In the Matter of:
FEDERAL COMMUNICATIONS COMMISSION
A NEW FCC FOR THE 21ST CENTURY
Pages:    1 through 131
Place:    Washington, D.C.
Date:     May 20, 1999
      FEDERAL COMMUNICATIONS COMMISSION
     A NEW FCC FOR THE 21ST CENTURY
                   The Portals
                   445 12th Street, S.W.
                   Washington, D.C.
                   Thursday,
                   May 20, 1999
                   The parties met at 2:00 p.m.
                   BEFORE:  WILLIAM E. KENNARD
                            Chairman
                   APPEARANCES:
                   Mr. Jonathan Askin
                   Ms. Blackler
                   Ms. Kathryn Brown
                   Mr. Leonard J. Cali
                   Mr. Alan F. Ciamporcero
                   Mr. David L. Donovan
                   Ms. Michele C. Farquhar
                   Mr. Brian F. Fontes
                   Mr. Jerald N. Fritz
                   Mr. Bruce D. Jacobs
                   Mr. Thomas M. Koutsky
                   Ms. Patricia A. Mahoney
                   Mr. Robert M. McDowell
                   Mr. Roy M. Neel
                   Ms. Melissa Newman
                   Mr. Preston Padden
                   Mr. Andrew R. Paul
                   Mr. Michael V. Roberts
                   Mr. Dale "Zeke" Robertson
                   Mr. John N. Rose
                   Mr. Jonathan B. Sallet
                   Mr. Sargeant
                   Mr. Grant E. Seiffert
                   Mr. Alan R. Shark
                   Ms. Lisa Sockett
                   Mr. Thomas J. Tauke
                   Mr. David S. Turetsky
                   Mr. Brent Weingardt
                   Mr. James Winston
                   Mr. David W. Zesiger                         P R O C E E D I N G S
                   CHAIRMAN KENNARD:  Good afternoon, everybody, and
     thank you for coming.  I look around the table.  There are a
     lot of very familiar faces, and that's a good thing because
     assembled here are the people who appear a lot before the
     FCC and know all our strengths and weaknesses.  And that's a
     good thing because we are here to do what I believe is one
     of the most important initiatives that I will preside over
     while I'm here, and that is designing and implementing a
     plan to restructure the FCC for the next century.
                   And it's an effort that we are taking very, very
     seriously at the FCC and are devoting a lot of resources to
     because the cost of not doing something dramatic here is
     great, because we do need to remake this agency and reform
     it and make sure that it is relevant in protecting consumers
     into the next century.  A difficult thing to do, because as
     you know, this agency is overwhelmed with work right now.
                   We are still involved in a lot of the
     implementation of the '96 Act.  We are dealing with a lot of
     mergers and transactions that arose out of that act.
                   It's a very, very busy place, so we are challenged
     today to write the blueprint for how the FCC should look in
     the next century, and at the same time handle this
     tremendous work load that you know we have before us.
                   I outlined this process when I testified earlier
     this year before the House Telecommunications Subcommittee,
     and I hope some of you have had a chance to look at that
     plan.  But, basically, I outlined a process which we are
     engaging in today by kicking off the first of these three
     forums, but also a vision for what the FCC's core functions
     should be as we move into a more competitive deregulatory
     era.
                   Now, I outlined what I think are going to be those
     core functions.  And that is universal service, spectrum
     management, and consumer protection.  Getting there, though,
     means that we've got to succeed in bringing competition to
     all aspects of the communications marketplace.  That, I
     believe, is what Congress directed us to do in the 1996 Act,
     and Congress's vision is that we would write the rules to
     get that process going, implement a policy to promote
     competition, and then our mission would change dramatically
     as we move into more competitive markets.  And it's my hope
     that you folks today will tell us what your vision is for
     the future FCC and how we get there.
                   And I'm going to ask you to do something for me,
     which I think is really essential if this process is going
     to be successful.  And that is, I hope that you will put
     aside some of the -- what I'll say the more parochial
     arguments that you have.  That is, we know all the dockets
     that are before us.  We know what's in your pleadings, and
     we could probably go around this room and pretty much tell
     for each person what the hot button issues are and what you
     ant us to do in universal service or access reform or must-
     carry.  We know that.
                   What we'd like you to do and what I urge you to do
     is to put that aside for the moment and tell us how the FCC
     could work better, what the FCC should look like in order to
     work better.  And I'm almost going to ask that you be fairly
     candid in that assessment because there are some things that
     you might feel constrained to say in this group.  But tell
     us whether you think how the process on the 8th floor could
     be improved.  I certainly have my own frustrations which I
     can't really share with you, but I hope that you can share
     your views about that.
                   The circulation process, what works?  What doesn't
     work?  Where are the bottlenecks?  Where in the agency are
     we not communicating effectively, and how could we change
     that?
                   And what we're really looking for is not just a
     laundry list of issues from each one of you, because that
     becomes cumbersome and difficult to deal with.  But
     prioritize it for us.  Give us your top three or five things
     that we could do to really remake the agency and make it
     better, both as a matter of policy and process.
                   And I'm hoping that this process of the forums
     that we're going to have will kick off a really robust
     debate in the communications bar and the industry, and
     people will start to coalesce around some sort of
     fundamental truths that we all should be pursuing.
                   So, with that, I will turn it over to our Chief of
     Staff, who will outline for us what we intend to achieve
     today.  Thank you again for being here.
                   MS. BROWN:  Thank you.  I'm Kathy Brown, Chief of
     Staff to Chairman Kennard.  I also thank all of you for
     coming today for answering our notice to say, "Please come
     and help us in this process."  And so, thank you really for
     your time.  I realize your time is valuable.
                   Just to sort of outline what we should do, we put
     forth a couple of questions which we hope could perhaps just
     structure the discussion.  We have about two and a half
     hours.  We don't need to take that long if we can say this
     all in an hour.  That's fine, too.  But we wanted to provide
     an opportunity actually for a conversation.
                   My role, and I will try hard to stay with it here
     is to be neutral and to listen.  So, if you see me wanting
     to respond, Pepper's job is to hold me back and just allow
     you really to talk and for us to listen, and try to listen
     actively to what it is you're saying.
                   We hope for a very -- we want a working meeting,
     which is why you see flip charts.  We'd like to actually
     take your comments, let you see what people are saying, see
     if folks are coalescing around a particular issue, if
     there's a particular direction we think we ought to go, and
     see if we can't get a sense of the community as to what the
     main issues are going forward.
                   And so, we'll start with that vision thing.  Where
     is the industry going to be in five years, in ten years?
     And then how does a regulatory agency and structure reflect
     the changes in the industry that we would anticipate?  In
     the shorter term, what is it we need to get to that vision?
                   And so, we'll talk a little bit about how.  In the
     second part, we might do better in terms of implementing the
     current structure, how we might need to change that
     regulatory structure.  And there, I mean much more process
     oriented.  And in the third part of the discussion, we
     thought we would put on the table what are sort of the
     organizational structures that will help us get there.
                   So, that's sort of the logic of the meeting.
     Where are we going?  How can we get there?  And then, what
     structure really will work to back up that sort of vision
     and mission?
                   I thought to open we would all go around and
     introduce ourselves and perhaps say a word or two.  And I
     would hope you would all keep this to a sentence or two
     about what your vision is of the industry, of an industry
     that's fast changing, of a structure that's fast changing,
     and then perhaps just a word or so about what you see
     happens with respect to the regulatory structure and agency.
                   Before we do that, though, I thought it would be
     good for the group to just agree on some ground rules for
     the meeting.  And so, why don't I suggest the first, and
     then if other folks would like to suggest some ground rules,
     I'd like to just get them up there and then see if we can
     agree to them.
