about a traffic jam on the 405, and then having it suggest an alternate route so you can get home faster and spend more time with your family.

Imagine your home. A refrigerator that has the ability to sense when you are running low on milk and that will send e-mail to you to remind you to pick some up on the way home. Or better yet, it will contact an e-grocer, who will send you the supplies you need.

Oh if all these things would have been available when I was a student, I suppose Big Granny and I would have been sending e-mail and video-messages back and forth all the time. Of course, I still would have missed her homemade cooking and her country-style peach cobbler.

Well, as you may know by now, these possibilities either exist today, or they are not far off in the future.

Through technology, our world of opportunity is growing.

The rapid growth and expansion of communications technology throughout the globe has led to a highly intertwined market.

According to a recent study, the Internet economy is projected to reach $507 billion this year! That is ahead of the $300 billion telecommunications industry and approaching the $750 billion publishing industry.

Convergence is a major trend in todayís marketplace.

We see broadcast and cable networks establishing web sites, providing content to supplement their video services. Cable companies, phone companies, satellite, and wireless providers are all providing high-speed Internet access. And the utilities are preparing to get into the act.

Technologies are converging as well. Cable modems and Digital Subscriber Lines (DSL) broadband technology are bringing us a world in which video; voice and data are all readily accessible and conveniently bundled.

The possibilities are limited by only two things: human imagination and bandwidth.

Recently, my bureau reported to FCC Chairman Kennard on the state of the broadband industry. We included a detailed technical discussion of what broadband technology is, and for those of you who are interested, that report is available on our web site. www.fcc.gov and just follow the links.

For those of you want a quick reference, in the FCCís Section 706 Report to Congress, we define broadband as:

The capability of supporting, in both the provider-to-consumer, or downstream, and the consumer-to-provider, or upstream, directions, a speed in excess of 200 kilobits per second.

Now, what does that mean in practical terms? It means download times that are up to 100 times faster than the speeds you are used to.

It is the difference between using a common garden hose and a high-pressure fire hose.

Let me put in terms that are particularly appropriate for Los Angeles, the movie capital of the world. Recently, USA Today conducted a study on Internet download times.

They measured download speeds of a regular dial-up telephone modem and the download speed of broadband modems.

Using the recent movie Titanic as the example. Titanic ran for 3 hours and 14 minutes.

The results were impressive. A regular dial-up modem (like the one most of us have at home) took 42 hours and 30 minutes to download "Titanic."

My God, the ship itself only took 3 hours to sink!

By contrast, the download time for the broadband modem was 9 minutes. 9 minutes. . . . 9 minutes! Thatís amazing!

If this is what broadband can do for entertainment, imagine the possibilities in business, education, and communication.

So, you ask, if broadband is so great, why donít we have it yet? And what is the raging debate all about?

Unfortunately, the current debate does not center on the promise of the technology. It is not about how this great technology can be used to educate our kids, bring health care to remote areas, improve our commercial efficiency and competitiveness.

This debate has not centered on the promise of broadband.

Rather, it is a debate about the mode of transition. It is a debate about the means, not the ends. We must keep that in mind when discussing this issue.

It is about who should be allowed to use whoís systems, and under what terms that use will occur. Most importantly, the debate is about whether the government should mandate that usage and those conditions.

There are millions being spent in dual efforts to define the issues in terms of open or closed access.

You hear the sound bites: Open is good. Closed is bad. Forced is bad. Regulate. Donít regulate.

Today, I want to put aside all the rhetoric, and talk about the reality.

Broadband technology has been deployed in two forms.

One is the cable modem. The other is the digital subscriber line, or DSL.

Cable operators have begun to offer broadband services to consumers in various localities through cable modems. In fact, you can get it here in Orange County.

When a consumer signs up for cable modem service, the cable operator will usually provide Internet access through a wholly or partially owned or affiliated Internet Service Provider, or ISPs.

ISPs that are not affiliated with cable operators are attempting to obtain direct access to cable broadband platforms that would enable consumers to access the Internet directly through their service.

There is no national regulation that would force cable operators to allow this access.

Local franchising authorities, who have the power to grant cable franchises and approve the transfers of cable franchises, have begun to require cable companies to "open up" or provide "open access" to their broadband platforms for competing ISPs as a condition for the approval of franchise transfers.

The issue is under review here in Los Angeles, and before the 9th Circuit Court of Appeals.

There are many different opinions about this, and I am here to talk to you about our role and our goals in this debate.

First and foremost, the FCC is committed to ensuring that the promise of technology accrues to all Americans. In that sense, we are keepers of the promise that technology holds.

That tele-medicine and tele-education are not just concepts, but realities.

That the digital world is one filled with opportunity.

And that all Americans enjoy that opportunity.

As such, we are not acting as a market regulator --- we want to act as a market facilitator.

The FCC wants to see broadband deployed to all Americans as soon as possible. In approaching the issue, we keep two important touchstones in mind at all times.

First, there is the consumer.

At the FCC, we are guided by a simple question: Is this good for the American consumer?

It is the first thing we look at, and we keep this question in mind at all times. If a policy does not promise benefits to American consumers, we do not adopt that policy.

