Remarks of

Michael K. Powell

Chairman, Federal Communications Commission

At the

NSTAC XXVII EXECUTIVE SESSION LUNCHEON

U.S. Chamber of Commerce

May 19, 2004

Washington, D.C.

(as prepared for delivery)

Good afternoon, and thank you for allowing me the opportunity to address
the Executive Session of the National Security Telecommunications
Advisory Committee. I particularly want to thank Dr. Vance Coffman for
his efforts in arranging this lunch, and bringing together such a
distinguished group of industry leaders.

It is indeed a pleasure to be here, for we share a desire and a
commitment to provide the American public with the most secure,
competitive, and technologically advanced telecommunications
infrastructures possible.

***Security in an Expanding Communications Universe:***

When President Ronald Reagan created the NSTAC in 1982, he was seeking
ongoing advice on the pressing telecommunications security issues of the
day, primarily the breakup of AT&T and the increasing dependence of the
government on private telecommunications infrastructure and services.

Over the past 20 years, we have seen a vibrant, dynamic, and competitive
telecommunications market develop. Today's communications market offers
Americans unprecedented choices, and the number of innovative
communications platforms continues to expand at a remarkable rate.

As economic and consumer welfare grows from the expanding communications
universe, so too, does our dependency on critical communication
networks. Moreover, the task of securing the multiple and varied
networks on which our knowledge economy rides becomes more challenging.
In the post 9/11 world, security is our greatest challenge and must be
our highest priority. Just as we have embraced economic policies that
advance new platforms and new competition, we must embrace the
responsibility of expanding our security focus to encompass all relevant
components of the ever-changing communications cosmos.

The challenges are complicated not just by the ever changing nature of
the communications landscape, but also by the fact that the threat to
our national security is far more complex than that of a generation ago.
The Cold War presented enormous, even catastrophic risks to the world;
but the nature of that risk possessed a clarity not found in today's
edition of evil -- terrorism involves a foe that is far more fragmented,
diffuse and elusive -- and with terrorism, threats morph constantly and
are difficult to identify and neutralize.

I am convinced, however, that with industry and government standing
shoulder to shoulder we can protect the network and our nation. The
Commission has worked hard with the industries in our sector to advance
the mission of making our communications systems secure, reliable and
resilient. Furthermore, we must be proactive and scout the emergence of
future technologies to ensure that we incorporate a security focus into
them as they unfold. I know NSTAC is equally committed to these critical
objectives.

***Homeland Security:***

We are well aware of the weight of the challenge, but I am buoyed by the
opportunities. The FCC has set out to deeply integrate a homeland
security focus into our operations as well as drive industry to adopt
critical practices.

First, give me a moment to summarize our effort to make security an
integrated component of sound communications policy. I have made
homeland security one of the six pillars of the Commission's Strategic
Plan, and each of the Commission's Bureaus and Offices has integrated a
homeland security focus into its work. Our goal is to provide leadership
in evaluating and strengthening the Nation's communications
infrastructure and to facilitate rapid restoration in the event of
disruption.

To achieve our goals we need to work across all platforms and to step
outside our traditional "stovepipes". In order to facilitate this new
thinking, we created a Homeland Security Policy Council comprised of
senior management from each of the Bureaus and Offices to develop and
coordinate the Commission's Homeland Security initiatives. In addition
we opened an Office of Homeland Security, dedicated to this mission.

Let me now turn to our efforts to work with industry to harden our
networks and plan for contingencies in case of disruption. The Network
Reliability and Interoperability Council, has a long tradition of
developing industry practices to prevent and plan for network outages on
the wireline phone network.

