NATIONAL TELECOMMUNICATIONS

AND

INFORMATION ADMINISTRATION

ANNUAL REPORT

CY 1997

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MISSION AND SCOPE

The National Telecommunications and Information Administration (NTIA): (a) serves through the Secretary of Commerce as the principal adviser to the President on domestic and international communications and information policy-making; (b) develops pro-competitive policies for presentation before the Congress and the Federal Communications Commission (FCC) and in bilateral and multilateral international fora; (c) manages all Federal use of the electromagnetic spectrum and generally promotes efficient use of spectrum; (d) in partnership with business and other federal agencies, conducts telecommunications technology research, including standards-setting; and (e) awards grants through the Public Telecommunications Facilities Program, and the National Information Infrastructure initiative.

The Government Performance and Results Act (Public Law 103-62 of August 3, 1993), commonly referred to as GPRA, provided a guideline for the development of NTIA's strategic plan in 1997. As an active participant in the Department of Commerce's strategic planning efforts, NTIA senior managers became convinced that implementing an agency strategic planning process would allow them to improve the management and effectiveness of the agency. Within the resources available to the agency, NTIA addresses the highest priority issues in telecommunications and information today and maximizes the return on those resources by utilizing this expertise throughout its programs. Our analysts bring not only an appreciation of the complexities of developing national policies, but they also draw on technical expertise to understand how those policies will facilitate or hinder development, and application expertise to gauge the impact on communities and individuals. This internal synergy is critical to NTIA's credibility and respect in the community; the agency's power of influence and ability to successfully advocate positions is a direct result of this synergy. The NTIA plan sets forth our vision for the future, defines our mission, and establishes goals and objectives. Formal strategic planning represents a management change for NTIA -- a change which will help create a more effective agency, one capable of assisting consumers and industry to benefit from the emergence of the telecommunications and information industries as the fastest growing and most productive sector of our economy.

NTIA's vision, mission and the strategic goals and objectives that follow, guide the National Telecommunications and Information Administration in its unique role against the backdrop of an exciting, demanding, and promising future.

Vision:

NTIA envisions a world where telecommunications

and information technologies are used to protect and

improve the global quality of life.

Mission:

NTIA's mission is to promote the efficient and effective use of telecommunications and information resources in a manner that creates job opportunities, enhances U.S. competitiveness, and raises the standard of living.

GOALS AND OBJECTIVES 1997 -- 2002

The following agency goals and objectives define NTIA's priority efforts. The goals are not listed in any relative priority order and the agency does not plan to prioritize these goals against each other at this time.

Goal 1: Increase the availability of affordable access to telecommunications and information services for all Americans.

NTIA develops policies promoting universal, available and affordable services for all Americans, and competition in telecommunications and information markets. In 1997, no issues were more important than those surrounding implementation of the Telecommunications Act of 1996. These issues included universal service, access charges, interconnection, the V-Chip and children's television programming, the Political Response Rule and transition to digital television.

In a historic decision responsive to concerns expressed by NTIA, the FCC in August 1997, adopted a new universal service regime for the country. Highlights of the decision include:

Schools and Libraries: Chief among the features of the universal service order was the adoption of a $2.25 billion fund to reimburse telecommunication providers with discounts for telecommunication services for schools and libraries. The President has set a goal of linking every classroom in America to the Internet by the year 2000. Through NTIA's work this goal will more likely be reached. On behalf of the President and Vice President, NTIA presented and argued for a program to provide schools and libraries, primarily those with little resources, with deep discounts in their bills for all telecommunication services. NTIA filed a proposal that was widely debated and then adopted in important parts. NTIA worked as part of the implementation team of the FCC, the Departments of Education and Agriculture and interested education groups to put together an implementation plan for delivery of services to schools and libraries and payment to the companies who provide the services. NTIA's staff spoke with educators, regulators, telecommunication practitioners and the industry all over the country in support of the President's goal.

Rural Health Care Facilities: Another provision of the FCC's universal service order provides discounts to rural health care providers. NTIA provided the FCC information, based on experience with NTIA's TIIAP grant program, that showed the need for discounted rates for rural areas and helped conceptualize the program together with the Departments of Health and Human Services and Agriculture. NTIA continues to be involved with implementation efforts and has taken a lead in advising the White House on how to integrate the telecommunications efforts that are going forward generally in the health care profession.

Lifeline Service: The FCC adopted several provisions largely developed by NTIA. Among other things, the FCC adopted a uniform federal approach to funding phone service for poor people. It also adopted, again at NTIA's urging, a rule that would prohibit companies from disconnecting a customer's local phone for failure to pay toll calls, and allowed customers to cap their toll calls at no charge. NTIA demonstrated in its filing that these changes are likely to increase telephone penetration among under-served customers.

Access for the Disabled: The Telecommunications Act provided for "open access" to the telecommunications network for people with disabilities. NTIA was an active participant in the rulemaking before the Disabilities Access Board, to ensure that these provisions are implemented.

In parallel with the changes mandated by the Act, the FCC undertook a proceeding to reform access charges -- payments that telecommunications providers must make in exchange for access to the public switched telephone network. NTIA staff met with industry, consumer groups and the states to help the White House develop the Administration's position on these reform measures. In an extremely complex proceeding, NTIA filed formal comments with the FCC in favor of the position that the FCC ultimately accepted. This resulted in substantial reductions in access charges and a pro-competitive reform of the way in which such charges are collected. NTIA staff briefed senior White House officials on the proposal and were called upon to brief the Vice President to harmonize Executive Branch positions. NTIA's proposal was widely seen as breaking the logjam that had developed at the FCC over the access reduction issues.

