### Remarks of

**FCC Commissioner Susan Ness**

**Before the Bridge Builders\' Conference...Over the Digital Divide**

### Wilmington, DE

### February 17, 2000

(As prepared for delivery.)

# Introduction

Thank you for inviting me to be here today.

The digital divide has become the hot topic at conferences such as
these. President Clinton has focused attention on making sure that the
technological future is within reach of every American. Congress, the
Department of Commerce and state and local governments have also
launched important initiatives to bridge the digital divide.

What I like about this conference in particular, is that we are here \--
not just to discuss the problems that a digital divide poses for this
country -- but to craft solutions. It was a great idea to invite all of
the bridge builders to come together and share their tools.

# Digital Tools

Indeed, the digital tools of this century have the power to unlock doors
of opportunity for people everywhere. And government entities and
community leaders have a vital role to play -- they must make sure that
those doors are open, not locked shut.

At the FCC, our role is slightly different than initiatives announced by
other governmental entities. Because we oversee the telecommunications
industry, we are focused on the evolution of the telecommunications
infrastructure, rather than Internet training programs or rounding up
donations of computers.

In fact, we at the FCC \-- together with our state partners \-- have a
statutory obligation to ensure that the telecommunications
infrastructure is sufficient to deliver all of the

wonderful applications that are being developed. As part of that
obligation, these new applications must be equally available \-- in our
classrooms, inner-city neighborhoods, and across rural America.

# An Economic Revolution

So, one might ask, why is it so important that this technology be widely
available? And, why is there so much attention on this issue at this
point in time?

The answer is clear: we are in the middle of an economic revolution.

Participating in the new economy depends on access to advanced
technology. Broadband infrastructure -- which delivers such services as
high-speed Internet access and video conferencing -- is becoming an
essential component of economic prosperity.

Whole communities have been transformed into powerful economic engines
because they have the infrastructure the high tech businesses need. I
have watched in awe as scores of Internet start-ups and dot-coms have
sprung into existence almost overnight. Young entrepreneurs are testing
new ideas, awash with seed capital. Savvy business leaders are focused
how to improve their services, and bring yet more innovations to the
American consumer. And, we constantly read about the need for more
housing and employees in the high-tech areas, and the money to be
earned.

But, in addition to these new high-tech corridors, access to broadband
infrastructure can also revitalize existing communities. The beauty of
the Internet is that you can do business from virtually any location.
Indian craftsmen, for example, can sell their goods through a website
that is accessible to people around the world.

In fact, broadband may create possibilities for e-commerce as
revolutionary as mail order catalogues were in the 19th century.

But the blossoming of new services depends in large measure on preparing
the soil -- installing the telecommunications infrastructure first.

# The Importance of Uniform Access

Problems arise, however, when some geographic areas or demographic
groups do not have access to high tech tools, and thus are left out of
the communications revolution.

As e-commerce becomes more and more widespread, broadband services will
become an essential component to operating a business. I can foresee a
time when, for example, factories will need access to high-speed
services in order to locate and place orders for additional supplies.
Lack of access, therefore, could result in factory closures, which could
have a devastating impact on jobs, population growth, and economic
prosperity.

Lack of broadband access can also impact a community\'s education,
health care, and recreational services. A child assigned to write a
school report on Abe Lincoln can produce a very comprehensive product if
she can pull up the contents of the Library of Congress at the click of
a mouse. The edge that Internet-savvy kids have over kids who don't have
access to these services can have an enormous impact on future
generations.

High-quality healthcare is also of critical importance to communities.
Telemedicine facilitates exchange patient information from one site to
another over electronic communications. Telemedicine can save lives in
remote rural areas where a patient and the closest health care
professional are miles apart.

For example, a specialist at a North Carolina University Hospital was
able to diagnose a rural patient's hairline spinal fracture at a
distance, using telemedicine video imaging. The patient's life was saved
because treatment was done on-site without physically transporting the
patient to the specialist who was located a great distance away.

The disabled community can also reap the benefits of broadband services.
This morning at our FCC meeting, we saw a demonstration of video relay
conferencing. It enabled those with hearing disabilities to carry on
real time conversations with others using technologies that convert
among voice, text, and sign language.