In 2002, we re-chartered NRIC to address the new and urgent threat to
our homeland. Both its focus and membership were broadened, recognizing
the need to take a more holistic view of network security. Specifically,
the composition of NRIC VI was expanded beyond wireline carriers to
include wireless carriers, ISPs, the satellite industry and others. By
the end of 2003, NRIC VI, under the very capable chairmanship of Richard
Notebaert of QWEST, had revised over 800 best practices to better
prepare operators of the public switched telecommunications network, and
to address emerging issues of cyber-security. The FCC has taken steps to
promote the adoption of these best practices, producing, for example, a
DVD tutorial that we have distributed to over 600 carriers and other
interested parties.

A few months ago, we raised the curtain on NRIC VII, asking it to focus
more sharply on wireless network issues. Reflecting that focus, NRIC is
chaired by a member of the wireless industry for the first time --
taking command is Timothy Donahue, President and Chief Executive Officer
(CEO) of Nextel Communications Inc. An area of special attention will be
how to drive ubiquitous Enhanced 911 deployment for wireless services.
Ensuring that public health and safety personnel have effective
communications services available to them in emergency situations is
vital, and furthering the deployment of new technologies that enhance
Homeland Security has been a centerpiece of our agenda. The prominence
of wireless issues in NRIC itself reflects the rapid growth of
communications platform alternatives for voice service.

September 11^th^ highlighted the importance of redoubling our efforts on
wireline and wireless, but it also revealed the critical need to do
something to prepare and better utilize our media networks.
Consequently, the Media Security and Reliability Council was literally
"born" of the 9/11 tragedy. On September 11, with the destruction of the
World Trade Center, 22 New York City broadcasters lost their
transmission facilities, and over-the-air broadcast service was
disrupted to the largest market in the country. In the immediate
aftermath, suffering both a loss of technical facilities and the
personal loss of staff who died on the roof of the World Trade Center,
these New York City broadcasters were inventive in finding alternate
distribution facilities.

MSRC was created to institutionalize and expand on the response to that
experience. More broadly, its goals are to study, develop and report on
best practices designed to assure the optimal reliability, robustness
and security of the broadcast and multichannel video programming and
distribution industries.

The group brings together representatives from across the media
industry. In its first years, it was chaired by Dennis J. FitzSimons,
CEO of the Tribune Company. It adopted over 100 best practices designed
to ensure the continuous operation and security of media facilities, and
to operationalize mutual assistance in times of emergency.

These best practices cover such diverse topics as local coordination and
planning, emergency procedures, EAS, vulnerability assessments, disaster
recovery plans, physical security, and redundant facilities. In December
of 2003, in conjunction with the Florida Association of Broadcasters, we
actually conducted a "model city" project in Tampa, Florida to test
these best practices. Over 100 participants attended, including
officials from DHS, FEMA, the Florida State Cable Association, local
Florida Broadcasters, and local emergency managers. This type of
exercise is essential. If you don't test and practice your plan, you
don't have a plan.

MSRC was recently rechartered, and in the next two years, under the
leadership of David Barrett, CEO, Hearst/Argyle, it will focus on
fostering coordination among local emergency managers and media. The
first meeting is on June 2, when we will also host a forum with DHS and
other governmental and private entities on the role of media in Homeland
Security.

In addition to MSRC and NRIC, with other federal partners, we have
undertaken or expedited initiatives that will enhance government-wide
communication capabilities in the event of an emergency. These
initiatives include the Wireless Priority Access System, which allows
officials in high-risk locations to communicate with each other more
reliably in a crisis, and the Telecommunications Service Priority
System, which, as you know permits priority restoration of government
and private wireline systems that are critical to swift recovery from an
incident.

We also continue to work with our colleagues at state regulatory
agencies to ensure the continued security and robustness of our
telecommunications infrastructure. In June we will be holding a
"Critical Infrastructure Inter-dependency Workshop" in coordination with
NARUC's Ad Hoc Committee on Critical Infrastructure, the Department of
Homeland Security and the Federal Energy Regulatory Commission. At this
forum, federal and state entities involved in critical infrastructure
protection and homeland security will address the interdependence among
energy, water and telecommunications services.