NTIA also continued to work with the FCC and the states on an interconnection regulatory system that will ensure entry by competitors into the local exchange market. NTIA has done much work with the states on this issue and is often credited with being the "honest broker" in this debate by both sides and the industry.

NTIA also began planning for a major national conference on next steps for universal service. Planned for February 1998, the conference will highlight the gains made in universal service and the next generation of telecommunication needs for individuals and communities, especially those who are not likely to see the immediate benefits of a competitive market. NTIA also is collaborating with Columbia University on a conference for international regulators, to be held in March 1998, to share with the world the lessons learned in implementing competitive policies, Universal Service and deploying technologies.

Goal 2: Develop and promote policies and plans for use of the radio spectrum that provide the greatest benefit for all Americans.

NTIA has major responsibilities for supporting federal agency missions and promoting U.S. commercial interests dependent upon the use of the radio spectrum. Due to the global nature of telecommunications, fulfilling these requirements depends heavily upon international activities. Therefore, NTIA has increased its efforts in international forums, particularly the International Telecommunication Union (ITU).

The ITU is a specialized agency of the United Nations (UN) with 188 member nations. ITU members develop international agreements, voluntary standards, and recommended practices that members agree to consider in the development of their respective national policies. NTIA's international policy and spectrum management staff work with the State Department and the FCC ensure that the international spectrum needs of the United States are met now and in the future through various technical study groups, radio conferences and other forums of the ITU. The part of the ITU devoted to radio spectrum issues is the ITU Radiocommunication Sector (ITU-R). The principal work of the ITU-R is conducted at World Radio Conferences (WRCs), which are held every two years. These conferences establish new and revised International Radio Regulations that direct the use of radio spectrum worldwide. The ITU-R also includes a large number of study programs carried out by Study Groups. Study Groups are comprised of technical experts that meet periodically to establish technical practices, recommend technologies and technical solutions and provide the technical basis for World Radio Conferences.

NTIA plays a key role in the preparations for and the conduct of the U.S. representation in these Conferences. NTIA, through the Radio Conference Subcommittee (RCS) of the Interdepartment Radio Advisory Committee (IRAC), approved more than 40 proposals for WRC-97. The FCC is responsible for coordinating private sector proposals. Due to the increasing use by the private sector of spectrum once exclusively reserved to the Government, there are many areas of overlap between public and private sector spectrum use. NTIA and the FCC accordingly have, by increased coordination during proposal preparation, improved the process through which proposals are developed.

Six NTIA staff members served on the U.S. delegation for the month-long WRC-97 in Geneva. Many others served on the Home Team, providing analysis and support during the complex negotiations. NTIA is deeply appreciative for the personal dedication and sacrifices made by these individuals. The results of the WRC-97 generally were favorable to U.S. interests and proposals. New spectrum is now available for Low Earth Orbiting (LEO) mobile satellite services and new non-geostationary satellite services, as well as for space science services including the international Space Station and global environmental monitoring. Spectrum also is provided for new stratospheric fixed systems known as Sky Stations that will use innovative technology to fly large platforms at altitudes of approximately 17 miles to serve the communications needs of metropolitan areas. The WRC-97 adopted new procedures designed to mitigate the problem of over-filing at the ITU for the limited number of available satellite slots. Other proposals, including access to more channels for High Frequency (shortwave) broadcasting, were deferred to the next conference in 1999.

In coordination with the Department of State and FCC, NTIA is participating in the planning for the Plenipotentiary Conference of the ITU, which will take place in Minneapolis, Minnesota, October 12 - November 6, 1998. The Conference, which takes place every four years, sets the ITU policy direction for that time frame, and elects the ITU's Director General and its four senior officials. For the first time since 1947, the United States will host this conference, with participation expected by Ministers from virtually all the 188 member countries of the ITU. NTIA is working with the State Department to coordinate the activities of U.S. industry and the Minnesota Host Committee (MHC). NTIA and State have negotiated Memoranda of Understanding (MOUs) with both the ITU and the MHC to allocate and control costs associated with this event.

In preparation for the Plenipotentiary Conference, NTIA also will participate in the ITU's Administrative Council in the Spring of 1998. The Council will give further consideration to broad policy issues and to restructuring proposals that have been under consideration and debate throughout 1997. NTIA has advocated a stronger role for industry in ensuring that ITU continues to have an effective, efficient and useful role in global telecommunications policy. Decisions taken at the Council will require final action at the Minneapolis Plenipotentiary.

NTIA spectrum management experts, in conjunction with Motorola and ComSearch, successfully conducted a radio frequency spectrum management training seminar for 18 spectrum managers from 17 developing countries. The seminar is conducted annually in Washington under the auspices of the United States Telecommunications Training Institute (USTTI). The seminar is an industry and government joint venture that provides free training to spectrum professionals and regulators from developing nations. The seminar covered basic spectrum management and computer-aided techniques, development of commercial enterprises, and advanced spectrum management. The seminar fosters international dialog and cooperation, reinforces U.S. ties with foreign countries -- especially those moving toward privatization and liberalization of their telecommunications markets -- and provides a forum to discuss national and international telecommunications and spectrum management issues.

