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Remarks of Assistant Secretary Strickling at the Practising Law Institute's 29th Annual Telecommunications Policy & Regulation Conference

December 08, 2011

Remarks by Lawrence E. Strickling

Assistant Secretary of Commerce for Communications and Information

PLI/FCBA Telecommunications Policy & Regulation Institute

Washington, DC

December 8, 2011

As prepared for delivery

I am pleased to return to this conference as a speaker. I realize I am the last speaker before the Chairman’s dinner, so I am under a lot of pressure to be brief, and maybe even interesting.  But I do want to take this opportunity to review our accomplishments of the last year and preview our priorities for the coming year. And what a year it has been. We all remember the prediction of the talk show evangelist Harold Camping that the world was going to end this year.  The conventional wisdom is that Camping was wrong. But there are many, including probably some of you, who predicted that the world would end before the FCC would ever reform universal service so perhaps Camping actually was onto something. 

Of course, I am not here to talk about the FCC but rather my agency, the National Telecommunications and Information Administration, and while none of our work will either require or lead to the end of the world, we are working on a host of compelling issues that will help shape the telecommunications and Internet landscape for years to come.
Our work focuses on three principal areas—spectrum, Internet policy and broadband.  I’ll talk about each in turn.

Spectrum    

First: spectrum.

One of NTIA’s core missions is to manage the use of spectrum by Federal agencies. Our work in this area is more important now than ever before as spectrum is fast becoming a pillar of America's digital infrastructure. Spectrum has enabled the mobile broadband revolution, changing the way that Americans communicate and do business.

But while demand for America's spectrum resources is increasing at rapid rates—the amount of information flowing over some wireless networks is growing at over 250 percent per year—there has not been a corresponding increase in supply. If we do not meet America’s growing spectrum needs, we not only threaten our economic growth but also our role as the world leader in wireless innovation.

Last year, President Obama committed to make available 500 megahertz of Federal and nonfederal spectrum for wireless broadband over the next 10 years. The initiative – to nearly double the amount of commercial spectrum over the next decade – will spur investment, economic growth, and job creation while supporting the growing demand by consumers and businesses for wireless broadband services. 

So last fall, NTIA released a ten-year plan and timetable that identified 2,200 megahertz of spectrum for evaluation, the process for evaluating these candidate bands, and the steps necessary to make the selected spectrum available for wireless broadband services.

We also released the results of a fast-track review to identify some spectrum reallocation opportunities that exist in the nearer term. We recommended a total of 115 megahertz of spectrum be made available for wireless broadband use within five years.

This year we focused our efforts on evaluating the 1755-1850 megahertz band for potential repurposing to commercial use. This 95 megahertz of spectrum is used currently by federal agencies for a host of important services, including some very complex Department of Defense systems, but is of great interest to industry given its location in the spectrum table.

NTIA completed its technical review of the band at the beginning of October, the target date we set forth in our timetable. We are now collaborating with OMB and the federal agencies to finalize our recommendation, which we expect to release in the coming weeks.  This has been a complex inquiry because we are dealing with large systems, such as air combat training systems, that will be very expensive to relocate and will take years to relocate.

We are approaching the point where the days of clearing spectrum bands of all government uses and then making them available for the exclusive use of commercial service providers are pretty much over. Today, federal agencies have exclusive control over only 18 percent of the spectrum between 300 and 3000 megahertz.  Over the years, the critical missions performed by federal agencies have required systems of greater and greater complexity, which makes their relocation quite costly and lengthy.  We are headed for an environment where commercial wireless broadband will need to co-exist in the same bands with federal operations. This new environment raises technical issues for sure. But it also raises business issues as to how spectrum users, whether companies or agencies, will be able to organize themselves to take advantage of new technologies that support novel spectrum sharing arrangements.  So this is an important issue for research and analysis over the coming years, and we must solve it if we are going to be able to meet the demand for spectrum for commercial wireless broadband services.

