REMARKS OF REED E. HUNDT
               CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION
                                    
                      AMERICAN CHAMBER OF COMMERCE
                             WARSAW, POLAND
                            JANUARY 23, 1996
     

     Thank you all very much for inviting me today, and for rising at the crack of dawn
on a cold winter's day to talk with me about a revolution that will go down in history as the
most benign,  bewildering and beneficent revolution humans have ever put themselves
through, the communications revolution.

     It is fashionable to discuss the challenge of change that the communications revolution
puts to societies and economies.  Of course there are few countries in history that can claim
to have shown more boldness, courage and success in confronting the necessity of change
than Poland.

     In the last six years -- it must seem like lifetimes to you -- Poland has simultaneously
experienced democratic and economic revolutions. 

     The Nobel Prize winning poet Czcslaw Milosz has written of the "command to
participate actively in history."  This is a command that has been heard and answered by you
in this room, and of course by the people of Poland.  You have not only participated in
history:  you have made history here in Poland in the last few years.

     In this tumultuous and inspiring time the American Chamber of Commerce has played
a tremendous leadership role.  I am honored to be invited to speak to you, and in particular I
would like to thank the members of the Chamber here, including especially Ameritech,
AT&T, Motorola, RP Telecom, and US West for hosting this special Chamber breakfast. 
My special thanks also to Ambassador Rey, who is doing such an outstanding job of
representing the United States here in Poland, for welcoming me to visit with you today.

     I am here to talk to you about participating in still another chapter of history: the
transformation of the world economies and societies from the industrial to the information
age.  I am here also to seek participation in this transformation from colleagues with whom I
will be meeting later today:  communications ministerial officials from the Czech Republic,
Hungary, Lithuania, the Slovak Republic, and Ukraine, as well as, of course,  our Polish
hosts, with special acknowledgement to the amiable and farsighted Polish Minister of
Communications Andrzej Zielinski.

     We will be discussing our common challenges, in particular our common goals in the
World Trade Organization's Telecom Services Talks. 

     In these discussions, and in similar discussions on the need for a global information
initiative I have had on previous trips to Germany, France, Russia and Spain, the
fundamental topic is revolution.  After the revolution of democracy, after the revolution of
market economics, there comes, faster than an international internet data transfer, the
communications revolution.

     Such a confusing thing is the communications revolution.  We all sense that it takes
us from the industrial age to the information age; that it destroys jobs by the bushel and
creates jobs by the ton; that it tears down business organizations and invents whole new
forms of business.  We know that it changes the way people learn, the way they elect and
run governments, the way they get health care, entertain each other, find out the news.  But
we don't know by any means where it is taking us.  We just know we feel its tidal pull, and
to avoid drowning we have to exert some control over our direction.

     And it wouldn't be bad, I suppose some of you are thinking, if we knew what to
invest in as well.

     In the middle of the American Civil War, President Abraham Lincoln said, "I confess
plainly not to have controlled events but to have been controlled by them."

     This sort of candor got him the nickname Honest Abe.

     To be honest, none of us controls the communications revolution -- we're controlled
by it.  But we can speculate about its future.

     If you ask me whether internet telephone calls will destroy today's accounting rates
scheme and ultimately make international calls as cheap as or cheaper than local calls today. 
I can only say probably, but I'm not sure.

     Will satellites, digital terrestrial broadcast, and other new delivery mechanisms bring
a hundred channels of video to every village, town, city and country in the world within five
to ten years: probably, but I don't know for sure.

     Will wireless telephony lead to a tripling or quadrupling of the telephone penetration
of Eastern European countries in less than a decade?  Probably, but not certainly.

     Will open communications regimes, with transparent rules, independent rulemakers,
and privatized, liberalized markets lead to accelerated economic growth and double digit job
growth in both less developed and developed economies?  I think so. Indeed I believe it to be
true.  But the case hasn't been proved through experience yet.

     Will medical advice and education and other services be transformed by the
communications revolution, so that the highest quality of advice that can be delivered by
voice or video or data will be available anywhere on the planet?  Yes, but it's not clear who
will have access to the cornucopia of skills that telemedicine and tele-education will make
available.

     And will the main obstacle to the delivery of all the economic and social benefits of
the communications revolution be the threat of alliance between dominant monopolies and
government?  This is the one questions I feel I can answer with certainty.  You bet.

     Historian Karl Polayni writes about the 'great transformations' of society.

     The communications revolution can and I think inevitably will lead to great
transformation in domestic and global economies.  In national and international society.  The
timing of this transformation can be delayed by problems of capital formation, or competing
claims on consumer spending, or twists and turns in technological development.

     But mere delay in the development of some technology in a particular country will not
be a long term concern.  The real continuing, long term challenge, for any country,
including the United States, is that there is always a possibility that governments and
incumbent companies may seek not just to delay, but to block forces of change.

     Dominant communications companies and the governments of the countries they are
in must go through great transformations to obtain the benefits of the communications
revolution.  These transformations start with the familiar steps of privatization, liberalization,
fair rules of competition like interconnection rules, and the creation of an independent,
transparent rulemaker.