NTIA experts also conducted a one-week radio frequency spectrum management training seminar in Tel Aviv, Israel for spectrum regulatory officials from Israel, Jordan, and the Palestine Authority. Following the seminar, NTIA continued to provide technical assistance to Israel on a number of spectrum management topics. And at the request of the newly-established radio frequency spectrum regulatory agency of the Republic of Panama, NTIA presented a radio frequency spectrum management training seminar in Panama. Under the sponsorship of the Panama Canal Commission, a U.S. federal entity, an NTIA expert drafted new regulations for telecommunications services in the Panama Canal.

Forty federal government employees attended a spectrum management seminar conducted by NTIA. The seminar is taught by NTIA and experts from other Federal agencies. A benefit of this annual seminar is that it permits the students to discuss and confer with senior officials, providing guidance on problem resolution, and it also enables NTIA to obtain a good understanding of the spectrum management problems being experienced in the field.

In 1997, NTIA completed a revision and expansion of the Emergency Readiness Plan (ERP) for Use of the Radio Spectrum. Upon final approval, NTIA will issue a CD-ROM containing the complete ERP including the certified database of wartime spectrum priority data. This plan and its associated database will be the basis for NTIA and the Federal government to exercise spectrum responsibilities during all types of emergency scenarios. In 1997, NTIA also completed a significant portion of the reviews of spectrum-dependent systems projected for use in a wartime emergency environment. In these reviews, the missions and priorities of systems support, the frequencies the systems are authorized to use in a wartime emergency, as well as other pertinent data were validated. After validation, the information was entered into the first-ever prototype electronic database addressing prioritized emergency requirements for spectrum use by Federal agencies in support of a national emergency.

Goal 3: Implement policy and plans to manage and conserve Federal use of the radio spectrum considering the national interest.

Managing the spectrum and making future spectrum plans requires technical engineering expertise. This expertise is used to ensure that the spectrum policies and rules and regulations required for proper spectrum management nationally and internationally are technically valid; to derive the necessary technical facts that will lead to resolution of spectrum issues and problems; provide a technical and engineering basis for future spectrum planning and standards; and provide new ways to adopt new spectrum efficient technologies so the Federal government can use the spectrum efficiently and effectively.

Spectrum Authorization and Coordination

To fulfill the Federal Government's needs for radio spectrum, NTIA's Office of Spectrum Management (OSM) maintains the Government Master File (GMF) of approximately 405,825 frequency assignments. There were approximately 145,443 requests for new assignment actions in 1997.

Fifty system reviews addressed conformance to frequency allocations, technical standards, and compatibility of operations of proposed systems with existing and planned uses. These reviews also include recommended corrections to be made so that these new systems will not cause or receive interference to other users in the same radio environment. System reviews were split evenly between DOD and non-DOD agencies at 25. Systems included aeronautical, ship-borne, and land-based satellite systems, and various radiolocation and radio navigation systems. Over half of the systems reviewed were satellite systems and associated earth stations. The total cost of the systems reviewed exceeds $3 billion.

NTIA reviewed and coordinated 103 foreign satellite systems in 1997, a substantial increase over the 72 foreign systems it coordinated in 1996. NTIA also submitted 47 U.S. satellite systems to the ITU to protect these systems from interference from other foreign countries and provided other countries coordination for their satellite systems. Thirty-five U.S. systems were submitted in 1996.

NTIA developed an automated spectrum management system to provide a standardized method for Federal agencies to submit applications for spectrum support, technically select spectrum that is interference free, and validate that the spectrum requested is within the rules and regulations governing spectrum authorization. The Joint Spectrum Management System for Windows (JSMSw) was released to the Federal agencies this year. The goal is to complete the transition to an all-electronic process in 1998 throughout the entire frequency assignment coordination system.

Interdepartment Radio Advisory Committee (IRAC)

The IRAC is comprised of representatives from the 20 Federal agencies that are major spectrum users and is an integral part of the spectrum management process. This committee provides advice to NTIA on spectrum management, resolution of various spectrum issues and problems among Federal agencies, between the government and non-government sectors through the FCC, and internationally through forums such as the ITU. The IRAC is chaired and administered by NTIA. The IRAC and its subcommittees and ad hoc groups conducted approximately 139 meetings and addressed over 4,170 documents in 1997. These documents dealt with various Federal, non-Federal, and international spectrum management, policy, and planning issues and problems.

Spectrum Reallocation

The Spectrum Reallocation Report of 1995 identified 235 MHZ of radio spectrum for transfer from Federal government use to private, commercial use. The final reallocation plan was developed in consultation with the affected Federal agencies, the Federal Communications Commission, and the public over an 18-month period. This transfer of spectrum, while expected to cost Federal agencies over $500 million, will provide U.S. industry and the public with important new spectrum resources for emerging telecommunications technologies. NTIA continued with implementation of its plan in 1997, releasing an additional 25 MHz to the FCC for private sector use. Another 70 MHz will be made available by 1999 and the remainder by 2004.

The Balanced Budget Act of 1997 calls for NTIA to identify an additional 20 MHz of Federal spectrum for reallocation to the private sector. NTIA began intense negotiations with IRAC agencies to identify spectrum that provides a reasonable balance between Federal impact and potential benefits to the public. The final report is due in February 1998. Efforts on the 20 MHz reallocation as well as other requirements of the Act will continue in 1998.

The FCC completed a rulemaking in 1997 to authorize a whole new class of unlicensed radio devices that will provide high speed access to the National Information Infrastructure. The spectrum for these devices is currently used by Federal government systems including high powered navigation and radar systems. NTIA provided detailed filings with the FCC and coordinated extensively with industry groups to assure that these systems can prosper while at the same time minimize impact to and from Federal systems. The final FCC Memorandum Opinion and Order drew extensively from NTIA comments in reaching the final decisions.

