*Pages 1--5 from  Microsoft Word - 43167.doc*
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 Remarks  of  Michael  K.  Powell 
 Chairman,  Federal  Communications  Commission  Voice  on  the  Net  Conference 
 Boston,  Massachusetts  October  19,  2004 
 (as  prepared  for  delivery) 
 I.  INTRODUCTION 
 It  is  election  season  that  important  moment  in  American  life  when  we  choose  our  President.  Despite  the  closeness  and  toughness  of  this  election,  one  must  still  be  proud  of  the 
 enduring  tradition  of  our  democracy.  As  I  stand  here  before  you  in  Boston,  a  city  that  figured  so  prominently  in  the  founding  of  the  republic,  I  have  a  sense  of  how  our  first  President,  General 
 George  Washington,  would  have  felt  standing  before  the  Minutemen  that  would  form  the  Continental  Army,  for  like  him  I  am  looking  out  over  a  crowd  of  revolutionaries,  bent  on  ending 
 the  old-  line  regime  and  giving  birth  to  something  profoundly  new  you  are  bringing  about  a  revolution,  like  the  American  Revolution,  intent  on  bringing  power  to  the  people. 

 Clearly,  you  are  a  revolutionary  army  on  the  march: 
 The  fact  that  this  conference  has  doubled  its  attendance  from  last  year    to  5000  attendees    is  proof  positive  that  something  is  happening.  Seven  years  ago,  voice  over  the  Internet 
 protocol  (VoIP)  had  not  emerged  from  the  labs  in  any  meaningful  way,  desktop  computers  struggled  to  turn  256  cycles  per  second,  and  a  gigabit  of  storage  required  a  second  mortgage  on 
 your  home. 
 Today,  citizens  operate  on  machines  more  powerful  than  those  on  the  spacecraft  that  landed  on  the  moon.  WiFi  networks  are  dotting  the  American  landscape,  and  VoIP  has  ignited  a 
 fire  under  a  stalled  and  depressed  industry.  In  fact,  the  Yankee  Group  estimates  that  there  will  be  1  million  VoIP  subscribers  by  the  end  of  2004,  up  from  just  131,000  last  year.  Thats  a  650% 
 increase.  Something  is  taking  hold.  So,  it  is  with  great  pleasure  that  I  come  before  you  today  at  the  2004  VON  Conference  to  talk  about  the  new  revolution  and  how  important  it  is  for 
 government  to  nurture  the  Internet  as  a  platform  for  innovation  and  entrepreneurial  activity  and  not  crush  it  with  the  heavy  burdens  of  a  sovereign  out  of  touch  with  the  people. 

 II.  THE  FORCE  OF  CHANGE 
 Forces  have  been  building  for  some  time  that  have  allowed  VoIP  to  erupt  onto  the  scene.  The  central  drivers  of  todays  revolution  are  technological;  silicon,  storage  and  speedy 
 connections  have  combined  to  form  a  powerful  storm  that  is  reshaping  the  communications  landscape. 

 Micro  processing  power  continues  to  place  enormous  computing  capability  into  the  laps  and  palms  of  our  citizens.  Cheaper  and  greater  storage  places  enormous  volumes  of  information 
 into  our  living  rooms  and  even  our  pockets.  And,  the  growing  availability  of  high  speed  Internet, 
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 nearly  48  million  subscribers  by  our  latest  count,  is  connecting  up  these  forces  in  a  way  that  ensures  that  the  world  will  never  be  the  same. 
 Like  the  great  American  Revolution,  the  IP  technology  revolution  will  usher  in  a  new  form  of  democracy.  It  will  place  more  and  more  control  into  the  hands  of  individual  citizens  and 
 away  from  central  institutions.  In  short,  technology  is  democratizing  communications  like  never  before. 

 Just  consider  the  rash  of  devices  we  all  can  buy  today.  MP3  players,  like  Ipod,  let  consumers  be  their  own  record  producers.  PVRs,  like  Tivo,  let  consumers  be  network 
 programming  executives.  Cell  phones  are  highly  personalized  and  customized,  with  a  personal  number  people  take  with  them  wherever  they  go.  PDAs  have  WiFi  chips  in  them  and  let 
 Americans  access  the  worlds  information  from  almost  anywhere.  These  are  powerful  and  important  developments. 

 In  addition  to  individual  empowerment,  local  communities  are  revived  as  well.  Last  week,  I  was  in  New  York  City  and  visited  a  wonderful  studio  called  the  Manhattan 
 Neighborhood  Networks.  It  provided  facilities  to  allow  average  citizens  to  produce  their  own  programs  for  airing  on  public  access  channels.  It  allowed  members  of  the  community  to  check 
 out  top  quality  video  cameras,  once  only  available  to  the  most  sophisticated  news  operations.  It  taught  citizens  to  produce  and  edit  programs  on  desktop  computers,  using  off-  the-  shelf  software. 
 In  all,  MNN  says  it  has  over  1200  producers  from  the  community  who  cover  issues  unique  to  their  locality.  I  was  interviewed  by  some  kids  who  were  running  their  own  Youth  Channel  and 
 talked  with  some  of  them  over  publicly  available  WiFi  hotspots.  They  had  used  these  hot  spots  to  collect  footage  remotely  and  transmit  from  all  over  the  city.  This  is  technology  for  the 
 masses. 
 VoIP  will  do  the  same  thing  for  voice  service  that  technology  is  doing  in  other  walks  of  life  bring  greater  value  to  individuals  and  communities. 

