1                     WIRELESS LOCAL LOOP FORUM
 2                                                   (9:10 a.m.)
 3              MS. BROWN:  I'm Kathy Brown.  I head the Office
 4    of Policy Development at NTIA.  Traditionally, our office
 5    has been sort of a think tank part of Government, of
 6    telcom, and over the last number of years I've done a lot
 7    of thinking and a lot of work on procompetitive policies,
 8    the implementation of the act and beyond, to ensure that
 9    new technologies find their way to the market, that we're
10    not erecting any Government barriers that will keep the
11    deployment of what we think are pretty exciting
12    possibilities from getting to the market.
13              So this is a second in a series of forums that
14    we are sponsoring.  We have named it New Frontiers on the
15    Information Superhighway, and we mean that.  We think
16    there are new frontiers.  The first forum was on Internet
17    telephony and the second on wireless technology,
18    specifically this notion, this idea of wireless local
19    loop.
20              In the room today are some of the best minds in
21    the industry and in Government and in decisionmaking,
22    policymaking in Washington, in the country on this issue,
23    and we hope today will be an opportunity for us to talk
24    together about this.  It is a forum, and we have tried and
25    asked our speakers to keep their  presentations relatively

 1    brief and to the point so that we can share ideas.
 2              The point is that we come out of this experience
 3    with perhaps some new learning, some new ideas, and maybe
 4    some answers to some problems we see out there, and so I
 5    hope you will all participate.  I hope you will stay as
 6    long as you can during the day, and that you will feel
 7    very comfortable in joining in the discussion.
 8              I wanted to bring to your attention that CTIA
 9    has very graciously provided some refreshments down in the
10    corner, some coffee and muffins.  The Government
11    unfortunately is too poor to even give you coffee, but the
12    industry, thank goodness, knows that one needs a cup of
13    coffee in the morning.
14              CTIA has also arranged for a demo room where a
15    number of companies are demonstrating some of the
16    technologies we'll be talking about today.  Lucent is
17    there, Motorola, Nortel, Teligent, and World Access, so I
18    hope during the day you will take a trip down around the
19    corner to the demo room and have a look at what the
20    companies have set up.
21              With that, I would like to start the program by
22    introducing Larry Irving, who is the Assistant Secretary
23    for Telecommunications and Information.  He has been on
24    this super information highway right now for 5 years here
25    at NTIA.  He's seen a lot of things happening, has  been a

 1    real proponent of a competitive open marketplace, I think
 2    understands a little bit about the potential for these new
 3    technologies, and I'm very pleased that he is here to open
 4    the program.
 5              (Applause.)

                    U.S. DEPARTMENT OF COMMERCE

10              MR. IRVING:  Good morning, and let me thank
11    Kathy.  These fora are really her idea, and her brain
12    child, and I get the honor of participating, but I really
13    want to express my appreciation publicly to all of you for
14    inspiration, because I think these really helped us.  We
15    hope that these fora will help us to learn some things,
16    will give us an opportunity to discuss these issues, but
17    also will give us an opportunity to educate people a
18    little bit about some technologies.  We don't know much
19    about, and I want to thank Kathy for that.
20              I want to apologize to you. We're a little late
21    getting started this morning.  I'm worried that I'm going
22    to become the late Larry Irving before my time, and I'm
23    late this morning because of Christmas.  My wife and I
24    went out last night and we bought a new Christmas tree,
25    and I  did the guy thing and I'm  putting the tree up, and

