**Remarks of**

**Michael K. Powell**

**Chairman, Federal Communications Commission**

**at the**

**2004 Satellite Leadership Dinner**

**Folger Shakespeare Library**

**Washington, D.C.**

**March 2, 2004**

**(As prepared for delivery)**

**"U.S. Leadership: The Satellite Partnership"**

Thank you David for your kind introduction. To the members of Congress
and the Executive Branch, the CEOs and members of industry, to all of
you here \-- good evening. It is a pleasure to be with you in these
revered walls. This setting reminds me that William Shakespeare often
referred to the concept of the "harmony of the spheres."

Under this philosophy, when all elements on Earth and in the heavens are
balanced, the music of the spheres is considered to be the most
exquisite. Satellite systems illustrate this concept. By orchestrating
technology in the sky and on the Earth, satellites deliver benefits to
U.S. consumers across our nation \-- from a firefighter in Texas to a
farmer in Montana. *That* is music to *my* ears.

[Maestros and Musicians]{.underline}

We are all players in the "Global Satellite Partnership." The
partnership includes the U.S. commercial space industry, the Congress,
the U.S. government, including the FCC, as well as their counterparts
around the globe.

In 1962, when black rotary phones were the rage, Congress laid the
foundation for the world's first global satellite communications
satellite system. Then, in 1965, while I was watching a 12-inch black
and white television in my family living room, INTELSAT launched the
first communications satellite, "Early Bird."

While satellites may appear to be only a small fraction of any given
communications service market, the fact that satellite firms participate
in so many market segments \-- telephony, Internet, television, and
radio \-- means they are a key force in inter-modal competition.  In
many instances, the particular strengths of satellite technology \--
gives it a competitive edge in the provision of some services.  This
means that satellite services contribute to innovation, thus, spurring
competition in larger measure than looking at market share statistics
alone would suggest. The headline here is that the satellite industry is
providing competitive alternatives for U.S. consumers.

With vision and tenacity, the satellite industry has demonstrated that
it can be a strong competitor with other telecommunications services --
as well as a collaborator. Satellite systems unequivocally are a key
platform in the digital migration. In the current culture of cell phone
cameras, Tivo and WiFi, satellite providers are delivering new services
to people on the road, in the sky, on the water, at work and at home.
The spotlight \-- and Wall Street \-- are focusing currently on Direct
Broadcast Satellite and Digital Audio Radio Satellite services \-- two
true *consumer* services. Today, one in five television households in
the United States receives television by satellite, the fastest growth
ever for a consumer electronics product.

The commercial satellite industry must remain prudent. Though satellites
are invisible to we mortals who live on earth, as the CEOs here tonight
know all too well, deploying a satellite system is costly and
time-consuming. It takes lift \-- literally blastoff \-- to thrust even
*one* satellite in space. A single geostationary satellite costs up to
\$150 million to build and more than another hundred million to launch
and insure. And every satellite system requires equipment on the earth.
The time and money it takes to get satellite services into consumers'
eyes, ears and hands is daunting -- and requires considerable foresight
and planning on the part of satellite operators.

Like the industry itself, the FCC has used foresight regarding
satellites. As early as the 1970s, under its "Open Skies" policy, the
FCC established a framework of maximum flexibility and minimum
regulation. The FCC fully opened the U.S. market to commercial
communications satellite providers to serve the United States. And they
did. In the 1980s, commercial communications satellite systems populated
the Earth. And to accommodate increasing requests for more geostationary
satellites, we literally made room in space. The FCC allowed for smaller
spacings between orbital locations; and, in return, providers in the
Fixed Satellite Service had to operate at lower power levels to avoid
interference. That's an example of partnership.

[From Chorus to Orchestra: Globalization Takes the Stage]{.underline}

The globalization explosion of the 1990s has lead to a smaller but more
complex world today. The signing of the World Trade Organization
Agreement in 1997 dramatically altered the telecom landscape. At the
same time, liberalization took hold and monopolies broke apart. New
multinational alliances formed; intergovernmental satellite
organizations privatized. Responding to competitive changes, some
satellite companies restructured. The satellite industry is more global
than ever before.

Globalization has challenged regulators worldwide. Whereas the First
Radio Telegraphic Conference in 1903 had nine participating nations, the
2007 World Radiocommunications Conference will host nearly 150 nations.
Whereas 70 years ago, the FCC allocated spectrum for a small number of
radio services, today the call for spectrum -- especially bands with
cutting edge technical properties \-- are loud and plentiful.

I have heard industry's various calls and the Commission has responded.
During my tenure, the FCC has authorized earth stations on vessels;
secured spectrum at WRC '03 for satellite services, including Internet
in the sky; authorized ancillary terrestrial components for certain MSS
satellite systems; and coordinated operations of many satellite systems
with other nations. The FCC also is streamlining its systems. Last
summer, based on the maturity of the industry and the premium placed on
faster licensing, the FCC unanimously adopted a new "First-Come,
First-Served" approach. Whereas in the past, getting a space station
license could take up to three years, today it takes six to nine months.
Consistent with technological changes, the FCC also streamlined earth
station licensing and modernized our electronic filing system.

[Solos and Symphonies: Satellite Services for the People]{.underline}

The impact of satellites on Americans is more profound than ever before.
From ports in Alaska to ships in the Atlantic, satellite services beam
up and reach down to touch us in every aspect of our lives. Satellite
services allow a small business in Tennessee to track company inventory
worldwide; a health care professional in Appalachia to provide medical
services under the guidance of a doctor in Chicago; and law enforcement
officials in Ohio to see high resolution images of buildings, bridges
and approaching storms. Some satellite systems also help provide
universal service, advancing the availability of telecommunications
services in our country.

