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Remarks of Assistant Secretary Irving at NARUC's Summer Meeting

Realizing the Promise
San Francisco, CA
July 22, 1997

"Realizing the Promise"

Remarks by Larry Irving


Assistant Secretary for Communications and Information

National Telecommunications and Information Administration

Department of Commerce

at NARUC's Summer Meeting

San Francisco, California

July 22, 1997

[as prepared]


Thank you for inviting me to join you this afternoon. I would like to begin by extending a warm welcome to Bob Rowe, as NARUC's new Communications Committee Chairman. I also want to welcome Russell Frisby to the leadership. And I look forward to getting to know the other new leaders.

I have been attending NARUC's meetings for 15 consecutive years, first as a Congressional staffer, now as a member of the Clinton Administration. Thanks for inviting me back this year.

I had comments all prepared on Friday, and then the phone started ringing and faxes started flying and it was clear that I needed to start again. The 8th Circuit has taken action that means we must revisit where we are. Eighteen months ago there was ecstasy over the new Act. Twelve months ago, we were working together to clarify the role of the States and the Feds in implementing the requirements of the Act. Today, there is acknowledgment that now the work to realize the promise of the Telecom Act begins in earnest. The 8th Circuit has, for the moment, clarified roles and responsibilities.

The Court did not mince words in saying that "Section 2(b) remains a Louisiana-built fence that is hog tight, horse high, and bull strong, preventing the FCC from intruding on the states' intrastate turf." Even a city boy like me can sense that the court feels strongly about this issue.

The 8th Circuit's decision underscores the important role that the States will play in developing competition in the local market. I have no opinion today on the merits of the court's decision. And I don't yet know if the decision will be appealed. The Solicitor General will make that determination. I do know, however, that an appeal to the Supreme Court will take about a year. So the drive to competition, to the realization of the promise of the Telecom Act will require continued and increased cooperation between the State and Federal governments.

So let's do it! State Commissions already have begun to open markets, and are doing a very good job. Let's continue to build a state/federal framework for fostering competition. Realizing the promise of the Telecom Act means having true competition in the provision of telecom services and bringing consumers greater access to and choice of telecom goods and services at lower prices. There is still a lot of work to do.

Monopolists will resist. There has never been a monopoly that has willingly accepted competition, and the LECs will not be the first to do so. But the benefits of competition for businesses and consumers are so great -- such as stimulating the development of broader bandwidth networks -- that we must push forward to achieve these goals.

We need to keep our perspective. Fifteen years ago, Judge Greene issued his decision regarding the break-up of AT&T. We heard a lot of grumbling the first two to three years, but five years later, everyone was talking about the wisdom of divestiture. Today, some people are voicing "concerns" about the Telecom Act, and whether we can realize the promise of the Act. I believe we can if we ensure that we inject as much competition into the local market as we injected into the long distance market. All of us, state and federal policymakers alike, must have the courage, discipline, and wisdom of Judge Greene. It's just that simple!

I know that delivering on the promises embodied in the Act will not be easy. We must promote competitive entry, adopt reasonable and fair policies for incumbent companies, ensure universal service, and, perhaps most importantly, build and maintain public confidence in the process. We must now make decisions on the most difficult issues. For as Texas Agriculture Commissioner Jim Hightower said, "Ain't nothin' in the middle of the road but yellow stripes and dead armadillos."

From our view in Washington, there are three priorities: (1) ensuring a procompetitive interconnection pricing regime; (2) establishing a universal service scheme that ensures reasonable rates for all consumers and protects those areas of the country where competition is not likely to materialize in the short term; and (3) facilitating the adoption of operating systems that will allow companies to interconnect and for consumers to have seamless access to a number of providers.

Achieving these goals may prove to be more difficult than landing on Mars. But it can -- and I believe will -- be done. Success on these issues will require a federal-state partnership, and I am telling you now that the Administration is ready to do what it takes. Among the most challenging concerns are the rural issues involved in both universal service and access charges. The rural issues implicate our national economic development -- but they also are state issues. We must continue to collaborate to develop consensus -- among the federal and state policymakers and regulators as well as across our nation's different regions, rural and urban, West and East coasts.

