as prepared for delivery to the
Global Forum 2002
October 17, 2002
Thank you very much, Jacqueline, for that kind introduction and for the leadership role of the European Institute in promoting consistent dialogue on critical transAtlantic issues.
I am very pleased to have the opportunity to be part of this year's Global Forum. It's a wonderful opportunity to renew old acquaintances, establish new relationships and to learn from collective experiences. The Global Forum has convened dialogues on critical issues facing our industry for over ten years now, and I am pleased to be part of this year's assembly of movers and shakers in the industry.
This year's focus on "The Promise of Broadband Services" couldn't be more timely.
The dot com boom and bust has taken its toll on our country's economy and the telecom sector. The resulting bankruptcies, lay-offs and capital cuts have had a ripple effect touching almost every aspect of American commerce. Yet, the telecom industry with its broadband future is a solid business with an enormous potential for growth -- growth based upon sound economic realities rather than hype, excess and cooked books. The challenge for those of us in government is to provide a policy framework in which our country's telecom industry can prosper, innovate and advance to the benefit of us all.
PRESIDENT BUSH'S CALL FOR AN AGGRESSIVE EXPANSION OF BROADBAND SERVICES
President Bush has called for an aggressive expansion of broadband, recognizing the promise of the high-speed future. Broadband has the potential to provide a lightning fast means of data transmission that could revolutionize the way we all send and receive information. In addition to enhancing business efficiencies and broadening commercial opportunities, broadband holds the promise of expanding educational opportunities, improving health care, increasing governments' responsiveness to its citizens, and generally enhancing our global competitiveness. Thousands of new jobs could result from greater broadband deployment, both directly through network construction, and indirectly through industries related to advanced networks and services. Not surprisingly, then, broadband is an important potential source of growth and investment for our country and for others around the world.
But right now, only a relatively small segment of the American population is enjoying the benefits of broadband. A recent report co-authored by NTIA and the Economic and Statistics Administration, titled "A Nation Online: How Americans Are Expanding Their Use of the Internet," found that 54% of Americans are currently using the Internet. However, of those users, only roughly 20% use broadband (that's only about 10% of the overall population). While the FCC's most recent broadband data show that the market for broadband service is continuing to grow, we still have a long way to go before realizing broadband's full potential.
The Administration has been taking a number of steps to create incentives for investment, to stimulate demand and usage, and to remove unnecessary government impediments to competition and deployment. In order to create incentives to deployment, the Administration has:
- extended the Internet tax moratorium;
- successfully urged Congress to modify the tax depreciation schedules to allow companies to depreciate the capital costs associated with broadband roll-out over a shorter time period; and
- extended the research and experimentation tax credit (and we continue to urge Congress to make it permanent).
The Administration has also taken steps to help promote demand for these exciting new services by:
- making e-government a priority for all agencies, leveraging $52 billion in federal IT procurement to make government run more efficiently;
- exploring ways to expand telework opportunities;
- holding workshops on key demand issues, such as digital rights management and the benefits of broadband for small business; and
- making broadband demand a priority of the President's Committee of Advisors on Science & Technology (or PCAST).
PCAST came out with a draft report two weeks ago, recommending different ways in which the Administration should promote broadband deployment. The report stressed that government should "remove barriers" to broadband deployment, such as by urging state and local officials to eliminate overly burdensome rights of way requirements.
This is one area where NTIA has played a significant role. And it is an area where, uniquely, all sectors of the broadband industry -- Bell Operating Companies, CLECs, cable companies, overbuilders, and wireless providers -- actually share the same point-of-view!
These providers are concerned that restrictions by certain municipalities, states and federal government landowners on accessing public rights-of-way and tower sites might be inhibiting or at least delaying broadband network construction.
To ensure that rights-of-way regulation is appropriate and not an impediment to broadband deployment, NTIA has undertaken a series of actions at the local, state, and federal levels. We have met with representatives of localities and their associations to identify means for improving and simplifying current processes where needed, while ensuring sufficient flexibility for municipalities to best serve their citizens. We have participated in rights-of-way discussions with state officials in the National Association of Regulatory Utility Commissioners, particularly its Rights-of-Way Study Committee, which has worked diligently to identify best practices and recommendations to streamline the current process.
