Remarks of Assistant Secretary Victory at the Third Annual James H. Quello Communications Policy and Law Symposium

It is a privilege to speak to you at this third annual Communications Policy and Law Symposium. Thank you to all of the folks at Michigan State for the opportunity to take part in this conference. Since its founding in 1998, the Quello Center for Telecommunications Management and Law has become a valuable resource for policymakers and industry executives seeking new alternatives for a changing industry. I am honored to be here to contribute to the discussion on access issues, and particularly pleased to honor the work of the legendary former Chairman of the Federal Communications Commission, Jim Quello. 

Jim, if only you'd been coaching the Michigan State Spartans, then maybe your professional longevity would have influenced their short NCAA tournament career, and the team wouldn't be rethinking its access to the Georgia Dome this weekend! All kidding aside, while I am not seeking to match your 23 plus-year record of fine service for five presidents, I am aspiring to achieve the tenacious commitment to expanding the benefits of telecommunications that you exhibited as a public official. During your long career, you shaped policies to guide rapid transformation of the telecommunications industry. And my, how it has changed since you entered broadcasting more than fifty years ago.

Convergence: Publicly Beneficial but a Royal Regulatory Pain

The industry changes of the past fifty years have been especially dramatic during the last decade. Ten years ago, the telecommunications world consisted mostly of circuit-switched analog service provided principally by incumbent local telephone companies through their wireline facilities. Sure, broadcast, cable, wireless and satellite services existed, but these providers delivered discreet, neatly packaged services to distinct users for distinct uses. Things fit nicely into separate baskets and so it is not surprising that these services all had different regulatory schemes.

But today, the word is convergence. In this new era of telecommunications, a variety of companies are building facilities to provide consumers with innovative products and services using multiple platforms. Wireless voice and data products are increasingly competing directly with services traditionally provided over the telephone network. Video programming initially available only through television rabbit ears can now be received also through cable and direct broadcast satellite services. And cable companies are also making significant in-roads in providing traditional telephone service.

Broadband is one of the most recent and dramatic examples of the convergence phenomenon. The high-speed Internet services that fall under the broadband classification promise to enhance the quality of life for all Americans. They can expand educational opportunities, improve health care, increase governments' responsiveness to its citizens, and enhance our global competitiveness. And, thousands of new jobs could result from greater broadband deployment, both directly through network construction, and indirectly through industries related to advanced networks and services. Broadband is the latest poster child for convergence because it can be provided across telephony, cable, wireless and satellite platforms with other approaches probably on the horizon. Clearly, full and fair cross-platform, facilities-based competition will help to sustain long-term consumer benefits. But given the differing regulatory legacies of each of these platforms, how do regulators ensure that full and fair cross-platform competition develops? Further complicating matters - how can this be done while preserving opportunities for intra-platform competition for some traditional services? This is the challenge today's regulators face. 

Over the past several months, we in the Administration have been focused on how to help create the right environment for broadband to thrive. To inform our policymaking, we convened a Broadband Forum in the fall, requested public comments on the issues (and received almost 100 in response), and extensively engaged public interest groups, industry representatives, academics, and other interested parties in discussions on broadband issues. We heard about demand issues and supply issues. On the supply side, we heard about potential regulatory impediments at the federal, state, and local level. To be sure, we heard a lot on a variety of different issues. In most cases, we heard a lot of different points of view. But there was one issue where all current and potential providers of broadband spoke with one voice and - to tie in with the theme of this conference - it was most definitely an access issue. The issue was access to rights-of-way and tower sites. My remarks today will focus on this important issue.

Rethinking Public Rights-of-Way Governance

You know, my first discussion with industry on rights-of-way issues was a little surrealistic. Here I had representatives of Bell Operating Companies, CLECs, cable providers, cable overbuilders and wireless providers all in my office and they actually shared the same point-of-view. That view was that constraints on accessing public rights-of-way and tower sites might be inhibiting or at least delaying broadband network construction. While most of the concerns were voiced about municipal and county activities in this area, federal agencies that own public lands were also identified as posing potential roadblocks to access. 

I should emphasize that these companies stated that rights-of-way access problems were not the norm, but rather were limited to only a relatively small number of jurisdictions. However, these companies underscored that, due to the nature of networks, only a few "difficult" jurisdictions can have a disproportionately adverse effect on the roll-out of uninterrupted statewide or regional advanced services networks, which ultimately can impair national broadband coverage. 

Specifically, these companies identified four issue areas in which they felt that rights-of-way regulation or processes can impede the construction or upgrade of facilities:

· The first is delay. They pointed to jurisdictions with lengthy or unclear application processes that delayed their construction by several months or sometimes longer.

· The second is unreasonable fees. They complained of jurisdictions that charge fees based on revenue and other non-cost measures, such as conditioning rights-of-way access on a carrier's contribution of free network capacity. 

· The third is a third tier of regulation. They challenged that some local ordinances recreate state certification procedures by requiring extensive disclosure of corporate business plans, ownership and control documentation, financial, legal and technical qualifications to provide service, as well as current and future and service plans. 

