MICHAEL K. POWELL

Commissioner

Federal Communications Commission

Before the

National Cable Television Association

Atlanta, Georgia

May 5, 1998

(As Prepared For Delivery)

I am delighted to be here. When I asked my staff what stimulating
intellectual topic the cable folks wanted me to wax eloquently on down
here at NCTA, I was a bit dumbfounded when I was told cable modems. In
fact, it prompted me to ask whether Decker \[Anstrom\] was mad at me for
some reason. No, I was assured, they just thought you would enjoy the
challenge of bringing life to what might appear to be a dry subject. Oh
well, I heard the food was good at this convention, so I took the
challenge to sing for my supper.

Indeed, cable modems actually are extremely exciting. Just as art can
imitate life, I believe a consumer electronics device can symbolize a
momentous economic revolution. This little box symbolizes the promise of
technological convergence, which we talk so much about. Convergence, is
fueling the information age, and the cable modem is its foot soldier.
Traditionally, we think of accessing the Internet and the World Wide Web
with a personal computer through the analog connection to the
public-switched telephone network. Today with the introduction of
cable-provisioned Internet service, passed over state-of-the-art hybrid
coaxial-fiber networks, cable service providers are readily able to
offer high-speed, broadband access to the Information Highway.

I definitely know that I do not have to explain what are cable modems or
what are the functions and capabilities of this innovative device to the
panelists and most of the audience assembled here today. But for those
of you out there who are interested (and still awake), a cable modem is
a relatively new technological innovation that transmits and receives
digital computerized information over the modified cable television
network. The device converts the digital information into a radio
frequency signal, transmits the signal \-- downstream up to 36 Megabits
per second and upstream up to 10 Mbps \-- and then re-converts the RF
signal into digital. The cable modem gives the user high speed and,
importantly, always on-line capability.

In my opinion, these two attributes − speed and constancy − are the
critical ingredients for transforming the Internet from a high end hobby
for the few, to an indispensable tool for the masses.

The Internet is a tremendous resource. From my computer at home I can
\"surf\" on the World Wide Web and find information on a variety of
personal and professional interests. I can hear audio dispatches sent by
climbers on Mt. Everest, read electronic copies of the London Times'
morning edition, download sections of the Code of Federal Regulation, or
receive, through push technology, stock, sport,
local-national-international news, and other information. You can even
view our FCC documents and read the transcripts of our en banc hearings
over the Internet, although admittedly we do not yet get the number of
hits that ESPN\'s web site gets! But, we are working on it.

I can do all of this, if I am willing to suffer through lengthy dial-in
procedures and if I have the patience to wait for this information to
reach my screen. The true promise of the Internet will not be realized
without high speed broadband, all-the-time capability. Just the
capability available with cable today.

Since I cannot yet get cable data service in my area (that is Mike
Powell cable customer talking, not FCC Commissioner), I had to take
advantage of my lofty title and invoke the public interest to go out
into industry to test this tremendously cool toy. In February, I was in
California and was able to sit down and \"test drive\" a cable modem. I
was absolutely astounded by the service. I could download very quickly a
variety of audio and video clips and various large data files. I
participated via Internet in a classroom exercise with students from a
local Southern California elementary school. And, again, what stood out
about this system was the blazing speed and full-time,
there-when-you-want-it capability.

The high-bandwidth transmission capacity of the hybrid coaxial-fiber
plant is a decided advantage for the cable service providers. Cable
modems take advantage of that transmission capability with speeds
ranging from 100 to 1000 times faster than widely available ISDN and
copper twisted-pair technology. To provide a demonstrative example of
the comparative data transmission speeds, just realize that it takes a
28.8 telephone modem approximately 5 minutes to transmit a single 1
Mbyte photographic image. A ISDN modem will process the image in 2
minutes. And a cable modem will process the image in 1 second. This is
fast. Recently a Judge commented that applying established law to the
Internet is a bit like trying to catch a moving bus. At these speeds,
its more like trying to catch a speeding jet!

With blinding speed and full-time on-line connections, users can enjoy a
perceptible increase in computing and communicating capability and surf
the World Wide Web for as long as they would like. This means that
children and teachers in different cities or states can participate in
distance learning; that doctors who use the Internet can communicate
with one another to seek expert advice on particular cases, and even to
transmit real-time medical images to other doctors around the world;
that businesses can take advantage of \"cable-conferencing" and
\"cable-commuting."

Cable service providers are investing billions of dollars in capital
improvements and technology so that they can offer the panoply of
interactive, multimedia applications I just described at speeds only
previously imagined. Every segment of the communications industry is
developing and deploying high-speed, broadband Internet access - whether
you are talking about xDSL, or terrestrial wireless or satellite
applications \-- hoping to cash in on our collective appetite for speed
and full-time connectivity. Paul Kagan Associates, Inc., estimates that
cable-provided Internet access will grow from providing additional
revenue of \$21 million per year in 1996 to \$1.6 billion per year by
the year 2000. This is a real growth opportunity.

But to realize this potential, you will have to solve the practical
problems. According to a recent report in the media, less than 10% of
your systems are two-way capable and thus ready for full cable modem
service. Another practical problem is getting the signal from the side
of the house to your personal computers. I have heard that the
installation of a cable modem today takes two technicians up to two
hours. This costs you money and customer time. These problems must be
solved for the service to really take off.

In sum, what all of this means is that we \-- the U.S. communications
industry and users of communications services \-- have yet another
competitive and innovative technology of which to take advantage. Let us
not forget that the competition which springs forth from our
implementation of the Telecommunications Act of 1996 is driving force
for ingenuity and innovation, and propels new development and
investments in advanced telecommunications technology and services.
Cable modems are an example of such innovative breakthroughs.

Before I close my remarks, I would like to digress for a moment to say a
word about a matter of great national concern. It is the Year 2000
problem \-- the \"Millennium Bug.\" As you know, many of our nation\'s
automated and intelligent systems were not designed to take into account
the millennial change that will occur on January 1, 2000. Since many
computer applications store dates using only two digits to represent the
year, in the Year 2000 they will interpret \"00\" to mean the year 1900,
resulting in serious malfunctions and often unpredictable consequences.

This problem is serious. The nation\'s communications infrastructure is
critical, not only to the economy but also to military preparedness,
public safety, government services, emergency services, and personal
communications. I am pleased that there is substantial attention being
paid to fixing this problem from cable modem vendors, cable industry
representatives, NCTA, and CableLabs that cable modem interfaces are (or
will be) year 2000 compliant.

I implore all of you to put this issue at the top of your list of
priorities. Find out if your networks and systems are Year 2000
compliant and, if not, seek out an answer as to why not. You can find
more information on this issue at our Y2K website which you can access
from our homepage at \<http://www.fcc.gov\>.

Well, I guess I have a bus (or jet) to catch. I hope that you all enjoy
the panel discussion. It was a pleasure being with you today. Thank you.