                   I would like first to suggest that we try to build
     on each other's ideas so that if someone hears an idea that
     they would like to jump in on, that we try to build on that
     idea and see where we go with it.  One ground rule.  Others?
                   Let me just suggest that one person speak at a
     time, and third, that you don't throw anything at the
     moderator, and I guess I'm okay to start.
                   Where shall we start?  On the right or the left?
     Alan?  Brian, where do you want to start?  Go ahead, Alan.
     If you would introduce yourself, sort of who are you with or
     what part of the industry you represent, and then a word or
     two about your vision.
                   MR. CIAMPORCERO:  Hi.  I'm Alan Ciamporcero with
     GTE.  Kathy, just one ground rule.  This always seems to
     work reasonably well in other places.  Maybe if people want
     to talk, they put their thing up like that.
                   MS. BROWN:  That would work.  If you want to talk
     after our introductions, and you just go like this, it's a
     way for me to recognize you.  Thanks, Alan.
                   MR. CIAMPORCERO:  And just a sentence about where
     the industry is going, I guess my sense is that in terms of
     conversions, "We ain't see nothing yet."  We've only seen
     the very, very tip of the iceberg.  The fascinating thing I
     think in five years, we're literally all going to be in
     everybody else's business.  And so, I think we need rules
     and structures that not only are fair, but that facilitate
     that, that cause the economy to be as dynamic as possible,
     kind of like the computer industry.  We want to grow that
     fast, and we're all going to grow into each other's
     businesses.
                   MR. ASKIN:  Hi.  I'm Jonathan Askin.  I am the
     legal counsel for ALTS.  And unfortunately, I'm a last
     minute substitute for my illustrious president, John
     Windhausen.
                   I want to hammer home on two concepts that I want
     to borrow from constitutional history.  Basically, like
     liberty, the price of competition is eternal vigilance.  I
     think that the FCC has done a wonderful job, but the job is
     not done.  It seems every time we take two steps forward,
     something comes along to bring us one step back.
                   You're working hard on the rules at breakneck
     speed.  You're doing a terrific job, but there's a lot more
     to be done.  And even once you've finished the bulk of the
     rules, you will essentially have given us -- to borrow a
     second concept from constitutional history -- you will have
     given us rights without remedies.
                   For that reason, I think it's very important -- I
     think you've made a wonderful first step by trying to
     establish an enforcement bureau.  I think you should
     probably take that one step further and try to -- and
     appoint one of the Commissioners, perhaps the Chairman as an
     enforcement commissioner, the same way Commissioner Powell
     is the Defense Commissioner and the Y2K Commissioner.  I
     think it's very important for us -- for the industry to know
     that someone on the 8th floor really cares about promoting
     competition and will effectuate the remedies to which you've
     already given us the rights.  Thanks.
                   MS. NEWMAN:  I'm Melissa Newman, and I'm at U.S.
     West.  And you know, the one thing I've always thought about
     this industry, at least on the telecommunications side, we
     all want to get to the same place, and the question is, how
     to get there?  And my vision would be, except in very
     limited circumstances, which I think Chairman Kennard
     outlined, spectrum management, universal service, the best
     way to get there is to let market forces do what they do
     best.
                   And in the very few instances where you need to
     come in, you will.  But I would say, when in doubt, don't
     regulate and stay out.  And in the few cases you need to,
     come in with limited, targeted measures to address those
     problems and then move on, and hopefully competition will
     take hold.
                   MR. KOUTSKY:  I'm Tom Koutsky with Kovak
     Communications Company, a not so start-up data CLEC.  And I
     just have a couple perspectives.  This is now the third
     person in a row that just recently left the Commission
     within the last two years.  So, we might -- in this part of
     the table, you might hear some different grumbling.
                   But to build on what Jonathan said, competition is
     really a process.  It's not an end.  It is not something
     that we can achieve, and it's not something when we're done
     achieving we should be content about having achieved it.
     The competitive process is going to be a whole series of
     intercarrier, fact-related issues.
                   As we have more carriers today than we did before
     the Act, we're going to obviously have more intercarrier
     disputes.  Those result in a kind of a fact-intensive,
     almost case by case type approach to trying to figure what
     is hard to describe other than what is the truth.  As a
     result, I would suggest that the Commission think more of
     itself as an adjudicatory body.  We all know the Commission
     is a political body at its heart and soul, but it was
     charged with by Congress with both executive, legislative
     and judicial resources or authority.
                   I think that we have a lot of things that get done
     in rulemaking, which perhaps should be done in an
     adjudicatory fashion, and to think about possible ways of
     maybe revitalizing or utilizing a modified form of an ALJ
     process.  For a lot of these fact-finding type disputes, I
     think it's something that should be explored.
                   MR. SEIFFERT:  Good afternoon.  I'm Grant
     Seiffert, TI's Vice President of Government Relations.  We
     represent over a thousand small and large manufacturers and
     vendors of telecommunications equipment.  I'd like to say
     starting out, we endorse everything that our customers
     around the table support today.
                   No, seriously, we don't fight the telecom wars, we
     just provide the bullets.  And we care about competition.
     That's what is moving our industry into the convergence
     world of merging that telephone and the Internet together.
                   Our companies are increasingly becoming more busy
     around the world.  The global market is very important to
     us.  Any way that the Commission can support our activities
     globally in helping to break down barriers to competition,
     supporting mutual recognition agreements overseas, so that
     we can test the things once instead of four times around the
     world certainly will improve and will reduce the cost to
     selling our products around the world.
                   Delays, for example, in resolving proceedings,
     granting product approvals, processing waivers for trials
     and new technologies, and authorizing new wireless services
     to contribute to slowing down -- also contributing to
     slowing down the industry's ability to get those services to
     all Americans.
                   The industry is just morphing at an incredible
     speed.  I don't have to tell you that, and I commend you for
     this exercise.  I think that a five-year plan may be a
     little too long the way the industry is moving.  And if
     there's anything we can do to be helpful to move that pace,
     we certainly will be there to support you all in that
     effort.
                   MR. SHARK:  Good afternoon.  I'm Alan Shark.  I
     head the American Mobile Telecom Association and sister
     group, The International Mobile Telecom Association.  So, I
     guess it's going to be real tough for Brian at the end of
     this, because I already see that we're converging on some of
     the thoughts even at this end being number 6.  But, as I
     look at convergence, I look at competition.  I have to echo
     what has been previously said, and that it is a great goal,
     but it's an ongoing process.
                   What concerns me about competition is that we're
     seeing trends where there really is less competition as
     certain entities become larger.  And our fear is really for
     some of the smaller players, the nonconsumer wireless part
     of this.  And so, when we talk about the industry, I step
     back for a moment.  I really question, do we really have an
     industry, or is the word really a way to describe a series
     of small industries, whether they're converging or not or
     coming together, but they really are different.  They have
     different needs.
                   And so, the real, I guess, question, is as things
     converge, can they coexist?  And therefore, what is the
     regulatory environment that will help them?  Number one.
     Number two, what then will ensure that you have a robust, I
     would say, small carrier or private carrier or specialized
     carrier that can exist, because right now they're having a
     very, very tough time, and that might be on the market side,
     but also, on the regulatory side, which I hope we'll get to
     later on, specific things in terms of regulatory reform.
                   MR. TAUKE:  I'm Tom Tauke with Bell Atlantic.  We
     commend you for the seriousness with which you are
     approaching the issue of FCC reform.