Because the federal government manages important rights-of-way over millions of acres of federal land, the Administration has also formed a Federal Rights-of-Way Working Group to develop "best practices" for federal rights-of-way management, particularly as it impacts broadband deployment. Our tasks include streamlining and standardizing current federal rights-of-way application processes where possible, ensuring that federal fee structures are just and reasonable, and developing appropriate policies to make certain that telecommunications providers fulfill their rights-of-way obligations. We want to see the federal government lead by example, and create a model of cooperation that others can emulate.
Meanwhile, the FCC is moving ahead with proposals for broadband regulatory reform. President Bush has expressed confidence in the Commission, its leadership and its expertise to fashion the optimum framework for our broadband future. As the Commission moves forward with its efforts, NTIA will be assessing when and where its views could contribute to a better outcome for competition, deregulation and the American consumer.
EMERGING POTENTIAL FOR WIRELESS BROADBAND
While, up to this point, broadband has been most often thought of as a wired technology, wireless broadband seems destined to be a part of the broadband future. Broadband services are beginning to be delivered via terrestrial wireless and satellite systems. Ad hoc services using 802.11 or "WiFi" technology are also proliferating.
All of these innovative new services and technologies require spectrum for delivery. A pressing challenge for those of us who manage spectrum, also identified in the PCAST report, is ensuring that adequate frequencies are available to fuel future wireless growth (including broadband services), as well as to provide the increasingly indispensable infrastructure for our military, law enforcement, and public safety needs.
We at NTIA have been trying to look at long-term policy and process reforms to better accommodate the dynamic nature of wireless technologies and wireless needs. Toward that end, in early April I hosted a two-day Spectrum Summit, from which several basic spectrum management goals emerged. First, the U.S. Government agencies involved in spectrum management -- NTIA, FCC and the State Department -- must work collaboratively as "one spectrum team" to serve our nation's collective interest. FCC Chairman Powell and I have taken the first steps to improve our interagency communications and to take a more forward-looking approach to accommodate advances in technology within our domestic spectrum.
Secondly, we should develop policies that encourage spectrum efficiency. NTIA has long advocated and required the use of spectrum efficient technologies by Federal agencies. For example, NTIA has developed, and the Federal agencies are now implementing, a transition to narrowband technology to relieve the congestion in the land mobile radio bands used by the Government. NTIA and the Federal public safety agencies have also adopted technical standards for receivers to minimize interference and increase overall spectrum efficiency.
Third, we must establish forward-looking policies that enable technological advances and eliminate legacy regulations that stand in the way of innovation. One such promising reform in this area is the FCC's proceeding on creating secondary markets that would permit parties to "lease" their spectrum to others, to put otherwise unused spectrum to its most efficient use. Another is the accommodation of frequency flexible wireless systems, such as those under the 802.11 standard, on an unlicensed basis.
And fourth, we should ensure that we have policies that assure the deployment of robust wireless networks that are prepared for the worst of crises and able to deliver the very best of services to the American people. The events of September 11, 2001, demonstrated how critically important interoperability is for the success of our nation's first-responders. NTIA is attempting to assist in achieving this goal through research at our Boulder, Colorado lab, and through education and outreach.
Another critical component of wireless broadband is third generation, or 3G, wireless telecommunications services -- envisioned as a potential wireless on-ramp and off-ramp for the Internet. We recently had hard-fought success in making spectrum available for this innovative service. NTIA, in coordination with the FCC, the Department of Defense, and other federal agencies, announced a plan to make 90 MHz of radio spectrum available in the future to meet the needs of 3G. The cooperative efforts of all the interested stakeholders resulted in a plan, known as the "3G Viability Assessment," that will accommodate critically important spectrum requirements for National Security at the same time as it frees-up valuable spectrum needed to bring innovative new services to American consumers.
We will soon be turning to look at new wireless IP-based architectures that are emerging at the unlicensed and user-driven level. Traveling below the regulatory radar screen, WiFi has grown from a West Coast coffee shop phenomenon into an emerging mainstream means of broadband access to the Internet and high-speed wireless connectivity within campus environments, offices and homes. Next spring, I hope to schedule a Wireless Broadband Summit to explore the issues associated with these promising new sources of competition and capabilities.
In conclusion, let me reiterate the Bush Administration's approach to telecom generally and broadband specifically: first, teamwork is needed at all levels of government; and second, unnecessary barriers to the deployment of new technologies must be removed. As the PCAST report noted, the design of broadband systems and decisions on deployment must be made by industry and consumers. If we remove barriers to these market forces, we can spur the growth, not only of broadband, but also of jobs, investment, economic growth, and social welfare worldwide.