In 2012, spectrum issues also will be prominent in the international arena. The 193 member countries of the International Telecommunication Union will meet next month at the World Radiocommunication Conference and make decisions about spectrum that affect how unmanned aircraft will be controlled and whether imagery that supports disaster relief operations has sufficient resolution.  They will also determine when and how future mobile broadband needs will be met. We have joined with other nations in the Americas in a common proposal to address this issue as a matter of urgency, and to make specific spectrum allocations in 2015.  We are working closely with the FCC and federal agencies to ensure we succeed internationally in making mobile allocations while taking into account the needs of incumbent users.

On the legislative front, I am pleased to see that Congress continues to work on comprehensive spectrum legislation. This legislation is crucial to advancing the President’s goals of making additional spectrum available for commercial wireless use, achieving the long-overdue goal of a nationwide, interoperable public safety broadband network, and reducing the deficit.  Senators Rockefeller and Hutchison have shown great leadership in crafting a bipartisan bill that tracks closely with the spectrum provisions in the American Jobs Act, and Representatives Waxman and Eshoo have proposed similar legislation in the House.  Each of these measures, in varying degrees of detail, contains critical elements to achieving the Administration’s goals in this area, which include:

  • Giving the FCC authority to conduct voluntary incentive auctions;
  • Maximizing the efficiency and effectiveness of federal spectrum use through improvements to relocation and spectrum sharing processes;
  • Reallocating the D Block for public safety use;
  • Building out a nationwide, interoperable public safety broadband network through a strong, nationally-focused governance body;
  • Ensuring new opportunities for innovation through expanded unlicensed spectrum;
  • Supporting critical research and development; and
  • Reducing the deficit. 

Each of these goals is achievable, if done the right way, and we continue to work with the House and Senate so that the President can sign legislation in the near term.  But I do need to add some specific comments about the draft bill approved by a subcommittee of the House Energy and Commerce Committee last week. 

Having observed close-up how large telecommunications networks are built, I have serious concerns about the House bill.  Specifically related to public safety, the bill’s governance model appears to turn a blind eye to the past years of failure in achieving nationwide public safety communications interoperability through a patchwork of state networks. If past is prologue, such an approach is doomed to fail, potentially wasting billions in taxpayer dollars along the way. Additionally, the bill ignores the critical role that both unlicensed spectrum and communications research and development have played and can continue to play in driving innovation and job growth.  Imagine where we would be today if we did not have the benefit of all the Wi-Fi systems that were made possible by the use of unlicensed spectrum.  I greatly appreciate the work that Chairmen Upton and Walden and their staff have undertaken, and I am hopeful that these issues can be resolved satisfactorily going forward. NTIA is committed to working with all parties to make that happen.

Internet Policy  

Next, let me turn to Internet policy.  This year has been a very active one for NTIA in the area of Internet governance as well as in privacy policy.  In fact, the Senate Commerce Committee had a hearing this morning on the new top level domain program that Internet Corporation for Assigned Names and Numbers (ICANN) will be starting in January.  Our work at NTIA in this area has focused on how we can preserve and expand the marvelous economic and job creation engine that the Internet has become.  As we address these issues, we are guided by two principles.

First is trust. It is imperative for the sustainability and continued growth of the Internet that we preserve the trust of all actors on the Internet. For example, if users do not trust that their personal information is safe on the Internet, they may not use it to its full potential. If content providers do not trust that their content will be protected, they may be reluctant to put it online.

Second, as we find ways to address Internet policy challenges, we want to preserve the flexibility companies need to innovate. Our view at NTIA is that multistakeholder processes are best suited for striking this balance.  By engaging all interested parties, multistakeholder processes encourage broader and more creative problem solving, which is essential when markets and technology are changing as rapidly as they are. They promote speedier, more flexible decision making than is common under traditional, top-down regulatory models which can too easily fall prey to rigid procedures, bureaucracy, and stalemate.

The United States strongly supports the use of a multistakeholder process as the preferred means of addressing Internet policy issues. We have been active in promoting the multistakeholder model in the international arena through our work at ICANN and the Organization for Economic Cooperation and Development (OECD).

