Gores full remarks at the NPC on NII and Telecom part 2 of 3

[David Farber <farber () central cis upenn edu>]

   Last year the revenues in this sector exceeded $700
billion, and we exported over $48 billion of telecommunications
equipment alone.  When AT&T sold the first cellular phone, they did
their calculations and predicted that by the year 2000 there would be
900,000 cellular phones in the United States.  Well, we have 13
million now and it's still 1993.  The predictions now for the year
2000 for mobile telephone users totals 60 million, not 900,000.


             This kind of growth in this and other industries in
telecommunications will create thousands and tens of thousands of new
jobs.  But the biggest impact may be in other industrial sectors
where those technologies will help American companies compete better
and smarter in the global economy.


             Today more than ever, businesses run on information.  A
fast, flexible information network is as essential to manufacturing
as steel and plastic.  If we do not move decisively to ensure that
America has the information infrastructure we need, every business
and consumer in America will suffer.  But there are obstacles that
lie in our path.  Many of them are there in the system we have
created over the last 60 years.  Systems of regulation that made
sense when telephones were one thing and cable another may simply
limit competition in a world in which all information can flow
interchangeably over the same conduits.


             To understand what new systems we must create though, we
must first understand how the information marketplace of the future
will operate.  One helpful way is to think of the national
information infrastructure as a network of highways, much like the
interstates of the 1950s.  These are highways carrying information
rather than people or goods.  And it's not just one eight-lane
turnpike, but a collection of interstates and feeder roads made of
different materials in the same way that highways are concrete or
macadam or gravel.  Some highways will be made of fiberoptics, others
of coaxial cable, others will be wireless.  But this is a key point:
They must and will be two-way highways so that each person will be
able to send information in video form as well as just words, as well
as receiving information.


             These new information highways will be wider than
today's technology permits.  That's because a television program
contains so much -- so many more bits of information than a telephone
conversation, and because new uses of video and voice and computers
will consist of even more information moving at even faster speeds.
These are the computer equivalent of wide loads that need wide roads
again in both directions.


             This new information marketplace, based on these
highways include four major components:  First, the owners of the
highways, because unlike the interstates, the information highways
will be built, paid for and funded principally by the private sector.
Second, the makers of information appliances, like telephones,
televisions and computers, and the new products of the future that
will combine aspects of all three.  Third, information providers --
local broadcasters, digital libraries, information service providers
and millions of individuals who will want to share or sell
information.  And most important, fourth, information customers who
will justly demand privacy, affordability and choice.



             At some time in the next two decades, we will think
about the information marketplace in terms of these four components.
We will not talk about cable or telephones or cellular or wireless,
because there will be free and open competition between everyone who
provides and delivers information.  This administration intends to
create an environment that stimulates a private system of free-
flowing information conduits.  It will involve a variety of
affordable and innovative appliances and products, giving individuals
and public institutions the best possible opportunity to be both
information customers and providers.


             Anyone who wants to form a business to deliver
information will have the means of reaching customers.  And any
person who wants information will be able to choose among competing
information providers at reasonable prices.  That's what the future
will look like in, say, 10 or 15 years.  That's the future we must
create.


             But how do we get there from here?  This is the key
question now facing government.  It is during the transition period
that the most complexity exists and that government involvement is
the most important.  It's a so-called phase change -- like moving
from ice to water.  Ice is simple and water is simple, but in the
middle of the change there's a mixture of both.  In this case, part
monopoly, part franchise, part open competition.  We want to manage
that transition.


             And so I am announcing today that the administration
will support removal over time and under appropriate conditions of
judicial and legislative restrictions on all types of
telecommunications companies -- cable, telephone, utilities,
television and satellite.  We will do this through both legislative
and administrative proposals, prepared after extensive consultation
with Congress, industry, public interest and consumer groups and
state and local governments.


             Our goal is not to design the market of the future.  It
is to provide the principles that shape that market.  And it is to
provide the rules governing this difficult transition to an open
market for information.  We are committed in that transition to
protecting the availability, affordability and diversity of
information and information technology as market forces replace
regulations and judicial models that are simply no longer
appropriate.


             On January 11th, in Los Angeles, I will participate in a
day-long session during which I will outline in more detail the main
components of the legislative proposals we will present.  Today,
though, I want to set forth the principles upon which it will be
based -- and there are five principles.  First, encourage private
investment.  The example of Samuel Morse is relevant here.  His
telegraph was a federal demonstration project funded by Congress
between Washington and Baltimore.  Afterwards, though, after the
first amazing transmission, most nations treated the telegraph and
eventually the telephone service as a government enterprise.  That's
what Morse wanted, too, but the Congress said no; find private
investors.  This he, and other entrepreneurs eventually did; and in
the view of most historians, our nation has a tremendous advantage in
telecommunications because we encourage private investment instead of
a government monopoly.


             We face a similar choice now.  We must steer a course
between a modern Scylla and Charybdis; between the shoals of
suffocating regulation on one side and the rocks of unfettered
monopolies on the other.  Both stifle competition and innovation.



             The Clinton administration believes, though, that as
with the telegraph, our role is to encourage the building of the
national information infrastructure by the private sector as rapidly
as possible.


             The second principle is to promote and to protect
competition.  I've talked about highways, and you know that all roads
once led to Rome, but how many lead to each home?  One, or two, or
more?  Whatever the answer to that question, the same principle
should apply.  We must prevent unfair cross-subsidies and act to
avoid information bottlenecks that would limit consumer choice or
limit the ability of new information providers to reach their
customers.  Because of the nature of these networks there are certain
links that are vulnerable to control by a very few.  And that can
lead to the expansion of a monopoly power to other parts of the
network, and we must guard against that.  We can see aspects of this
question in the debate over the powers of the regional Bell operating
companies, and in the passage last year of the Cable Act of 1992, and
in the proposal to open up or unbundle the local telephone loop.