Public Safety

NTIA and the FCC established the Public Safety Wireless Advisory Committee (PSWAC) in 1995 consisting of over 400 representatives from the nation's Federal, State and local public safety community. In the fall of 1996, the PSWAC provided NTIA and the FCC a 760 page report on the operational, technical and radio spectrum requirements of public safety through the year 2010. NTIA and the FCC are addressing the recommendations made by the PSWAC. A follow-on effort was proposed by Assistant Secretary Irving, calling for the establishment of a National Public Safety Council which will continue the information flow and strengthen the relationship among public safety entities at all levels, and assist NTIA and the FCC in implementing the PSWAC recommendations.

Spectrum Use

NTIA updated a number of reports summarizing the Federal government's use of the spectrum. They include: (1) How the Federal Government Uses & Manages the Spectrum, which describes the national spectrum management process and displays the use of the spectrum by the Federal agencies; (2) Spectrum Use Summary (137MHz -10GHz), which provides an overview of Federal and non-Federal spectrum use in approximately 102 bands; (3) Spectrum Information Fact Sheet which depicts the Federal government's spectrum management functions, spectrum allocated to the government and private sector, and government investment in spectrum; and (4) United States Frequency Allocations Chart which displays the distribution of spectrum among 33 radio services, the nature of use (primary, secondary or permitted), and whether the allocated band is government or non-government exclusive or shared.

NTIA completed the consolidation of its personnel resources in the greater Washington, D.C. area into a central location. NTIA's Computer Services Division and its Spectrum Engineering and Analysis Division, a group of some 50 persons and the home for NTIA's computer automated frequency management records system, was relocated to the NTIA headquarters in Washington, D.C. NTIA continued the development necessary to move processing of frequency applications from its mainframe computer system to networked workstations. The migration is expected to be completed in 1998.

Goal 4: Promote applications of advanced telecommunications and information technology that benefit all Americans.

Starting in September, NTIA initiated a number of projects that look toward the future of telecommunications and explore policy questions that are on the horizon. In this regard, NTIA has launched a series of policy forums under the title "New Frontiers on the Information Superhighway." This series is intended to identify and describe new technologies that offer the promise of competition, innovation, investment and choice for consumers. The first of these forums explored the policy issues of Internet Telephony. The second forum addressed the potential for wireless technology as a complement or competitor in local telephone markets. Both forums provided live broadcast of images and audio feeds over the Internet. Forums planned for 1998 will focus on cable television, satellite services, and advanced television.

NTIA has played a leading role in promoting and building international consensus for the core principles underlying the development of the Global Information Infrastructure (GII). The adoption of these key principles by the world community will help increase competition in the global marketplace and open foreign markets for U.S. companies. Building on the GII principles, NTIA contributed to the development of the Administration's policy paper, "A Framework for Global Electronic Commerce," released by the President on July 1, 1997. NTIA subsequently assisted in advancing the Administration's policies intended to promote the global development of electronic commerce through consultations with other governments in bilateral and multilateral fora.

NTIA played the lead role in drafting the U.S. Government response to the Organization for Economic Cooperation and Development's (OECD) GII Report, which was presented at the February 1997, meetings of the OECD's Working Party on the Information Economy (WPIE), the Global Information Infrastructure/Global Information Society (GII/GIS) Experts Meeting, and the Information, Computer and Communications Policy (ICCP) Meeting. Preparations involved outreach to a greatly expanded group of U.S. companies, and coordination of U.S. Government and private sector views on GII policy and implementation. NTIA continued to have the lead in drafting final U.S. Government and private sector comments on the GII/GIS Report and the Executive Summary, which were presented at the OECD Ministerial in May.

NTIA promotes the application of telecommunications and information technology to benefit all Americans. NTIA's Office of Telecommunications and Information Applications supports the Administration's efforts through the National Information Infrastructure (NII) to use new telecommunications and information technologies to connect our citizens to one another, to services, and to information. While the private sector is building the NII, Federal Government actions are necessary as a catalyst to facilitate and encourage private development of the NII. NTIA continues to demonstrate the benefits of the NII and promote its development through its management of the Telecommunications and Information Infrastructure Assistance Program (TIIAP).

TIIAP is a highly-competitive, merit-based program that brings the benefits of an advanced national information infrastructure to communities throughout the United States. TIIAP provides matching grants to nonprofit organizations such as schools, libraries, community organizations, hospitals, police and fire departments, and state, local, and tribal governments that demonstrate innovative applications of new information and communications technologies.

In 1997, fifty-five public institutions, competitively selected from more than 900 applicants, were awarded $20.9 million in federal matching grants. Projects were selected on the basis of their ability to serve as models that can be replicated across the country. The grants were awarded in five categories; some examples of the awards include:

Education, Culture and Lifelong Learning: a Jackson, Mississippi, project will put technology into the children's wing of a hospital to allow children who are chronically ill to communicate with their teachers, classmates, friends, and family;

Public and Community Services: a Philadelphia, Pennsylvania, grant will link 125 family-centered, non-profits and government agencies to help people transition from welfare to work, and access job training;

Health: a Knoxville, Tennessee, grant will use technology to provide initial care for trauma patients by putting technology to work in ambulances, rural emergency departments, and a Level 1 Trauma Center; the grant is expected particularly to help save the lives of people involved in rural highway accidents;

Public Safety: a Chicago, Illinois, grant hopes to reduce the number of crimes committed by youths by linking the juvenile court system with social service agencies to help ensure that the youths get the service that is ordered by the court; and

Community-Wide Networking: a Spokane, Washington grant will enhance a local community network to spur economic development by creating on-line career centers with innovations such as virtual job shadowing.

