Remarks by William E. Kennard, Chairman
>Federal Communications Commission
>to WIRELESS 98, Atlanta, Ga.
>February 23, 1998
>
>I have a lot to tell you about things going on in Washington. But I want to
>start by telling you about somebody from the tiny village of Bora in
>Bangladesh.
>
>Her name is Noa Jahan Begum. And if you walked up to her house now,
you'd see
>twenty or thirty -- or fifty -- people. They're her customers. Some sit in
>her house, on chairs if they get there early enough. Others sit on the floor.
>The rest are lined up outside. And this goes on every day.
>
>Why? What's happened to transform a woman who had no work nine
months ago
>into an entrepreneurial success story? She got a loan from Gramin Bank --
and
>bought a cell phone. Noa Begum lives only 20 miles from Daka, the capital
of
>Bangladesh. Still, most of her neighbors have never even seen a phone --
or a
>light bulb for that matter. To get a message to relatives in Daka they would
>walk. To call a relative, say, in New York City, they'd go to the city --
>then wait days for a pay phone. Because to the rural poor, your technology
>has become a sure way to a better life. These new wireless phones give
>isolated people a link to the rest of the world. They
>help them in the most urgent ways.
>
>If you talk to economists at the World Bank, they'll tell you that the key to
>including poor people everywhere in the larger global economy is radio
based
>technology. They have an opportunity they've never had in the whole span
of
>human history.
>
>And that's what I want to talk about today.
>
>The opportunity you have. The opportunity the world has. And the
>responsibilities it imposes on us all.
>
>I have to admit -- this story has a resonance for me thatgoes beyond its
>meaning for this industry. Because I feel that -- like this woman in
>Bangladesh -- I was lucky enough to grow up in an era in this country when
>there were possibilities never before possible for my family. My entering
>telecommunications is a legacy of the people who wanted to reach out and
>create opportunity where it did not exist before. I got started when a TV
>station in San Francisco started a minority internship for college students
>and went out and recruited me.
>
>Sometimes we see historic shifts in the way we viewourselves and our
place in
>the world. It may be a college student like me finding new opportunities
>never before possible, in an expanding field, or an isolated village given
>the ability to make a phone call. Or it may be an industry, given a chance to
>become part of the mainstream. That's what's happened to wireless.
>
>All of us remember when wireless was an outsider. Patronizing security
>analysts saw the possibility that you might complement the networks of the
>wireline telephone companies one day. Some said there would be about
900,000
>wireless subscribers by the year 2000. CTIA says that today there are more
>than 54 million, and counting.
>
>Why were the analysts wrong? Some of you probably say that analysts are
>always wrong about wireless. But back then it wasn't all lack of foresight.
>After all, the equipment itself was initially clumsy. We called phones
>"bricks" -- and for good reason. The batteries were so large we had to carry
>them in bags. Service was mobile, all right. But hardly portable.
>
>And there were other problems. You had trouble gaining access to the
larger
>telecom network. Some service providers weren't even allowed to
interconnect.
>Or else providers could connect -- for an outrageous price. Because of that
>price your customers were the privileged and well off. What changed
things?
>
>What made it so every second person on Peachtree Street here in Atlanta
seems
>to be walking along with a cell phone the size of a wallet pressed to his
>ear, or slipping it in and out of his jacket pocket? You could undoubtedly
>come up with a list that would include brilliant physicists ... innovative
>venture capitalists ... tough marketers . . . good managers. You'd be right.
>
>But I'd like to point to one decision made by government. The Budget Act of
>1993.
>
>That Act of Congress helped to make wireless what it is today. It leveled the
>playing field between competitors by mandating that the same regulatory
>scheme apply to all similar mobile wireless services -- and that we would
>keep regulation to the absolute minimum necessary to ensure competition.
>
>It gave the FCC discretion to avoid most common carrier regulation that
would
>inhibit the growth of this industry. It gave us auction authority and
>declared that in using auctions to license spectrum-based services we had
to
>make available opportunities for minorities, women, small businesses and
>rural telcos And here is a vital point.
>
>It recognized PCS and other wireless technologies on the horizon as not
just
>complements to the telephone network but potential competitors, and
>ultimately, as substitutes. I remember that time very well. I'd just come to
>the FCC as General Counsel when we were implementing the new law.
Personally,
>I was pretty sympathetic towards this industry that had been dismissed for
so
>many years and denied the same opportunities as other telecom providers.
I
>also thought it had great potential. Which is why I enjoyed so much of my
>early tenure as General Counsel implementing auction authority.
>
>I'll never forget getting set for our first auction. We'd spent the weekend
>before testing the software for it. It totally crashed. Technicians stayed up
>all night to get it fixed on time.
>
>I'll never forget the auction, either: all those people cooped up at the
>Shoreham Hotel in Washington, snooping around to find out who other the
>bidders were, wandering into the FCC booth pretending they were lost to
see
>what they could learn. It did work out, though.
>
>And look what has happened since.
>
>Those auctions in 1995 and '96 instantly created new competitors. Cellular
>duopoly? No such thing anymore. Competition? We now routinely have four
or
>five wireless companies in every major city in America.
>
>Customers love wireless. And why not? It frees you from the network.
Instead
>of you coming to the network the network comes to you. And wireless
customers
>are always looking for that new handset chock full of new functions.
>
>Less regulation. More competitors. Lower prices for consumers. All this has
>spurred unprecedented growth in subscribers. As our LMDS auctions get
>underway, the result will be facilities-based competitors with enormous
>capacity -- as much as fiber optic cable. Wireless has arrived. You've
>changed the way America communicates. You should be proud of this
>accomplishment. I'm proud of role that the FCC has played in your success.