     The steps are well-known to everyone here, are more the same than different in every
economy, and must be taken to permit the communications revolution to bring about true
transformation in any country.

     There are many practical reasons why regulators and regulated monopolies might
want not to take these steps.  These reasons exist in every country, including mine.

     Some fear incumbent monopolists will be forced to lay off employees if they embrace
the changes needed to participate in the communications revolution.  These fears are
probably justified, there has been much downsizing in U.S. companies, including substantial
recent layoffs at AT&T.

     But in the United States, those employees who may lose their jobs with traditional
communications providers are much in demand -- by the communications competitors and
new computer services entrepreneurs who are entering the market.  To cite one example I am
familiar with from personal experience, one of the fastest growing and most sophisticated
new job opportunities is in the toll-free computer assistance "help desk."

     Others fear their ability to attract capital investment will be adversely affected by
change.  But overall, the stock market embraces and thrives on the communications
revolution, and the significant benefits it offers to the economies of those countries who
liberalize their markets.

     Still others worry that universal service will be harmed by such liberalization.  Our
experience suggests the opposite --  that competition does far more than monopolies to
further universal service.

     These concerns must be overcome, the steps of reform must be taken.   

     If our Congress passes a telecommunications reform bill in a month or two, as I think
it will, the FCC will be newly empowered to take these procompetitive steps in all sectors of
our communications economy.

     We can expect the companies with dominant market share in the local exchange
market, in cable, and in other areas, to argue vigorously against many of the steps we must
take.

     But everyone will benefit after all markets are open to competition, and after new
competitors can count on procompetitive rules to give them a chance to succeed.  If Poland
had not embraced free trade when it jumped to a market economy, its exports wouldn't be
booming now.  And if we in the United States and elsewhere don't embrace competition in
both theoretical and practical terms, we won't get the tremendous capital investment, job
creation, and consumer benefits that are certain to follow from that competition.

     So this is our message to ourselves at home and here and elsewhere. 
Communications services are like software, soap, salsa and shoes.  Free trade,  open
markets, rules limiting anticompetitive behavior by dominant firms, all bring economic
growth in communication services as well as in shoes.  And this approach also brings
innovation and widespread distribution of the relevant products.

     When modern communications becomes cheap, widely available, and competitive,
then it begins to play its  full role in the great transformation of economies and societies. 
Modern communications can build democracy; it can bring medical advice down from a
satellite or through a broadband pipe to remote villages and towns; it can make news and
entertainment the common fare of everyone in a country; and it can tie nations and peoples
together.

     The Irish Times of Dublin now publishes its newspaper not only 8 in Dublin but in
Chicago, to the many Irish Americans living there, thanks to cheap modern communications.

     With 10 million Americans proudly claiming Polish origin, who knows that
newspapers, tv shows and radio broadcasts from Warsaw will be big hits in Chicago.  But I
know that such a thing is a real possibility.

     There is no reason why some countries and some economies must be first in
embracing the communications revolution and others must wait their turn.  Network
economics and technology are the same everywhere.  Each country has special circumstances
and of course the United States has an advantage because of its huge consumer market.  But
fundamentally every country has a clear chance in this present time to benefit immediately
from the communications revolution.

     Indeed it's already happening.  I believe every Eastern European country has seen a
huge increase in telephone penetration since the wall fell in East Berlin.  And every Eastern
European country has welcomed major investment from the West as it has begun to open its
market to new communications companies.

     But the pace of change can accelerate even faster, and the development that will
follow rapid early adoption of competition in communications can help sustain all other
reforms any of us desire, from more educational tv and better political campaigning in the
United States to whatever goals any other country would put first on its agenda.

     The path to fundamental transformation in communications was first described by our
Vice President, Al Gore, in a now famous speech he gave in Buenos Aires in early 1994. 
There he called for a worldwide Global Information Infrastructure initiative by which the
governments of the world would make way for an information highway to run through every
country and bring us all together.

     His basic principles have since been adopted by the International Telecommunication
Union as the core precepts of policy.  They have been endorsed by the G7.  They have been
advocated at a Business Roundtable Meeting in Madrid last fall.  And they are the agenda for
the all important discussions known as the Telecoms Services negotiations in the World
Trade Organization.

     The principles on which offers must be made if the G11 is going to work are simple,
although they must also be set forth in meaningful detail.

     1.   Separate telecoms regulators from telecoms operators and privatize the
operators as soon possible.  Let private foreign investment help that process.

     2.   Introduce competition in the provision of telecoms services and facilities on a
"date certain" basis.  Do as much as possible as soon as possible.  What you do not permit
now, set a time for allowing in the future.

     3.   Competition won't automatically happen when it is declared legal.  Efficient
markets depend on fair effective rules for governing relations between the dominant carrier
and new entrants -- that is, for setting rules of interconnection and competition.

