WIRELESS LOCAL LOOP FORUM TRANSCRIPT
REGULATORY TWISTS ON WIRELESS LOCAL LOOP:
DAVID AYLWARD, PRESIDENT, NATIONAL STRATEGIES, INC.
7 MR. AYLWARD: Thank you, Joe. Thank you for
8 having me.
9 We are going to do four presentations. I am not
10 going to do one. I will just make a few remarks at the
11 beginning and hopefully have a lot of time for people to
12 interact and ask questions.
13 I am an amateur student of history, particularly
14 in communications. And one of the things I was thinking
15 about and particularly reminded of as I looked across the
16 room and saw Dale Hatfield for the first time in a long
17 time is that when, 20 years ago, 25 years ago, a few
18 people in government thought -- and outside of
19 government -- thought it would be a good idea to have
20 competition in long distance, they started a process. And
21 while at the time, in going through it, it certainly
22 appeared, on a day-to-day basis, there was not a grand
23 plan, and there were forward steps and backward steps,
24 indeed there was, in some senses, a grand plan or a grand
25 vision. And that was the achievement of competition in
1 long distance.
2 And the Federal Communications Commission, led
3 originally by people like Dean Burch and Dick Wiley and
4 Dale Hatfield and Phil Verveer and a variety of others --
5 and I apologize if I have left somebody really important
6 out -- led that charge, and said, this is going to have to
7 happen, and for it to happen there are a series of
8 barriers that have to be knocked down. And the next 10-15
9 years was a process of knocking those barriers down.
10 And what we are really talking about here when
11 we look at local loop is kind of the same issues arising,
12 or many of the same issues arising, now that this last
13 monopoly island in what is becoming an interesting sea of
14 competition around it faces these same kind of questions.
15 And you would like to think it would happen
16 because the marketplace demanded it, either from an
17 economic point of view or from a political point of view.
18 But go back in long distance, when Bill McGowan was trying
19 to sell his wares in the mid- to late-seventies, when he
20 first squeezed into my cubbyhole in the Cannon House
21 Office Building and tried to teach me what long distance
22 was all about, there were not any pro-competitive forces.
23 People did not know what they did not have.
24 And there were a few computer companies that
25 came in and said, you know, our main frames are being
1 slowed down by these slow long distance lines, we need
2 competition. But there was no political force to really
3 make this happen. And I think that is exactly the case
4 today. You do not see consumers rising up in arms and
5 say, give me my Maypo; give me my local competition. They
6 do not know what they do not have. So that force is
8 There is a very large and successful wireless
9 industry, which I am privileged to represent, CTIA, but
10 they do not care very much about wireless local loop. You
11 do not see CMRS companies, particularly the established
12 cellular companies, saying, We want to do this; we have a
13 business plan and we are going to do it now. There are a
14 few wireless startups, like WinStar and Teligent and
15 others that are interested, but that is basically the
16 equivalent of McGowan back then.
17 And there are certainly entrenched interests
18 who, if I were a LEC, I do not want wireless local loop
19 competition. I would have to be an idiot not to want to
20 have competition, with a nice, $90 billion market to
21 myself and my colleagues.
22 So it really kind of comes back to, if it going
23 to happen, who is going to knock down the barriers? And
24 that is going to be government, if it happens. And it is
25 either going to be 51 State governments, which it may be
1 in some instances, or it is going to be the FCC. It is
2 not going to be Congress. Congress thinks it already did
4 So maybe some people in Congress will push, but
5 the fact is that my experience when I was on the Hill, and
6 I think it is still true now, is that congressmen are in
7 favor of competition until it changes something. And as
8 soon as it threatens to change something, like your bill
9 going up or you adding 75 cents on your bill in order for
10 another bill to go down, then they get very upset and they
11 do not want to see things change. So I do not think
12 Congress is going to make it happen.
13 So it is really going to be the government. And
14 I think it is fair to say that neither the current
15 Commission -- the current Commission has not said that,
16 has not adopted that approach yet, and it would be
17 interesting to see whether they do or not.
18 But in trying to think about these issues, the
19 way issues in communications tend to come up is in
20 dockets -- a piece over here, a piece over there, an issue
21 over here. And it is hard to kind of see that forest.
22 And if you are Bill Kennard or his new colleagues or Susan
23 Ness or Dale Hatfield or any of these other folks -- I
24 insulted you once before, Dale, then you came in, so I had
25 to do it again --
2 MR. AYLWARD: -- trying to get a grip on the
3 forest. I have tried to organize the issues into five
4 areas. And let me just try to describe five clumps of
5 issues, and then hopefully the speakers will take on some
6 of the pieces of those when we get into the rest of the
8 Authority issues. As a parent, I am always
9 interested in authority issues. And I think here, there
10 is kind of, Who is in charge? Is it the FCC or is it the
11 States? And the answer may be different, depending on
12 whether you are moving when you are on the wireless phone
13 or whether you are not moving on the wireless phone. Or
14 whether, as I said in a speech at PCIA a couple of months
15 ago, if you go into wireless local loop, make sure you
16 have a CMRS component to it.
17 So, question one: Who is in charge, both on the
18 front end and on the back end?
19 Section 332 gives a special status to CMRS,
20 which the Commission may or may not want to exercise.
21 That is one question. But it also gives -- turns CMRS
22 carriers into LEC's at some point down the road, and
23 therefore, presumably, gives local folks the authority
24 down the road, whenever that is.
25 There is some economic issues which I do not
1 think have been addressed at all. We tend to address
2 economic issues by themselves, in little pieces.
3 Universal service we will address as an issue. We have
4 spent a lot of time in our company looking at a wireless
5 local loop business plan. And we would like to go into
6 this market with a start-up company. And one of the
7 things that we have been looking at is, what are the
8 aggregate effects on investment of the various mandates,
9 fees and taxes that various entities of government are
10 starting to look at?
11 And I would suggest that the FCC and NTIA ought
12 to be taking a look at this, because that is the only
13 place I know that it can be done in the aggregate.
14 If you add all of these up, you are starting to
15 look at 20 to 30 percent on gross revenues. That is a
16 huge burden to throw on any company or any group of
17 companies that you want to do something new. You are
18 saying, come on down, let's start -- saying to CMRS
19 carriers, hey, why don't you get out of this comfortable
20 wireless business you are in and go compete with the local
21 monopoly. Which is kind of a tough thing to do to begin
22 with. And, by the way, here is a burden of 20 to 30
23 percent we are going to add to your bills.
24 Now, government is having trouble thinking about
25 that, because the universal service people say, I only put
1 3.75 percent on your bill. Yes, but what about the State
2 version of that?
3 The local tax people say, what is wrong with my
4 7 percent, 10 percent special wireless tax? The City of
5 Dallas says, what is wrong with my franchise fee of 5
6 percent or so on new wireless providers? I do it to the
7 phone company. It is a right-of-way fee. I am sorry you
8 are wireless, you do not use the rights-of-way, but you
9 would if you needed to, or maybe you do not, but I want
10 your money anyway.
11 If you add all of these up -- and you look at
12 number portability and CALEA -- just the general clump of
13 taxes, it is a significant economic issue. And I would
14 argue, one that any economist will tell you is going to
15 reduce investment. Or it is going to cut demand, which
16 will then reduce investment. And neither is a good thing
17 if you are trying to get new companies into a market or
18 old companies to do something different.
19 Access issues. There is a whole series of
20 issues under this, whether it is siting of antenna or what
21 I would argue is probably maybe a bigger issue, access to
22 premises -- or equal to that. We fought this issue 20
23 years ago with supers in New York, who did not want to let
24 cable into their buildings. Congress has legislated on
25 this, saying you cannot be prevented from having a dish.
1 Well, what is the difference between a flat
2 panel and a dish? One is curved. One is flat. One says
3 "telephone, video and data," one does video. Can building
4 owners be a barrier?
5 Rights-of-way. Interconnection agreements. I
6 mean there are a series of access issues.
7 There are some consumer issues. If wireless is
8 really going to compete, it is going to have to do things
9 that wire line companies do today, like E911, calling
10 party pays, service issues, time of service, directory
11 assistance, voice quality, that kind of stuff.
12 And, finally, universal service, which I guess
13 is an economic issue. I am thinking of it more as a
14 flat-out barrier to entry. In the business plan we
15 developed to do wireless local loop, if somebody says the
16 LEC is going to get 10 bucks a subscriber subsidy, and
17 then another 5 bucks a subscriber from a State fund, and I
18 want to go compete with them, unless I am going to get the
19 10 bucks and the 5 bucks, I am not going to compete with
21 And I am sorry I missed the discussion this
22 morning, but unless there is a flat equality of treatment
23 per subscriber there, universal service will become a
24 barrier to entry.
25 So there are lots of issues. I think the real
1 issue is whether the government decisionmakers are going
2 to look at this and say, we want to achieve that goal, so
3 let's start walking down the road and knocking down these
5 And we have got four people here today to talk
6 about these issues. We have appropriate quota
7 representation, since this is a Democratic administration.
9 We have two former NTIA people. We have two current or
10 former FCC people. We have two Hill people. There are
11 only five us, so you can tell there is a little overlap.
12 That is called two-fers, by the way.
13 Michele Farquhar I think most of you know. She
14 last served as Chief of the Wireless Bureau at the FCC.
15 She was at NTIA before that in two very senior positions.
16 She was at CTIA before that, when I first met her. And
17 she is now a Partner at Hogan & Hartson, making an ungodly
18 amount of money for the first time in her life, which I
19 congratulate you, and continuing her expertise in wireless
20 and a whole bunch of other issues.