 1    about 7:00 this morning I was in the bathroom and I heard
 2    a crash, and I can assure you, there's an old story -- you
 3    know, there's an old joke, if a tree falls in the forest
 4    does it make a noise?  If it falls in the living room it
 5    most decidedly does.
 6              (Laughter.)
 7              MR. IRVING:  So I have been in tinsel and
 8    glitter and lights for about 40 minutes this morning
 9    trying to put together a tree that my wife says I told you
10    it was crooked.
11              (Laughter.)
12              MR. IRVING:  A great way to start your day.  So
13    Merry Christmas.
14              But I also want to welcome all of you to NTIA's
15    advanced technology forum on wireless local loop.  As
16    Kathy noted, today's forum is the second in a series.  The
17    first was on internet telephony in September.  They're
18    supposed to be every other month.  It would have happened
19    in November, but again my schedule wouldn't accommodate
20    it, so I'm glad your schedule could accommodate your being
21    here today.
22              All of the forums will focus on innovative
23    developments in telecom and information technologies in
24    industries that are bringing increased competition to
25    industries and we hope redefining  our daily lives and the

 1    lives of our brothers and sisters on this planet.
 2              I want to thank all the distinguished panelists.
 4    I know  a lot of people have rejiggered their schedule,
 5    have come a long way, have tried to do what they could to
 6    accommodate us, and we think we have a really outstanding
 7    group of people who will be addressing you today.
 8              Because of the many ways to define wireless
 9    local loop we have tapped a broad group of talent, and
10    there really is a broad group of talent in this industry,
11    and I know that there are members in the audience who
12    won't be presenting but also bring great expertise to the
13    topic, and I really hope that this will be interactive,
14    that people in the audience will also engage in the
15    debate.
16              This should be a dialogue.  It shouldn't just be
17    us yakking from the front at you.  We want to have a real
18    exchange of ideas and information.
19              Let me begin by extending some thanks, first to
20    CTIA for coordinating a demonstration of wireless local
21    loop technology in conjunction with this forum so we can
22    see the physical manifestation of what we will be
23    discussing today, and I want to thank my old friend Randy
24    Coleman and also Karen Bruno for their efforts on behalf
25    of Tom  Wheeler and CTIA, and I guess  some of you have to

 1    thank CTIA for the coffee.
 2              I stay away from coffee, and I think you should
 3    thank me from staying from coffee. I talk faster when I do
 4    coffee, so I try never to do -- Kathy said all of us need
 5    a little coffee.  Not all of us.  It's a scary thing when
 6    I do coffee.  I've had people that threatened to quit and
 7    a wife threaten to leave if they ever see me on coffee
 8    again.
 9              So, in addition there are a lot of other people
10    who have helped and advised us and are making this forum
11    possible and we hope a success, and I particularly want to
12    thank Mark Golden of PCIA who provided a tremendous amount
13    of guidance and helped us frame the issues and made some
14    suggestions of speakers and panelists for this forum.
15              And finally, let me again commend Kathy Brown
16    and her staff, but particularly Joe Gattuso and Anne
17    Stauffer.  They put in a lot of hours to pull this off,
18    and I want to publicly acknowledge their efforts.
19              When we talk about wireless technologies I think
20    it's amazing when you think about how fast this has become
21    commonplace.  I've been doing telecommunications for 15
22    years, 5 years at NTIA, and I've had a front row seat at
23    maybe the emergence of telecommunications and wireless
24    telecommunications in this country, and it really does
25    offer conduits  for  the delivery  of  communications  and

 1    content both domestically and worldwide in ways none of us
 2    I think could have contemplated 5 years ago.
 3              I often remember the story that AT&T back in
 4    1982 thought the worldwide market for wireless
 5    communication devices would peak at 1 million, because
 6    what they were thinking about was the analogue things that
 7    were big and bulky and scratchy and didn't work too well,
 8    and they basically sold off their rights because of their
 9    concerns then that there really wasn't going to be a
10    market, but mobile communications have an increasing
11    percentage of the value of the global telecommunications
12    market.
13              In 1990, mobile communications were under 5
14    percent of the global telecom market.  They're now just
15    under 20 percent of that market.
16              The newsletter, FT Mobile Telecommunications,
17    calculates that the world cellular subscriber total will
18    pass 200 million by the end of this year.  In Scandinavian
19    countries mobile phone penetration rates are heading
20    toward 50 percent.  In China there will be 15 million
21    mobile telecommunications subscribers by the end of this
22    month.  In Italy at certain times of the day it's already
23    cheaper to use a mobile phone rather than a fixed phone,
24    and if you want to have fun in Rome, just watch the
25    scramble when the  phone, the mobile phone  starts ringing