                   Five quick points.  At the risk of repetition,
     convergence is real, point number one.  Point number two, I
     think that the convergence is occurring at a very rapid
     pace.  The technologies in the marketplace are moving
     quickly.  Point number three, I believe that the most
     important thing that the FCC can do is keep its eye on
     empowering consumers.  In order to empower consumers, you
     have to have open markets.  But empowerment of consumers so
     they can make choices is critical.
                   Four, if you have empowered consumers, then you
     have a marketplace that works.  And a marketplace that works
     is one that does not need heavy regulation.  So, three is
     empowering consumers.  Four, the marketplace works.  And
     five, under those circumstances, the FCC should be an
     organization that focuses on dispute resolution, enforcement
     of certain consumer protection requirements.
                   MR. ROBERT:  Thank you, Mr. Chairman.  My name is
     Michael Roberts.  I'm an owner of a variety of
     telecommunications properties.  We own interest in or
     controlling interest in about nine television stations.  I
     participated in the C & F block auctions for the PCS
     wireless.  I own one of each.  And I also am the affiliate
     for Sprint PCS for the entire State of Missouri, and I have
     the entire state except for St. Louis and Kansas City.
                   We have opened up our first store in Jefferson
     City, Missouri.  We have customers and we're doing business.
     Thank you very much.
                   I think there are a number of issues that as an
     owner I can present to you that we need to take into
     consideration.  One important one is that we need as owners
     a greater sense of urgency on the part of the FCC on our
     issues.
                   It tends to be -- if we write you and ask for
     help, whether it's in a litigation issue for clarification
     or policy change, generally when you're in business you need
     a response because you're setting your budgets, making your
     plans, hiring your staff, and you're doing a number of
     things that if we wait too long, larger players can beat us
     out.  And they can get there before we can.  And we don't
     have a clear signal frequently from you as to which way we
     may need to go, left or right, up or down, or just quit.
                   As we go through our issues, I think we need to
     make sure that we flush them out.  And I think that by doing
     that, you'll be able to hear not only from the large
     companies, but hopefully our participation today will allow
     you to get a feel for what some of the smaller companies are
     concerned about.
                   I'd be interested a little bit in looking to the
     views of foreign ownership of telephony opportunities as
     well as broadcast.  I think that's one that's been bouncing
     around and looming in the minds of a number of us who are
     seeking financing.  In areas that sometimes are not
     necessarily comfortable here in our country, there may be
     others who might be interested.
                   I'm particularly interested in this forum looking
     at opportunities to diversify ownership.  Stronger minority
     participation in ownership will be very key to me and a
     large part of this country, because as the United States
     begins to find itself becoming more integrated, the minority
     is soon to become the majority, and yet, in the ownership
     halls, we don't necessarily see that.
                   A hundred years ago, had this table been here, it
     would have been a bunch of folks talking about the future of
     the industrial society.  And this table would have
     represented the titans for the next hundred years.  I think
     today we have the titans for the next hundred years, but we
     want to make sure that those titans are well integrated and
     well represented and reflect the United States.
                   So, those are some of the primary points I'm
     interested in us exploring, and I want to thank you very
     much for hosting this.
                   MR. TURETSKY:  I'm David Turetsky from Telegen.
     Telegen is an integrated communications provider.  We're
     building new facilities, base networks, broadband local
     networks.
                   One crucial goal I think that we all share is
     competitive marketplace.  And that is to try to find common
     ground between new companies and existing companies,
     consumers able to make choices.  And I agree with Mr. Tauke
     that that is indeed the standard that we ought to focus on.
                   And for one, we're building as fast as we possibly
     can.  We've launched in 26 markets so far, and we're trying
     to get to give as many consumers choices as we can.  In that
     regard, a couple of very quick points.  One, as much as
     there's temptation to do so because so many have worked so
     hard for so long in making this transition successful, we
     should resist the temptation to declare the transition
     successful prematurely.
                   There still is hard work to do to sweep away
     barriers and obstacles.  Not all of them are posed by
     competitors.  Some of them are posed from other sources to
     facilities-based networks.  But seeing the job through in
     spite of whatever political pressure comes about is really
     crucial.  And there is a temptation to declare a success and
     look past and try to get on with the next stage.  And I
     suggest that it would be a mistake to succumb to that until
     markets really are competitive and consumers really do have
     choices.
                   In that regard, we have to keep our eye all the
     time on why it is we regulate.  And I think we regulate
     mostly because of monopoly or market power.  And that means
     that as unpopular it may be and as easily it can be twisted,
     means those with no market power shouldn't be regulated in
     the same way as those with market power.  At the same time,
     we have to recognize that competition is going to advance in
     a spotty way.  And there are incumbents in certain areas who
     may be deserving of certain kinds of regulatory relief, but
     we shouldn't throw the baby out with the bath water.
                   And finally, down the road I think, if we ever
     declare a point where we think we are through this
     transition, and as I say, we'll be through it in spotty
     ways.  Some markets will be competitive.  Others, there
     won't be choices.  There'll be hard decisions then on what
     the right regulatory level remains.
                   But I think we ought to not overdo the temptation
     to turn the FCC into a consumer protection agency.  When we
     get to the point of competitive markets, I think that's when
     we also start to think about turning the consumer protection
     function over to the agencies that have traditionally done
     that.  Otherwise, we may end up with a temptation to
     overregulate because we'll have a dedicated agency focused
     on a particular place.  And if it's a competitive
     marketplace, we shouldn't anticipate that it'll have, you
     know, so many problems that it warrants a whole agency to
     deal with it.
                   MR. NEEL:  I'm Roy Neel.  I represent the U.S.
     Telephone Association, which represents all the local
     carriers, large, mid-size and small.
                   Building on what Tom Tauke said, we believe you
     should recognize convergence is on us today, and that you
     don't have five years to wait.  Not suggesting that you
     intend to wait five years to implement anything, but that we
     don't have time to wait.  All you have to do is look at
     AT&T's acquisitions to see that.  At least the largest
     company in the U.S. believes that convergence is on us and
     is representing a competitive opportunity as well as a
     threat.
                   We think it's time for the FCC to begin regulating
     services and not industry segments, because the current way
     of thinking of segmenting a converged industry into cable,
     wireless, common carrier and so on ignores that very
     convergence.  And it seems to set up a situation where you
     appear to be enabling competitors instead of competition.
     Until you deal with that in a converged environment and look
     at services regardless of who the carrier is, whether
     they're an incumbent player or an incumbent carrier or a new
     carrier, you'll be ignoring the converged environment and
     the reality of that.
                   Extremely important is the timeliness of
     decisions.  You've been beaten on now for months, if not
     years on the delay of decisions.  And I don't think we can
     say that enough.  And I think all of us would support an
     effort to get decisions out in a timely way, whether it's on
     mergers or whatever.  So that's absolutely critical.  But
     most important is that you accept convergence is upon us
     now, and that you should begin reorganizing the Commission
     in a way that recognizes that and stop regulating industry
     segments and look at services instead.  Thanks.
                   MR. ROBERTSON:  Good afternoon, Chairman, Kathy,
     Mr. Pepper.  I appreciate the opportunity to be able to
     speak to you about the issues that you bring up and offer
     you some vision.  I first want to congratulate you and the
     rest of the Commission on the approval of portions of the
     ITTA forbearance petitions that were issued.  I'm anxious to
     read the order.  Thanks for that consideration.
                   As an engineer, I may look at this regulatory
     environment and where we're going maybe a little bit
     different than a lawyer or others.  But I see communications
     as activities, and your agency is to regulate the provision
     of those communications or activities.
                   But, historically, we have related a type of a
     communication with a particular technology.  And seeing
     convergence in a different way, what I think in the future
     we will have is communications will be technology
     independent.  In fact, the customer or the consumer may not
     even know what technology he or she is using even for video.