Satellite networks using Very Small Aperture Terminals bring tremendous
benefits, for instance, enabling companies to conduct credit card
validations in lightning speed. In addition, the industry's time-tested
service of backhauling other telecommunications services and
distributing programming to broadcasters and cable companies continues
to thrive.

In November 1989, live footage of the fall of the Berlin Wall in Germany
reached the United States by satellite. On September 11, 2001, instant
images of the collapse of the World Trade Center towers reached every
time zone on earth via satellite.

For decades, satellites have been providing national security and
emergency preparedness functions. Today, they are recognized as critical
infrastructure and a vital force for homeland security. Satellites
provide voice, data, video, as well as location and remote sensing
services for our nation's first responders. Under FCC requirements,
providers of mobile satellite voice service must establish 911 emergency
call centers and explore the technical feasibility of identifying a 911
caller's physical location.

The U.S. Government, of course, is a major user of commercial satellite
communications. For example, in the Iraq War, over 80% of its satellite
communications went over commercial networks, including systems
authorized by the FCC.

[Harmony and New Horizons: Opportunities and Challenges]{.underline}

Today, satellite systems are linking people and nations on earth like
the music in a symphony. Exactly 213 years ago in France, two brothers
sent the first optical telegraph message. The text of that message read,
"If you succeed, you will soon bask in glory." Like them, the commercial
satellite industry has demonstrated success and is primed to bask in new
opportunities.

Estimates show that in 2002, the satellite services sector yielded over
\$50 billion dollars in worldwide revenue and \$17 billion in U.S.
revenue. The same year, the entire satellite sector, including
manufacturing, launch services and ground equipment produced over \$
42.2 billion in U.S. revenue and 122,000 U.S. jobs. Today, in the
geosynchronous orbit, there are approximately 90 FCC-licensed active
commercial communications satellites and over 25 non-U.S. satellites
authorized to serve the United States. In non-geostationary orbits,
there are four active commercial communications satellite systems
comprising approximately 145 FCC-licensed satellites to serve the United
States.

Two-way broadband by satellite already is available in the United States
and soon Ka-band satellites will bring Americans additional competitive
service options. As demonstrated in story after story at the Rural
Satellite Forum that the FCC hosted in January, satellites are providing
basic and advanced services in rural and remote areas throughout our
country. On a personal note, I would like to thank the many satellite
companies and entrepreneurs that came to the FCC that day and
demonstrated first-hand the services they receive by satellite.

Satellite operators are continuously pushing the edge of the envelope --
or I should say, the universe -- in inventing advanced technologies to
deliver satellite services. Video compression and new modulation schemes
enhance spectrum efficiency and increase the amount of information
throughput per hertz. At the same time, satellite manufacturers are
making space stations with larger, 30-meter antennae that unfurl in the
sky like large umbrellas, dispersing smaller spot beams to even smaller
consumer handsets.

Further growth is on the horizon. A recent forecast predicts that the
demand for transponder capacity will grow 60% in the next ten years. For
the near-term, the areas of expected highest growth include
telecommunications in the air (including Internet access), last mile
data (especially for businesses) and subscription television. And while
satellite television and radio services are blanketing the United
States, like any consumer good or service, the price points for these
services will remain important factors.

The ongoing challenges for the industry are: to compete, innovate and
educate. As it naturally seeks to provide the least costly and most
effective services, the industry must continue to be a fierce competitor
to cable and other communications systems; utilize hybrid networks such
as satellites and WiFi; be imaginative with technology and spectrum; and
make satellite networks more reliable, secure and interoperable. The FCC
is serious about milestone enforcement and I encourage companies,
consistent with the terms of FCC authorizations, to use, not squander,
spectrum. The industry may seek gains in new opportunities that the FCC
has created through the upcoming DBS auction and secondary markets in
spectrum. It also may see benefits by educating policymakers about the
magic and the merits of satellites.

From my perspective at the FCC, I see a much more complex, competitive
and technologically advanced world than the one Early Bird saw. I see
satellite services using different spectrum bands, government operations
using commercial spectrum and dual-flagged satellite systems. As
industry innovates, consumer demands rise and the vital interests of the
United States intensify, FCC issues are becoming even more complicated,
challenging dated definitions and models. As a result, government policy
makers and international bodies must do more than react and adapt. They
must look ahead and create new approaches. They must constantly take the
pulse of change. They must be alert and agile.

To further this effort at the FCC, I encourage dialogue, ideas and
solutions from industry and all members of the public. Under my
leadership, the FCC will continue to make decisions faster and smarter.
We will continue to provide regulatory flexibility, take into account
the role of satellites as critical infrastructure, and let technology
stimulate the economy with new jobs and more revenue. In the end, the
market and consumers should be free to determine the services of the
future. The truth is that no matter how high-minded anyone of us is
about satellites, consumers don't care about how a technology works or
where it comes from -- be it space, undersea cable, or utility wire.
Consumers are agnostic about the *makeup* of a technology. They care
about *services*. I challenge each of us to continue to explore new ways
to bring satellite services home to the American people and to the
world.

In conclusion, I thank the Satellite Industry Association and the
Satellite Broadcast Communications Association for the invitation to
join you tonight. To all the honored guests, thank you; it has been a
delight.