 1    at a dinner table.
 2              Everybody in Italy, in Rome, has a mobile phone,
 3    basically because their fixed phone doesn't work very
 4    well, but mobile telephony is an amazing thing.  If you
 5    want to really be scary, watch somebody riding down the
 6    street on a Vespa with a mobile phone to their ear.  that
 7    will get you off the streets.
 8              Wireless local loop technologies and services
 9    are being deployed successfully around the world as first
10    service in many countries and as a competitive service to
11    wired network in places such as the United Kingdom.
12              You know, the United States has experienced
13    growth in mobile communications goods and services, too. 
14    I was ready Com Daily last night on the Net, and Tom
15    Wheeler announced that there are 50 markets with five or
16    more wireless competitors right now.
17              In this country there are 50 markets with five
18    or more wireless competitors, and I think many of us
19    remember, I certainly remember when we first got our first
20    cellular licenses in Washington, D.C., and we thought this
21    was a miraculous day.  There are five or six.  Any of us
22    here in Washington have a choice of five or six different
23    mobile competitors right now, and prices, the important
24    thing about competition is that prices fell an average of
25    6 percent  across this Nation between June of '96 and June

 1    of '97.
 2              When you bring in more competitors, you bring
 3    the prices down.  When you bring the prices down, more
 4    people have access.  The more people who have access, more
 5    people have access to telephony, and I know that I
 6    personally -- if you gave me the choice right now, if
 7    you're going to snatch the wires out of your home and take
 8    away that telephone, or take away one of your two mobile
 9    phones, take the wires out of my house.  Not even a close
10    question.  There's no way I would rather have a wired
11    phone with static.
12              I know I use my mobile phone more than I use my
13    phone at home, and I think that's true for many people who
14    are mobile, who are running around the country and running
15    around the city.  I'm never at home, but I'm always
16    somewhere I can be reached with a mobile phone.  If I'm on
17    the Hill I need my Ricochet so I can show Members what's
18    happening with regard to the Internet.  I can't always
19    find a phone line in a Member's office.  I can't always
20    find a plug with a laptop.  In Ricochet I can surf the net
21    right there.
22              Using wireless technology is becoming more and
23    more important in what we do every day, and I think all of
24    us have to realize it.  It is only going to become more
25    robust.

 1              And I was thinking as I was walking over here,
 2    if somebody never had a wired phone and their first
 3    experience was with a mobile phone, would they  understand
 4    why they would want to have a phone that's plugged in if
 5    they don't have access, if they couldn't move around with
 6    it?
 7              And I think for those of us who grew up one way,
 8    it makes sense, but for people who grew up another way,
 9    their first experience with a telephone is a wireless
10    phone, a mobile phone, that makes -- it changes the
11    dichotomy.  It changes the equation.
12              And as you bring the prices down by having to
13    have wires going to remote areas we're going to change the
14    economics and bring telephony to some areas.  that's going
15    to change some paradigms as well.
16              We're just beginning to explore the potential of
17    wireless technologies, including wireless local loops, and
18    I want to urge the wireless industry to meet the challenge
19    to becoming true competitors to traditional wire line
20    providers in the United States, not just for those of us
21    who don't have a life because we're too busy working, but
22    for all Americans.
23              Since the passage of the Telecom Act in '96
24    wireless has increasingly shown its potential to bring us
25    real   competition  and  to   bring  it  to  traditionally