21 So, Michele, why don't you go first.
22 MICHELE C. FARQUHAR, PARTNER,
23 HOGAN & HARTSON
24 MS. FARQUHAR: Thanks, David.
25 Good afternoon. It is great to be here.
1 My remarks today are focused on three primary
2 areas: First, the current wireless market growth trends.
3 Second, regulatory and other obstacles, both overt and
4 covert, to wireless competition in the local exchange
5 marketplace. And, third, several suggestions for how both
6 regulators and the wireless industry can foster increased
7 wireless/wire line competition.
8 In particular, I believe that incremental and
9 docket-by-docket efforts may not be sufficient to prompt
10 wireless entry in the local market in the near term.
11 Indeed, both regulators and industry advocates need to
12 take a comprehensive look at this issue and develop and
13 overarching policy framework for jump-starting wireless
14 facilities-based competition.
15 The wireless marketplace continues to boom, with
16 both cellular and PCS subcribership now exceeding 50
17 million. The number of subscribers has almost doubled in
18 the last 2 years, from about 25 million when I first
19 joined the FCC's Wireless Bureau in 1995.
20 Another trend is that subscribers increasingly
21 use their phones for personal rather than business use.
22 Cellular subscribers usage is 58 percent personal versus
23 25 percent business. And PCS subscribers slightly less.
24 Their usage is 49 percent personal compared to 30 percent
1 Moreover, an increasing percentage of customers
2 are buying a second, third or fourth wireless phone for
3 their households. Thirty-four percent of all wireless
4 users indicated that they had more than one wireless phone
5 in their household in March of 1996, whereas the number
6 had climbed to 44 percent for PCS and 39 percent of
7 cellular users by early 1997.
8 Already about 1 in 6 cellular and PCS users have
9 said that they have three or more wireless phones. And
10 for those of you who heard Assistant Secretary Irving's
11 remarks this morning, his household is certainly one of
12 those, with about four wireless phones.
13 In addition, the entry of PCS into many markets
14 has had a positive impact on subscriber rates, generally
15 leading to a price reduction of about 25 percent in these
16 markets. In the Washington, D.C. market, for example, the
17 launch of APC-Sprint Spectrum led to a 35 to 55 percent
18 decrease in cellular rates. And the average monthly bill
19 in the U.S. has fallen to below $50.
20 Already wireless revenues are more than 10
21 percent of wire line revenues, although wireless minutes
22 constitute only 3 percent of the minutes of wire line
23 communication. The Yankee Group predicts that by 2004, 20
24 percent of voice calls will be wireless.
25 These trends -- rapid growth, declining prices,
1 increasing personal use, and more wireless phones per
2 household -- may suggest greater consumer willingness to
3 view wireless as a substitute rather than a complement to
4 their existing residential wire line service. The FCC's
5 second annual report to Congress on competition in the
6 commercial mobile services, released in March of this
7 year, indicates that 13 percent of Americans are using
8 wireless telephony as a complement to their wire line
9 communications, with some possibly using wireless as an
10 alternative to a second line.
11 The report indicates that the primary obstacle
12 to classifying wireless as a true or potential substitute
13 for wire line remains the permanent charge, despite the
14 recent price reductions. On the other hand, the report
15 notes that several PCS carriers are not charging for the
16 first minute of incoming calls, and their subscribers are
17 more likely to use their phones as a general
18 communications device and not just for special or
19 emergency communications.
20 Another important development is that more
21 wireless services will be deployed in the business and
22 consumer market as the FCC prepares to auction spectrum at
23 28 gigahertz, 39 gigahertz and possibly 24 gigahertz in
24 the coming year. Many potential providers in these bands
25 are targeting the business rather than the residential
1 markets, at least initially, often for a wireless fiber
2 access service rather than a true wireless local loop
4 Nevertheless, new fixed wireless services, as
5 well as the eventual buildout of the PCS C, D and F bands
6 and the wireless communications service at 2.3 gigahertz,
7 may contribute to what one Deloitte & Touche economist
8 recently described as the coming spectrum glut, at which
9 point carriers will have to take any warm body as a
10 customer, even a land line caller.
11 Despite these trends, when policymakers evaluate
12 the success of the Telecom Act of 1996, particularly the
13 state of local competition in residential markets, the
14 picture looks grim. Wireless still remains a potential
15 success story in U.S. local consumer markets.
16 Several factors are usually identified -- I will
17 call these overt barriers -- which tend to operate at the
18 customer level. And these include current wireless
19 billing practices under which consumers pay for incoming
20 as well as outgoing calls, number portability, consumer
21 concerns about service quality, and, perhaps most
22 importantly, cost. While some of these obstacles affect
23 all competitive local exchange carriers, or CLEC's, such
24 as number portability, many are unique or loom far larger
25 in the wireless arena.
1 Wireless carriers' profits, for example, are
2 increasingly nibbled by State and local taxes, new
3 universal service payments, higher than cost
4 interconnection rates, and regulatory mandates for new
5 location technology, leaving little cushion for aggressive
6 buildout or drastic rate reduction that would help them
7 compete better with the low wire line charges. Wire line
8 subsidies that keep the cost of local service artificially
9 low may also set a high bar for the wireless industry to
11 The FCC's pending proceedings on calling party
12 pays billing mechanism, as well as its ongoing efforts on
13 the LEC-CMRS interconnection rules, could offer some
14 relief as soon as next year.
15 Other factors, which I will refer to as covert
16 obstacles, include the threat of increased State and local
17 regulation, tower siting and other capacity issues, and
18 general regulatory uncertainty. The threat of increased
19 State and local regulation and taxation could actually
20 serve as a disincentive for many wireless carriers seeking
21 to enter the residential market, especially given the
22 additional infrastructure investment needed to deploy
23 these services.
24 Likewise, carriers' requests for many additional
25 tower and antenna sites, especially important for the
1 fixed wireless services at the higher gigahertz
2 frequencies, could languish in the hands of local zoning
3 authorities. These issues, in conjunction with the
4 regulatory profit nibbling that I mentioned earlier, could
5 affect carriers' willingness and ability to provide
6 residential services. So that the consumer may really
7 never have a choice between technologies.
8 It is also worth noting that wireless revenues
9 remain a major source of profit for many wire line
10 companies, perhaps encouraging these particular carriers
11 to continue to view mobile service as more of a
12 complementary service than as a substitute to their own
13 residential service.
14 Commission action on pending preemption
15 petitions as well as its ongoing proceedings to determine
16 State regulatory authority over fixed wireless services --
17 commonly referred to as the CMRS flex proceeding -- and
18 the full extent of local authority over tower siting
19 issues, which was raised in its recent notice in the RF
20 proceeding, could help alleviate some of the current
22 Finally, how can government and industry
23 encourage greater deployment of wireless local loop? As I
24 suggested earlier, a critical first step for government
25 policymakers is to work with the wireless industry to
1 identify obstacles and plan a comprehensive, pro-consumer
2 policy framework to address the issue. Incremental,
3 docket-by-docket efforts may not be sufficient to prompt
4 wireless entry into the local market.
5 In addition, it may be time to reevaluate
6 whether a strict technology-neutral framework is helping
7 or hurting wireless/wire line competition, at least in the
8 short term. Inherent differences between wireless and
9 wire line technologies and networks, differing regulatory
10 frameworks, and differences among the wireless
11 technologies themselves may suggest the need for a new
12 interim model, or a greater effort to remove any inherent
13 bias against wireless providers.
14 Indeed, short-term incentives to encourage
15 wireless local loop may produce a legion of pro-consumer,
16 pro-competition and pro-universal service benefits, as
17 well as more economic development.
18 Policymakers should also study international
19 wireless local loop deployment for successful models, and
20 ensure that spectrum policy, local competition policy and
21 Federal preemption policy are all moving in the same
22 direction. Most importantly, recognition of the need to
23 avoid a death by 1,000 cuts at the Federal, State and
24 local level could fuel wireless deployment in the same way
25 that regulatory forbearance has fostered the tremendous
1 growth of the Internet.
2 Internet service providers, for example, have
3 garnered congressional interest in a short-term national
4 moratorium on State and local taxes of electronic
5 commerce. In describing this effort, Senator Ron Wyden of
6 Oregon notes that the growth of Internet taxes could kill
7 the goose that lays the golden eggs.
8 Many wireless carriers advocate that the simple
9 answer is suggested by the recent Eighth Circuit ruling on
10 interconnection: broad Federal preemption of State and
11 local regulation, under Section 332. Yet cities have
12 successfully argued that placement of towers and taxation
13 are uniquely local, and States are unlikely to relinquish
14 jurisdiction over intrastate telecom issues or services.
15 Even if broad Federal preemption is legally possible, it
16 is unlikely to be politically sustainable in the long run.
17 Instead, carriers could seek short-term,
18 targeted preemption, or Section 332 relief, directly tied
19 to the FCC's desire to encourage facilities-based local
20 competition. Carriers could begin competitive local entry
21 and the offering of full service bundles of telecom
22 service in specific test markets -- much like AT&T is
23 planning to do -- with or without such relief.
24 This would provide an opportunity to inventory
25 the necessary investment, the actual barriers to entry, as
1 well as consumer acceptance. The FCC still lacks data on
2 all of these fronts.
3 The industry could also undertake a
4 comprehensive economic analysis of LEC/CMRS
5 interconnection issues and the role of wireless in the
6 local competition marketplace, particularly the types of
7 stimuli or incentives necessary to encourage such entry.