     4.   Governments generally have no problem getting the blame they deserve;
getting the credit is more difficult.  To get the credit -- and the political authority -- for
bringing the benefits of the communications revolution, governments need to create
independent rulemaking authorities that rely on open transparent processes for their
decisionmaking.

     5.   We are all competing for capital.  Communications capital markets are global. 
To compete fairly, and to get a fair share of investment, each country is going to need to
lower foreign ownership barriers.  In every country the watchword should be local needs and
world money; the alternative will be local needs and no money.

     The WTO Talks offer a platform for a common approach to these fundamentals of
regulation.

     Frankly the participation of the countries of Central and Eastern Europe is needed in
order to do the right thing globally.  We must act together for  the WTO negotiations to be
successful.

     The telecommunications ministries in the countries of Central and Eastern Europe
recognize the timeliness of the WTO talks.

     Three countries -- the Czech Republic, Hungary, and the Slovak Republic -- have
made offers that are substantive and valuable contributions to the WTO negotiations.

     Poland is now formulating its offer, and Minister Ziolinski's willingness to host
today's High-Level Meeting of telecommunications ministers is a comment on the importance
that Poland attaches to the WTO Talks.
     
     The countries of Lithuania and Ukraine are in the process of acceding to the World
Trade Organization.

     Successful competition of the WTO Talks is a matter of great importance to
parliamentarians, to communications finance ministries, to regulators, to the communications
and information industries, and to the companies and individuals that subscribe to
communications services.

     I hope you who are here today will all joint me in urging the progressive market-
opening approach through the WTO Talks.

     I don't have the Nobel Prize winning stature to issue a "command to participate
actively in history."
     
     But I do believe that the opening of all markets to communications competition in
tantamount to welcoming the communications age.  And that is what it means to embrace a
benign, if somewhat bewildering, future instead of opposing it.

     There is no country on the planet that does a better job at welcoming the future and
putting away the mistakes of the past right now than Poland, so I suspect I've come to the
right place for my message.

     Thank You.

NEWS                                                     January 23, 1996
                                    
                                    
       CHAIRMAN HUNDT URGES COUNTRIES TO FASHION TELECOM POLICIES
                  AROUND "LOCAL NEEDS AND WORLD MONEY"
                                    
     Urging foreign countries to allow increased foreign investment in their telecom
industries, FCC Chairman Reed Hundt said "In every country the watchword should be local
needs and world money; the alternative will be local needs and no money."
     
     Hundt was speaking in Warsaw, Poland, where he is meeting with communications
ministerial officials from the Czech Republic, Hungary, Lithuania, the Slovak Republic and
Ukraine concerning "common challenges and common goals" in the World Trade
Organization's Telecom Services Talks.

     He noted that "Successful completion of the WTO Talks is a matter of great
importance to parliamentarians, to communications and finance ministries, to regulators, to
the communications and information industries, and to the companies and individuals that
subscribe to communications services. . . . [T]he opening of all markets to communications
competition is tantamount to welcoming the communications age.  And that is what it means
to embrace a benign, if somewhat bewildering future, instead of opposing it."

     "When modern communications becomes cheap, widely available, and competitive,"
Hundt said, " then it begins to play its full role in the great transformation of economies and
societies.  Modern communications can build democracy; it can bring medical advice down
from a satellite or through a broadband pipe to remote villages and towns; it can make news
and entertainment the common fare of everyone in a country; and it can tie nations and
peoples together." 

     He said, "There is no reason why some countries must be first in embracing the
communications revolution and others must wait their turn.  Network economics and
technology are the same everywhere.  Each country has special circumstances and of course
the United States has an advantage because of its huge consumer market.   But fundamentally
every country has a clear chance in this present time to benefit immediately from the
communications revolution."

     He said, "The WTO Talks offer a platform for a common approach to these
fundamentals of regulation.  Frankly, the participation of the countries of Central and Eastern
Europe is needed in order to do the right thing globally.  We must act together for the WTO
negotiations to be successful."

     He said if the Global Information Infrastructure, first described by Vice President
Gore in Buenos Aires in early 1994, is going to work, all countries must adhere to five
fundamental principles.   

     "1. Separate telecoms regulators from telecoms operators and privatize the operators
as soon as possible.  Let private foreign investment help that process.

     2. Introduce competition in the provision of telecoms services and facilities on a "date
certain" basis.  Do as much as possible as soon as possible.  What you do not permit now,
set a time for allowing in the future.

     3. Competition won't automatically happen when it is declared legal.  Efficient
markets depend on fair effective rules for governing relations between the dominant carrier
and new entrants -- that is, for setting rules of interconnection and competition.
 
     4. Governments generally have o problem getting the blame they deserve.  Getting the
credit is more difficult.  To get the credit -- and the political authority -- for bringing the
benefits of the communications revolution, governments need to create independent
rulemaking authorities that rely on open transparent processes for their decisionmaking.

     5. We are all competing for capital.  Communications capital markets are global.  To
compete fairly, and to get a fair share of investment, each country is going to need to lower
foreign ownership barriers." 

                                  - FCC -