But there is a challenge emerging to this model in parts of the world.  Some nations appear to prefer an Internet managed and controlled by nation-states.  In December 2012, the U.S. will participate in the ITU’s World Conference on International Telecommunications (WCIT).  This treaty negotiation will conduct a review of the International Telecommunication Regulations (ITRs), the general principles which relate to traditional international voice telecommunication services.  We expect that some states will attempt to rewrite the regulation in a manner that would exclude the contributions of multi-stakeholder organizations and instead provide for heavy-handed governmental control of the Internet, including provisions for cybersecurity and granular operational and technical requirements for private industry. We do not support any of these elements.  It is critical that we work with the private sector on outreach to countries to promote the multi-stakeholder model as a credible alternative.  Our work must begin right away.

In pushing back on these initiatives of other countries to regulate the Internet through a treaty, we must be vigilant to protect the multistakeholder process in our country. For example, at ICANN, a multistakeholder process that ran for six years resulted in the approval last summer of an expansion of top level domains.  This process involved global stakeholders from the business community, civil society, registries, registrars, and governments.  At NTIA, we worked throughout the process to make sure that ICANN adequately addressed government concerns and we have also spent significant time the last two years pushing for overall improvements in ICANN’s accountability and transparency to the global Internet community. 

Nonetheless, we are now seeing parties that did not like the outcome of that multistakeholder process trying to collaterally attack the outcome and seek unilateral action by the U.S. government to overturn or delay the product of a six-year multistakeholder process that engaged folks from all over the world.  The multistakeholder process does not guarantee that everyone will be satisfied with the outcome. But it is critical to preserving the model of Internet governance that has been so successful to date that all parties respect and work through the process and accept the outcome once a decision is reached. When parties ask us to overturn the outcomes of these processes, no matter how well-intentioned the request, they are providing “ammunition” to other countries who attempt to justify their unilateral actions to deny their citizens the free flow of information on the Internet.  This we will not do.  There is too much at stake here. 

But we are sensitive to the concerns being raised by some companies about the introduction of new gTLDs. Today, Chairman Rockefeller held an important oversight hearing in the Senate Commerce Committee on the subject of how ICANN will expand top level domains. We agree with the Chairman’s concerns over how this program will be implemented and its potential negative effect if not implemented properly. We will closely monitor the execution of the program and are committed to working with stakeholders, including U.S. industry, to mitigate any unintended consequences.

We are putting these principles of trust and multistakeholder process into practice with our work on privacy. The current privacy policy framework has come under increasing strain as companies collect more and more personal data on the Internet, putting at risk the consumer trust that is an essential foundation of the digital economy.

Last year, when the Commerce Department launched its examination of online privacy, the public response showed us that both industry and public interest groups are in broad agreement that consumers need clearer, more consistent privacy protections in the Internet economy. But we need to bolster privacy in a manner that continues to ensure the Web remains a platform for innovation, jobs, and economic growth.

We learned a tremendous amount from the stakeholder input we received throughout this process, and we are now finalizing a soon-to-be-released report that sets forth Administration-wide policy.  Let me preview the framework we will be announcing.  It consists of four pillars.

First, we will set forth a Consumer Privacy Bill of Rights that provides clear protections for consumers and greater certainty for businesses. And we will ask Congress to enact the Bill of Rights into law. A baseline consumer data privacy law would increase legal certainty for businesses, strengthen consumer trust, and support the United States’ consumer data privacy engagements with our international partners.  A wide array of stakeholders—from industry and civil society—has voiced support for legislation. 

Second, NTIA will convene interested parties to develop codes of conduct based on the Consumer Privacy Bill of Rights.  This will be an open and transparent multistakeholder process, and we expect that commitments to follow codes of conduct will be enforceable under U.S. law. 

We can start this work even before Congress enacts the Bill of Rights into law.  NTIA will work with various constituents to identify specific markets or business contexts that pose significant consumer privacy issues and are ripe for codes of conduct.  We will urge all stakeholders who share an interest in these areas to participate in the efforts that interest them.  Together we will work toward consensus on appropriate, legally enforceable codes of conduct. 