8 Finally, the wireless industry could take better
9 advantage of the current government programs that might
10 leverage their infrastructure investment, such as NTIA's
11 Telecommunications Information Infrastructure Assistance
12 Program, or TIIAP. According to TIIAP Director Steve
13 Downs, less than 10 percent of the grants during the first
14 3 years have gone to wireless projects. This program
15 could serve as a real test bed for future schools,
16 libraries and health care projects, and even general
17 residential service initiatives, enabling wireless
18 carriers to develop projects to offset some of their
19 universal service contributions.
20 In sum, the Information Super Highway still has
21 many separate lanes for separate technologies: wireless,
22 wire line, cable, broadcast, satellite, et cetera.
23 Policymakers should work together at the Federal, State
24 and local levels to encourage greater convergence and
25 competition between the wireless and wire line
1 technologies, particularly by removing any roadblocks.
2 NTIA is well suited to play a key role in this
3 effort, and I applaud its leadership in hosting today's
5 Thank you.
7 MR. AYLWARD: Tom Sugrue is our next speaker.
8 He is a partner in the Washington firm of Halperin,
9 Temple, Goodman & Sugrue. He specializes in
10 communications in a wide variety of areas. I think many
11 of you know him. He has served at the NTIA. He has
12 practiced before the FCC, the Congress, the executive
13 branch in Federal courts, and lots of international
15 He has represented folks on interconnection,
16 universal service, access charges, standards and
17 procedures for the Bell Company entry into the InterLATA
18 market, which some of you may have missed -- it is kind of
19 a small issue going on these days -- and is implementing
20 regulatory reform provisions of the Telecommunications
22 Prior to joining this firm, he was the Deputy
23 Assistant Secretary of Commerce, Deputy Administrator of
24 NTIA. And he comes from Harvard Law School, the JFK
25 School at Harvard, and Boston College.
2 THOMAS SUGRUE, PARTNER,
3 HALPERIN, TEMPLE, GOODMAN & SUGRUE
4 MR. SUGRUE: Thank you, David.
5 It is good to be here with such a large number
6 of former colleagues and current friends, I hope, both on
7 the panel and in the audience.
8 Michele is always a tough act to follow. I
9 think we are, as speakers, going in descending order in
10 terms of preparation and organization. She is very well
11 prepared and organized as always, if you know Michele.
12 I have an outline that I hope has a beginning, a
13 middle and an end. I do not know if they all relate to
14 one another, but we will find out.
15 Salemme is writing his remarks right now, so
16 they will not be stale when he gets up here. And Roz,
17 being from the government, can say whatever the hell she
18 likes and everyone will pay attention to it. At least
19 that was my attitude when I was in government.
20 So I thought I would address one aspect of the
21 regulatory policy affecting the deployment of wireless
22 local loop that I think sometimes gets ignored. And that
23 is that wireless local loop is part of -- it is one kind
24 of facilities-based competition in the local exchange
25 area. And the rules that the Commission has adopted, the
1 1996 Act, and the rules the Commission -- and the
2 States -- have adopted to implement that Act will have an
3 impact -- a direct impact on the incentives to use this
4 particular technology.
5 And while there are a lot of issues that are
6 specialized to wireless local loop, having to do with
7 spectrum allocations and tower siting and things like that
8 that are very important, there is also a set of generic
9 issues that directly affect the business and economic
10 incentives to invest in any local infrastructure on a
11 competitive basis.
12 And I would like to look at some of that, and to
13 provide just a brief background, a brief but somewhat,
14 admittedly biased and tendentious background, of the 1996
15 Act, in order to sort of set up these points. And the
16 basic facts, I am sure, are familiar to everyone here,
17 although I will add, as I said, some editorial comments as
18 I go along to provoke either discussion, thought, or one
19 or the other.
20 Of course, the Act opened all telecom markets to
21 competition. And I would not quarrel with hardly anything
22 David said in his opening remarks, although I would not
23 discount that particular declaration that Congress made.
24 There is one part of the Act that is relatively clear:
25 All markets, all barriers are down, and everyone should be
1 able to offer any other service.
2 Would that it had spoken with similar clarity in
3 some other provisions as well.
4 It preempted State and local barriers to entry,
5 although there are a number of particular State and local
6 regulations, obviously, that affect particularly wireless
7 local loop deployment -- public rights-of-way, the taxing
8 issues, the franchise fees, and so forth. But I am going
9 to focus on another part of what the Act did, which was to
10 establish three key obligations of incumbent local
11 exchange carriers and three key rights of new entrants.
12 And that is interconnection, access to unbundled
13 elements and resale. And these are the three main
14 vehicles for entering the local market for any local
15 competitor, whether it be wireless, wired or otherwise.
16 One way to look at these three provisions is
17 that they provide a hierarchy of entry vehicles, in terms
18 of the extent to which a new competitor has or is planning
19 to deploy its own facilities as part of its competitive
20 strategy. Interconnection is obviously a key.
21 You can have two competitors with their own
22 facilities, serving their own customers, but unless the
23 two can interexchange traffick, can interconnect, so that
24 a subscriber to one can call a subscriber on the other,
25 the things the economists call network externalities take
1 over and the local exchange goes back to being probably a
2 natural monopoly. But, again, interconnection is
3 something that two facilities-based networks do vis-a-vis
4 the other.
5 At the other end of the spectrum there is a
6 provision in the Act so that new entrants can come into
7 the market without any facilities. And that is called
8 resale. They have a right to purchase any service the
9 incumbent provides on a retail basis, to get it at a
10 wholesale discount, and can offer it to subscribers of
11 their own on a resale basis.
12 In between, the Act creates the right to acquire
13 parts of the incumbent's network on an unbundled basis.
14 And that is the UNE's, the unbundled network elements,
15 that have been the subject of great debate. The policy
16 ground there, as I see it -- and, again, this is my
17 interpretation of it -- is building a full, complete
18 network is very expensive, very time consuming. It
19 involves putting in place switches, loops, transport
20 networks, signalling and so forth.
21 And in order to facilitate competition and to
22 make it happen more rapidly, the law provides that the new
23 entrants can purchase parts of the incumbent's network,
24 match them up with its own facilities to provide an entire
25 network, and then invoke its rights to interconnection
1 through the interconnection provisions of the Act and the
2 regulations. So I would interpret these three provisions,
3 again, as providing this hierarchy between full facilities
4 competitor, partial facilities and no facilities.
5 Well, a number of actions the FCC and the States
6 have taken in interpreting the Act and these provisions
7 affect the ability and the incentives of competitors to
8 invest in facilities that would provide a basis to provide
9 what I would consider the most robust and most complete
10 form of competition in the local exchange. The first has
11 to do with the pricing of unbundled network elements. And
12 I am going to focus on -- for this purpose -- namely,
13 unbundled network elements.
14 The statute says the price must be based on
15 cost. The FCC applied a pricing methodology known as
16 TELRIC, total element long-run incremental cost. It is a
17 forward-looking cost methodology based on the most
18 efficient technology available. I do not intend to get
19 into all the details of TELRIC. I am not probably
20 competent to do so, or to debate them -- although I have
21 heard some people debate them who did not seem to be
22 competent to do so either.
24 MR. SUGRUE: But suffice it to say it produces
25 low prices for unbundled network elements. I think there
1 is general agreement on that. Obviously, "low" is a
2 relative term. But I think the new entrants would largely
3 say those are -- or many new entrants would say -- they
4 are reasonably low, appropriately low.
5 The incumbent providers say they are
6 unreasonably -- indeed, unconscionably or even
7 confiscatorially low. And the FCC is fairly explicit
8 about saying, yes, we want the rates for unbundled network
9 elements to be low, to facilitate rapid entry by new
10 competitors and entry through unbundled elements, which
11 they view as a stronger form of competition than resale
13 A second set of issues has to do with the
14 availability of unbundled network elements. Two key
15 issues there. One could argue -- indeed, it was argued --
16 that unbundled network elements should be limited to those
17 parts of the local network that exhibit natural monopoly
18 characteristics, or are essential facilities in the
19 language of antitrust, and not that just a whole network
20 should be available. You should look element by element
21 and say, can this be effectively supplied on an efficient
22 basis by competitive supply?
23 That was not done, basically. The Commission
24 interpreted the law pretty much as saying that all parts
25 of the network, at least at the present time, have to be
1 unbundled and provided on an unbundled basis.
2 The second issue is who can take unbundled
3 network elements. Should it be limited to those
4 competitors who have some of their own facilities, and so
5 they need to lease loops here or a switch here or a
6 transport there or a signalling there to sort of flesh out
7 their network? Or can a new entrant with no facilities at
8 all lease a complete set of unbundled elements and put
9 them together? This is the network platform concept. And
10 the Commission, as I think most of you know, said no, we
11 are not going to limit the availability of unbundled
12 network elements to competitors who have some of their own
14 Now, fair enough, we should note that not all
15 these rules survive legal challenge. The Eighth Circuit
16 reversed the FCC on jurisdictional grounds on the pricing
17 rules. But I think the FCC's pricing rules have been very
18 influential. Most States have adopted some version of
19 TELRIC for their own pricing. And I think the FCC could
20 properly claim credit for a lot of that. And in large
21 part, the FCC's approach, at least, is in place, despite
22 the Eighth Circuit's reversal.
23 As to the availability of unbundled network
24 elements, those rules, the court said, was within the
25 FCC's jurisdiction. It upheld the FCC on the point that
1 they are not limited to essential facilities, basically.
2 The FCC defined what elements have to be available. And
3 it upheld the Commission that a competitor does not have
4 to have its own facilities.
5 It did say, though, that the competitor has to
6 combine those elements itself; that the incumbent carrier
7 does not have to do that job for it.
8 And I should also note that many of these issues
9 are subject to petitions for review in the Supreme Court,
10 and so we may not have heard the last of this on the court
12 Well, what sort of impact does this have on the
13 deployment of wireless local loop or on competing
14 infrastructure generally?
