Remarks of

**FCC Commissioner Susan Ness**

**Before the**

# **1999 Women\'s Leadership Forum**

**Washington, D.C.**

**June 22, 1999**

Thank you very much, Kathy. It is a pleasure to be here. I am delighted
to see so many of today\'s \-- and tomorrow\'s \-- leaders assembled in
one room. Congratulations to Kathy, CJ, and the Forum Steering Committee
for arranging this event and showing that inspiring video of quotes.

Seeing all of you brings to mind how I came to be a part of the
communications industry.

I began at WRSU in New Brunswick, NJ in college radio. From there,
recognizing that I wasn\'t destined to be the next Diane Rehm or Nina
Totenberg, I went to law school.

I remember interviewing for jobs on the other coast in my third year. I
went to one law firm. The interview went really well. The firm was
prestigious, and my skills and their needs seemed to match perfectly.

Then, the interviewing partner looked at me and said, \"I\'d love to
hire you, but I\'m not sure that my partners are ready for a woman to
join the firm. You see, we always eat lunch at the same club, and they
don\'t allow women in. I\'m sorry, but I don\'t think my partners would
want to change where they eat lunch.\"

Well, I don\'t know what happened to that firm. But I can tell you this:
they were clearly out to lunch.

I am sure that we can spend the rest of the day sharing stories like
this. And the fact that we can tell these tales and laugh about them,
illustrates that we have, in fact, made significant progress over the
past 25 years.

And yet, we have not achieved as much progress as one might guess. Think
of who runs the largest telephone companies, the largest long distance
companies, the largest cable companies, the largest wireless companies,
and the largest broadcast groups. Any women CEO's come to mind? I doubt
it.

This is a theme I'll return to later in my remarks.

Technology and competition are driving extraordinary changes in our
industry at a breathtaking pace. These changes provide an unparalleled
opportunity for women to break into top jobs in businesses that did not
exist 30 years ago.

Each of you in this room has gotten where you are through ability and
hard work. Each of you has proven that women can and will succeed in the
communications field.

It isn't enough in the digital revolution just to have a Molly Pitcher
here or there. Rather, there is every reason to expect that women will
be on the frontlines, building the businesses, setting the policy, and
making a difference in our country and the world.

Think about how this technology is changing your own lives and the lives
of almost every American. Now, families all across this nation have a
choice of a vast array of high-tech communications services, services
that now cost less.

Taking a call while driving to work or at a soccer game is now the norm
for more than 70 million Americans who last year had a mobile phone, and
made calls on a service that cost 40 percent less than it did three
years ago.

Calling friends and family across this nation has gotten cheaper and
cheaper as the choice of providers has expanded.

Sending an instant message to an aunt in Manila or a colleague in Milan
is routine for the 30 million households now on-line.

And as more and more Americans go on-line, so has American commerce.
Five years ago, few people had even heard of the World Wide Web. By
1998, 26% of retailers had a web-site, and it is estimated that they did
over \$10 billion in sales -- heading for \$100 billion within three to
four years.

It is no surprise, then, that data traffic has now surpassed voice
traffic on phone lines and may soon represent over 90 percent of all
communications.

The telecom industry is changing, changing fast, and changing for the
better. Today, I want to talk briefly about six major industry trends
and the implications for women pursuing their destiny.

## Competition

From a policymaker\'s point of view, our number one goal is to promote
competition.

Competition is the foundation of our economy. It\'s the driver of
investment and innovation. Consider those markets that are competitive,
like the market for long distance services, information services,
computers and other customer-premises equipment, and \-- increasingly
\-- wireless services.

These are the markets where we see the most innovation, the greatest
increase in consumer choice, and the greatest reductions in prices.

But competition doesn\'t come easy. In some sectors there are monopolies
to undo, and displacing a monopoly isn\'t something that happens
overnight. But it\'s something the FCC and the state public utility
commissions have been working hard to achieve. The capital markets have
responded, showering new entrants with tens of billions of dollars of
capital to build new facilities.

Despite the disappointing failure of the local Bell companies to go head
to head with their sisters in adjacent territories, we are now much
closer than ever before to making competition in local phone service a
reality. Meanwhile, direct broadcast satellites have challenged the
cable monopoly by signing up 10 million customers over the past few
years.

And wired and wireless alternatives for both telephony and video
services are now being rolled out. As we work to dismantle barriers to
entry, technology works to circumvent them.

New kinds of satellites, new kinds of antennas, and the increasingly
ubiquitous Internet protocol mean that an alphabet soup of new services
-- MMDS and LMDS, and LEO's \-- and fixed wireless services may all help
to undermine traditional monopolies.

I am a pragmatist. A laboratory breakthrough is not the same as a
marketplace reality. And a business plan is not the same as real cash
flow.

But I am also an optimist. I continue to believe that we are on the
right track, and that, with the right policy direction and enforcement,
Congress\'s vision of a largely competitive marketplace will \-- over
time \-- be realized.