The third pillar of our framework, effective enforcement, is critical to ensuring that companies are accountable for adhering to codes of conduct and other privacy commitments.  In the U.S., we will encourage Congress to provide the FTC and the Attorneys General in our States with authority to directly enforce the Consumer Privacy Bill of Rights.

Fourth and finally, we will reaffirm that the United States is committed to increasing interoperability with the privacy frameworks of our international partners. The codes can play an important role bridging the differences in privacy regimes between countries, and we will welcome international participation. 

I expect that the development of these codes will be a major initiative for NTIA next year.

Broadband

Last, let me address our work on expanding broadband access and availability.  In the past year, we have become one of, if not the, leading source of public data on broadband access and adoption in America.

Last February we published the National Broadband Map – America’s first public, searchable nationwide map of broadband Internet availability. We are updating the map twice a year.  Each update is powered by an extensive, publicly available dataset – more than 20 million records – that shows where broadband is available, the technology used to provide the service, the maximum advertised speeds, and the names of the service providers. It is the most extensive dataset of its kind. We are also collecting the locations of community anchor institutions and the broadband services that they adopt.

One of the key take-aways from the map is that well over 90 percent of Americans have access to some level of broadband service. This does not diminish the fact that many communities still need broadband infrastructure.  Moreover, the map demonstrates that countless community anchor institutions – such as public safety facilities, hospitals, schools, and libraries – lack adequate broadband. 

We’ve performed additional research on broadband adoption.  Our Digital Nation report, a survey of 54,000 households which we released last month, shows that only 68 percent of households subscribe to broadband. So nearly a third of households –more than 100 million Americans – are cut off from the Internet at home. And approximately one in five households –20 percent– do not use the Internet anywhere.

This is a troubling statistic in the 21st century economy, when broadband access and digital literacy skills are needed to compete in the workforce. For example, about 80 percent of Fortune 500 companies only accept job applications online. And with approximately 60 percent of working Americans using the Internet as an integral part of their jobs, broadband access and digital literacy are paramount to succeeding in the digital economy.

Meanwhile, here is what Americans tell us about why they don’t adopt broadband: Nearly half of non-adopting households cited a lack of interest or need as the primary reason. The next most common reasons were the expense and the lack of an adequate computer.

The point is that there are different reasons why people do not adopt broadband at home. In some cases, there is a perception that it’s not needed. In other cases, the reason is affordability or an insufficient computer. As we often say, there is no “one size fits all” solution to this issue. We can’t make assumptions that the cause for non-adoption is simply related to income or availability.

Our findings also underscore that community anchor institutions are important means of broadband access for those who don’t have broadband at home but do want to go online. Besides the workplace, schools and public libraries are the main locations where these Americans use broadband.

So the research reaffirms the importance of broadband availability in anchor institutions and the role of public computer centers. The analysis also indicates that effective broadband outreach and support should be targeted to specific populations, and it should demonstrate the relevancy of broadband. 

I’m pleased to say that NTIA is investing in a host of projects nationwide doing just these things.  

Thanks to the Recovery Act, NTIA is investing nearly $4 billion in about 230 projects to expand broadband access and adoption. These projects will build and upgrade broadband infrastructure, expand and improve public computer centers, and promote sustainable broadband adoption through computer training and other approaches. These investments promise to stimulate economic growth and job creation in both the short and long term.

Already, grantees in NTIA’s Broadband Technology Opportunities Program, or BTOP as we call it, have deployed or upgraded more than 29,000 miles of broadband infrastructure and installed more than 24,000 workstations in public computer centers. In the last quarter, grantees provided more than 755,000 hours of training to around 220,000 participants.  And grantees report that their programs have already led to a total of more than 230,000 new broadband subscribers.

The numbers are impressive, but let me give you a few examples of how these projects are benefiting their communities.