15 And my concern is that unbundled network
16 elements really serve a dual role. They are a way that a
17 new competitor can enter the market efficiently and
18 rapidly. They provide more opportunities. They are
19 cheaper than resale, at least for many purposes. For
20 example, the most lucrative business customers. They
21 provide more revenue opportunities because you get the
22 exchange access revenues. But, at the same time, they are
23 a competing source of supply if you are an entrant that
24 has its own facilities or wants to offer competing
1 So unbundled local loops provided by the
2 incumbent are a competing source of supply if you want to
3 be in the wireless local loop business. So there is a
4 tradeoff here. Rules and regulations that facilitate
5 achievement of the first goal make unbundled elements
6 freely available, as cheap as possible and so forth
7 arguably could undermine the second goal. That is, you
8 are making one competitive source of supply too cheap, too
9 available and too easy a means to enter the market.
10 And just to cite a couple of examples of
11 pricing -- and again, without getting into whether prices
12 are right, just as general matter, the cheaper the prices
13 of unbundled network elements local loops, the lower the
14 incentives, or the harder the business case to make to
15 deploy competing infrastructure to offer local loops,
16 whether they be wireless or otherwise. And local loop
17 infrastructure is not inexpensive and it is not free of
19 And one risk now if you are going to make such
20 an investment, you have to take into account not only the
21 market risk or what the incumbent will do to its prices,
22 but that the regulator will come in and say, those prices
23 for those unbundled loops have to be lower and lower.
24 The availability of unbundled network elements
25 is a similar thing. If you are limited to essential
1 facilities or you had to have some of your own facilities
2 to acquire unbundled network elements, there would be
3 stronger incentives, I suggest, for competing
5 Other countries -- Canada, for example, does
6 limit unbundled network elements to essential facilities.
7 Switches are not unbundled. Local loops are unbundled in
8 urban areas only for 5 years. It is too early to tell.
9 These rules in Canada were just adopted a few months ago.
10 But it will be interesting to see how infrastructure
11 investment in local exchange develops in Canada.
12 The U.K. even took a more extreme position.
13 There is no unbundling at all.
14 Now, people argue with some degree of validity,
15 the U.K. had a special case. The telephone plant was
16 being deployed with cable plant at the same time.
17 Nevertheless, those decisions were made in both Canada and
18 the U.K. not as a favor to the incumbent carrier, but
19 really as to provide an incentive for the competing
20 providers to invest in their own infrastructure, and
21 arguably to reward the competing providers for taking
22 those risks when they make those investments.
23 So I would just suggest one thing to my friends
24 at the FCC or input to the States or in public policy is
25 that, as we proceed along, the fight has often been about
1 the new entrants on one side and there is the incumbent
2 local exchange industry on the other. Among the new
3 entrants, not all interests are the same. I would suggest
4 to you that among those who want to compete by way of
5 facilities, some of their entrants are really
6 diametrically opposed with those who want rapid entry just
7 by whatever means possible.
8 The fault line on this seems to have been
9 dividing -- that is, IXE's on one side and some
10 competitive LEC's on the other -- that may not always be
11 the case. MFS and Brooks are being acquired by WorldCom,
12 which will be WorldCom and MCI. So major IXE's and major
13 CLEC's are getting together.
14 The incentives may change somewhat; the
15 arguments may change somewhat. But I have not seen
16 myself, in the regulatory discussions, enough of a sense
17 that by promoting one form of competition you really may
18 be cutting the legs out from under this other form of
19 competition. And while you may say the Act -- and the
20 Commission does argue -- the Act is neutral as to
21 facilities or resale competition, I do not think it is
22 beyond the ken to make a judgment on that.
23 I would make a judgment on that and say I would
24 err on the side of trying to promote incentives for
25 investment in competing facilities. It is a more robust
1 form of competition. It is a more real form of
2 competition. It provides a path out of regulation, so we
3 can have a deregulated, fully competitive market. A
4 resale market does not do that.
5 So I would hope as we move along -- there are
6 some little drops along the way that indicate the
7 Commission may be thinking along these lines -- Joe
8 Farrell's, who is the Chief Economist, valedictory address
9 last May, I thought was very thoughtful on some of these
10 points, and laid out some of the balance. The Commission
11 has said it is going to look at the impact on incentives
12 for innovation on the ILEC side. I would suggest they add
13 to that the incentives for innovation on the new entrant
14 side, for adding facilities and for trying to compete on
15 the basis of that investment.
16 So wireless local loop will look a lot better if
17 we create a stronger and more efficient set of incentives
18 for making those investments.
19 Thank you.
21 MR. AYLWARD: Gerry Salemme is the next speaker.
23 He is now Vice President for External Affairs and Industry
24 Relations for the NextLink Company, which is owned by a
25 variety of people, including Craig McCaw. He has joined a
1 team of his former friends and colleagues at AT&T in that
2 activity, and he is directing issues and advocacy for
4 Before joining NextLink, as I mentioned, he was
5 AT&T's leading Federal regulatory person here in
6 Washington. And prior to that, worked for Ed Markey as
7 his senior telecom policy analyst in the U.S. House of
8 Representatives Telecom Subcommittee. He received both
9 his B.A. and M.A. in economics from Boston College.
10 He told me the other day that he is really not
11 doing wireless stuff. He is doing wired competition. And
12 knowing a little bit about Craig McCaw and Gerry, I think
13 if anybody in the room takes that seriously, you should
14 not be doing this kind of business.
16 GERRY SALEMME, VICE PRESIDENT,
17 EXTERNAL AFFAIRS AND INDUSTRY RELATIONS
19 MR. SALEMME: Thank you, David. I appreciate
20 the invitation to be here today, Joe, Kathy, the rest of
21 the group at NTIA.
22 And I think, as David just said, we are a wired
23 CLEC provider. We are basically someone who tries to
24 string fiber and connect switches and directly goes to
25 buildings and compete against those incumbent ILEC's that
1 Tom Sugrue talked about.
2 And I want to start by thanking Tom for lowering
3 expectations. As you will see, I am totally disorganized,
4 and I will try to get through this and have a coherent
5 point at the end.
6 But we are really a wired company. But, in my
7 past, I have worked for McCaw Cellular and Craig McCaw.
8 During that time, we actually identified and purchased the
9 initial rights and helped create that AT&T wireless fixed
10 solution that I think they discuss on the first panel.
11 That was actually something that Craig McCaw and his team
12 had found prior to the merge with AT&T. So that is
13 something that we know a little bit about. I think it
14 demonstrates the bullishness that Craig and the former
15 McCaw team have on fixed wireless solutions.
16 And even though we are currently, at NextLink, a
17 provider of services using wired fiber facilities, we
18 really are technology agnostics, as Craig says. And we
19 are out every day, looking at every potential spectrum
20 play, every wireless play, so that we can build out our
21 portfolio, so that we can have every possible arrow in
22 quiver to take on those entrenched incumbents in the local
23 exchange market. And I think those are the type of things
24 that we will continue to do.
25 Beyond that, we also have an extended McCaw
1 family of his investments. He has two other complete
2 wireless plays. One is Nextel, which I think people have
3 heard a little bit about. It is an enhanced SMRS
4 provider, providing digital cellular service.
5 Currently, right now, it has one unique feature
6 that distinguishes it and differentiates it in the market
7 from the traditional digital cellular providers, which are
8 pretty pervasive right now -- up to five in a market. It
9 has a push to talk feature, which allows for a lower-cost
10 conferencing feature, so that you can have people on a
11 conference in a smaller network, and you can conference
12 them. And it is something that has been used a lot by
14 We are kind of excited about the fact that
15 technology, if it is good, will find the right market.
16 And sometimes you do not even know where it is coming
17 from. One of the things that we have realized with this
18 push to talk that Nextel has is that -- in Beverly Hills,
19 90210, those new little clique of rich kids want to take
20 Nextel phones instead of cellular phones to school.
21 Because if you are in the right clique, you all get
22 conferenced immediately, and you can have a broadcast
23 message to where the party is, without having to dial
24 everyone's number.
25 And it is just one of those features that we see
1 as being unique. And it is one of the reasons we are
2 bullish on wireless. No matter what happens, you can use
3 wireless technology to really find a personal solution, to
4 find a unique solution. And ultimately we do believe that
5 fixed wireless is going to be a solution that is going to
6 be very strong in the local market.
7 And I see David Turetsky and Teligent, WinStar,
8 we really do look at a lot of those wireless technologies
9 to make it and to help drive competition. But the real
10 question is, how do you get to the next level? How do you
11 take the competition beyond where NextLink is right now,
12 which is to a small business market, beyond what is
13 probably the target market of our other CLEC competitors
14 right now?
15 How do we move down to that residential
16 provider? Which is the real promise of that Telecom Act
17 that Tom just articulated, and Michele and David earlier.
18 We need to be able to say, how do we get the real spirit
19 of competition in the local market to be pervasive beyond
20 the single target, down to that mass residential market?
21 And that is where it gets more difficult. That
22 is where it gets a lot harder. In McCaw's companies, we
23 think that the Teledesic fixed satellite service in the KA
24 band, which we are licensed in the FCC and also recently
25 had our spectrum at the World Radio Conference just a
1 couple of weeks ago approved for 500 megahertz of clear
2 spectrum, we think that is a digital IP platform service
3 that can provide broad band service right to the home.
4 It is a $9 billion investment, 288-satellite
5 constellation. But what that constellation, we believe
6 that we really can provide a broad pipe to the home. And
7 to do that on an international basis, to be able to
8 amortize those costs over that full world market gives
9 you, I think, an opportunity to be able to say $9 billion
10 is not a lot. Think of how much money it costs right now
11 to rewire all of the United States and you will see that
12 that can really be a very cost-effective way to enter this
13 market and to provide service, especially in areas where
14 you are never going to get a wire.