As the former head of consumer affairs for Nissan, when I moved from the private sector to the government, I was impressed by the level of commitment that the FCC has to the consumer.

I see that commitment everyday. I know how much time, energy and passion go into doing our best for the American consumer.

Second, we look at competition. The 1996 Act mandated the FCC to encourage competition in the telecommunications marketplace while telling us at the same time to deregulate.

We believe in competition. We believe in the ability of the market to solve problems. And we believe that competition is in the best interestsí of the consumer.

By using competition as a touchstone, we put our faith in the belief that the market will find the best solution to the questions that new technologies create.

With consumers and competition as our guideposts, the FCC has chosen not to regulate at this time, and to monitor this industry as it develops.

Our policy is one of vigilant restraint. We have decided not to mandate access to broadband platforms. We are forbearing from regulation at this time because we believe that this is the quickest way to get this technology deployed.

The Chairman has clearly stated the FCCís four goals bringing broadband services to Americans:

Fast deployment-- Our challenge today is to make broadband happen and make it happen fast. The faster we can get broadband services to all Americans, the faster they can participate in this new economy.

Ubiquitous deployment-- We have to make sure that all Americans have access to broadband in our country. If the full promise of this technology is to be realized, it must be deployed everywhere. It must reach the inner cities. It must reach the rural farmhouses. It can not be allowed to become another symbol of the digital divide. It can not become another way to separate the haves from the have-nots. Broadband can not be allowed to become a barrier --- it must be a bridge.

Competitive systems-- We want to see multiple broadband pipes: cable modems, DSL, wireless, and satellites. The challenge for us is to make sure we are creating a regulatory environment that is technology neutral so we get as many players on the field as possible. Competition is developing between the telephone companies and the cable companies. This is just the beginning. At the beginning of 1998 there were 50,000 cable modems in service in America. At the end of 1998 there were 500,000 Ė a ten-fold increase. By the end of this year there will be 1.5 million or more cable modems in service. This deployment of cable modems has spurred the deployment of DSL.

We want to ensure that openness continues-- Openness allowed the Internet to thrive and produce innovation in both content and technologies. Technologies that are transforming society.

To regulate at this juncture would be to say that the market has failed before the market has been given a chance.

History is filled with examples of individuals who made erroneous predictions about the future of technology before that technology had the chance to prove its worth.

We do not want to make the same mistake that Harry Warner of Warner Brothers, the King of the Silent Film, made in 1927, when he said "Who wants to hear actors talk?"

We donít want to make the same mistake Ken Olsen, the founder of Digital Corporation made when he said "There is no reason for any individual to have a computer in their home."

The computer industry offers us an excellent example to follow.

The government decided not to regulate technical standards for the computer industry.

Rather, we let the market determine how the computer industry would evolve, and the results of that decision have been staggering.

Despite Ken Olsenís prediction, over 50% of all Americans have a computer in their home.

The decision not to regulate reflected a fundamental understanding of what fosters creativity and innovation: Letting the market do its work.

Regulation at this point could have the unintended effect of impeding the development of this industry.

However, in order to make sure that consumersí interests come first, we must continue to carefully monitor developments in this market.

To be sure there are clear risks associated with a regulatory policy of restraint.

Risks such as the threat of monopoly of Broadband, or the creation of an irreversibly closed system.

However, at this point in time, we feel these risks do not pose an immediate threat to the open nature of the Internet.

Our monitoring has shown us that no monopoly exists at this point.

Granted, cable broadband deployment does seem to have an early lead. But as I stated before, DSL deployment is accelerating, and investments are being made in wireless and satellite based broadband technologies.

And it is vital to remember that this is a nascent industry. There are only one million people who use broadband to connect with the Internet. That is less than 3% of all Internet users in North America.

As for the threat of an irreversibly closed system, we believe that consumer demand will ultimately compel cable operators to open their systems. Consumers want choice, and economics tells you that competition, not regulation, promotes choice.

We are aware of the threats and will be ever vigilant to make certain that they do not occur.

If we see the threat of a monopoly than that is the appropriate time to move swiftly and consider regulatory options. That is why we are monitoring to ensure that a closed system does not evolve. We believe that in order to reach our goals we must resist regulation at this time.

Connecting consumers is the goal of our policy. It is a goal that we share with the consumer groups. It is a goal with share with local and state regulators. We believe we have set upon a course that will ensure that this goal is reached.

Recently, I accompanied my sister as she took her 18-year-old son to start his freshman year at Boston University. This is her only child, and this was the first time he was leaving home.

Like my grandmother, my sister wanted to see her sonís environment in her mindís eye, also. But unlike my grandmother, she had options.

She got a computer with Internet access and video streaming capability. This way, she and her son can send pictures and messages back and forth to each other.

Now granted, my nephew isnít as forthcoming with the pictures of his dorm room as my sister would like him to be. But she has a method of communication available to her that wasnít even imagined in my grandmotherís day.

Technology today can do so much to deliver on the promise of a better life and a brighter future for all Americans.

Thank you, Town Hall for allowing me this wonderful opportunity to share my views on this important issue.