Even beyond education and healthcare, access to broadband services is
changing the way that people live. My daughter attended a camp this
summer which contemporaneously posted on its web site photos of the
campers' production of Shakespeare's *As You Like It*. I liked it a lot.
My son spends hours on-line with his classroom buddies, working on
homework projects and playing games.

But without access to high-speed services, there is a real danger that
communities might get left behind.

# Identifying Barriers

Our biggest challenge as government officials and community leaders is
to identify any barriers that might exist, and to eliminate them.

One way that communities, or portions of communities, can be left behind
is lack of infrastructure into the home -- also known as the broadband
"last mile." A massive backbone infrastructure doesn't help much if the
wires into your house are of poor quality or low capacity, and the
bitstream slows down to a trickle by the time the information enters
your home computer.

I am delighted that companies in virtually all sectors of the
communications industry are rushing to deploy broadband services. Some
broadband access technologies work better than others, depending upon
the location, the economics, and the use.

The role of government is not to pick winners and losers. Rather, our
job is to eliminate barriers to competition so that companies have the
incentive to invest and innovate. If we are successful, consumers will
have the opportunity to choose the technology that best meets their
needs.

Communities have also expressed frustration about lack of access to the
high-speed backbone that crisscrosses our vast country. Just because a
fiber-optic cable passes through a rural community, it doesn't mean that
the Internet traffic generated by citizens of that community can enter
the backbone at that point.

This is the Internet equivalent of the impact that the first railroads
had on industrial communities. That is, having train tracks nearby is
only helpful if there is also a train depot.

For the Internet, there must be an onramp \-- or "point-of-presence" \--
to transfer traffic onto the Internet backbones that are so essential to
connecting the World Wide Web.

# What can be done?

The next question is: how can we all work together to make broadband
deployment to all Americans a reality?

First, here is what we do *not* want to do. We must not stifle the
growth of the Internet by imposing unnecessary regulation. The Internet
has grown enormously in recent years with minimal government regulation,
subject instead to the competitive marketplace principles of openness
and connectivity. We must remember that regulation imposes costs. Often,
the best action is to take no action.

But there are initiatives we *should* undertake to promote investment
and help accelerate deployment of high-speed services.

## **E-Rate**

One initiative is a program that Congress and the Clinton/Gore
administration established in the 1996 Telecommunications Act to help
link schools and libraries to the Internet. This program is called the
e-rate.

In its first two funding years, the FCC's e-rate program has committed
more than \$3.6 billion to provide schools and libraries across the
country with discounts on telecommunications services and Internet
connections to the classroom. Using these discounts, small town
libraries can provide access to information previously available only in
big cities, and schools can introduce an entire generation of students
to the Internet. They can provide distance learning, enabling students
to select from a wide range of advanced courses previously available
only in the largest or wealthiest schools.

We give priority to the most economically disadvantaged schools and
libraries. We also allow each institution to select the services it
needs.

The e-rate program is a huge success. In two years, over one million
classrooms were connected to the Net. A recent Department of Education
report found that almost two-thirds of public school classrooms are now
linked to the Internet. Moreover, classrooms are almost six times as
likely to have high-speed connections to the Internet, rather than
dial-up access.

Although the e-rate program is making a difference, there is still much
more work to be done to bridge the Digital Divide. Sadly, as the
Department of Education report found, 74% of classrooms in *low-poverty*
areas, but only 39% in *high-poverty* areas, are connected to the Net.
By targeting discounts to those most needy, we can give all Americans
the skills and knowledge to thrive in the Information Age.

***Section 706 Reports***

In addition to funding the E-rate program, the FCC -- together with the
states -- has a statutory obligation under Section 706 of the 1996 Act
to ensure that \"advanced telecommunications capability is being
deployed to all Americans in a reasonable and timely fashion.\"

The first step is to gather information to determine how rapidly
advanced services are being deployed and whether any segment of the
population is being left out. We issued our first annual Section 706
Report on broadband deployment just over a year ago.

In that report, we concluded that deployment of advanced
telecommunications generally appeared reasonable and timely, given its
early stages. Our initial finding was based in part on the fact that use
of broadband was equal to or surpassed the spread of other technologies,
such as mobile service and television, at a similar point in their
commercial life cycles.