## Deregulation

As this tide of competition rolls in, the shoreline of regulation
undoubtedly will recede.

Much of the regulation previously administered by the FCC will become
unnecessary as markets become more competitive.

To be sure, government plays an important role in bringing about the
transition from monopoly to competition. But once competition arrives,
government needs to step back and let the market work its magic.

The best solution to a market problem is a market solution, and that is
what we should search for. And Congress empowered the FCC to conduct
this search. In the Telecom Act, Congress gave the FCC an extraordinary
new power: power to forbear from regulating. We can eliminate not only
our own rules but even statutory provisions enacted by Congress.

There are limits on this power, of course. We can only forbear if we
conclude that

Marketforces will ensure just and reasonable prices and practices, that
consumers will

be protected, and that the public interest will be served.

To its credit, the agency has shown itself willing to use the
forbearance power when circumstances warrant. Generally, we do so when
the development of competition has justified an easing of regulation.

But we also have the latitude to forbear when we believe doing so will
itself accelerate the development of competition.

Of course, there is a role for the FCC in a de-regulated world. Rules of
fair competition will have to be enforced. So will consumer protection.

Also, the FCC will continue to serve as \"spectrum traffic cop.\" And
universal service will need our attention.

Yet it is clear that we must prepare now to build a New FCC -- one that
is committed to the same goals, but which looks and operates differently
from the way it does today.

## Convergence 

In the new century, the FCC will take on a changed role because the
industries that we oversee will likely have been transformed.

Think about your own businesses. How many of you who began working for
phone companies ever thought that you would worry about transmitting
video? How many of you in the cable business ever thought that you would
now provide phone service?

And how many of you in computer companies ever thought that you would
have to worry so much about the cable and phone platforms?

Digitization is changing everything. Microprocessors are continually
growing cheaper and more powerful. New and old services are using the
Internet protocol.

Multiple services can now share the same digital bitstream, whether that
bitstream is coming to us over a Digital Subscriber Line, a cable modem,
a digital broadcast, a wireless local loop, or a satellite.

We are fast approaching a future characterized by convergence and
increased bandwidth. The long-awaited "Information Superhighway" is at
last being built.

Of course, it\'s not the case today that five separate information
superhighways are running to every home. Most of us don\'t even have
one, much less two. But the trends are very favorable on both the supply
and the demand side.

This presents public policy challenges. Despite a comprehensive and
forward-looking rewrite in 1996, the Communications Act still
contemplates different regulatory schemes for different market segments.
We have Title II for telecommunications, Title III for broadcasting and
other radio services, and Title VI for cable.

As technologies, service offerings, and consumer demand converge in
various ways, it may be more difficult \-- and less logical \-- to
impose very distinct regulatory classifications and rules on each
industry sector.

So, which of these services will help to fund universal service? Which
of these services should be subject to equal access and unbundling
requirements?

How does one harmonize the differing regimes when cable is regulated
primarily at the local level, local telephony is overseen primarily by
the states, and broadcasting, spectrum use, and satellite operation are
handled by federal authorities?

Local, state, and federal officials will need to work together to create
new solutions to these challenges. And it may turn out that some of the
solutions can only come from Congress.

Meanwhile, however, I hope you will look on convergence not just as a
challenge, but as an opportunity as well. The Internet enables
entrepreneurs to spring into being with little capital. What's needed is
a great concept for how to weave the Internet into our daily lives. So
convergence can create a platform for female-owned companies to emerge.

## Consolidation

The flip side of convergence, and all the entrepreneurial activity it
has stimulated, is consolidation. The past several years have brought us
a number of mega-mergers, with more to come.

Proponents justify consolidations on a variety of grounds. They may be
based on a perceived strategic value of certain assets, as with AT&T\'s
acquisition of Teleport. They may reflect a perception of the
efficiencies associated with larger scale, as with Worldcom\'s
acquisition of MCI.

They may be driven by economies of scope, and the hope for synergies
across business lines, as with Disney\'s acquisition of ABC, and they
may embody hopes to exploit convergence, as with AT&T\'s acquisition of
TCI.

As a general matter, these mergers are beneficial and receive prompt
approval from both the FCC and the antitrust authorities.

But some mergers may diminish the prospects for competition or frustrate
the statutory goals of the Telecom Act. These are not the kind of
mergers I want to approve.

Some of the mergers we review have both negative and positive
consequences. These are the hard ones. The Bell-Atlantic-NYNEX merger is
a case in point.

There, we lost the potential competition each company could have brought
to the other's market \-- a decided negative from a public policy
standpoint. This merger was approved only because we felt the public
interest balance was tipped by the parties' concrete market-opening
commitments.

We believed that these promises would help consumers throughout the
merged companies' region, thereby advancing the goals of the
Communications Act.

In the coming months, careful scrutiny of mergers will continue to be
important. But I want to emphasize, even though we must be thorough, we
must also act expeditiously. Businesses need certainty. Investors
shouldn\'t wait interminably for regulatory decisions \-- on mergers or
otherwise.