Over the past four years, the program has awarded $100 million to 332 projects, which was matched by more than $150 million in non-federal funds to invest in the development of the NII. Connection of these public institutions to the NII by the year 2000 is one of this Administration's priorities. The TIIAP program supports this goal by demonstrating effective, efficient models for using the NII to improve lifelong learning, health, safety, and other public services.

In 1997, NTIA released Networks for People: TIIAP at Work, a report which describes early experiments in building and using the information infrastructure. The report describes the challenges involved in developing a more seamless and universal information system, and in sustaining projects that enrich the community. The TIIAP projects detailed therein illustrate the use of telecommunications tools to benefit society and to extend those benefits to disadvantaged individuals and communities. NTIA brought together over 500 people from public and private organizations for a conference at which the report was released and the findings of TIIAP-funded projects were discussed.

In addition, NTIA contracted with Westat, a research firm, to conduct an assessment of the grants awarded by the TIIAP program in its first two years. The assessment will assist the program in gauging its effectiveness and will facilitate ongoing program evaluation.

Goal 5: Act as a catalyst for domestic telecommunications and mass media infrastructure development.

NTIA's research laboratory, the Institute for Telecommunication Sciences (ITS) in Boulder, Colorado, performs state-of-the-art telecommunications research to support NTIA and Department of Commerce goals. ITS also conducts specific research under reimbursable agreements with other Federal agencies and under cooperative research agreements with private sector partners. ITS is an active contributor to many agency endeavors, including those dealing with spectrum efficiency and sharing issues, broadband wireless technology issues, advanced telecommunication standards, and Internet technology issues.

Spectrum Research and Engineering

ITS undertook research and engineering studies in coordination with NTIA's OSM to further expand applied knowledge of the radio frequency spectrum. Results of this research were spectrum use concepts and models that led to more efficient industry and Government use of the radio frequency spectrum. ITS performed spectrum resource studies as required to ascertain current and future Federal use of the spectrum and determine where significant improvements in utilization appear possible. Additionally, ITS operated a mobile capability, the Radio Spectrum Measurement System (RSMS), to measure and analyze the actual use of the spectrum. This system is used to perform measurements in the land mobile and radar bands at selected sites, and make other specialized measurements as necessary to ensure compliance with frequency assignment rules and regulations. ITS completed selected site measurements in coordination with OSM, at locations in Baltimore, Boulder, Savannah, and New Orleans. The Institute also completed interference analyses of Government systems with private sector systems in selected locations, and performed measurements to obtain necessary technical information for application to spectrum issues and problems, and to aid spectrum planning and policy. Measurements were completed on Space borne Radar Compatibility with Terrestrial Radar; Radar Emission Spectrum Measurements; Narrowband Maritime Radio Tests; VHF Maritime Receiver Standards; RF Lightbulb Emissions; and Spectrum Reallocation Support.

ITS also undertook research and engineering to support the development of wireless technologies such as personal communication services (PCS) and local multipoint distribution services (LMDS). Measurements and modeling of the propagation of radio waves on short paths in selected environments are crucial for the planning, development, and deployment of commercially viable systems. ITS supported the development of wireless local area networks through models supported by measurements that enable the accurate prediction of broadband communication link performance. These models serve as a basis for system planning as well as spectrum regulation. Results also assisted companies in assessing the value of the radio spectrum in preparation for FCC auctioning. Finally, ITS developed fundamental data and more accurate modeling of radio propagation that will lead to improved methods of planning spectrum sharing for various services including advanced television (ATV) systems.

Telecommunications Standards Leadership and Research

During 1997, at the request of the Department of State, the Institute continued to provide leadership in the ITU and was responsible for coordinating U.S. contributions to international standards on Integrated Services Digital Networks (ISDN). ITS also provided leadership on ISDN performance standards development and contributed to related multimedia performance standards development. ITS continued these important leadership activities, and conducted focused research supporting the development, demonstration, and implementation of ISDN performance standards promoting U.S. domestic competition and international trade objectives.

ITS' international standards activities were complemented by active involvement in the development of U.S. standards for ISDN and advanced packet-switching networks within the American Standards Institute (ANSI)-accredited T1 (Telecommunications) Standards Committee. ITS developed formal contributions proposing technical solutions to some of the most compelling issues facing U.S. telecommunications planners. Examples included interoperation of multi-vendor systems employing various transmission media (cable, microwave, fiber, satellite) in a competitive environment, and the key ISDN problem of economical resource sharing among integrated services. ITS' results are promoting competition and innovation in the provision of broadband digital services and are ensuring that emerging U.S. ISDN standards are consistent with a competitive market environment, with the Administration's NII and GII objectives, and with applicable NTIA and FCC policy guidelines.

Additionally, ITS undertook telecommunications research and engineering activities directed toward the development, implementation, and promulgation of user-oriented performance measures for integrated data, audio (including voice), video, and multimedia communication equipment and services. ITS continued to apply its state-of-the-art ISDN performance measurement laboratory in validating and optimizing telecommunication performance standards. This research is aimed at developing user-oriented, technology-independent performance parameters and measurement methods for digital audio and high-speed data communication services. ITS continued related research in digital video communication performance supporting such emerging and future applications as video telephony and teleconferencing, computer-aided design and manufacturing, and interactive video distribution, and is continuing to integrate its prototype data, audio, and video performance measures to provide multimedia test capabilities. These user-oriented test capabilities will be extremely valuable in implementing and optimizing the NII and GII.