     And therefore, I think whether we want to accept or whether
     we want to move fast, slow, or how, I think we have to
     recognize that the activity that you're regulating and we
     are providing is rapidly moving to the time where the
     segmentation of regulation becomes irrelevant.
                   The one thing that I would ask you to do in
     retooling or looking at your agency, Chairman, is to think
     of how to be faster, how to be quicker, how to yield
     decisions in a way that is more consistent with the
     evolution of the network and the evolution of the manner in
     which we provide communications.  And if we can somehow get
     the agency to be able to move away from its current role of
     arbitration between competitive interests and leave that to
     the courts and other particular agencies that are built, and
     rules and regulations and laws are built for them, to be
     able to deal with that and concentrate more on the consumer.
                   And when the consumer, even in consideration of
     forbearance, rates, tariffs, new services, I would ask you
     to apply one test.  Apply a test that is company-independent
     and technology-independent.
                   I represent SBC Communications.  So if you're
     considering something of mine in way of application, after
     you've considered it, and you come to a conclusion, I would
     ask you to test if this was provided by another provider
     such as MCI or AT&T, would I see it the same way?  Maybe not
     at first, but eventually when we have a convergence of
     technology and we get into the point where we are
     concentrating on the consumer and not the technology.  That
     test should be -- your answer should be fairly simple.  It
     should be the same regardless of who provides the service.
                   Thank you very much for the opportunity to
     respond, and I look forward to the conversation.
                   MR. SALLET:  I'm Jonathan Sallet from MCI
     Worldcom.  First of all, let me commend you, Mr. Chairman
     and the Commission for undertaking these for us.  It's quite
     forward-looking for any entity, government or private to
     understand the changes coming and to try to take advantage
     of that change by looking forward on how it might change its
     own processes.  So the fact that you have invited this kind
     of discussion is itself helpful reassurance that the
     Commission will be well suited to take on the challenges of
     the 21st Century.
                   As we look forward at the changing roles of the
     Commission, we see it something like a phase change and sort
     of high school physics when the world is not all water and
     not all ice, but somewhere in between containing chunks of
     both.  What we think we see right now is a period where
     there are large icebergs of market and monopoly power
     drifting through the growing sea of competition.  And we
     think any attempt to think about regulation has to pay
     attention to the quite distinct difference between market
     dominance, on the one hand, and competition that is working
     in a vibrant way on the other.
                   Let me just note three specifics.  There are many
     others in which no doubt will emerge later on in the
     conversation.
                   The first is the suggestion of the creation of an
     enforcement bureau, which is exactly right.  It's exactly
     right, first of all, because it is necessary.  There are
     critical enforcement issues that are arising under the
     current laws.
                   Secondly, because it looks to the function that
     needs to be served and not just the nature of the entity or
     the nature of the delivery method that is in question in
     order to ensure that a function is carried out.  And in this
     regard, may itself be a harbinger of other reforms that the
     Commission may wish to consider.
                   And third, because it recognizes that we are
     traveling through space at technology time.  Time that is
     very rapid.  So that the institution of a rocket docket
     speaks specifically to the need to have quick, fast
     decisions.
                   Second fact, for all the talk of reform which is
     very important, one ought not forget that there's a great
     deal of work to be done that is pending at the Commission
     right now.  Remand proceedings, just from my perspective,
     remand proceedings following the Supreme Court litigation,
     the kinds of enforcement matters I've mentioned, the kinds
     of merger reviews that are now pending, and I note from
     having read the trade press, rumors that there may even be
     someday 271 applications filed.
                   All of this suggests that whatever is done in
     terms of reforming the FCC, it's critically important that
     the strength of the FCC be preserved to be able to take on
     the quite considerable workload that it faces.
                   And third, the question of merger reviews.  The
     FCC has carved out a quite distinct role for itself.  I've
     been on both sides of this, sometimes a proponent of getting
     a merger approved, sometimes actually even closing that
     merger, sometimes the other side.  But it seems to me from
     both perspectives, though it is clear that the public
     interest test is best served by having the Commission review
     mergers to see where they, or under what conditions they
     would serve competition, at the same time to use the public
     interest to ensure that the danger of market power is not
     created by a new business combination.
                   So all of this means, we think, that at the time
     we talk about structural reform or bureau reform or any
     other forms of restaffing, the critical components is that
     the FCC be effective and strong enough to take on what one
     might call the titanic challenges that are at hand.
                   MS. BROWN:  You have to see if you can do better
     than the iceberg analysis.
                   MR. WEINGARDT:  I'm going to talk about the star
     wars, which I haven't seen.
                   My name is Brent Weingardt.  I'm Vice President
     for Government Relations at PCI, Personal Communications
     Industry Association, and we represent several facets of the
     wireless industry.  And I agree with Alan Shark that there's
     no one wireless industry, but in general, that industry is
     widely competitive.  And it's only constrained by the laws
     of physics, which we're always trying to change and the
     innovation and creativity of the licensees and the
     manufacturers looking for new products.
                   And just as an example, I asked some of the staff
     -- you know, I've got a list here, but I only have a minute.
     What are some of the products that we could mention?  And
     you've heard most of them.
                   The one that I locked in on was the paging
     industry, which you focus in as an old staid, prosaic
     industry, one-way numbers, whatever.  You know they're going
     two-way.  You know that they're sending services like stock
     market quotes, et cetera, but there's a call for doing
     things like having Coke machines, soda machines, being able
     to page back when they're out of Diet Coke back to the
     distributor.  Something prosaic, not a consumer product, but
     these are the type of services that we haven't even thought
     of around this table.  Someone is, and we're not even
     talking about the three G products.
                   Let me just focus briefly, first of all, agreeing
     with what all 12 of the previous people have said, seconding
     it.  But the idea of convergence.  You have a convergence of
     candidate.  You have a product out there that suffers from
     potential convergence.  And that's LMDS and fixed wireless
     in general.  You want them to be the poster child of
     convergence or bundling.  They can offer cable-type
     products.  They can offer Internet access.  They can offer
     voice.  They can offer data.  They can offer point to point
     video.
                   And guess what?  They would be regulated like all
     of those things I just mentioned.  The Commission said, "You
     tell us what you're offering, and we'll regulate you that
     way."  And on top of that, if you are a common carrier,
     you're going to be regulated by the states.  These are
     industries, notwithstanding Teligent and Winstar who are
     doing fine that have little or no market share, and yet they
     suffer from potential regulation five, six, seven different
     ways.  And that's the convergence problem.  It's not your
     fault.  It's just the convergence is catching up with old
     categories.
                   And I won't raise all the prosaic issues that we
     had, but when I look at them on page 2 of my sheet, what I
     think it is, they all come out to "Please enforce the
     mandates that you've already established, interconnection,
     et cetera."  Got them all listed.  Tower siting, et cetera.
                   So, whoever said we need a cop to enforce the
     rules or something like that, that are already in place, I
     second that.
                   MS. BROWN:  Thank you.
                   MR. MCDOWELL:  I think we're almost at the halfway
     point.  I'm Robert McDowell, Vice President, Assistant
     General Counsel of the Competitive Telecommunication
     Association.  And I, too, Mr. Chairman, would like to
     commend the Commission on being so forward-looking at this
     point.  As I understand it, the 21st century actually
     doesn't begin until the year 2001, so we're a year and a
     half out, and apparently there was not a Y0K crisis, because
     there was no Y0.  I didn't know that until recently.