How does consolidation affect women? It poses another negative \-- the
elimination of senior jobs \-- jobs that might have been open to women
on the rise.

## Globalization

What is extraordinary about the communications revolution is that none
of the developments I have mentioned is occurring in the United States
alone. The same changes in technology, business strategy, consumer
demand, and public policy are also apparent throughout the world.

Today, more than ever, ideas, products, and capital travel at lightning
speeds.

Today, more than ever, the world\'s economies are interdependent. Not
surprisingly, U.S. communications and information companies are
increasingly active in overseas markets, and foreign companies are
increasing active in the U.S. market.

There has been a remarkable change in other governments\' views of
telecommunications. State-owned telephone companies are being
privatized. New independent regulatory agencies, often modeled after the
FCC, are being established.

And a large number of countries have committed, under the World Trade
Organization, to concrete market-opening measures.

It seems that the goals of competition, deregulation, and universal
service are increasingly part of a shared vision for communications. I
urge each of you to pay attention to developments in international
communications, and to exploit these opportunities.

## Universal Service

Finally, as we look outward to the promise of the worldwide market, we
must also look inward to our national community. For in this era of
change we also must continue to honor our responsibilities to promote
universal service.

The opportunities of the New Economy should be made available to all
Americans.

That means addressing the distinct needs of low-income consumers,
consumers in rural areas, students, library patrons, and rural health
care patients, as well as people with disabilities.

The challenge is how do we make sure that the services that will be
basic to our lives in the next century reach all Americans?

The implicit subsidies that worked so well in a monopoly environment
won\'t serve as well in a competitive environment. You can\'t assume
that the underpricing of service to low-income or rural subscribers will
continue to be funded by overpriced business lines, vertical features
like Caller ID, or intrastate toll. After all, the new entrants will
target those high-margin services first, and drive out the subsidies.

Thus, the high-cost support system must be revamped. We need to preserve
affordable service while making subsidies explicit and competitively
neutral and economically efficient.

This is one of the toughest challenges that we face at the FCC. But we
are making steady progress, and we will see it through.

Meanwhile, we are also taking proactive steps to bring the skills and
tools needed to compete in the Information Age to our nation\'s
children.

Thanks to Senators Snowe, Rockefeller, and Kerrey, as well as the
inspired leadership of President Clinton and Vice President Gore, we now
have the e-rate program that provides discounted communications services
to elementary and secondary schools and public libraries throughout the
nation.

Over 80,000 schools and libraries \-- and more than 38 million kids \--
have already been helped by the e-rate program. This year's funding will
help 40 million more. The benefits go disproportionately to rural
schools and to schools serving low income households.

Some people want to try to make the e-rate a political football. They
say that we can\'t afford to connect our nation\'s classrooms and
libraries to the Internet. I say to them, remember what Derek Bok, the
former president of Harvard, once wrote: \"If you think education is
expensive, try ignorance."

For if we keep our children ignorant of the technologies shaping our
world, we\'ll all have to pay \-- with unqualified workers, limited
economic growth, and unrealized opportunities.

**Conclusion**

And as we create these opportunities for our children, we must realize
that the digital divide is not just a kids issue. It\'s also about who
is participating in these high-growth industries; and who is not.

This was a concern before the dawn of the digital age. The very first
time that I set foot in the FCC was 15 years ago as a panelist at a
conference organized by Commissioner Mimi Dawson on the challenges that
women media entrepreneurs faced when trying to acquire capital for their
ventures.

Fifteen years later, much has changed. As we discussed, this industry is
churning with opportunities created by competition, globalization and
new technologies. And yes, most luncheon clubs now admit women.

Markets have been opened and industry boundaries are converging. New
industries, like wireless, have exploded, and whole new industries like
the Internet have been created. The opportunities are immense.

Yet one thing hasn\'t changed.

To this day, I go to industry conferences, and see very few women in the
highest echelons of the telecommunications and media businesses.

I just got back from one trade association meeting, and the program book
said it all. Page after page of general session panelists -- not one
woman. Not one minority.

The same thing occurred at an earlier industry convention \-- the
superpanels featured all men.

Not one woman heads the largest telephone, long-distance, wireless,
cable or broadcast companies: The Executive Committees of most of the
major trade associations are devoid of women. When Wireless Week
recently ran a profile on the 25 most influential women in the industry,
the same issue profiled the 50 Newsmakers of 1999. Of the 50
"newsmakers," not one was a woman.

This is the challenge for all of us in this room. As policymakers,
businesswomen, and engineers, we must work to open up our industries to
women and to all those that have been shut out for too long.

We must make sure that the immense opportunities of the Information Age
\-- in old media and new media alike \-- are open not just to our sons,
but to our daughters.

As you all move up the career ladder and pioneer this industry \--
remember.

Remember that as women leaders \-- as American leaders \-- your job is
to fill a seat at the table with the values that you cherish.

Give voice to what you know and what is in your heart, and you will
benefit your companies, your industry, and our entire country.

Thank you.