15 And if you look at some of the places throughout
16 the world, we believe it is a market that is going to be
17 ripe for entry using a fixed-satellite wireless solution.
18 So that is one of the things that we are continuing to
19 work on and promote.
20 But the real question is, can you get local
21 competition at all? I mean I always want to step back and
22 say, is fixed wireless going to work? Sure, it is going
23 to work. The technology, the economics dictate that it
24 can work. The question is not: Is fixed wireless going
25 to be a technology that is going to succeed in the local
1 market? The question is: Is local competition going to
2 be viable for residents in the United States? Is the
3 potential of the Telecom Act going to be realized?
4 And I just want to step back, before we get into
5 the specifics of what you need to do to help the fix
6 wireless local loop strategies become successful, to
7 really look at where are we in local entry right now. And
8 I just want to go through a couple of quick things,
9 because it gets back to the discussion of the 1996 Telecom
10 Act, the FCC implementation of Section 251, the States,
11 the courts, and where we sit right now, coming up on our
12 second anniversary of the Act.
13 And let me start by saying I cannot be more
14 bullish about NextLink and the potential for us to
15 continue to succeed and add on customers, on net, doing
16 everything we can on our own, occasionally buying an
17 unbundled loop to provide service to a business customer.
18 It is a market that you can do. The pricing is right.
19 The technology is right off the shelf, and it is a matter
20 of logistics and putting it together and just spending
21 enough capital to make it happen.
22 The real question is: How do you go downstream?
24 How do you go down market to meet those residential
1 I think others have said in the past -- and I
2 think Tom just said this -- resale to me is a real
3 questionable strategy. I have not seen the economics work
4 out, at a 20 percent discount, to make resale work. So if
5 resale does not work, that leaves you the two other
6 solutions -- the unbundled elements and facilities-based
8 Unbundled elements can work in some situations.
9 I would agree with Tom to a certain extent that, though
10 they should be permitted and I think the Act allows you to
11 bundle them completely, unbundled elements work better in
12 piece parts. And that if you can get two or three of
13 those unbundled elements, put them together, you are in
14 much better shape than trying to put all of them together
15 and buy that glue from the ILEC's and make that happen.
16 But the real issue here is, how do you provide
17 competition, then, to the local incumbent ILEC if you have
18 basically roadblocks that continue to be in your way? And
19 most of the roadblocks that we have to navigate are really
20 regulatory roadblocks, not economic and not technology.
21 So, 251. Tom starts by saying there is
22 absolutely no longer a barrier to entry. That States can
23 no longer prevent you from entering the market. Well,
24 technically, that is correct. I am sure that, if you go
25 back to the Act, that is the first line of the Act. The
1 reality, though, is that you still have to go get
3 You are still often opposed, and there are
4 intervenors by the ILEC when you do get certified in a
5 local market. You are still fighting every day to get a
6 municipality to let you have a right-of-way, to take them
7 to court not to pay a franchise fee of 5 or 7 percent when
8 you are competing against an incumbent local exchange
9 company that already has its facilities in place and they
10 are not paying and costs for it.
11 So one of the things you really have to look at,
12 and I think we really have to review again, is how we can
13 ensure that we have a streamlined process to be able to
14 enter the market and to make it work quickly. One of the
15 points Michele made earlier -- number portability -- it is
16 essential for a local exchange competitor to have number
17 portability. A person wants to keep their own number.
18 That is even more essential in a local market.
19 If you want to have a wireless competitor or a
20 wired competitor, they have to be able to, transparently
21 to the customer, get that number changed. We have no idea
22 how that is going to be implemented by the ILEC's right
23 now. I think the recent filings by some of those
24 incumbent LEC's to delay the implementation of number
25 portability, some of the concerns about what a dip is
1 going to cost you as you get into the number portability
2 database, really just threatens the ability to get some
3 local competition underway.
4 We have reciprocal compensation issues that we
5 can go through. Right-of-way issues, I would love to
6 spend a few minutes on this. We are trying to build, in
7 San Francisco -- and you know, the Dunbarton Bridge is
8 just one of those bridges you have to get across -- it
9 would be very nice to be able to get across. It seems
10 that one of the incumbent LEC's -- a big one -- has an
11 agreement with the State of California -- I would say it
12 is an illegal agreement with the State of California --
13 saying that they have the only right to build on that.
14 And that if I want to get facilities, I have to lease from
15 that incumbent LEC.
16 Well, I can take them court and I can be
17 successful, because clearly the Act says that you cannot
18 have State rules and regulations that prohibit
19 competition. I do not have enough time to do that and be
20 in the market in 6 months. Those are the things that
21 happened on a wired and wireless basis. Because I still
22 need facilities across that bridge, even if I build out a
23 wireless network.
24 So there are those issues. There are the
25 right-of-way issues that are just inherent parts of the
1 251 and the Act. And in the overlay of 271, the threat
2 that if an ILEC is into the market before it really has
3 any viable competition, we are going to be even less
4 successful in being able to get entry in those markets and
5 get interconnection agreements that work.
6 But let me just get quickly -- because I already
7 gave up all my time and I have bored people to death --
8 what we can do in specific issues with regard to the
9 wireless world. And for me, there is an issue like access
10 to a NID. And I do not know if people have paid any
11 attention to this and I do not know what the panel did
12 this morning. But I do know that AT&T Wireless has a nice
13 little antenna you put on the side of your house, you
14 string a wire down, similar to what we do with our
15 Teledesic. If you can come into the NID and not have to
16 drill another hole to pull that wire up, you are in much
17 better shape.
18 That is one of the issues that the FCC has half
19 got right but left half to the States. Again, it is one
20 of the things that if you want to make it easy, if you
21 want to encourage a wireless provider to easily hook into
22 the customer premise equipment, the inside wiring that is
23 already in the house, access to that NID is very
24 important. As you get to the unbundled elements, what are
25 you buying? What is an unbundled element?
1 I remember once advocating on behalf of AT&T, we
2 wanted as many unbundled elements broken up as often as
3 possible. Now, I try to get a loop and someone tells me
4 that a line card is separate from the loop. So now there
5 are two unbundled elements, you cannot combine them
6 without paying twice as much. Now, I do not know what
7 position I want any more.
8 But, I will tell you, we have got to make it
9 easy so that you can get some access to some of those
10 elements -- I think Tom would agree -- that allow a
11 wireless competitor to get in and hook up into the
13 The other thing I want to talk about is CMRS
14 flexibility. The PCS providers, I think, with the help of
15 the FCC in October of 1996, were allowed to use PCS fixed
16 as a primary and as an NPRM, saying, how do they get
17 regulated -- are they CMRS or are they a local exchange
19 I think it is very important to have them
20 continue to be classified as CMRS until they reach the
21 definition that is in Section 332 of the Act, which says
22 they are a substantial replacement for the local exchange
23 company throughout the State. Those words were kind of
24 carefully -- I do not know -- who knows whether words are
25 ever carefully chosen in legislation.
1 They seemed important at the time. And they are
2 words. They must have some meaning. So let's make sure
3 that we use that, so we do not have the added pressure of
4 having the CMRS services classified with State pricing
5 regulation and entry barriers they potentially get there.
6 The last thing is just USF. And I am not going
7 to hit the part David -- he already beat that. I am going
8 to hit eligibility. And you have got to have a
9 technology-neutral solution. Everyone says that, but then
10 the States get involved and technology-neutral solutions
11 have got to deal with pricing. Because somebody may have
12 a different price if you buy a wireless service, they have
13 to -- you know, the minutes of use in wireless may be a
14 little different, and they have to also deal with
15 geographic coverage.
16 Some States are asking you to cover such a broad
17 area that a good, economically viable wireless solution
18 that would be a lot more cost effective than any wired
19 technology that could possibly be thought of cannot meet
20 the coverage mechanisms. And then they become uneconomic.
22 So those are a couple of things.
23 And I know I am all over. But this one story.
24 I have a friend in Montana who built his house in the
25 middle of nowhere. You know, he has got money and he
1 wants to build a nice house in the middle of nowhere.
2 That is great. So he is trying to get electricity and
3 phone service. And the electricity charged him $40,000 to
4 carry a line out there. His phone service was $100.
5 Now, I am very proud of USWest for being able to
6 get a wire out there for $100. I am not very proud that I
7 am paying for his wire in my bill in BellAtlantic.
8 Something has got to be done to deal with that issue. And
9 that is a broader issue. But it is something that does
10 actually, I believe, pervert the pricing system in
11 telecommunications, which makes it hard for anybody to
12 make an investment in a wired or a wireless environment.
14 MR. AYLWARD: Gerry is going to learn that he
15 advances himself faster by not attacking rich people who
16 own ranches in Montana.
18 MR. AYLWARD: They will cut you in on the
19 buffalo herds. It is kind of a neat deal.
20 Rosalind Allen is our last speaker. She is
21 Deputy Chief of the Wireless Telecom Bureau at the FCC.
22 She runs the Commercial Wireless/Private Wireless and
23 Enforcement Divisions and generally runs the place.
24 Previously, she served as Chief of the Wireless
25 Bureau's Commercial Wireless Division, where she was
1 responsible for taking an awful lot of money out of the
2 pockets of a lot of entrepreneurs in America. And I hope
3 you get it all, Rosalind.