 VoIP  offers  consumers  unprecedented  flexibility,  unheard  of  in  traditional  telephone  services.  I  recently  returned  from  an  extraordinary  trip  to  Cypress  and  Jordan  where  Khalid 
 Hudhud,  a  senior  official  with  the  Jordanian  Ministry  of  Telecommunications,  uses  a  VoIP  phone  with  a  617  area  code  to  make  calls  to  family  and  friends  living  in  the  U.  S. 

 Just  like  many  other  applications  provided  over  the  Internet,  VoIP  is  nomadic,  it  doesnt  matter  where  the  provider  is  located    a  server  providing  a  VoIP  application  could  be  down  the 
 street,  or  in  the  next  state,  or  in  Britain,  Ukraine,  India,  or,  as  is  currently  the  case  with  Skype,  which  has  been  downloaded  over  15  million  times  by  users  around  the  world,  in  Estonia.  This  is 
 not  your  fathers  telephone. 
 The  IP  revolution  also  unleashes  the  strength  of  innovation  and  entrepreneurial  spirit  that  has  been  the  hallmark  of  American  economic  life.  The  Commission  has  squarely  recognized 
 how  dramatic  a  change  it  is  to  move  from  a  circuit  based  network,  in  which  applications  are  tightly  woven  into  the  architecture  and  controlled  centrally,  to  an  IP  network  that  is  capable  of 
 running  applications  over  top  of  it.  It  means  great  innovation  is  possible.  Through  creative  software  development,  competitors  can  create  new  applications  that  can  ride  on  any  IP  platform, 
 at  substantially  lower  cost. 
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 This  holds  great  promise  for  the  communications  sector.  It  means  lower  prices,  greater  value,  more  competition,  and  more  innovative  services.  VoIP  is  barely  a  few  years  old  as  a 
 retail  offering  and  providers  have  already  cut  prices  several  times  to  compete  for  consumers.  These  are  the  benefits  indicative  of  a  true  revolution. 

 To  realize  the  innovation  dream  that  IP  communications  promises,  however,  we  must  ensure  that  a  willing  provider  can  reach  a  willing  consumer  over  the  broadband  connection. 
 Ensuring  that  consumers  can  obtain  and  use  the  content,  applications,  and  devices  they  choose  is  critical  to  unlocking  the  vast  potential  of  the  Internet. 

 Today,  broadband  consumers  generally  enjoy  such  freedom.  Numerous  benefits  will  follow  if  the  industry  continues  to  preserve  choices,  value,  and  personalization  that  broadband 
 users  continue  to  expect  and  demand.  Internet  Freedom  will  promote  comparison  shopping  among  the  growing  number  of  providers  by  making  it  easier  for  individuals  to  obtain  access  to 
 meaningful  information  about  the  services  and  technical  capabilities  they  rely  on  to  access  and  use  the  Internet. 

 Moreover,  Internet  Freedom  promotes  innovation  by  giving  developers  and  service  providers  confidence  to  develop  applications  that  will  reach  consumers  and  run  as  designed,  and 
 also  serving  as  an  insurance  policy  against  the  potential  rise  of  abusive  market  power  by  vertically  integrated  providers. 

 Some  in  the  industry  are  beginning  to  recognize  the  importance  of  consumer  empowerment  and  the  Internet  Consumer  Freedoms  that  I  have  outlined: 
 (1)  Freedom  to  Access  Content:  Consumers  should  have  access  to  their  choice  of  legal  content; 
 (2)  Freedom  to  Use  Applications:  Consumers  should  be  able  to  run  applications  of  their  choice; 
 (3)  Freedom  to  Attach  Personal  Devices:  Consumers  should  be  permitted  to  attach  any  devices  they  choose  to  the  connection  in  their  homes;  and 

 (4)  Freedom  to  Obtain  Service  Plan  Information:  Consumers  should  receive  meaningful  information  regarding  their  service  plans. 
 There  are  positive  developments  in  this  space:  providers  are  beginning  to  offer  naked  DSL  access  to  their  broadband  pipe  without  the  requirement  that  customers  also  subscribe  to 
 their  voice  offering.  Similarly,  AOL  and  MSN  recently  announced  an  agreement  to  integrate  their  instant  messaging  services. 