Other Federal Agency Support

Under other agency reimbursable work agreements, the Institute provided telecommunications planning assistance to a variety of Federal agencies. For example, ITS completed a national plan, approved by the Secretary of Transportation, for the augmented Global Positioning System (GPS) to meet the navigational and positional needs of all modes of transportation. ITS also provided support to the Federal Highway Administration in the development of Intelligent Transportation Systems (ITS), formerly the Intelligent Vehicle Highway System (IVHS). Leadership of the IEEE Vehicular Radar Standards subcommittee for developing collision avoidance radar standards for the Nation's highways was also provided.

ITS also provided key technical support to the work of the Federal Railway Administration in improving railway traffic management and safety, to the National Communications System in enhancing communications survivability during national emergencies, and to other Department of Defense and Security agencies in improving their strategic and tactical communications capabilities. These efforts support a key NTIA responsibility of making available its laboratory's telecommunications expertise to other Federal agencies in a centralized, cost-effective manner.

Industry Outreach

The Federal Technology Transfer Act of 1986 (FTTA) allows Federal laboratories to enter into cooperative research agreements with private industry, universities, and other interested parties. The law was passed in order to provide labs with legal authority to enter into these arrangements and thus encourage technology transfer from Federal labs to the private sector. NTIA established a core telecommunications research expertise that is accessible to both the public and private sectors and is actively engaged in technology transfer and commercialization efforts by fostering cooperative telecommunications research with industry where benefits can directly facilitate U.S. competitiveness and market opportunities. Through cooperative research and development agreements (CRADAs) with industry, the Institute applies its expertise to practical problems in telecommunications today.

ITS continued work on several CRADAs with the private sector (e.g., U S WEST Advanced Technologies, Inc.; American Automobile Manufacturers Association; GTE Laboratories; Integrator Corporation; Industrial Technologies, Inc.) to design, develop, test, and evaluate advanced telecommunications concepts in direct support of the NII and GII. Data derived from these CRADAs provide a foundation for domestic and international standards development and efficient allocation of radio frequency spectrum resources. To date, major contributions to personal communication services (PCS) and LMDS technologies have been and will continue to be carried out under these CRADAs to aid U.S. efforts to rapidly introduce new communications technologies for the benefit of society. ITS is in active negotiations with a major test equipment manufacturer to enter into commercial license agreements using an NTIA-patented advanced perception-based audio-quality measurement system. These CRADAs, in whole or part, also facilitate telecommunications standards development for advanced systems implementation.

In addition, ITS continued its efforts to expand technology results to the larger user community. One way was through the Telecommunication Analysis Services (TA Services) program, an on-line dial-up service that currently reaches over 300 government and private sector users across the nation and makes available the latest models and tools developed by ITS in the telecommunications field. In 1997, the Institute expanded the availability of these services through greater outreach efforts, e.g., National Association of Broadcasters Conference demonstrations, and by making available the latest models (e.g., PCS propagation) that will be useful to telecommunications systems planners and designers.

Together with the Commerce Department's Bureau of Export Administration and the Technology Administration, NTIA is working on the organizational and resource recommendations for implementing the Report of the President's Commission on Critical Infrastructure Protection.

Goal 6: Promote the free flow of information and diversity of voices in the nation's electronic media.

NTIA has taken a leading role in Internet related issues, including the development of Electronic Commerce. NTIA staff participated in developing the President's E-Commerce initiative. NTIA is committing increased resources to governance and content issues related to the Internet. In June 1997, NTIA released Privacy and Self Regulation in the Information Age, in which prominent experts address issues surrounding self regulation and privacy and how best to develop and implement self-regulatory approaches to protecting privacy.

A notice requesting comments on issues related to systems for registering Internet domain names was published in the Federal Register on July 2. More than 500 comments were filed electronically in that inquiry and are available to the public on the web site established for this proceeding at http://www.ntia.doc.gov/ntiahome/domainname/domainname.htm.

NTIA also played a major role in providing U.S. Government input to the OECD for the inventory of countries' laws, regulations, and policies relevant to the Internet beginning in February. At the conclusion of the inventory project, as the U.S. Government lead on Internet content at the October meeting of the Ad Hoc Group on Internet Content, NTIA negotiated a compromise agreement regarding future work, and refocused the delegates on a joint government-industry forum in March 1998, featuring industry self-regulation initiatives. NTIA also played an important role in creating a new mandate for the Information Security and Privacy Experts Group, recommended future OECD work on privacy, domain names, and electronic commerce, and helped coordinate the November 19-21 OECD conference in Turku, Finland, on electronic commerce, entitled, "Dismantling the Barriers to Global Electronic Commerce."

NTIA coordinated with the White House to organize the July 16 public forum that included industry leaders and groups representing teachers, parents, and librarians to discuss ways, including new technologies, that parents can screen inappropriate material on the Internet. The President has directed the Office of Management and Budget, working with the Department of Commerce and the Government Information Technology Services (GITS) working group, to develop and implement policies and procedures for labeling Executive branch World-Wide Web sites. In 1998, NTIA will work with industry to encourage adoption of self-regulatory regimes and will hold a meeting to explore and showcase the extent to which effective self regulation has been deployed in the private sector to protect privacy. NTIA also will issue a Discussion Paper on the transition to self-governance of Domain Name Service.