The FCC also allocates and manages spectrum, which, in the Homeland
Security arena, has led us to conduct rulemakings and other proceedings
aimed at providing public safety entities the spectrum and technologies
they need to function in today's world: the 800 MHz proceeding, the 4.9
GHz proceeding; our narrowbanding proceeding; and proceedings enhancing
technological developments with clear Homeland Security implications
such as RF ID Tags and the ground penetrating capabilities of UWB are
just a few examples.

***New Technologies/Convergence:***

At the same time that we are taking steps to ensure the security of our
telecommunications networks and infrastructure, we are turning a corner
on the digital migration. Innovative entrepreneurs are replacing
yesterday's slow, limited networks with many different types of
high-speed, full-service digital networks, such as BPL, WIFI, FTTH,
Cable Modem and DSL. And these networks are ushering in the latest
advanced applications, like internet voice, streaming video and music
services. Competition among these facilities-based networks, combined
with the openness of Internet Protocol, has begun to introduce the
transformative forces of innovation and entrepreneurial spirit into a
sluggish telecommunications sector. While this new age brings tremendous
promise and opportunity, it also carries new risks. Again, first and
foremost among those challenges is security.

There are incredible opportunities presented by a converged world, both
for Homeland Security and consumer choice. Robustness is built into the
very fabric of packet networks like the Internet. On September 11 one of
the Internet's most important metropolitan hubs, New York City, suffered
extensive physical damage -- communications equipment and fiber optic
cables at ground zero were damaged or disabled by the attack. The effect
on Internet services was primarily localized. Packets, like water
flowing toward a downhill destination, are tenacious in seeking out
alternate paths. As the National Academy of Sciences reported, the
September 11 attack had minimal impact on the Internet as a whole and
the network displayed great flexibility in the face of extreme stress.

IP-enabled services, like voice over the internet, undoubtedly present
challenges, but we should focus as much on the promise as the problems.
Consider, as an example, 911 service. When a person in distress calls
911 today, he reaches an operator in a dispatch center who, often only
receives a call-back number and a location. All other information comes
from the often-distressed caller. Imagine a world where technology could
do more. Imagine that chronically ill people are equipped with wireless
devices that could transmit their critical vital signs to dispatch
centers. Imagine wireless devices embedded in vehicles that could
transmit the nature of the accident -- for example, if it involved a
rollover -- to the dispatch center. Imagine a dispatch center that could
send this, and countless other, critical scraps of intelligence to
emergency personnel. Imagine how many lives would be saved. Keeping the
world unchanged is not a virtue, making it better is.

Already today, two percent of U.S. firms use some form of IP telephony,
and that number is expected to grow to 19 percent by 2007. A new Yankee
Group survey found that 73 percent of wire line service providers and 31
percent of wireless operators either have implemented, or were testing,
packet telephony in their networks.

As a regulator, the FCC is embracing the reality that the torrent of
change from IP technologies has arrived, is unstoppable and will
accelerate over the coming years. And American citizens will be the
richer for it. A critical aspect of our job is to establish regulation
that allows the ever-changing telecommunications industry to flourish.
If we do not create a regulatory climate that attracts and encourages
investment, we will face the rude realities that opportunity can and
will go elsewhere. The President has set forth a bold vision of
ubiquitous broadband connectivity by 2007 -- creating a friendly
regulatory environment for the deployment of these services is a
priority of the highest order for this Commission.

But to bring this discussion full circle, one cannot expect to enjoy the
fruits of progress, if you do not ensure those who wish you ill cannot
easily snatch it from you. A critical aspect of our job is to ensure
that our security focus expands as the telecommunications universe
expands. That is a job for ALL of us. We have a historic opportunity to
build security into our evolving network at the front end of its
development, rather than trying to bolt things on at the end. We should
not let it pass us by.

***Conclusion:***

Industry/government partnerships are the key. The NSTAC is a model for
such partnership. Together we should pair our enthusiasm for new
technological advances with an enthusiasm for securing them. I look
forward to continuing our work together.

Thank you.