Assistant Secretary Nancy J. Victory
As prepared for delivery to the
NARUC Telecommunications Committee
Summer Meetings, Portland, Oregon
Monday, July 29, 2002
Thank you, Bob and Joan, for inviting me to participate in your Telecom Committee's summer program. It's a wonderful opportunity to renew old acquaintances, establish new relationships and to learn from your collective experiences. Joan, thank you also for the opportunity to enjoy the sights, sounds and scenery of your great state. This is my first visit to Oregon, but it won't be my last!!
I am particularly pleased to be here today with my longtime friend and colleague, Commissioner Martin. Kevin has been an consistent source of support, insight and collegiality in building a strong and effective relationship between the FCC and NTIA on issues of common concern. I also am pleased to be here with Commissioner Rowe. Next month, I will have the pleasure of being in Bob's home state of Montana as part of Senator Burns' field hearings on spectrum management. I hope to see you then.
CORPORATE RESPONSIBILITY AND ACCOUNTABILITY:
THE FOUNDATIONS FOR AMERICA'S BROADBAND FUTURE
Acts by an irresponsible few have shaken the foundations of the responsible many in the telecom industry. President Bush has spoken clearly and unequivocally that corporate responsibility and corporate accountability are the keystones for a sound American economy. Secretary Evans has strongly reinforced those views within the Department of Commerce. In my capacity as advisor to the President and the Secretary, let me leave no doubt that corporate responsibility is my top priority. Without investor confidence and public trust, the dreams of a bright telecom future and a broadband world will prove unobtainable and illusory.
In rebuilding confidence and trust, we need a coordinated approach in which federal and state decision-makers work together to address our common concerns and to achieve our common goals. As a starting point, I would encourage NARUC and you, its members, to help inform, guide and harmonize actions with those of us at the federal level. To assist such exchanges of information and views, I have designated Jack Zinman, my senior advisor, as the Telecom Corporate Responsibility contact person. He will be seeking out your thoughts and ideas in the days ahead.
PRESIDENT BUSH'S CALL FOR
AN AGGRESSIVE EXPANSION OF BROADBAND SERVICES
All of us have glimpsed 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% have broadband access (that's only about 10% of the overall population). While the FCC's most recent broadband data, released last week, 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.
As President Bush emphasized just last month, "[t]his country must be aggressive about the expansion of broadband." And indeed, 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;
· making broadband demand a priority of the President's Committee of Advisors on Science & Technology;
· holding workshops on key demand issues, such as digital rights management and the benefits of broadband for small business; and
· exploring ways to expand telework opportunities.
The Administration has also been working to identify and eliminate unnecessary government impediments to broadband competition and deployment. As you know, one issue where NTIA is focusing its attention is on public rights-of-way management. This issue stands alone in one regard: 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 and federal government landowners on accessing public rights-of-way and tower sites might be inhibiting or at least delaying broadband network construction. While the industry admits that the problems seem to lie with only a small number of jurisdictions, due to the nature of networks, a few bad actors can have a disproportionately adverse effect on the roll-out of national, statewide or regional advanced services networks. Conversely, public rights-of-way managers have also identified problems they maintain are created by some service providers.
To ensure that rights-of-way regulation is appropriate and not an impediment to broadband deployment, NTIA has undertaken a series of actions. We conducted a broadband forum last fall and launched a broadband deployment proceeding at the end of last year, both of which raised rights-of-way as an issue. We have participated in NARUC's rights-of-way discussions, particularly its Rights-of-Way Study Committee, which has worked diligently under the leadership of Commissioners Nelson, Deason, Kjellander, Cartagena, and Burke to identify best practices and recommendations to streamline the current process. I commend the Committee for its efforts and its thoughtful report.
NTIA has also met with representatives of the cities and their associations, such as the National Association of Telecommunications Officers and the National League of Cities, to identify means for improving and simplifying current processes where needed, while ensuring sufficient flexibility for municipalities to best serve their citizens. Later this year, we intend to take an in-depth look at some communities to learn up-close how they handle rights-of-way management at the state and local level. And we plan to issue a rights-of-way report highlighting what we learn.
While state and local rights-of-way policies will be crucial to widespread broadband deployment, we're also acutely aware that the federal government manages important rights-of-way over millions of acres of federal land. To make sure we're doing our part to eliminate any unnecessary impediments in this area, the Administration has formed a Federal Rights-of-Way Working Group, which includes representatives from all of the federal agencies with major rights-of-way management responsibilities. Our mission is 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!
The Working Group met for the first time earlier this month. I must say I was pleasantly surprised by the enthusiasm with which the various agency participants approached the effort. This is a group excited to compare notes on rights-of-way management experiences and eager to streamline and simplify the process. The first step is to compare and contrast the different agencies' information collection requirements, processes, and fee schedules and then to assess successes and failures. At the suggestion of the agencies, we will be inviting industry representatives, both large and small, to meet with the Working Group and share their points of view as to where things work well and where more attention needs to be focused. Ultimately, we expect the Working Group to be at the forefront of crafting federal rights-of-way policies that will help bring the promise of broadband to all Americans.
Meanwhile, the FCC is moving ahead with proposals for broadband regulatory reform, which we just heard Commissioner Martin address. 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 ahead 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 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 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 with joint participation by Chairman Powell, Commissioner Martin, and Commissioner Abernathy all playing important roles. Our objective was to hear from the experts as to the successes and failures of current spectrum management policies, as well as how to further improve the process.
From the Summit, I believe 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. 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 adopted technical standards for receivers to minimize interference and increase overall spectrum efficiency. We are also exploring innovative new technologies, including those that will permit radios to select their operating frequencies, decrease power, and adjust coverage, based on sensing the operating environment and dynamically selecting unused channels.
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 communications capabilities are for our nation's first-responders. Interoperability among these agencies is essential to their ultimate success. NTIA is attempting to assist in achieving this goal through research at our Boulder, Colorado lab, and through education and outreach. Last month, NTIA and the Public Safety Wireless Network Program co-hosted a summit in Washington to focus on current and emerging solutions for achieving interoperability.
While we wrestle with building a sound spectrum management framework for the future, the demands of the present increase unabated. The search for new homes for new services - whether to accommodate new allocations, relocation of incumbents, or advanced sharing techniques - involves inherently nettlesome issues. Fortunately, we have a good news story to tell on what had until recently been one of the thornier spectrum allocation issues - 3G.
3G is envisioned as a potential wireless on ramp and off ramp for the Internet -- a wireless complement to the broadband network. Last week, 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 for advanced, third generation or "3G," wireless telecommunications services. After extensive public outreach and work with industry and affected agencies on technical analyses of the various band options, NTIA and the federal agencies identified 45 MHz from the 1710-1755 MHz band, while the FCC identified 45 MHz from the 2110-2170 MHz band. 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 it frees-up valuable spectrum needed to bring innovative new services to American consumers. We will be working with the FCC as it moves forward on the recommendation in the viability assessment.
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. This fall, I hope to schedule a Wireless Broadband Summit to explore issues and spectrum needs for these promising new sources of competition and capabilities.
In conclusion, let me reiterate the three themes embedded in the Bush Administration approach to telecom generally and broadband specifically: First, corporate responsibility will be demanded and ensured. Second, federal and state teamwork is needed. And, third, unnecessary barriers or inefficiencies to deployment to all Americans must be removed.
Thank you for this opportunity to share with you some of the Bush Administration's thoughts on these important issues.