5 MR. AYLWARD: Prior to joining the FCC in 1987,
6 she practiced telecom and intellectual property law at
7 Reid, Smith, Shaw & McCloy. And she holds degrees from
8 Georgetown Law Center and Vassar College.
10 ROSALIND K. ALLEN, DEPUTY CHIEF,
11 WIRELESS TELECOMMUNICATIONS BUREAU,
12 FEDERAL COMMUNICATIONS COMMISSION
13 MS. ALLEN: Thanks, David.
14 And thanks to my friends and colleagues at NTIA
15 for inviting me to participate.
16 And let me just be clear, I really do not run
17 the place. Dan runs the place and Bill runs the place.
18 But, anyway.
19 I kind of appreciate coming after Gerry,
20 because, in a way, he has kind stolen some of the thoughts
21 of I had. And I will say, first of all, that these
22 thoughts are my thoughts. They are not the thoughts of
23 anyone at the Agency or anything like that. Because some
24 of them may be in the form of a little bit of a bomb
25 thrown out here sort of thing.
1 But, in a way, I have always looked at wireless
2 local loop as kind of being a fallacy. It is an interim
3 step towards something else. Are we ever really going to
4 have a totally wireless local loop? No, we are not. I
5 mean, ultimately, people have made investments in a lot of
6 things that are out there. Technology is changing. So 20
7 years from now or 30 years from now, we are going to have
8 something that mingles a lot of different elements.
9 And wireless local loop, though, is a very good
10 paradigm for what you want. Because when you think of it,
11 you think of competition that comes quickly at a
12 relatively low cost and with ubiquitous coverage. So I
13 think it is just a useful thought, but I think it is good
14 to keep the long-term picture in mind.
15 And in that sense, I think that one way we like
16 to look at the wireless industry in general is that we are
17 at the tail end of the 271 process in the wireless world.
18 In other words, let's look at the whole telecom process --
19 meaning the whole telecom industry -- as a whole, and the
20 RBOC's are over here and they are trying to get into
21 different areas and bundle different things, the wireless
22 folks are over here. They already can get into all these
23 different things. And the question is, how does that
24 happen and how do they bundle these things together? And
25 what kinds of ground rules are consumers going to see
2 So as we plan out a regulatory scheme for the
3 wireless world, I think we should try to keep in mind what
4 we want the wired side to ultimately look like. Because I
5 think that is kind of where we are going.
6 When I talked to David yesterday about what
7 should I talk about, I kind of threw out some softball
8 topics, like maybe I can talk about calling party pays or
9 something like that. And David was very tough with me.
10 And he said, no, you have got to talk about the
11 jurisdictional issues. And that was exactly what I did
12 not want to talk about. Because as most of you know,
13 these are real hot potatoes at the moment. And we have
14 got them before us in a number of different contexts.
15 But I think what I will try to do is identify
16 where those issues are going to come up over the next few
17 months. And just give you some thoughts about identifying
18 the kinds of things that are going to need to be decided.
19 Because these are kind of difficult decisions. And they
20 come up in a variety of contexts. And all of them do have
21 implications for how do you fit the wireless regulatory
22 scheme into the larger competitive picture of the telecom
23 industry, or what do you want the whole telecom world to
24 look like 20 years from now -- or maybe 10 years from now.
1 Let's hope it is sooner than 20 years from now.
2 One area is obviously interconnection. Very
3 much on the minds of everyone. Because if you do not get
4 interconnection right, you can never have local
5 competition. And that is just a basic fact.
6 The Eighth Circuit has kind of left our
7 blueprint for local competition in a bit of limbo at this
8 point. And there are some jurisdictional issues to be
9 pursued here. I think I can safely say, because I have
10 heard a variety of representatives from other
11 commissioners' offices and the chairman's office say this,
12 that we will be looking at this -- the Commission will be
13 looking at this issue next year in some context --
14 probably the early part of next year.
15 We are going to be very interested in developing
16 a full record on these issues. And I think you will find
17 that this will kind of be a kind of proceeding that will
18 seek a lot of specific arguments from folks on the
19 jurisdictional theories and also on some of the practical
20 implications of their jurisdictional theories.
21 And let me just leave some food for thought here
22 on the one hand. And in this sense, I will describe the
23 extremes. We have got a wide spectrum of views here, but
24 they tend to settle on some extremes. And one extreme
25 would be to say, well, you know, 332 really sets up CMRS
1 as something completely different. And the Eighth Circuit
2 has sort of confirmed the view that this is completely
4 And here, again, nothing is always that easy.
5 And we are asking people to talk about these
6 jurisdictional theories, to think about them, to think of
7 the practical implications of a totally Federal scheme.
8 Would this promote the speed of competition? Would it
9 impede it because we may have thousands of ratemaking
10 cases that need to be disposed of?
11 So I think we are looking for people to think
12 this through. On the other extreme, I think perhaps some
13 people -- USTA and some other folks -- may also think
14 wireless has got to be treated exactly like the wire line
15 side for all purposes. And maybe that is going too far
16 the other way. Because there are some unique technical
17 characteristics and perhaps some unique competitive
18 characteristics here.
19 This is just defining either end of the spectrum
20 of the kinds of issues we are going to look at. And I
21 think that all of you should start giving a lot of thought
22 to that right now, because we will be really interested in
23 hearing what you have to say.
24 And this is just kind of a broad comment on the
25 332 scheme and the whole "Is wireless special or not?"
1 But, you know, of course wireless is special, but I think
2 one thing that is kind of interesting to think about --
3 and this is kind of in a way the seminal question of
4 anything further we do in interconnection -- is let's say
5 that the Eighth Circuit decision holds or let's say the
6 Supreme Court turns down cert or whatever, is it incumbent
7 upon us to try to push local competition with whatever
8 tools we have got?
9 I mean if we are left with 332, should we push
10 that to the max to get local competition? The other side
11 of the question is, let's assume something different
12 happens. Or let's assume nothing different happens. I
13 mean let's assume that the Supreme Court takes this,
14 something gets changed, so that we kind of need to regroup
15 ourselves. Or let's say, again, the Supreme Court does
16 not take this, the decision does not change at all.
17 Does it really make sense to have -- and here I
18 am maybe taking issue with 332 itself to some extent --
19 but does it really make sense to continue to have a
20 statutory scheme that takes one subset of the wireless
21 world, the cellular PCS folks and the mobile folks, and
22 treat them differently than, let's say, the 18 gigahertz
23 folks or the 28 gigahertz folks or the 39 gigahertz folks,
24 particularly when some of those other folks may actually
25 have a lot more potential to be a long-term competitor
1 because of the capacity they have?
2 I do not know. I mean ideally I think it would
3 be nice if we could have a statute that made distinctions
4 on the basis of your competitive position and not on the
5 basis of the technology you happen to use. But that is
6 not what the statute says right now. And this is kind of
7 the dilemma that I think the Commission is going to be
8 presenting themselves as they look at this whole thing.
9 We want competition, but what is the value to
10 treating one class of competitors different than someone
11 else who may be similarly situated?
12 So that is enough on interconnection. Let me
13 move on, because I have a few other things that I want to
14 talk about where 332 will come up.
15 I do not know if any of you have been following
16 this, but we recently got a petition for declaratory
17 ruling from SBC that deals with some practices that are
18 very prevalent around the United States right now. And
19 these are really class action suits that are being brought
20 the country. And they look at the billing practices at
21 various carriers.
22 The arguments that are being made are that,
23 really, the little FTC laws of the various States are
24 calling certain billing practices of various wireless
25 carriers fraudulent. They are challenging things like
1 roaming charges, their hand-off at borders of different
2 carriers, things of that sort. They are also challenging
3 rounding up to the next money -- things of that sort.
4 And I think it is a very interesting question
5 for the Commission, because one of the great benefits that
6 consumers have right now in the wireless world, where they
7 have five competitors in a market, is that they can choose
8 and evaluate and compare the different plans. And they
9 are really living in the post-271 world here, because they
10 can pick that bundle of services that makes most sense for
11 them at that price.
12 On the other hand, if you kind of get the courts
13 involved in this, you could have a situation where they
14 are ratemaking basically, and they are dictating exactly
15 how these services ought to be provided. So I think this
16 is a balance of the legitimate consumer protection powers
17 of States that want to ensure that consumers know what
18 they are getting and they are truthful and full
19 disclosures against getting too involved in exactly what
20 kinds of rates and what kinds of services folks are
22 Let me just very quickly touch on a final thing.
24 Universal service has come up, and I know it came up this
25 morning. I will just bring it up again.
1 I think that perhaps this is an unpopular view
2 among this audience, but I think that with being a
3 competitor comes certain responsibilities, as well. And I
4 think there are ways to balance those goals.
5 I read with a lot of interest the other day the
6 Washington Public Utility Commission decision, where there
7 is really a move to make it much easier for wireless
8 carriers to become eligible carriers and get subsidies as
9 a result of that. And I think that is a really good move.
11 And, frankly, every time -- and it happens very
12 frequently -- I have a lot of wireless folks come in with
13 these great ideas for doing things that will serve kind of
14 underserved or high-cost areas. I kind of tell them,
15 look, you know, try to be an eligible carrier. This is
16 great that you are doing this.
17 I recently talked to a company that, as a result
18 of a partitioning and disaggregation deal, is going to
19 provide an extremely high capacity mobile service
20 throughout the Southeastern United States. That is great.
22 They seem to have a lot of the earmarkings of being able
23 to be an eligible carrier. And I think that it would be
24 great if the Federal Government can work, together with
25 the States, on promoting those types of initiatives.
1 Because absolutely we want things to be
2 technology neutral. And absolutely we want people to be
3 compensated for their investment. But, at the same time,
4 we want people to understand their responsibilities. If
5 they want to be a competitor to the local exchange
6 network, that does involve some responsibilities.