             The third principle is to provide open access to the
network.  If someone has an information service to provide over the
network, they should be able to do it just by paying a fair and
equitable price to the network service provider.  Without provisions
for open access, the companies that own the networks could use their
control of the networks to ensure that their customers only have
access to their programming.  We've already seen cases where cable
company owners have used their monopoly control over their networks
to exclude programming that competes with their own programming.  Our
legislation will contain strong safeguards against such behavior.
Mitch Kapor, the founder of Lotus and head of the Electronic Frontier
Foundation, has spoken about the need for the national information
infrastructure to be a so-called open platform.  The IBM personal
computer is an open platform that any software programmer can use.
They can develop software to run on the PC, and they develop a so-
called killer application as he did with Lotus 1-2-3, they can make a
lot of money.


             In the 1980s, thousands of programmers developed
thousands of different programs which increased the productivity of
our businesses, helped our children learned and helped families
balance their checkbooks.  We need to ensure that the national
information infrastructure, just like the personal computer, is open
and accessible to everyone with a good idea who has a product they
want to sell.  It's essential.


             Fourth, we want to avoid creating a society of
information haves and have-nots.  That original expression, haves and
have-nots comes from Cervantes.  But we're not tilting at windmills
here.  This is the outgrowth of an old American tradition.
Broadcasts, telephones and public education were all designed to
diminish the gap between haves and have-nots.  In the past, universal
service meant that local phone companies were required to provide a
minimum level of plain old telephone service for a minimal price.
State and federal regulations provided for subsidies to customers in
poor and rural areas.  The most important step we can take to ensure
universal service is to adopt policies that result in lower prices
for everyone.  And the lower the price, the less need for subsidies.
We believe the pro-competitive policies we will propose will result
in lower prices and better service to more Americans.  But we will
still need a regulatory safety net to make sure that virtually
everyone will be able to benefit.


             In the past, it was relatively simple to fund universal
service.  The local telephone companies were regulated monopolies
that could be required to provide lifeline services.  As more
companies entered the market, as many of the regulations are removed,
we have to find new ways of dong the same thing.  Just last week, the

National Telecommunications and Information Administration of the
Department of Commerce held a hearing in New Mexico to examine just
that question and we're going to incorporate their findings in our
legislation.  As we think about the future of universal service, as a
society ought to think -- we as a society ought to think about what
kind of service and on what group of people we have to concentrate.


             Well, for one thing, schools and our children have to be
paramount.  Reed Hundt, the new head of the FCC, said recently there
are thousands of buildings in this country with millions of people in
them who have no telephones, no cable television and no reasonable
prospect of broad-band services.  They're called schools.  But when
it comes to ensuring universal service, our schools cannot remain the
most impoverished institutions in our society.


             We cannot relax restrictions from legislation and
judicial decisions without strong commitments and safeguards that
there will be a public right-of-way on the information highway.  We
have to protect the interest of the public sector in order to provide
affordable services for education, public health and government.


             Fifth, and the final principle, is that we want to
encourage flexibility.  After all, flexibility and adaptability are
essential if we are to develop policies that will stand the test of
time.  Technology is advancing so rapidly and the structure of the
industry is changing so quickly that we must have policies broad
enough to accommodate change.


             As the administration develops this legislation we're
trying hard to follow the example set by the authors of the 1934 act
and anticipate the certainty of many, many changes that will come
just ahead.  We're trying hard to enunciate key principles of policy,
identify which government agencies will implement the policy, and
then leave many of the details to them.


             I don't want to sound like I've thought all these ideas
up.  I haven't.  The fact is, in Congress, several important pieces
of legislation have already been introduced.  The Brooks-Dingell bill
in the House, for example -- it and the Markey-Fields bill represent
major steps forward, not to mention more than a year of hard work by
those four members of Congress, and others, including Congressman
Boucher and Congressman Oxley.


             In the Senate, Senators Danforth and Inouye have
introduced a major piece of legislation, and Senator Fritz Hollings
is working on another.  We're communicating carefully with all of
these leaders in the Congress.  Between now and the beginning of the
next session we'll continue our dialogue with them, with industry and
public interest groups to formulate our proposal for legislative and
administrative action.


             With high-level congressional support, a growing
consensus in industry and leadership from the President, we have a
unique opportunity.  We can eliminate many of the regulatory barriers
now in the path of the information superhighway and perform the most
major surgery on the Communications Act since it was enacted in 1934.
We will do it be avoiding both extremes -- regulation for
regulation's sake, or the blind adherence to the dead hand of a free
market economist.  We will do it with the principle that has guided
so much of the administration's efforts over the last year -- the
urgent need to create flexible and responsive government.


             It's fitting that this address is being delivered here
at the National Press Club because almost every form of communication
you can imagine is present here in this room, from the spoken word to
people who are taking notes -- some typing on laptops; some of you
will publish your observations through the use of printing presses,
others on television or radio reports.  People tuned into C-Span are

watching on television; still others are listening on NPR or over a
prototype of the NII, the Internet.


             All of these forms of communication bring us together.
They allow us to participate in a virtually instantaneous dialogue to
debate and then to build a consensus on the nature of America's
information infrastructure.  But even more, as I said at the outset,
these methods of communication allow us to build a society that is
healthier, more prosperous and better educated.  They will allow us
to strengthen the bonds of community and to build new information
communities.