Over the past year, broadband deployment has grown significantly. There
are now more than a million residential subscribers. We are encouraged
by the information we have received about the level of investment in
broadband by a wide assortment of companies, large and small. This
investment should lead to greater competition and more widespread
deployment.

At the time we issued our first Report, however, broadband deployment
was at such an early stage that we had only anecdotal evidence about
whether broadband was reaching rural and inner-city users and persons
with disabilities.

Just this morning we launched a *Notice* that will begin our second
inquiry into the status of broadband deployment. In this Notice, we have
posed specific questions to determine to what extent there is unequal
growth in broadband access between certain demographic groups and
regions of the United States.

If we determine that advanced telecommunications capability is not being
deployed to all Americans in a reasonable and timely manner, the statute
directs us to take immediate action to accelerate deployment by removing
barriers to infrastructure investment and by promoting competition in
the telecommunications market.

I encourage all of you to participate in this proceeding. It is an
excellent vehicle to assess how we are doing and to determine whether
barriers exist to more rapid deployment. You know firsthand the
challenges that your communities face. Your experience can help us to
reach our ultimate goal of enabling *all* Americans to have access to
the tools necessary to prosper in the Information Age.

#### Federal-State Joint Conference

We have also convened a Joint Conference with our colleagues on the
state regulatory commissions to promote the widespread and rapid
deployment of broadband services. We recently announced a schedule that
includes six regional hearings throughout the United States during the
next six months. Each hearing has a different focus. The themes range
from public/private partnerships to a special focus on deployment to
rural and urban multicultural communities.

As part of the Joint Conference, we will be publishing a Community Guide
that will highlight successful projects around the country. We want to
shine the spotlight on communities that have been able to accelerate the
deployment of advanced services to their homes and businesses.

Based on information gathered through our Second Notice of Inquiry and
the Joint Conference hearings, we will issue our Second Annual Report
within the next six months. In our second Report, we should have a more
accurate picture of the level of broadband deployment, and a better
understanding of steps we can take to accelerate deployment to consumers
in all regions of the country.

# Community Efforts

We are working very hard at the FCC to accelerate the deployment of
advanced services to all Americans, but there is also a lot that can be
done at the local level. Often, the best solutions are crafted by those
of you who are closest to the consumer.

There is a small town in Oregon called La Grande with a population of
13,000 people. After losing an opportunity to bring a major software
support company to town because of a lack of access to broadband
telecommunications services, the City, the County and the local
university came together to prevent future disappointments. They decided
to publicize their need for high-speed telecommunications connections.

First they tried to use their permit authority to get a telecom company
to provide access to its interstate cable by making access a condition
of passing through the community. Although that effort fell through,
they caught the attention of an entrepreneur who was enchanted by the
community's thirst for new technology. The entrepreneur created a new
telecommunications company to do business in that locality.

Through a combination of persistence and willingness to spend local
resources, a fiber optic point-of-presence was installed in La Grande in
August, 1999. The investment in telecommunications infrastructure made
it possible for an insurance claim processing center to relocate in the
town, resulting in 50 new jobs immediately with the assurance of 50 more
within two years.

This story illustrates for me the incredible power that local
governments and community leaders have to build a bridge leading into
their own communities.

Public entities like governments, schools, and hospitals are large
consumers. Working together you can use your considerable buying power
to attract new services and to put pressure on companies to upgrade
facilities.

The amount of investment in telecommunications infrastructure is
staggering. Don't rely solely on companies that serve you today. Talk to
new firms that see the market potential of smaller communities, and who
might be willing to engage in public-private partnerships. Use the
Internet to seek new suppliers.

***Conclusion***

This is truly an exciting time to be alive -- not only in America, but
around the world. A youngster in Boise, Idaho, communicates with a child
living in a burned-out village in Kosova. Teenagers in Japan can now
listen to the latest rock music coming out of Los Angeles.

Just this weekend, there was a front page article in the Washington Post
about a woman from one of the poorest regions of China. This 25-year old
former soldier and bar hostess, who never attended high school, posted
her photo on a Chinese website. She is now working in Nanjing as a
secretary.

The Internet is transforming lives across the country and around the
world.

We are all here with a common purpose --to ensure that a bright
technological future is available to every farmer, disabled veteran, and
inner-city school child in America. I look forward to working with you
to achieve that goal.

Thank you.