 1    underserved areas of our country, to inner cities and to
 2    remote rural communities, and I believe that wireless
 3    local loop can be the competitive alternative we've been
 4    looking for in this country.
 5              We are looking for ways to give people more and
 6    more choices in terms of who provides them telephone
 7    service at home, and we hope and believe that wireless
 8    local loops may give us part of the solution.
 9              I've heard about this technology, but I've also
10    seen this technology in other nations.  I've seen how
11    wireless local loops works in India, I've seen how it
12    works in South Africa, I've seen how it works in China as
13    I've traveled around this globe on behalf of you, and as
14    I've traveled around this world I know that it does
15    provide an alternative to some people, but in many
16    instances it provides the first real telephone connection
17    to people around the world.
18              Now, you've got to remember, if you live on this
19    planet, if you're alive today, the odds are 4 to 1 that
20    you don't have a phone at home.  In the United States, we
21    don't -- I mean, I carry two cellular  phones, one from
22    work, one from home.  My wife carries two cell phones.  We
23    have phones at home, all kinds of phones in the office,
24    but around this world, if you live on this planet, it's 4
25    to 1 odds you don't  have a phone at home.   80 percent of

 1    the households in this world don't have a phone.
 2              Now, we're going to provide telephone service,
 3    and in a lot of places the first phone coming in is coming
 4    in because of wireless local loop.  Wireless technology is
 5    going to change that equation.  That number won't be 80
 6    percent by the year 2000, and it won't be 80 percent in
 7    large measure because of the deployment of wireless
 8    technologies in remote areas and other underserved areas
 9    around this country.
10              I believe that the same technology can be
11    deployed in this country, and wireless local loop can
12    allow the policy debate to focus not on subsidies, but on
13    affordable access.  How do we bring the price down, not
14    how do we subsidize these technologies and access, and I
15    challenge today's panelists to tell us how and when this
16    can be achieved.
17              Today's discussion should identify barriers,
18    technical, economic, and regulatory, and we hope you will
19    also propose solutions, what we in policymaking can do to
20    assist you, and what we can do in this commercial trade
21    field in exploiting some of these new market
22    opportunities.
23              What exactly do we mean by wireless local loop,
24    and many of you know more than I do.  The local loop is a
25    connection between the telephone system and  the customer.

 1    Wireless local loop allows the final mile between the
 2    switch network and the customer become the final airway.
 3              There's really no single definition of wireless
 4    local loop.  It means a bunch of things.  But in general,
 5    wireless local loop refers to any system in which the
 6    connection to the consumer or the consumer's home or
 7    business is being made using a radio connection.
 8              In many discussions, wireless local loop has
 9    become synonymous with fixed wireless access technology. 
10    In a typical configuration, you install an antenna on a
11    consumer's home or on a nearby structure, and then you
12    have a fixed wireless connection made between that point
13    and the first point of switching, such as the telephone
14    company's central office.  This fixed technology may in
15    many applications be less expensive to instal and maintain
16    than traditional wire line connections.
17              In many countries around the world, again,
18    Colombia, Sri Lanka, Poland, these fixed technologies are
19    being deployed.  In many case, this technology brings
20    service to people in remote or rural areas for the first
21    time, and that's something we're very focused on, trying
22    to get these technologies for the first time, but also
23    where people already have technology, bringing that
24    technology in as a competitive alternative to the existing
25    systems.

 1              Wireless local loop can be defined broadly as
 2    well to include other wireless technologies that have the
 3    potential of supplanting wireless service, but wireless
 4    local loop is an attractive service because of three
 5    attributes.  One, cost.  It could be more cost-effective
 6    than wire line service.  Two, rapid deployment, and three,
 7    spectrum flexibility.
 8              The spectrum flexibility comes about because the
 9    wireless local loop has the flexibility because of
10    technology, provider service, and spectrum use.  An
11    amazing number of people are providing wireless local
12    loop.  Many different technologies are capable of
13    providing it.  PCS, LMDS (local multipoint distribution
14    service), DEMS (digital electronic messaging service), a
15    subject I'm becoming more and more familiar with, it
16    seems, every day, DBS (digital broadcast service).
17              There are also many different providers gearing
18    up to provide these services including PCS license
19    holders, CRMS license holders, LMDS license holders, WCS
20    license holders, satellite companies, LEX, and other wire
21    line telcos.
22              Services include fixed wireless, replacing the
23    home phone, mobile cellular that acts like a home phone,
24    and a fixed mobile hybrid in which the wireless phone
25    provides  local service to  be taken  out of the  house to