                   But, in any case, I'm going to continue
     unfortunately to the detriment of my colleagues here down
     the table to continue to use and beat on two words that are
     being used a lot today.  One is convergence.  And as
     technologies and functionalities converge, we see the FCC,
     the internal bureaucracy of that converging.  And then as we
     make the transition from a monopoly environment to a
     competitive environment, we see, obviously, the FCC's role
     diminishing over time as competition in the marketplace make
     those decisions that the Commission now makes as well.  And
     in the interest of expediency, I will end my comments there.
                   MS. FARQUHAR:  I'm Michele Farquhar, counsel for
     Western Wireless Corporation, which is a relatively small
     but aggressive wireless carrier, very focused on finding
     ways to compete effectively with wire line carriers,
     especially in rural markets and in international countries
     with similar perspectives like Iceland, Ireland and Haiti.
                   Western would like to offer three goals for the
     FCC for the future.  First, that it should focus more on
     enforcement, consumer protection, and insuring competition,
     themes that have been seconded by many people here in the
     room, and maybe look more like the FTC or the SEC in the
     future.
                   The second would be to ensure that the FCC becomes
     more and more efficient.  And one way Western would like to
     see that be done is with the institution of time limits for
     virtually everything that the FCC does.  Not necessarily
     that everything be done very speedily, because some things
     need to be done with more care and attention, but there
     should be a sense, even for large mergers with respect to
     how soon and how long it will take, whether it be one year
     or two months.
                   And the third issue is to rethink how the FCC gets
     input from outside parties, especially with the numbers of
     parties that they need input from increasing and taking more
     time for all the FCC staff to have series of meetings and
     have less time to get their work done during the day as
     they're meeting with all of these groups.
                   And maybe forums like the one today is a good
     suggestion, where you have carriers like Western that are
     based in not Washington, D.C., but Washington state.  It's
     harder for them to effectively compete in this environment
     and would prefer settings where they can hear and rebut
     other sides on the various issues that are being presented.
                   And so, therefore, we definitely appreciate the
     opportunity to be here today.
                   MR. CALI:  Len Cali from AT&T.  Good afternoon.  I
     think we all agree we're headed to competition in all market
     segments.  We're not there yet.  We're in a transition.
     Much work remains to be done.
                   Clearly, the Commission can restructure and
     reorganize its work in ways that enhances its ability to
     deal with this transition.  But I think the point I'd like
     to make is even more important than organization or
     structural change are really reform in regulatory
     philosophy.
                   And with that, I'd leave you two points.  Where
     competition does exist and is effective today, I believe the
     Commission really needs to embrace the deregulatory
     philosophy.  It needs to trust the marketplace.
                   Where it is still necessary, and it is for the
     Commission to regulate, the Commission should do so giving
     significant weight to the impact or effect of delay and
     uncertainty on investment.  That's a critical issue
     increasingly as carriers try to enter markets and be
     competitive.  The Commission faces many competing demands,
     but giving weight and resolving or addressing regulatory
     issues to the effects of delay and uncertainty is
     significant at this point in industry.
                   And with that, I'll pass on.
                   MR. FRITZ:  Mr. Chairman, I'm Jerry Fritz with
     Alburton Communications today representing the National
     Association of Broadcasters.  Kathy, Bob, thanks very much
     for holding this session.  We at the NAB applaud your
     efforts to keep pace with this change.
                   Having spent some significant part of the last 25
     years in and out of the FCC, I've a real passion for doing
     precisely what you're doing to restructure the Commission to
     keep face with that change.  You have some terrific people
     that work here, but making the institution of the FCC, from
     an institutional history perspective, the best that it can
     be, is a real challenge, and we applaud that.
                   Our vision of the communications marketplace is
     derivative of your vision that you articulated last month in
     Las Vegas that the communication marketplace of the future
     will be marked by a combination of wired and wireless
     interactive media.  That means a plethora of content will be
     available, substantially diminishing the premise for
     regulation of content.  That's a key premise to our vision
     of what you should be doing in the future.
                   What activities should the Commission do?  As
     content regulation becomes unnecessary, ownership
     restrictions become less important, as do other structural
     industry rules.  Spectrum management, however, and
     interference protections remain your core requirements.
                   Your vision, universal service, consumer
     protection and spectrum management are a succinct
     articulation of what the last nine chairmen that I know,
     this is not a political partisan issue.  It's a succinct
     articulation of their essential vision.
                   I note that that vision -- that being said, that
     there's a significant derivative point.  That regulation is
     only a surrogate for competition.  When that competition is
     realized, is fulfilled, the Commission needs to back away
     from the artifacts of regulation, including content and
     ownership.
                   I'll leave with this point because I have some
     significant structural suggestions to make in the next panel
     about how I think we can get there.  But true recognition of
     competition and a mere nod of the head acknowledgement to
     that competition are two very different things.  What we
     hear candidly is all of the right words.  Competition's
     here.  Competition's coming.  We need to back away.  We
     don't see the evidence of it to the extent that we think the
     market justifies it.
                   MR. PAUL:  I'm Andy Paul, and I'm the Senior Vice
     President of the Satellite Broadcasting and Communications
     Association.  And Mr. Chairman and Kathy and Bob, we're very
     pleased that you're holding this session because we come
     here with an entirely different perspective I think than
     perhaps a lot of the other companies or industries around
     this table.
                   Satellite television is a relatively new
     participant in the video marketplace.  While the C-band
     satellite television industry has been around since 1980,
     DBS didn't really start until June of 1994.  So, it's barely
     five years old.  So, I think from our perspective, we're
     just now beginning or we're still fighting to achieve our
     position in the video marketplace, which you know is a very,
     very competitive field.
                   So, as a result, one of the first things that we
     had to do was try to find a way that the satellite
     television industry was going to get full delegate
     representation in the FCC.  We worked very hard in '93 and
     '94 with the reinventing of the FCC program.  And we were
     very pleased when in October '94, the Commission formed for
     the first time the international bureau, which had a very
     specific assignment, among others, of folding in the
     satellite television industry, which up to that time had
     literally been represented in two or three other bureaus in
     a stratified way.
                   So, number one, we are very appreciative of that,
     and the people in the bureau are very fine people.  We've
     worked with them very closely on a number of satellite
     television issues that have come to the fore since this
     industry and been growing.  But remember, we still haven't
     gotten to that level where we are fully -- a full player in
     the video marketplace, if you will.
                   So, I will leave you with three points that sort
     of reflect our perspective.  Number one is we needed an
     advocate in the Commission very badly at the full bureau
     level.  We've gotten that in the form of the international
     bureau, and we really would not like to see that changed
     because I think we've gotten very -- they are very good
     people.  And I think finally they -- this is a complex
     industry to learn, and they've done a very good job of
     learning how it runs.
                   Secondly, we still believe that the bureau and the
     Commissioner need it because there are competitive balances
     that have to be achieved in the video marketplace which
     aren't there yet.  And there are going to be little tweaks
     and little fine tunes every once in a while that are going
     to be necessary to maintain that.
                   I think right now there's a feeling or a
     perception out there that if you subject satellite
     television to exactly the same rules as cable television,
     which is the giant video distributor in the marketplace,
     that you're going to achieve some kind of parity.  But, I
     think the Commission realized when they did the public
     service obligations for DBS that the satellite television
     industry is very different structurally than the cable
     television industry.
                   And it's been -- the Commission's been able to
     take account of the differences in that structure that has
     enabled you to fine-tune many of these little things that
     needed to be done.
                   And third, is something that Tom said in the very
     beginning, which was his last point, which is in the end,
     all of our goals is to make sure that consumers have choice.