· The fourth is discriminatory treatment. They contend that certain jurisdictions unreasonably favor some competitors over others, either in terms of lower fees or a more streamlined process. 

While litigation is an option that some communications firms pursue, the companies claim that the expense and uncertainty of trial and the inevitable appeals process further delay their infrastructure deployment. Sometimes these challenges even force companies to abandon plans to install broadband, towers, and other facilities in a particular area. Clearly, that sort of result benefits no one.

We are mindful that there are always two sides to every story. In a recent meeting with the mayors of Little Rock, AR, and Arvada, CO, a member of Nashville, TN's city council, and a telecom official from San Francisco, I heard firsthand of the challenges confronting local officials as they balance their responsibilities as trustees of public lands with their desire to attract advanced telecommunications capabilities to their communities. These elected officials know all too well that the availability of broadband infrastructure is necessary to entice new businesses and jobs to their localities. They also underscored their desire for competition among multiple providers to ensure consumers lower prices and innovative telecom services. At the same time, these local representatives told me how they struggle to minimize disruption to public roads and rights-of-way by coordinating access for all carriers. They also said they try to work to ensure non-discriminatory treatment of providers, but differences in regulatory relationships make this difficult. 

The meeting participants and other representatives of city and municipal interests also argued that, as trustees of the public's roads and rights-of-way, their fiduciary duty demands that they recover the fair value of private use of the public's property. Therefore, they contended that local governments should have the flexibility to use revenue-based mechanisms for efficient allocation of rights to use scarce public resources. Prohibiting localities from charging such fees for rights-of-way access unfairly subsidizes telecom carriers at the expense of the community, they say. They also dispute that local regulation impedes new entry. 

Clearly, the arguments of both sides have merit. How then to strike the right balance to properly address the concerns of industry and the governing jurisdictions? All clearly share the goal of achieving access - of fostering the prompt deployment of advanced services. In my mind, it requires a collaborative approach. Federal, state, and local officials share the responsibility for removing unnecessary impediments so that advanced services providers of all sorts can deliver competitive voice service and two-way, high-speed data and video services. And service providers must address the reasonable concerns of the jurisdictions they enter, restoring torn up streets and sidewalks and providing appropriate compensation for access. All must be involved in developing the solution and I am pleased to say that all seem to be taking steps to address the problem.

At the federal level, we at NTIA will be working to identify valuable lessons or best practices that we may share to help federal and state governments administer public rights-of-way and other regulations effectively, so communities can reap the remarkable potential of advanced services, while preserving the integrity of their public property. And, to make sure that the federal government sets an example of effective rights-of-way management, we will be examining our own procedures for accessing public lands and rights-of-way and exploring ways to eliminate any unreasonable obstacles to companies' use of these areas. I understand that FCC Chairman Michael Powell has similar interests in this issue. Chairman Powell recently announced that the FCC had begun to work aggressively through its Local State Government Advisory Committee to find solutions for rights-of-way access issues.

Some states have also begun to tackle these tough issues. We applaud their willingness to do so since no "one size fits all" solution will strike the right balance in every jurisdiction. In Michigan, for example, Governor Engler almost two weeks ago, signed into law legislation establishing a "rights-of-way authority," which will oversee the administration of these property rights throughout the state. The authority will coordinate rights-of-way management with municipalities and assess fees on telecom companies to recover the costs of their use of public lands. The new law streamlines the municipal permitting process and establishes a fast-track dispute resolution mechanism at the state's public utility commission. I would like to applaud the work of Governor Engler for leading on this issue.

In addition, the National Association of Regulatory Utility Commissioners (NARUC) has established a rights-of-way study committee to provide recommendations on this issue. I am pleased to say that I have been invited, and accepted my invitation, to join the committee. The full committee will be meeting at the end of April and hopes to present recommendations on rights-of-way administration this summer. Those of us in federal government have great respect for the states' abilities to experiment with alternative approaches on thorny issues. Therefore, I am looking forward to working with NARUC and others to identify positive experiences that may serve as models not only for other states, but for the federal government as well, as it seeks to improve rights-of-way management and remove other obstacles to broadband deployment. 

At the local level, a promising development is that the National Association of Telecommunications Officers (NATOA) is considering re-establishing its Industry Advisory Council to encourage dialogue between local and municipal telecom representatives and service providers on rights-of-way issues. The potential revival of this forum presents an important opportunity for key stakeholders to rethink public rights-of-way access and work together to find workable approaches. I strongly urge industry and local officials to pursue such discussions.

Conclusion

The sooner we can make progress on this issue, the sooner we can enjoy the potential fruits of broadband and other advanced services. So I encourage state and local governments to continue to work with NTIA, the FCC, and industry stakeholders to overcome the challenges to removing any unnecessary deployment obstacles that rights-of-way and tower siting regulations may impose. Just like in the NCAA championships, each member of the team has an important role to play. With a collaborative, team approach, we can create a workable and flexible policy on rights-of-way management that helps, not hinders, infrastructure deployment. And if we are successful, the winners will not just be the members of the team, but rather all Americans who will benefit from nationally deployed advanced telecommunications services, like broadband. Thank you.