>And I'm proud that I have been fortunate enough to have been a part of it.
>
>That's not to say that there aren't many challenges ahead before wireless
>becomes a true substitute for wireline service. Some key decisions are
ahead
>. . . areas where the wrong decisions can be costly. Here are a few:
>
>Interconnection. It must be based on forward-looking economic costs. Until
>this becomes the norm, interconnection will impede the move from
complement
>to substitute. Wireless competitors cannot keep paying above cost for
>interconnection. If they do, they will hit a wall -- quickly -- when they try
>to drop prices.
>
>Competition. By that I mean, how to prepare for it. There are tools all
>telecom competitors need to succeed: number portability, for example, and
the
>flexibility to use spectrum to meet changing market demands.
>
>Competitors must equip themselves right from the beginning with these
tools.
>
>Another competitive imperative is to make sure that we have a
>technology-neutral allocation of network resources. This means avoiding
>numbering exhaustion, avoiding overlay plans that aren't competitively
>neutral, and making sure that unbundled network elements are available at
>reasonable prices.
>
>Tower siting. Of course, wireless is a great advantage in a place like
>Bangladesh. You can put up towers anywhere. You don't face competitors
with
>millions of miles of copper wire already in place. Here, you face the power
>of entrenched incumbents. Any land use board who hears testimony about
how
>ugly towers are can delay you, then extend the delay until your opportunity
>disappears.
>
>I am optimistic that this problem can be solved. But the way to solve it is
>not to insist that the heavy hand of the federal government roll over local
>governments. I have no intention of turning the FCC into a national zoning
>board; that is not in my interests or yours.
>
>We need to work together to find solutions to this problem that all parties
>can live with. Colocation solutions. Model local ordinances. I stand ready to
>help, but the industry must show a commitment to work with local
governments
>to find creative solutions.
>
>And there are other areas in which we all must work as partners not only for
>the well being of this industry but for the well being of society.
>
>You know, a Gold's Gym just opened in my neighborhood. And if you go in
>there, you have these marketing people in their purple shirts, showing you
>the stationary bikes and weight rooms and aerobics classes and then they
whip
>out a rate card with all the special privileges, so instead of having dinner
>you'll go to the club and ride a bike until you're too tired to move.
>
>When you join a club, you're entitled to all the benefits that the other
>members enjoy.
>
>Wireless is a full-fledged member of the telecom club. You are entitled to
>all the benefits of the other members. But it also means responsibilities.
>Your industry knows about the responsibility of providing universal
service.
>The CTIA Foundation pioneered innovative ways to bring wireless
technology to
>schools. And through the Safe Schools and Crime Watch programs, you
continue
>to use your technology to help make America's schools and neighborhoods
safer
>places.
>
>But universal service also means contributing to the nation's universal
>service fund. There's nothing new about this obligation. It's the law, it's
>the right thing to do, and it's good business. The telecommunications
>industry has had the job of delivering universal service to Americans
>virtually since the development of the telephone. At first, this meant a
>phone in the corner store, then a phone in every home, and now the law
says
it means service to schools, libraries and rural health clinics. As
>rates for interconnection decline, wireless providers should bear their fair
>share of universal service costs. And they should do so directly. That's
what
>the law requires.
>
>E-911 is another responsibility that comes with membership in the club. If
>you market yourself as a safety service, consumers will take you at your
>word. Sure you face different technical challenges than the wireline
>companies. But 911 calls must go through, and you should develop
callback and
>location capability. We have already seen some encouraging trials of
location
>technology. Although the Commission's location requirement will not go into
>effect until 2001, I hope you will meet this requirement earlier.
>
>The American people have come to expect that their telecommunications
>networks -- all of them -- will help get them emergency assistance when
they
>need it. They are outraged every time they learn that someone was injured
or
>died because their wireless phone didn't work with the 911 system. It may
be
>hard to do, but it is about delivering customers the service they expect.
>It's not an unfunded mandate -- it's serving the customer. Providing E911
>services will protect your customers and move us closer to the day when
>consumers view wireless as a complete substitute for wireline.
>
>Membership in the club also means service to the disabled community.
Two
>years ago Congress required that you provide them access. How do we do
it?
>The best way is to consider access issues at the front end -- during the
>development and design process. It is an area where the truly innovative
can
>help the disabled -- and create a lucrative market.
>
>After all, look at other products first designed as "disability solutions":
>vibrating pagers, ball mouses, speaker phones. They are on the mass
market
>now. Speaker phones, Motorola's new talking pager, and PacBell's priority
>ringing service can be used by everybody. At the Winter Olympics, Japan's
NTT
>is testing another product with great potential for more than the disabled.
>It's a mobile phone that can be worn like a watch, weighs less than two
>ounces and uses
>voice-recognition, not a keyboard.
>
>Obviously, these are things that you do to serve the public interest. It is
>the job of government to be the guardian of the public interest. But I
>believe that the public interest will be served by a strong, competitive
>wireless industry. I have no interest in seeing wireless companies look for
>opportunity in Bangladesh instead of Baltimore.
>
>Yours is an industry that still holds great risk, but also holds the promise
>of great rewards and growth and opportunity. As wireless networks join the
>telecom club, they can break down local exchange bottlenecks and create a
>seamless national wireless network. We at the FCC want to see this vision
>unfold. We believe shaping our future will be the work of those who do not
fear change but embrace it. So let us work together. Let us work
>candidly and as partners.
>
>For we are embarking on a journey that has many pathways to reward,
whether
>we are walking along Peachtree Street in Atlanta or on a dirt road in a tiny
>village in Bangladesh.
> - FCC - |