     And they will have choice and they'll have diversity if
     competition flourishes in the marketplace.  And after all,
     that's what our business is, attracting consumers and trying
     to keep them.  So as long as that's the final goal of the
     Commission, then I think you're doing a good job and doing
     what you're supposed to be doing.  Thank you.
                   MR. ROSE:  Good afternoon.  I'm John Rose.  I'm
     with OPASTCO, President of OPASTCO.  And we represent about
     500 small local exchange carriers.
                   I would like to commend the Commission on this
     effort.  The key to this effort is not so much what we come
     out of this room today, but implementing specific goals.
     And I think five years is much too long.  I think if we're
     going to get on with restructuring the FCC, you ought to set
     a goal of more like two years.
                   And this is particularly important for small
     companies, because we believe that small companies need less
     regulation.  As a previous speaker said, we need quicker
     response on our issues at the FCC.  We need some time limits
     so we can get things through and make investment decisions.
                   And we also need things looked at in a holistic
     way.  That sometimes decisions are made in one part of the
     bureau or FCC that really affect us in another part.  And I
     think the idea of enforcement is good as long as it's looked
     at that people have legitimate differences and businesses,
     and they have legitimate arguments.  And it ought to be more
     or less an arbitration type thing or some dispute resolution
     rather than an enforcement bureau.
                   An enforcement bureau said, "You got a good guy
     and a bad guy."  And there are many legitimate business
     disagreements particularly in this future.
                   And the last thing is that the marketplace -- one
     thing you can predict is that we're going to -- the
     marketplace is going to evolve differently than we all think
     around this table.  And I think one of the challenges of the
     FCC is to be set up in such a way that it doesn't regulate
     more because the marketplace evolves differently than we
     thought in the first place.  Thank you very much.
                   MR. ZESIGER:  Mr. Chairman and Kathy and Bob,
     thank you again.  I like the commendation everyone has given
     you.  This is a signal effort, and I wish you all well.
     We'll continue to work with you throughout this process.
                   I'm David Zesiger.  I represent the ITTA, mid-
     sized local exchange carriers that are incumbents.  I just
     had a couple of points to some of the things that we've
     heard up to this point.  I won't keep you too long.
                   Obviously, the central theme here is convergence.
     We could have stated that before coming in here, but we can
     elaborate that theme.  And I think from a mid-sized company
     perspective, we can note that the realities of convergence
     do not alleviate the need for differentiated regulation for
     different sized companies.
                   Size still counts, and that cuts across every
     industry.  And I think you've heard echoes of that through
     some of the other comments so far.  You know that to be the
     case, of course, in all that you do.
                   Effectively, a one size fits all approach is just
     going to be too burdensome on some part of those that you
     regulate and will stifle competition that otherwise you
     might have been able to realize and ultimately benefits to
     the consumers.
                   One other point.  Effectively, there has been
     throughout the incredibly busy and a process over the last
     three and a half years of implementing the Act.  There's
     been little focus on the cost of regulation, something that
     I think smaller entities are probably a little more
     sensitive to given that regulatory costs are primarily fixed
     costs.
                   Our hope is that we move -- as the Commission
     moves more and more into the -- past the market opening
     phase of the implementation process into kind of the
     policeman's role or the enforcement role or however you
     might describe that, that you would keep a special eye on
     regulatory costs.  They do impose costs even though they
     affect benefits as well.
                   And also, the bottom line, which will be
     increasingly true, which is that in a competitive market,
     regulatory costs could ultimately become outcome
     determinative.  And that's not something that anybody wants
     either.  Thank you.
                   MS. MAHONEY:  Thank you, Mr. Chairman, Kathy, Bob.
     My name is Pat Mahoney.  I'm the assistant general counsel
     at Arridium, L.L.C.  And I 'm here today because I'm also
     chair of the Satellite Industry Association, SIA.
                   SIA represents the unified voice of companies --
     U.S. companies engaged in all aspects of the satellite
     industry, including manufacturing, launch, service provision
     and equipment.
                   We see two primary influences.  One, which I think
     everybody has mentioned, convergence.  And the other one,
     which hasn't really been discussed too much is globalization
     of communications.  We see these as the two primary
     influences on the FCC in the future.
                   With respect to what FCC regulations should be, I
     would like to share with you what the TABD, Telecom Services
     Group has -- U.S. and Europe have agreed to in the mid-year
     report, which was just adopted last week.  And I'm the
     comanager for the Telecom Services Group in the U.S.
                   And that is that because of convergence,
     regulations should be the minimum necessary to ensure full
     competition, ensure access to essential facilities and
     allocate scarce resources.  SIA also sees the FCC, a very
     important function should be to provide leadership,
     expertise, resources and support to foster technological
     development and promote competition.
                   And most importantly, we must work with other
     countries.  We cannot allocate spectrum in a vacuum.  We
     should work with other countries to create global spectrum
     policy.
                   For that reason, and because it was one of the
     issues that really gave impetus to the formation of the
     Satellite Industry Association in 1995, SIA strongly
     supports, as does SBCA, the retention of the international
     bureau.  We look at everything that the international bureau
     has done and the way it was formed in bringing people from
     five different bureaus to work on satellites all in one
     bureau.
                   We look upon the international bureau as being a
     key factor in the success of the WTO negotiations and the
     TABD activities, the adoption of the GMPCS MOU, two world
     policy forums, regional seminars where the FCC has brought
     in regulators from all over the world who have discussions
     and share U.S. goals of competition and regulation and in
     successful works that have happened since.
                   And we'd like you to consider maybe that the
     creation of the international bureau in 1994 was really the
     first step of a process that you are continuing now in
     organizing the Commission by function.  Thank you.
                   MR. JACOBS:  Hi.  I'm Bruce Jacobs with Voice on
     the Net Coalition, a new trade association that includes
     among its members, 3-Com and SYSCO, Intel, Microsoft and
     some companies providing service.  The focus of the
     coalition has been on educating policymakers about the use
     of the Internet and Internet technology to provide enhanced
     services related to voice.
                   And the Internet has been such a great engine of
     growth and of consumer benefits over the last few years.
     It's been building -- the members of the coalition and
     others have been building these enhanced services for
     businesses and consumers.  They add to competition and,
     particularly in the international arena, help to make
     communications cheaper for consumers.
                   The Commission's role during that time has been
     really to show some restraint and appreciation of the
     innovation that is being offered by expanding on the
     Internet to provide these new services.  And our perspective
     on the Commission's five-year plan is probably somewhat
     unique because the members of the coalition aren't
     regulated.  And so, we're not looking to make the regulation
     more efficient, so much as try to maintain that status and
     maintain the spirit with which the Commission has
     appreciated the innovation that's been going on and
     recognize that it doesn't need to get involved in every
     case.
                   We support the vision of the FCC's core functions
     as outlined in the March 17 report.  All of these functions
     are important ones and should be at the core of the
     Commission's future efforts.  And the restructuring that
     you've described is certainly consistent with the
     coalition's goals.
                   We appreciate the opportunity to share our views
     with you and we're happy to participate.
                   MR. WINSTON:  My name is Jim Winston.  I'm the
     Executive Director of NABOB, the National Association of
     Black Owned Broadcasters.  We're a trade association
     representing the interest of African Americans who own radio
     stations and television stations and cable television
     systems across the country.
                   Mr. Chairman, we certainly want to thank you,
     Kathy, Bob, for inviting me to speak.  And it's interesting
     because as I sat here, I was thinking that NABOB's mission
     and NABOB's message is a little different from most of the
     other messages here at the table.  And I thought about how
     that fits into the overall objective of this discussion,
     which is to determine how the FCC can restructure itself to
     better serve the American people.  And we're looking for,
     from this group, a vision of that.