  • I visited Kannapolis, North Carolina, one of the towns that will benefit from two infrastructure grants that will reach much of the state, especially rural areas. The effort is led by MCNC, a nonprofit broadband provider that has operated the North Carolina Research and Education Network (NCREN) for more than 25 years. Funded by a $104 million Recovery Act investment and $42 million in private sector matching funds, the project will deploy or upgrade a total of 2,600 miles of infrastructure. It will extend broadband to nearly 2,700 community anchor institutions, including universities, schools, community colleges, libraries, healthcare providers, and public safety facilities. About 1,100 of those anchors have already benefitted from improved access to the network.

Before we funded MCNC, its network delivered speeds of 1 gigabit per second or faster to only 12 out of 100 counties in North Carolina. With the Recovery Act dollars, MCNC will expand that number to 83 counties. This will not only improve education and other public services, but it can also spur additional private sector investment as local Internet providers utilize the new infrastructure to extend broadband service to homes and businesses that may otherwise be too costly to reach.

Even while construction is underway, the project is benefiting the state by creating jobs. Local businesses are serving as vendors, like Hickory-based CommScope, which is supplying fiber optic cable and other network materials.

Perhaps the most exciting aspect of the project is how a modern communications infrastructure can support economic revitalization. For example, Kannapolis was a textile mill town until 2003, when the mill closed and displaced thousands of workers. Now, less than a decade later, it is an emerging biotechnology and life sciences hub, home of the new North Carolina Research Campus. But the campus needs more bandwidth. In the past, researchers had to store data on disk drives and drive across the state to deliver the data to other institutions. The project we are funding will bring much-needed broadband capacity to the campus, a vital ingredient in the transformation of this 20th century American mill town to a 21st century global research center.

  • In June, I attended a ribbon-cutting event to formally kick off construction of the One Maryland Broadband Network, which will bring broadband access to every one of the state’s 24 counties. Local carriers will be able to use the new infrastructure to extend or improve broadband in an area covering nearly 2 million homes and 443,000 businesses, including rural communities in Western and Southern Maryland and on the Eastern Shore. The network will deliver connections of up to 10 gigabits per second to more than 1,000 schools, libraries, colleges, police and fire stations and government buildings.

Among the community anchors institutions that have hooked up so far are three fire stations in Baltimore City and Carroll County, an elementary school in Anne Arundel County, the police department and town hall in Sykesville, Md., and the State Police Barracks in La Plata, Md.   At the Police Barracks, the new network makes it possible for officers to download training videos in just seconds, quickly access criminal databases for background checks, and monitor traffic cameras in real time. The project tells us it has already created at least 430 jobs in construction, engineering and project management.

  • I was in Cleveland in October where One Community’s infrastructure project is aptly named “Transforming Northeast Ohio: From Rust Belt to Tech Powerhouse.”  The project is laying the groundwork for economic revitalization with a new broadband network. They expect to connect up to 800 community anchor institutions, including public safety and health care centers, and schools. Local providers will be able to use the new network to extend or upgrade broadband service in an area with over 6,000 anchors, two million households, and 200,000 businesses.
  • One Community also has a grant to increase the sustainable adoption of broadband service. The project, carried out by One Community and local partners in five states, has trained and hired more than 100 people, who are helping others in their own communities learn digital literacy skills.  The project provides customized computer training, low-cost equipment, and either free or affordable broadband service for low-income residents. More than 19,000 people have already completed the training and more than 13,000 have subscribed to broadband as a result of the project.

In overseeing these projects, NTIA is focused on ensuring that they are completed on time, on budget, and deliver the promised benefits to the communities they will serve. NTIA is taking action early to make sure taxpayer dollars are not wasted and that projects needing our technical assistance receive it so they can get back on track. 

In 2012, we will focus on accelerating the schedules of our grant recipients so we can maximize the immediate impact on the economy and ensure that the projects are completed by their end dates in 2013.  One way we are doing that is by sharing successful strategies across the grant portfolio on issues ranging from procuring fiber to streamlining the environmental review process.

Conclusion

As I close, I want to thank you again for the opportunity to speak. I hope this is an informative conference for you. This is an exciting time to be in the telecommunications and Internet policy arena, where our efforts can improve America’s economic future and the lives of our people.