7 And that is it. I won't take up your time.
9 MR. GATTUSO: I would propose we go for about 15
10 minutes, followed by a 10-minute break.
11 MR. AYLWARD: Since we used up most of the time
12 yakking at you, why don't we just not yak anymore and turn
13 it over to any of you that might have any questions. And
14 if you do not, we will make up some to fill the time.
15 QUESTION: Ms. Farquhar pointed out some of the
16 need for a comprehensive view of the obstacles to adoption
17 of wireless local loop widespread in the United States,
18 and saying that the docket-type approach, the incremental
19 approach, might not be the best way to do this. Do you
20 see any impetus over at the Wireless Bureau to take this
21 kind of overarching view of sweeping away the regulatory
23 MS. ALLEN: Well, here I will take off my policy
24 hat a moment and I will put on my practical hat. Yes, in
25 the sense of people are doing a lot of talking and a lot
1 of thinking within the Commission about a comprehensive
2 game plan, and one that will get us to the place we want
3 to be. But the best way to do that really is through
4 breaking out the issues and making sure that people
5 understand the game plan by showing the relationship
6 between those issues.
7 But I think, in terms of some kind of a monster
8 docket that tries to do this in one fell swoop, is
9 probably not going to be the most productive way to do it.
11 So, yes, I think Michele, as a former Chief of the Bureau,
12 knows. I think that is what she had in mind, and that is
13 really what we want to do. We are doing a lot of thinking
14 about that right now.
15 And we hope, through the items that come out
16 over the next year from the Wireless Bureau, that that
17 will start to unfold -- how the various pieces of the
18 puzzle start to fit together.
19 MS. FARQUHAR: Let me just add a side comment on
20 that. I think it will take the Wireless Bureau and the
21 Common Carrier Bureau working closely together and
22 integrating the pieces more closely than they have in the
23 past. I think they both Bureaus were so inundated by the
24 work from the Telecom Act, and that they tried as best
25 they could, and did, to work together. But I think a
1 closer level of coordination and input on both sides will
3 And it is ironic that I think the spectrum
4 policy is really fueled, some of the movement toward
5 wireless loop, more than local competition policy has.
6 And I think that has got to change.
7 Tom identified in particular some real barriers
8 there. And so did some of the earlier panelists this
9 morning. Talking about the exact cost of going out and
10 buying a local loop on the wire line side.
11 MS. ALLEN: I agree with Michele there. And I
12 just wanted to say, in terms of what are things, like
13 nowadays, you know, most of the crush, apart from the 271
14 applications that the Common Carrier Bureau has is kind of
15 over at this point. And we have had an opportunity, over
16 the past few months, to cultivate a very close working
17 relationship with them.
18 And I should also add that Bill Kennard has made
19 very clear that it is a key priority of him to have the
20 Bureaus working in a coordinated fashion with each other
21 and to share their ideas about the same issues, so that we
22 can come to the best of all possible policies when we
23 finally make a decision.
24 So that is very much what is going on. The
25 Common Carrier Bureau has almost an entirely brand-new
1 front office of folks, with a lot of fresh ideas and a lot
2 of preexisting relationships with folks in the Wireless
3 Bureau front office. So we really have done very well
4 recently in developing that kind of relationship.
5 MR. AYLWARD: I will pose one to you, Roz. I am
6 sorry, did you have a question? Go ahead.
7 QUESTION: Yes, I have got a question and I want
8 to follow it up with a similar comment.
9 We have heard two highly skilled advocates who I
10 think represent different sides of the picture, but it was
11 never made clear who exactly they are advocating for. But
12 one can assume that they advocated for different sides of
13 the picture. One side said we should encourage wireless
14 local loop and do all that we can to advocate. Another
15 one said that we should not focus so much on wireless
16 local loop, because these unbundled network elements, with
17 this ridiculously low TELRIC pricing -- to quote -- that
18 is not my opinion, that was what was implied -- that
19 should take care of all of this business.
20 I would like to put out to the table for
21 comment: What would be the thoughts about let's not
22 encourage either technology, let's just get the roadblocks
23 out of the way, let the market take it, and see which one
24 is the better technology, or is there a third technology,
25 or fourth or fifth or sixth, that would provide what the
1 markets wants from a cost and technology and efficacy
3 MR. AYLWARD: What do you mean by your question?
5 Is your question that there should be no barriers, and
6 anybody who can go set up a telephone system is allowed to
7 do so? Or, as Roz said, I do not think there is anybody
8 in this room who believes if you do not have
9 interconnection and you do not have it right it will not
11 QUESTION: No, I am not saying anyone can set it
12 up. I am saying different people on the panel stated
13 different barriers to entry and gave different solutions,
14 in terms of encourage this technology, encourage that
16 Now, how about --
17 MS. ALLEN: I do not know, maybe I was not
18 paying as close attention as I should. But I do not
19 really see that anything that any of these three folks
20 have said is inconsistent with each other. I think that
21 you are not going to have -- you know, yes, pushing
22 wireless is a very good solution to getting competition in
23 there quickly. But can you serve residential customers
24 effectively without UNE's? Probably not.
25 It depends on what you want to do. And I think
1 that the kind of paradigm you express is very much what
2 the Commission has been doing over the past few years. We
3 are getting away from the central manager view of this is
4 what you ought to provide and you cannot provide this
5 here, you have got to do that.
6 So we want to make people kind of as able to
7 respond to market forces in their business plans as
8 possible. And we do not want to get in the way.
9 So I kind of think what all three of these guys
10 are saying was completely consistent with each other.
11 MR. SUGRUE: If I could just try to harmonize.
12 One way you would let the marketplace work, arguably,
13 would be if you think these TELRIC prices are -- and I do
14 not use the word "ridiculous" -- but are low, or too low,
15 in a competitive market, if someone is charging prices
16 that are higher than it would cost you to provide a
17 competing service, either because they are earning
18 monopoly profits or they are inefficient and you can do it
19 better -- you have got a better technology or otherwise --
20 the way the market takes care of that is you can enter and
21 undercut their price. And that is how prices are driven
22 toward TELRIC or any other economist's theoretical model.
23 One of my concerns is just -- you know, this
24 panel is very experienced. We all go back a long ways.
25 We have all probably dealt with cost studies. It almost
1 drove me out of this business for a while, because it is
2 so daunting and artificial. And we have spent a lot of
3 time in the regulation of telecom moving away from
4 detailed cost studies. This is what incentive regulation
5 and price caps and social contracts and competition is all
7 And we have sort of now elevated cost studies.
8 Cost studies have come back with a vengeance. I mean they
9 are driving everything now. And I would rather see -- I
10 would really like to see facilities-based competition. I
11 am not speaking on behalf of my clients. They probably
12 would not. This is just me speaking. But what I see is
13 somehow the Commission wanting to sort of jump-start that
14 competitive process. It is actually sort of pulling the
15 wires off the sparkplugs for what would be long-run
16 competition. And I think we are sacrificing long-term
17 gain for short-term benefit.
18 MR. AYLWARD: But it is an absolute fact that
19 you will never have competition unless you have resale.
20 If you look at the history -- and history is a good thing
21 to look at -- we never would have had long distance
22 competition if Bill McGowan had to get in the business to
23 build an entire national network everywhere before he
24 could really start serving. You have got to have resale.
25 And I agree -- I mean I think, to the extent I
1 represent any dog in this hunt, it is a facilities-based
2 carrier. And I agree with you -- or it is a bunch of
3 carriers who have not decided to get in the market -- but
4 you are going to have to have facilities and you are going
5 to have build up over time.
6 The cost of capital to get into this market,
7 almost everybody that is coming in as a junk bond
8 company -- the new ones. They are paying 500 basis points
9 more than the box. So you have got to be able to build it
10 up over time or nobody is ever going to invest.
11 MR. SUGRUE: And if I could just reply. But we
12 never did require AT&T to unbundle its network. There was
13 resale and there was interconnection to the local
15 MR. AYLWARD: We tried.
16 MR. SUGRUE: I know. The Commission twice
17 rejected that, once in the mid-eighties and once in
18 Computer 3. Because it said no, what we want to do is
19 encourage MCI and Sprint and so forth to build their own
20 facilities. This is the part of the network we think can
21 be competitive. So I agree with you in part. But I think
22 we have taken it one step a little too far. That is just
23 my view.
24 QUESTION: And I completely agree with what has
25 just been said. You cannot have competition unless you
1 have both UNE's and competing facilities that can do it.
2 And I think that if we take the significant barriers out
3 of the way and see, down the road, 5 years down the road,
4 or 2 years down the road, does the comparative cost of
5 wireless local loop -- how does that compare with the
6 comparative cost of putting in physical loop versus the
7 UNE's, buying an unbundled loop.
8 And I would venture to guess that shortly we
9 will see these, quote, quote, ridiculously low unbundled
10 loop prices come down even lower as competing technologies
11 shoot the market price below. And we will see whether the
12 response is we cannot provide at this price or whether the
13 prices will drop to whatever the market is. I hope you
14 are right.
15 MR. SALEMME: Can I just make a point, just
16 because it is my only opportunity to do this so I am going
17 to play off what you said.
18 I think one of the things you said is let's let
19 the marketplace decide which technology, whether it is
20 wireless or wired or UNE's or resale, just let it decide.
21 I mean that is not going to happen, because we do not have
22 a free market anywhere. We have an incumbent local
23 exchange company that is monopolist, that controls
24 facilities. You have to make interconnection agreements
25 with them, without any leverage in what you get.