                   And it occurs to me that when you begin with the
     group we're sitting among, we're looking for a vision from a
     group that doesn't really reflect America in its racial and
     gender composition.  We have two African American, three
     women, by my count.  And so, we're looking at a body that
     does not reflect America to look for a vision for America.
                   So it seems to me that when I was here at the FCC
     from '78 to '80, the FCC established its minority-ownership
     policy to promote ownership, telecommunications facilities
     by minorities.  And in recent years, that policy has been
     dismantled by the courts and Congress.
                   It seems that we can't get to where we need to be
     if that's going to be the starting point.  So, that when we
     look at the FCC, it seems to me, where it needs to be, it
     needs to be reaching back to where it was some time ago.
     And a large part of that may be beyond the Commission's
     control, but the future of the FCC must involve shaping the
     telecommunications revolution so that all American can
     participate.
                   And convergence and all the other things that
     we're talking about today are not available to everyone.
     And so, I think what has to be on the table in the FCC's
     discussions is how it's still is able to serve all
     Americans.  I hope that will be part of the discussion
     today.  Thank you.
                   MR. PADDEN:  I'm Preston Padden with the Walt
     Disney Company.  And just listening to everybody's remarks
     reminded me of two things.  First, just the very existence
     of this Commission is certainly providing gainful employment
     in the private sector for a lot of really fine people.  And
     I think your goal should be to be put as many of us out of
     work as you possibly can as you figure out how to
     restructure the agency.
                   I mean, we're all out there converging like mad,
     and the agency is unfortunately stuck with a balkanized
     statute, which is really not one statute, but a bunch of
     individual statutes that grew up based on marketplace
     developments, most of which a long time ago, and then it got
     all glued together.
                   And as a result, the agency reflects that
     balkanization.  And as we converge and as both from the
     consumer end of pipelines and from the input supplier end
     pipelines that look otherwise perfectly identical fall into
     different pieces of this balkanized statute and agency and
     end up getting treated differently.
                   I think you've got a very, very tough job ahead of
     you to try and sort all that out.  And of course, the
     convergence that we're all doing is going to proceed at a
     pace that there's no government agency that can possibly
     keep up with.
                   So about the only advice that I've got for you is
     to do everything you can to defer to market forces.  Along
     the way, try to be on guard to instances where old
     regulations are inappropriately being kept around on
     industry sectors that are no longer dominant or no longer
     have the characteristics that gave rise to those regulations
     in the first place.  And at the same time, be on guard for
     the emergence of new gatekeepers as all of this convergence
     unfolds -- gatekeepers that have the potential to impede
     consumer access to competitive services.
                   MR. DONOVAN:  Mr. Chairman, Kathy, Dr. Pepper, I'm
     happy to hear that Preston comments that we will all have
     extra free time since we're unemployed to go to Disneyland.
     But, in the interim for those of us who will still be
     slogging around Washington, D.C., I'd like to thank you all.
     My name is David Donovan.  I'm with the Association of Local
     Television Stations.
                   And if I could just divide the comments
     essentially into two areas.  First, is probably a more
     substantive approach, and the second one is some procedural
     issues.
                   As I look around and we took about convergence,
     and I see all my common carrier brethren in which for the
     last several years, certainly since I was at the Commission,
     one of the key issues has been universal service.  And it's
     sort of strange for broadcasters to start talking about
     universal service.  But we've had a universal service in the
     mass media side, certainly in the video side, for the last
     half century, and it's free over your broadcast television,
     or it provides people both urban and rural, rich and poor,
     with access to basic information.
                   As we move forward with the information economy,
     access to that information will become even more important.
     We believe that free over-the-air broadcast television
     serves a more critical role going forward then it has even
     in the past.  As we talk about convergence, as video
     information becomes more and more a pay-as-you-go product,
     this government is going to be faced with a conundrum.
                   If you don't have a free basic service like free
     broadcast television, you either, one, let it become a pay
     service, which disenfranchises those who do not subscribe.
     Or, two, you try to work out some form of transfer of
     payment.
                   The first really is inconsistent with a
     participatory democracy.  The second is fraught with
     political pitfalls.  And I think that the problems that this
     government for years with concepts of universal service and
     what it is and how you pay for it, is evidence of that.
                   Free over-the-air television broadcasting solves
     that problem.  And I think, therefore, as you go forward,
     the regulatory focus certainly on the video side should be
     to foster the continued development of growth of a free off-
     the-air transmission system.
                   That sort of gets lost in the milieu.  It gets
     lost in the concepts of convergence as big players move.
     But the solution to a lot of the problems in the 21st
     century and for 21st century democracy will, in fact, be the
     preservation and the continued viability of that system.
                   Now, how does one go forward to preserve that?  It
     seems to us that you have to understand you have a different
     economic different structure that is based essentially on a
     single revenue stream of advertising.  That means as you go
     forward, you have to look at rules that impede our ability
     to compete against the pay services, because whether we like
     it or not, everybody in this room is going to be in
     everyone's business.  Everyone will be taking eyeballs away
     from me, and I'll be taking customers away from other
     people.  But the bottom line is that you need to deregulate
     in those areas that will permit us to harness efficiencies
     to move forward.
                   I can talk specifically about -- you know,
     specific rules and regulations later if we want to go into
     that.  But in the ownership area in particular, I think
     that's something the Commission needs to look at.
                   The second is, and I think the Commission has done
     a great job of this, is to try to speed the convergence to
     digital television.  And the final thing is, and it just
     echoes what Jerry has said.  As you move forward and
     convergence takes hold, the idea of specific content
     regulation on one sector of this converged thing really
     becomes not only less and less important, but not truly
     sustainable.
                   If you don't do it -- if local television cannot
     protect its local markets and cannot compete in this
     environment, I really think the government, five, ten years
     out is really in for some serious trouble as to what do you
     do with the information flow in this country.  Now, how does
     the Commission restructure itself to achieve that end?
                   There have been a lot of discussions in terms of
     speeding up, you know, mergers and transfers and things of
     that nature, but I think the first thing that the Commission
     needs to do is, and hopefully, eventually, this will happen,
     is to get rid of the sunshine rule, so all of you can talk.
     If you can talk, it may speed things up, because otherwise
     you have to deal with former people like me, which were your
     staff assistants which requires at least two or three
     conversations before you can actually do anything.  That is
     critical.
                   The second thing is is that when you design your
     bureaus, however you design it -- I mean, if we're all
     converged, maybe there's just one bureau, the Convergence
     Bureau.  But understand that as you design your bureaus, you
     are cutting across competitive lines.  Certain bureaus,
     because they regulate a certain industry may have -- be more
     knowledgeable about it, but their decisions are going to
     impact other industries.  Decisions by the cable bureau
     truly impact the broadcast industry.  And sometimes I feel
     there's not a tremendous coordination that goes on here, not
     just -- I mean, it was there when I was at the Commission.
                   I guess the final thing is and it also deals with
     enforcement.  And that is, I remember when the policy
     division would come out with a decision, and then the
     enforcement division was making decisions.  For some reason,
     some of the policy -- the subtleties of the policy never got
     over to the enforcement division.  So if you were setting up
     an entire enforcement bureau, it is critically important
     that there is constant communications with the policy end of
     the division, because the lawyers and the business planners
     are looking at the policy division as to what's going to
     happen next.
                   And I guess with that, I'll just end my comments,
     and thank you very much for inviting us.
                   MR. FONTES:  Thank you, Mr. Chairman, Kathy and
     Bob.  I appreciate this opportunity to come together this
     afternoon and see so many of my former colleagues when I was
     at the Commission.  It's always great as a former professor
     to hear one of my former students talk about universal
     service, and particularly, coming from a broadcaster.  So,
     go figure.