Continuing to provide support to the Office of the Vice President, NTIA researched and articulated policies for the Administration on several major mass media issues. Most notable were the "V-Chip," mandated by the Telecommunications Act of 1996, which will allow parents to screen violent and other labeled programming from their children; rules requiring broadcasters to air children's television programs; and rules regarding political statements made by candidates.

NTIA filed formal written comments with the FCC on the allocation of spectrum for digital television broadcasting. Moreover, NTIA now has the responsibility for staffing the President's Advisory Committee on the Public Interest Obligations of Digital Television Broadcasters. NTIA made substantial contributions to the conceptualization of the issues and to the background materials for the Committee, whose first meetings were organized by NTIA staff and held in Washington, DC in October and December. The Advisory Committee is expected to issue a report in June 1998.

NTIA's Public Telecommunications Facilities Program (PTFP) annually awards grants public broadcasting and to other noncommercial entities for the purchase of, or in some cases to plan for the eventual purchase of telecommunications equipment. In 1997, PTFP issued grants totaling approximately $14.2 million to 97 recipient organizations in 39 states, American Samoa, and the District of Columbia. The grants enable public broadcasting organizations, as well as many nonbroadcast operations, to buy equipment to activate new services, extend the range of present services, and improve existing broadcast facilities.

PTFP has been the sole source of federal funding for catastrophic loss and urgently needed replacement equipment. Communities hit by recent hurricanes, fire, wind storms, and earthquakes would be without public television and radio if it were not for the program. In 1997 for example, NTIA awarded a grant to replace the radio transmitter of KBRW-AM, Barrow, Alaska, that was destroyed by fire.

In total for 1997, PTFP awarded 37 public radio grants, 46 public television grants, and 14 distance learning grants. The awards will extend a public radio signal to approximately 1.1 million presently unserved persons and a public television signal to approximately 50,000 unserved persons.

Other examples of this year's awards include a grant to establish the first public radio service on the Hopi Indian Reservation in Arizona. Another grant will allow station KCET-TV, Channel 28, Los Angeles, to replace its master control and routing switcher equipment with equipment that has digital transmission capability, helping KCET lead the way in public television stations' efforts to meet the FCC's digital conversion schedule. Another award will fund the installation of diverse digital video interconnection equipment, which will allow the Alliance for Higher Education, Dallas, Texas, to use telephone-delivery technologies to bring video distance learning course work to institutions of higher education, K-12 school systems, health care providers and industry statewide.

NTIA released the 1997 Minority Broadcast Ownership Report on September 11. The report identifies owners of radio and television by minority group and analyzes ownership changes over time.

Goal 7: Promote U.S. telecommunications and information competitiveness abroad.

NTIA formulates and articulates policy alternatives for Executive Branch positions on major international telecommunications and information issues, and promotes U.S. policies to improve the competitiveness of the U.S. telecommunications industry in international markets.

Sixty-nine countries adopted the World Trade Organization (WTO) Agreement on Basic Telecommunications on February 15, 1997. This landmark agreement, which NTIA helped negotiate, covers over 95 percent of world revenues for basic telecommunications services -- a $675 billion industry -- and ensures that U.S. companies can compete against and invest in telecommunications companies around the globe.

As part of the interagency team, NTIA will continue to work on implementation of the agreement and assist in monitoring the compliance of countries under the agreement. In particular, NTIA has taken a leadership role in designing an implementation plan to assist developing countries in meeting their obligations under the agreement.

NTIA filed comments in the FCC's pending proceeding to revise existing foreign-entry regulations consistent with the WTO agreement. NTIA's comments supported the FCC's proposals to refrain from applying the "equivalent competitive opportunities" test to applicants from countries that have signed the WTO agreement. NTIA also supported the retention of the Commission's public interest standard, which will assist the Commission in applying the appropriate regulatory safeguards to prevent anti-competitive conduct.

Under NTIA's leadership, the European Union (EU) Commission's proposal for the 1997 Global Standards Conference was successfully restructured to feature the role of industry, rather than governments, in developing and implementing global standards for the further development of the GII. NTIA led the U.S. preparatory process, coordinated U.S. Government participation with industry, and represented the Department of Commerce on the U.S. delegation to the Conference. NTIA will continue to work closely with industry on proposals for follow-on activities in the global standards area.

The Global Information Networks Conference provided Commerce Secretary Daley with an opportunity to promote the Administration's policy on electronic commerce to more than thirty ministers from Europe, Canada, and Japan. NTIA played a key role in developing the Administration policy on this issue and in coordinating Secretary Daley's participation in the Conference. The Conference, which was hosted by Germany and the European Union, took place in Bonn on July 6-8. Secretary Daley spoke on "The Framework for Fostering Global Electronic Commerce." Other speakers from government and industry echoed the U.S. call for a market-driven, consumer-friendly environment for the development of electronic commerce. Issues for future resolution include encryption policy, selection of the forum for global standards coordination, and the creation of or changes in existing commercial laws and regulations to fit the needs of electronic commerce.

Together with other Executive Branch agencies, the FCC, and industry, NTIA continued to advocate pro-competitive accounting rate reform through participation in meetings of multilateral organizations and bilateral meetings with individual foreign governments. NTIA also coordinated its positions on a pending regulatory proceeding before the FCC to revise existing benchmark settlement rates with industry and other Executive Branch agencies, and filed formal comments in the proceeding before the FCC.