 1    roam within a predetermined area.
 2              The FCC is making spectrum available in many
 3    bands and is granting flexibility to many licenses.  There
 4    are several proposals for wireless local loop services on
 5    different spectrum bands.  Some parties propose using
 6    spectrum already allocated and largely assigned to
 7    different licenses in 2 GHz PCS bands.  Other parties are
 8    exploring new spectrum allocations, and we're working with
 9    Nortel at NTIA in our spectrum management office to
10    determine the feasibility of wireless local loop on bands
11    that the Federal Government currently uses.
12              And finally, several high frequency broad band
13    services, such as DEMS, LMDS and others, are considering
14    plans to offer wireless local loop services.
15              Wireless local loop can potentially help us meet
16    two of the most important goals in the Clinton
17    administration with regard to telecommunications.  One is
18    competition.  You will probably never hear anybody from
19    the Clinton administration talk about telecom without
20    talking about the importance of competition, and realizing
21    the promise of the '96 act, which is to bring competition,
22    not because competition by itself is great, but because
23    the benefits of competition are so important to our
24    economy and to consumers, and to workers.
25              The other  part of it,  which is something  I am

 1    equally passionate about, is universal service.  We are at
 2    94 percent in this Nation.  We can do better.  We believe
 3    we can bring prices down.  We believe we can change some
 4    of the subsidy systems.  We believe new technology is our
 5    best hope of doing that.
 6              Wireless local loop is a capability to provide
 7    competitively priced, feature-rich telecommunications
 8    services to people across this country.  In the United
 9    Kingdom, wireless local loop service provided by Ionica is
10    competing with British Telecom.  Nortel is involved in
11    that initiative, and I hope and expect we will learn more
12    about that venture from David Trinkwon of Nortel, who's
13    going to be on the first panel this morning.
14              But wireless local loop also offers tremendous
15    possibility for people living in underserved areas.  NTIA
16    has seen its potential in some of our TIIAP projects.  For
17    example, the Ogalala Sioux Tribe is using a TIIAP grant
18    that NTIA gave them to create a digital wireless home
19    health care service network, which is based on hand-held
20    radios and the Internet. 
21              Like many Native American communities, fewer
22    than 50 percent -- in this country, fewer than 50 percent
23    of the households in the Ogalala Sioux Tribe in Pine
24    Ridge, South Dakota, have a telephone.  Imagine, there's a
25    community in this  country where 50 percent  of the people

 1    don't have a phone, and I think a lot of you may have seen
 2    the story, it was a front page story just this week on
 3    Pine Ridge Reservation, what's happening in that
 4    community.  We're trying to use wireless technology to
 5    improve the economic situation and the health care
 6    situation, the communication situation, for the members of
 7    that tribe, and we'll talk about those kinds of things.
 8              We'll talk on our second panel about how to
 9    reach out to underserved areas, especially inner cities
10    and rural communities, with wireless local loop.
11              I mean, we talk about the Ogalala Sioux Tribe
12    and Pine Ridge, and it sounds kind of exotic.  I was born
13    in Brooklyn.  In Bushford, Brooklyn, 72 percent of the
14    people in the community just next door to the town I was
15    born in have access to telephones.  28 percent of the
16    people in Bushford, Brooklyn, 28 percent of the households
17    in Bushford, Brooklyn, don't have a telephone.
18              In this country, the greatest country in the
19    history of the world, the biggest economic power, we have
20    a community, in the richest city in the richest Nation in
21    the history of the world, 28 percent of the people don't
22    have a telephone at home.
23              Are there ways you can bring down the cost?  You
24    can use the technologies to provide competition, to
25    provide services to underserved areas.