1 I can tell you, in some of the interconnection
2 agreements that I have signed, that there are parts of
3 them that I get something that says, I have the right to
4 get reciprocal compensation on IP. I was forced to sign
5 something, because I had to get in the service, that said
6 if that law changes any time, I will pay back money, I
7 will pay rates that are outrageous. There are just
8 different things that you are forced to agree to.
9 So we do not have a free market, so you cannot
10 do it. So public policy has to take a position here. And
11 on spectrum auctions, for instance, it is great to say --
12 and we love auctions and we think that you should have as
13 much flexibility in picking any services you want -- but
14 spectrum auctions were to assign spectrum, not to allocate
15 spectrum to services.
16 So right now, when you have a spectrum auction
17 and you just say you can provide any service with that
18 spectrum, people are all going to take mobility, because
19 that is what the banks want. That is what is going to get
20 you the cheapest financing. That is the sure bet. People
21 are not encouraged to say, let's take more of a winger on
22 this thing economically and do local service.
23 You almost have to get back to having public
24 policy dictate what the real allocation of that spectrum
25 is for, and then only use the auctions for the assignment.
1 And I think the role for public policy here is to help
2 make the market competitive.
3 MR. AYLWARD: There is another paradigm here,
4 too. Which is the FCC did a lot of really good things
5 with wireless. From the beginning, it did things quite
6 differently than wire line. And it brought in
7 competition. It did not regulate rates. The Congress and
8 the FCC decided not to regulate rates. And we are going
9 in now to digital, all by themselves. Nobody ordered them
10 to put in digital.
11 So there is an interesting model there of what
12 happens when government does not regulate within market.
13 MR. SALEMME: And that is exactly what I am
14 saying. With five of six wireless carriers in a market,
15 we have seen some tremendous competition that because of
16 entrenched positions we are not seeing yet on the local
17 telephone side. Although there was actually a proposal
18 mentioned by someone -- and I do not remember who -- about
19 something that is on the table now to put regulation back
20 into the rate structure of wireless mobile, with the
21 calling party paying.
22 And my first thought is, as a cellular customer,
23 oh, that is a great thing; I no longer have to pay for
24 incoming calls. But then I start thinking, well, as a
25 wire line customer or as the person making the call,
1 especially with LNP, how am I going to know whether the
2 call is to wireless or wire line, especially as we are
3 talking now all day about the merging of these
5 And as an amateur economist, I look at it and
6 go, wait a second, the prices are already dropping down,
7 and the way these five or six carriers in a market are
8 going to differentiate themselves, someone is going to
9 come up with something that is going to make each -- you
10 know, whether I want to pay more for outgoing or incoming
11 or whatever, the market -- let's see how the market
12 settles before we start thinking about putting another
13 piece of regulation back in.
14 MR. AYLWARD: All right, we are at the end of
15 the panel. We have resolved all the regulatory issues, so
16 you all enjoy whatever you do next.
18 MR. AYLWARD: I am sorry, was there one more
20 QUESTION: I want to bring up the issue of roof
21 rights and inside wiring with regard to those wireless
22 CLEC's, like WinStar. I have heard from trade reports
23 that many of them are having difficulties with these roof
24 rights, because the prices are getting astronomical, and
25 with inside wiring also constituting a major barrier to
1 entry into the local loop.
2 I just want your views on what Federal
3 policymakers can do to ease those barriers to entry.
4 Specifically, Gerry, since you work for NextLink and you
5 are a CLEC yourself, but a wire line CLEC, but any views
6 on the wireless side, and Tom as well.
7 MR. SALEMME: I think David mentioned in the
8 beginning that you have Congress that has stepped up and
9 said that if you put a dish on the roof, you have to be
10 allowed to do that. But because it is an antenna
11 providing telephony and cable, Congress and the Federal
12 rules have not preempted that.
13 I want to make it as easy for David Turetsky and
14 Teligent to get on those roofs as possible so we can
15 compete. We have a similar problem getting inside wiring.
17 I mean there are times when we need to be inside a
18 building and it is hard to get to the closet that has
19 those facilities to hook up to those customers.
20 So those are the type of barriers that are
21 latent, you know, remnants of the monopoly that are not
22 even controlled necessarily by the ILEC but are just out
23 there, which impede the market from acting as a truly
24 competitive market. So you just cannot depend on the
25 market alone without some type of intervention by public
1 policy and governments.
2 I would say that you have got to get a new line
3 of demarcation.
4 MR. AYLWARD: But it is not clear to me at all
5 that the law does not cover it right now. I mean if the
6 FCC wants to interpret the law right now, why is it any
7 different to get telephone and video and data as opposed
8 to I Love Lucy? There is a law that says you get access
9 to this stuff.
10 MR. SALEMME: At a reasonable price.
11 And there is a court case, Brooks Fiber brought
12 a case on a wired in I think San Diego. And that is still
13 being litigated now -- to say that we do have the right to
14 access. And there are a lot of State laws. I think there
15 are 28 States that actually have laws in place. But,
16 again, going through the process of making it happen is
17 just a delay in competition.
18 MR. AYLWARD: It will not be an issue 5 years
19 from now. Five years from now, 10 years from now, there
20 is no commercial tenant that would allow its landlord to
21 play the kind of games that some of them are now. But
22 right now -- and I am not picking on landlords -- right
23 now, some are saying, gee, I just found out I can charge
24 the wireless guy 1,500 to 2,500 bucks a month to put a
25 tower on the roof. Here comes WinStar and they want to
1 put a little thing on the roof; well, that is a tower and
2 I will charge them 1,500 to 2,500 bucks.
3 There is nothing wrong about that. The ILEC's
4 have nothing to do with it. But, after a while, customers
5 will demand access and the problem will take care of
6 itself. But it is an up-front investment issue today.
7 MS. FARQUHAR: And part of my message was why
8 wait 5 years for that to happen?
9 MR. AYLWARD: I agree.
10 MS. FARQUHAR: We should remove the roadblocks,
11 and identify them and make it a priority right now. Not
12 so that wireless can be advantaged in any way, but so that
13 it will not be disadvantaged to the extent it is right
15 MR. SUGRUE: And I will just add, speaking a
16 little bit on behalf of my clients, that I am sure while
17 many of the competitors think this is a grand conspiracy
18 between the landlords and the incumbent providers, it is
19 generally not, from the things I have looked at.
20 MR. AYLWARD: I agree.
21 MR. SUGRUE: It is the landlord sees it as a
22 profit potential. And it is rent that the landlord wants
23 to extract in almost the classic sense of the term.
24 MR. AYLWARD: Since there are no real estate
25 interests, we are all safe saying whatever we want to do.
2 MR. AYLWARD: Thank you all very much.
3 MR. GATTUSO: Thanks to our panelists and our
4 moderator. Why don't we get together again in exactly 10
5 minutes, which would be just before 3:30.
7 MR. GATTUSO: I would actually like to be the
8 warm-up act here and review where we are at this point in
9 the program.
10 We're at three-quarters of the way through the
11 day and it actually probably feels like we're near the end
12 and in fact in some ways we are. In this very short day
13 you may not have realized how much you've learned about
14 wireless loop, but if you recall we started the day
15 talking about the various technologies and in fact there's
16 not a single technology but several technologies,
17 different places in the spectrum, different ways of
18 looking at wireless local loop, understanding what we're
19 dealing with here.
20 We then had a session on universal service,
21 which is really both a way to look at what the potential
22 is for whatever wireless local loop is to serve lots of
23 customers. That would be the residential customers, rural
24 areas, urban areas that have decaying copper, as we like
25 to say, and really that very much involves the Government
1 and Government policies for universal service.
2 Speaking of Government, that's where we picked
3 up after lunch, talking about all sorts of regulatory
4 issues, and now we come to what I call the pay-off panel,
5 the one that really gets into, I hope, the questions of
6 whether this is going to be a competitive alternative, if
7 it's going to be a competitive service, if it's going to
8 bring competition to telephony markets, and if it's going
9 to be economical, and that could be in general, or that
10 could be whether it's residential.
11 I'd also point out that as we've gone through
12 the day we've had one Government speaker on every panel.
13 Earlier we started out having a moderator, Ken Allen, from
14 NTIA's own laboratories in Colorado. The last two
15 sessions had Jeanine Poltronieri and Ros Allen from the
16 FCC's Wireless Bureau, and I was kind of in a fix for a
17 while on this panel. I had no Government speaker.
18 I didn't really know what to do, so I called up
19 Dale Hatfield, and I'm so thankful -- Dale, thank you so
20 much. He said, all right.
21 15 years of consulting -- I'll go back to the
22 FCC just for you.
23 So thank you, Dale, and that does segue really
24 nicely into Dale's biography. Dale recently rejoined the
25 FCC and Government service after 15 years.
1 During the time he was away he did have -- he
2 had founded and operated a telecommunications consulting
3 firm based on Boulder, Colorado. He advised on a wide
4 range of technology, economic, and policy and regulatory
6 He also served on the board of directors of a
7 public station in Denver, KBDI, and before 1982 Dale was
8 Acting Assistant Secretary of Commerce for Communications
9 and Information. In other words, he was head of NTIA for
10 a while. He's an alumnus of our organization, and also
11 was chief of the Office of Plans and Policy at the FCC.
12 He also held positions at the Office of
13 Telecommunications Policy in the Executive Office of the
14 President. He's taught courses in telecommunications
15 technology, and has taught a course in telecommunications
16 policy in the interdisciplinary telecommunications program
17 at the University of Colorado at Boulder.
18 He was a founding director of the
19 telecommunications program at the University College,
20 University of Denver. He holds a BSEE from Case Institute
21 of Technology and an MS in industrial management from
22 Purdue University.
23 Dale, I introduced you to introduce the panel.
24 Thank you.
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