NTIA promoted additional competitive entry for new U.S.-based satellite systems into the international satellite services marketplace. Activities included NTIA's expert testimony before committees in both the House and Senate; advocacy within an interagency group designing U.S. policy for reform of the Intergovernmental Satellite Organizations; providing, with the FCC and Department of State, statutory oversight of the Comsat Corporation's activities within the INTELSAT and Inmarsat intergovernmental organizations; and, participation in working groups and plenipotentiary assemblies of both INTELSAT and Inmarsat, where NTIA advocated U.S. pro-competitive positions.

African Developments

For the past three years, NTIA has had one of its policy specialists on detail to US AID and stationed in Gabarone, Botswana. From that post, the NTIA staff member is responsible for coordination with the ministers of telecommunications, other ministry officials and local private sector representatives for the twelve nations of the Southern Africa Development Community. In this capacity, NTIA helps with designing, planning and implementation of liberalization and privatization within the region's telecommunications sector. In addition, NTIA helped to coordinate a regional African policy symposium, "Private Participation in Telecommunications: A Symposium for Policy Makers," held July 14-16 in Botswana. The symposium emphasized that progress in improving telecommunications in Africa will not be possible without private participation in the sector.

Asian Developments

During 1997, NTIA actively participated in both working-group level meetings and preparations for Ministerial meetings in the Asia Pacific Economic Cooperation (APEC) process. The eighteen APEC member/economies hope to liberalize the telecommunications and information sectors by 2010 for developed economies, and by 2020 for developing economies. NTIA acted as chief spokesperson in the APEC Telecommunications Working Group's Steering Group on Development Cooperation, and successfully gained endorsement for a Spectrum Management & Policy database, now on the Internet at http://www.apec-wg.com, and for an Asia Pacific Information Infrastructure Development Assistance catalogue.

In conjunction with other Commerce Department units and the Telecommunications Industry Association, NTIA coordinated the first China-U.S. Telecommunications Summit, held October 8-11 in Dalian, China. The Summit successfully brought together senior Chinese and U.S. government telecommunications officials, Chinese provincial telecommunications officials, and U.S. companies seeking to improve access to the burgeoning Chinese marketplace, valued at over $1 trillion. Commerce Secretary Daley led the U.S. Government delegation which included Assistant Secretary Irving and other senior officials from the Commerce Department, along with senior leaders from the White House, the State Department, the FCC, and the Export-Import Bank.

Latin American Developments

NTIA participated in the Permanent Executive Committee of the Inter-American Telecommunications Commission to discuss regulatory and policy matters including accounting rates, universal service, and the global information infrastructure.

NTIA, State, and the FCC are negotiating a Direct-to-Home (DTH), Direct Broadcast Service (DBS), and other Fixed Satellite Services Agreement and Protocol with Argentina.

In conjunction with the International Trade Administration (ITA) and the Telecommunications Industry Association (TIA), NTIA began organizing the fourth Latin American Telecommunications Summit (LATS) to be held in the spring of 1998 in Argentina. Representatives from approximately thirty U.S. telecommunications equipment manufacturers and service providers are expected to participate in LATS. Telecommunications Ministers and senior government officials from the largest telecommunications markets in Latin America will participate. LATS provides the opportunity for industry representatives and senior government officials to discuss key telecommunications issues facing the region. LATS also provides the opportunity for equipment manufacturers and service providers to promote their products in the Americas. Past LATS have successfully generated hundreds of millions of dollars for U.S. industry.

NTIA received a grant from USAID to study rural telecommunications development programs in Peru and Chile to better understand the problems faced by rural areas and how these two countries address these problems. The study focuses on the Peruvian (FITEL) and Chilean (FDT) telecommunications development funds, their unique and innovative approaches to telecommunications development, and the lessons learned from the projects financed by these funds. The study will review the needs of and impediments to rural communications service, technologies available to address these needs, and the overall results of the funds.

NTIA Gold Medal Winner

Mr. William T. Hatch of NTIA's Office of Spectrum Management was awarded a Gold Medal by the Secretary of Commerce in recognition of his development of national and international spectrum management policy supporting U.S. proposals to World Radiocommunication Conferences leading to the development of innovative terrestrial and satellite based communications services. Through his efforts, the United States has achieved significant results in these conferences, leading to improved national and international competitiveness for the U.S. telecommunications industry.

NTIA ON THE WORLD-WIDE WEB

To expand electronic access to public information, NTIA established one of the first Federal government World-Wide Web (WWW) servers (http://www.ntia.doc.gov). All of NTIA's publicly available documents are posted on this web site. The following general principles guide NTIA's managers on electronic information dissemination; these principles apply to all NTIA electronic information dissemination efforts, regardless of specific form.

NTIA On-Line Information will be:

1. Designed for the external user; i.e., constituent ease of use, interactivity, and usefulness of the information will be the overriding priority.

2. Accurate, Timely, Complete, and Relevant.

3. Information should be available on-line no later than when it is available in hard copy and preferably before the hard copy is available.

4. Limited to organizational and programmatic information.

NTIA's efforts to develop this site were recognized with Vice President Gore's Hammer Award.

Comments

NTIA welcomes comments on its activities and programs. To offer suggestions or obtain further information, please contact Sarah Maloney or Charles Franz at 202-482-1835 or send e-mail to <smaloney@ntia.doc.gov> or <cfranz@ntia.doc.gov>.

Copies of documents cited in this report are for sale by the National Technical Information Service, Springfield, VA (703) 487-4650.