Together, we must work hard to achieve true competition. But we as a nation will never realize fully the promise of the new information economy until we address the digital divide. Access is the fundamental issue, and the one to which we must keep coming back until everyone in this country has meaningful access.

On the issue of access, I want to thank you for all the work the States have done, including thinking through the difficult policy issues as we redesign the universal service fund. But our work is far from complete. We need to make access a reality.

We continue to witness how the introduction of new technologies in our workplace and communities is creating a digital divide in this country. Many people living in rural communities and inner-cities do not have access to the new technologies and their applications. An April 1997 USA TODAY/CNN/National Science Foundation poll found that only 38 percent of students with a family income of $20,000 or less has a computer at home; compared to 83 percent of those with incomes of $50,000 or more.

As many of you know, NTIA's TIIAP projects are helping to eliminate this digital divide by bringing access to underserved areas, promoting innovative community networks and showing how isolated areas can build on-ramps to the information superhighway. Yet, as I speak, the Senate is considering cutting back TIIAP, and not because there no longer is the need for the program. The need is greater than ever before, and I urge each of you to think about how we can address these concerns, especially at the state and local level.

Access to telecommunications and information products and services is also critical to ensuring that our nation will be globally competitive. The demands of the new information economy are stretching our human resources. For instance, we simply do not have enough computer and technology-literate Americans to meet the needs of our nation's businesses. Today, some 190,000 high-tech jobs remain unfilled across our country. As documented in the July 21 issue of Business Week, American companies are forced to recruit workers from other nations in order to meet their need for thousands of computer programmers. There are simply not enough Americans with the requisite skills. Telecom and information technologies are the new language with which the next generation of students and workers will converse, learn, and do business.

But remember, we cannot even begin to exploit the riches of advanced telecommunications applications without the basic infrastructure in place and access to it. NTIA will continue to push the envelop on these issues, and we will be holding a summit on universal service in early December.

Realizing the promise also means using American ingenuity to meet the challenges we face with the development of new mediums for communication and dissemination of information and entertainment. With the advent of the digital age in television, additional spectrum will be available for new uses. Television itself has the potential for the delivery of new services and for many more channels. Similarly, wireless technologies will offer new conduits for the delivery of communication and content. Innovative uses of the Internet continue to emerge. Deutsche Telekom, Europe's largest telecom carrier and Internet service provider, on Friday became the first major telephone company in the world to offer Internet-based voice telephony in a trial involving 1,000 customers. Participants will be able to use ordinary handsets, rather than computers, to make their calls, and will pay only for the cost of accessing the Internet gateway at an average cost of about 13 cents a minute -- less than a fifth of the cost of a regular voice call from Germany to the U.S.

Beginning in September, NTIA will be launching a series of five forums on innovative technologies that are bringing more competition to the telecom arena. We will be examining the hurdles to deployment and how to bring the benefits to Americans. On September 4, we will kick-off the series, called "New Frontiers on the Information Superhighway," with a forum on Internet telephony. Other forums will follow, every other month, on the first Thursday, and will focus on emerging technologies for wireless, cable, satellite, and broadcasting services. All forums will take place in Washington, D.C. We hope that you will participate in these forums. If you are interested in doing so, please contact NTIA's Kathryn Brown.

Finally, let's remember that these issues are not about satellites, or cable lines, or switches, or software. These issues are about people -- how to harness the promise of telecommunications technologies and use them to communicate better with family, colleagues, and business partners; to revitalize our communities; to improve our children's education; to enhance the way to receive medical services; and to transform how we move people from welfare to work. These technologies are powerful and empowering. They enable us to bridge together communities, whether it is your geographic community, such as using wireless services to bring telephony to folks in sparsely-populated or topographically-challenged regions; or uniting demographic communities, such as providing elderly residents with access to SeniorNet. It all comes down to this: connecting communities, uniting people. As we work out the technical issues, we must keep in focus the human ones.

Again, the Administration has enjoyed working with NARUC and each of you. We look forward to continuing the partnership and realizing the promise of the Act that we all applauded just 18 months ago. Thank you.