 1              I look forward to robust discussion on this
 2    issue, which is extremely important to NTIA.  It should be
 3    extremely important to every one of us.
 4              One of our central missions for the last 5 years
 5    has been the attempt to improve Americans' access to basic
 6    telephony as well as advance telecommunications
 7    information services.  We have worked to put into effect
 8    public policies promoting this goal.  We've funded
 9    innovative projects and we have worked with industry, and
10    the things we've learned here we can export around the
11    world.
12              There is a hunger and need, a desire to learn
13    what we know in this country, and we can't forget the
14    things we learn here have great economic and practical
15    value to the American citizens.  They also have great
16    economic and trade value, and it will create jobs in this
17    country when we learn how to exploit them well.
18              We hope this forum will push us to ask the hard
19    questions, explore the economic, technical, and policy
20    questions, and clarify the appropriate roles for
21    Government and industry in this area.
22              It was interesting, we have to continually look
23    to the end game.   You know, I look at where we're at
24    right now, and I look at the passage of the Telecom Act
25    not quite  2 years ago, the  passage of the  WTO agreement

 1    earlier this year, I think of all that's happened with new
 2    technologies.
 3              Everybody in this room either has or uses at
 4    some point in the day a wireless technology.  You use a
 5    pager, you use a cell phone, you use a Ricochet or similar
 6    type machine at some point in our daily lives, our
 7    personal lives.  10 years ago, none of us were doing that,
 8    or virtually none of us were doing that 10 years ago, and
 9    now it's commonplace.
10              We're looking at the convergence of the Internet
11    with telephony, we're looking at all kinds of new and
12    exotic things.  This is a unique moment in our lifetimes,
13    and one of the things I said a week ago that I really
14    didn't know how true it is, there's never been a time in
15    history where a new age has begun globally simultaneously.
16              If you think of the agricultural age, and the
17    agricultural era, they started in different places at
18    different times.  It started in the Nile Basin a different
19    time than it started in the United States, which started
20    at a different time than it started in Europe.  Different
21    continents started at different times.
22              Even with the industrial age, it certainly
23    started in Europe and America long before it started in
24    Latin America and some other nations.
25              With  the  information  age, everybody  on  this

 1    planet is simultaneously engaged in trying to capture the
 2    value, the magic of this information age.  That doesn't
 3    come around that often.  We have a unique moment, a unique
 4    opportunity in these wireless technologies.  Use of the
 5    spectrum is going to be a key player in how we go forward
 6    together as a globe.
 7              And I think of the value of these fora.  Last
 8    night I was reading USA Today, and I noted the last forum
 9    we had was on Internet telephony.  I noticed a company
10    yesterday announced 7-1/2 cents per minute long distance
11    calls across the United States using Internet telephony,
12    and in announcing that, in announcing that new venture,
13    Joe Nachow of Quest said, and I want to quote, this is
14    exactly what the Telecommunications Act was about,
15    creating opportunities for capital investment so that new
16    technologies would be deployed and consumers and
17    businesses would benefit.
18              I couldn't put it better, so I won't.  That's
19    exactly what we're trying to do with the Communications
20    Act, trying to make sure that new technologies are
21    deployed, capital is invested, and consumers and workers
22    will benefit.
23              I look forward to hearing from our panelists on
24    how we can make wireless local loop a competitive
25    alternative.  I look forward to hearing how we're going to

 1    go forward together in this new era, and I thank you for
 2    your time and attendance this morning.
 3              Thank you very much.
 4              (Applause.)
 5              MS. BROWN:  If I can call up our first
 6    panelists, let me introduce the moderator of our first
 7    panel, then just turn it over to him.
 8              Ken Allen is with NTIA, and has been since 1974.
10    He's the chief of our Spectrum Division for ITS.  He leads
11    the research and spectrum management issues.  He has done 
12    a lot of work on emerging technologies, such as PCS and
13    wireless LAN, and advanced broadcasting, and intelligent
14    vehicle highway systems.
15              Ken is from Colorado.  We flew him in because he
16    knows a lot about this stuff, and actually we want to show
17    off some of our expertise, too, so with that I'm going to
18    turn it over to Ken, and he will introduce the panel, and
19    hopefully we will have a good discussion on the technology
20    side.

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