 The  entire  broadband  industry  should  nevertheless  take  heed  of  how  critical  unfettered  access  to  the  Internet  has  been,  and  will  continue  to  be,  to  the  success  of  the  Internet.  Consumers 
 have  a  high  expectation  that  such  access  will  continue,  and  the  benefits  to  them  and  the  nation  are  significant. 
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 III.  REGULATORY  CHANGE  A  NEW  CONSTITUTION 
 George  Washington  presided  over  the  Constitutional  Convention  in  1787.  He  and  the  founding  fathers  had  come  to  realize  that  the  old  form  of  governance  would  not  suit  the  young 
 republic.  It  needed  a  different  form  of  government  and  a  new  Constitution,  one  befitting  the  ideals  of  the  revolution:  a  Constitution  that  recognized  the  centrality  of  the  individual,  saw  the 
 need  for  federal  supremacy  of  the  law,  and  promoted  the  importance  of  interstate  commerce  to  the  economic  well-  being  of  the  nation. 

 We,  too,  need  a  new  Constitution  for  the  regulation  of  services,  one  befitting  that  revolution. 
 Many  regulators  have  protested  change,  saying  that  VoIP  is  just  a  different  way  to  make  a  phone  call.  But  isnt  that  the  point!  It  is  a  different  way,  and  it  deserves  a  different  regulatory 
 structure  that  reflects  its  unique  qualities.  I  guess  one  could  say  that  the  Constitution  and  the  democratic  form  of  government  are  just  another  way  to  run  a  nation. 

 But  it  was  not  just  another  way,  it  was  a  better  way  one  that  produced  the  greatest  nation  in  the  world.  A  nation  where  someone  with  a  good  idea  has  an  opportunity  to  succeed 
 with  minimal  interference  from  the  government.  A  different  way  that  favored  the  individual  over  institutions.  A  different  way  that  has  led  to  great  prosperity.  I  support  a  different  way  for 
 voice  over  the  Internet,  and  if  we  have  the  courage  of  our  forefathers  to  pursue  it  we  will  be  equally  rewarded. 

 Its  wrong,  just  plain  wrong  to  not  recognize  the  potential  of  VoIP,  or  to  see  it  through  the  lens  of  the  old  telephone  network  regulatory  model.  VoIP  is  a  data  application  and  as  such 
 has  all  the  hallmarks  of  the  Internet  itself. 
 Like  the  Internet,  the  change  is  cosmic;  it  obliterates  the  importance  of  time  and  distance.  There  is  no  need  to  organize  the  regulatory  regime  around  per  minute  prices  and  costs  as  we 
 have  done  with  common  carriers.  VoIP  service  is  offered  in  flat  bundles,  recognizing  the  efficiency  and  small  incremental  costs  of  information  services.  We  have  seen  the  great 
 advantages  of  cell  phone  buckets  of  minutes  and  what  that  did  to  increasingly  erase  the  idea  of  long  distance  as  a  distinct  service.  VoIP  will  complete  the  circle  and  collapse  any  such 
 geographic  distinctions  in  all  voice  service. 
 Like  the  Internet,  IP  data  communications  knows  no  borders.  In  the  height  of  the  dot  com  boom  you  often  heard  commentators  speak  of  the  death  of  distance.  It  was  an  accurate 
 understanding  of  the  Internet  and  IP  communications.  If  it  were  true  of  the  Internet  generally,  it  is  unquestionably  true  of  VoIP.  This  has  profound  implications  for  the  traditional  common 
 carrier  regulatory  model.  And  bold  action  is  needed. 
 It  is  very  likely  that  treatment  of  VoIP  will  have  some  of  the  farthest  reaching  consequences  of  anything  the  Commission  will  consider  in  the  near  future.  The  Commission  is 
 not  simply  considering  minor  adjustments  to  specific  regulations    the  Commission  is  considering  the  future  of  electronic  and  optic  communications  for  many  years  to  come.  And  we 
 have  to  get  this  right. 
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 The  first  step  in  getting  policy  pointed  in  the  right  direction  is  for  the  Commission  to  step  forward  and  affirmatively  establish  jurisdiction  over  these  services.  That  is  why  I  will  present  to 
 my  colleagues  for  a  decision  the  question  of  whether  VoIP  services    like  Vonage  -  should  be  subject  to  exclusive  federal  jurisdiction.  We  cannot  avoid  this  question  any  longer.  To  hold  that 
 packets  flying  across  national  and  indeed  international  digital  networks  should  be  subject  to  state  commission  economic  regulatory  authority  is  to  dumb  down  the  Internet  to  match  the  limited 
 vision  of  government  officials.  That  would  be  a  tragedy.  I  look  forward  to  working  with  my  state  and  federal  colleagues    indeed  my  international  colleagues    to  ensure  that  a  minimal, 
 well-  harmonized  regulatory  environment  is  applied  to  VoIP  services. 
 IV.  CONCLUSION 
 So,  here  we  are  on  the  precipice  of  something  big.  And,  like  our  founding  fathers,  we  will  have  to  decide  where  we  stand.  Will  we  have  the  courage  to  stand  for  change,  going  boldly 
 forward  toward  the  promise  of  a  better  world?  Or,  will  we  stand  timidly  with  the  familiar? 
 As  for  me,  to  paraphrase  another  great  American  Patrick  Henry,  as  for  VoIP  I  say:  Give  it  liberty,  I  say  give  it  revolution! 

 -  FCC  - 
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