                   I have the great opportunity to come at the end
     here and try to figure out what I could provide that's
     unique and different.  And probably, I'm not going to
     provide anything unique and different because this has been
     an issue that's been discussed for many decades and how to
     reform and structure the FCC.
                   I think, however, it's important that you have
     convened these meetings to discuss this Commission, this
     time, these industries as we move forward.
                   I'm sorry.  I forget to tell everybody who I am.
     I'm Brian Fontes.  I'm with the Cellular Telecommunication
     Industry Association.  I apologize.
                   The FCC, you have a difficult task before you now,
     and you have a more difficult task than any previous FCC.
     Likewise, those who follow you will have even more difficult
     tasks.  In listening to the commenters around the table
     today, I certainly agree that competition is the goal.  In
     the wireless industry, we believe that we are competitive.
     And this is something that's relatively new by FCC
     standards, going back, some would argue, to 1983, and others
     would argue with the licensing of PCS.
                   And just as we are learning how to become
     competitors, and it is a learning process, the Commission
     must also learn how to deal with a competitive environment.
     And so I believe that competition really is the hallmark of
     the Telecom Act of 1996.  It is, I think, the mission of
     this Commission and commissions that will follow, just as it
     has been the mission in some of the previous commissions.
                   I think that an important element to that whole
     competitive process is a different viewpoint in the role of
     regulators.  What is it?  What is the job of a regulator in
     a competitive market?  And I think the difficult task is
     trying to formulate rules that provide the output without
     going into details that would require that all competitors
     in a market perform exactly the same way to achieve the
     output that the Commission wishes to achieve.
                   I think also, too, in a competitive environment,
     and I compliment you for bringing up the issue of
     enforcement.  And I think that enforcement is particularly
     important in competitive environments when you do have
     market failures.  And there are other circumstances where
     enforcement will also play.
                   But, the difficult task of any agency in a
     competitive environment is to determine what constitutes a
     market failure and when to step in to remedy that market
     failure, either through regulation or through enforcement.
     So it's a difficult task that you have before you.
                   I would just like to say there are a couple of
     other folks that would have been interesting to have around
     the table.  Would have been interesting to have some folks
     from the financial community, and you probably will be
     talking to these individuals, and also, some folks from the
     states.  The state PUCs.  And I know that you have been
     talking to these individuals almost since day one of your
     chairmanship, because I think there is an important
     partnering, believe it or not, with these groups of
     individuals.
                   And it goes back to the issues that are raised by
     many others at the table, that you must make your decisions
     in a timely fashion, because so much depends in the
     development of a competitive market.  And that competitive
     market depends on the availability of capital to invest in
     those services, those technologies, et cetera, that will
     bring competition and benefit to consumers.
                   So it's important to hear from these individuals
     how your regulatory process affects their decision and how
     many is allocated.
                   Also, because of the Telecom Act of 1996, the role
     of the state regulator in the process is increasingly
     important.  And as much as you are working hard today and in
     the future to reform or restructure the FCC to address the
     competing converging industries, much of the work at this
     level may be for naught if there is not a parallel set of
     activities at the state level to address these similar
     concerns at the state level.
                   So, hopefully, there will be greater discussions
     on how best to create reform across the board at all
     regulatory levels.  So, I would hope that as we go through
     this discussion and perhaps we will talk more specifically
     about the Commission, I believe wholeheartedly in the
     mission of this agency.  You perform vitally important
     functions with respect to spectrum management, licensing,
     international concerns, participation and some of the
     substantive work that goes into international telecom
     treaties and so forth.
                   And so, there are very important functions this
     agency performs.  And it is important to recognize this
     agency has to make those necessary changes to address the
     competitive environment in some industries that exist today
     and in others that will exist tomorrow.  Thank you.
                   MS. BROWN:  Thank you, Brian.  I know the Chairman
     needs to leave at this particular time.  Thank you, Bill.
                   CHAIRMAN KENNARD:  Thank you.
                   MS. BROWN:  As you were all talking, I sort of was
     trying to make a picture of the themes that are emerging to
     see if we couldn't start to form a conversation around some
     of these things and see if we can go into a little depth.
                   According to our schedule, you should have had a
     break at this point, and then we would come back with a
     second session.  So we have a choice to make.  We can go on
     and talk about some of the things that have been raised for
     a little while, or we can break and come back.
                   Do I get a sense of the room?  Should we go on?
     Go on.  Good.
                   My sense of what I was hearing and you can push
     back, but let me try and get at least a picture of what
     you've been saying and maybe then a way to start talking
     about this, is that there are some pretty powerful forces
     right now that are pushing change.  And I'll adopt something
     I heard.
                   The two great forces seem to be this notion of
     convergence, and technology convergence, and this notion of
     globalization.  That those two huge forces are changing the
     entire way we're thinking about that industry, if there was
     an industry, or many parts of this industry and what's
     happening in terms of a transition.
                   And then this notion of globalization, which makes
     us sort of be aware that we are indeed not an island, but
     are operating with industries and countries and forces that
     are worldwide.  Sort of the notions around what's happening
     in sort of the regulatory world, let me try this as a couple
     of themes that I heard.
                   One, this whole notion of competition and
     deregulation -- that, in fact, we're moving, and everyone, I
     think, there's almost consensus that we want to move to a
     robust competitive market, and that the regulatory response
     should be to get out of the way, to deregulate.
                   But what I heard was a number of approaches to
     that.  And that is, should one declare that there is now
     competition in any particular section of the market or in
     the market, whatever the market is, and how do we define
     that?  Or do we, as someone said, need a phased approach to
     deregulation?  And the very specific questions that at
     least, or as in my mind are, how would we know?
                   When do we know that there's competition in a
     market, in a particular market segment?  Is there some
     benchmarking we ought to be doing?  If so, what does that
     look like?  Is there some record or reporting kinds of
     things that we should be doing to actually know when we
     should get out of the way?  How do we know other than just
     declaring that there is competition?
                   The other sort of theme that I heard was this
     notion of the gatekeeping role, the regulator, actually
     making rules, as opposed to, or in addition to, enforcing
     those rules.  And the questions that arise for me there as I
     listened to you is, all right, if there are rules that we no
     longer should have, what are those?  But what are the core
     rules that need to continue to ensure that we continue to
     have an open and competitive market?
              So, very specifically, what would be the core rules
     that need to continue?
                   And then on the enforcement side, I heard a little
     bit of a debate, or I would make it a debate on should
     enforcement be like litigation?  Should it be an
     adjudication?  That is, an ALJ with facts presented and a
     factfinder making a determination.  Or/and, should it be a
     dispute resolution kind of things where the industry perhaps
     is brought in to resolve and work out specific issues or
     maybe global issues on enforcement or on going forward?  And
     I heard some of that.  Someone said it should be more
     dispute resolution like.
                   Then I heard an interesting -- another theme.
     This notion of customer protection, and I'll oppose it to or
     maybe and customer empowerment, and the way I was thinking
     about that is, does the government protect you, or do you
     protect yourself?  And then, how does that happen in an
     information age?  Does the government or the regulator have
     a role in giving consumers information so that they become
     empowered?  Are there certain things that consumers
     nevertheless need government to do because they would not be
     able to resolve that dispute themselves with carriers, et
     cetera?  And what is that about?
                   And then the last theme I heard was really only
     stated in sort of shorthand, but it is one that I would put
     on the table.  And that is this universal service theme.
     This notion that we have a ubiquitous system of
     telecommunication services and broadcast services in this
     country that really seems to go to our core.  And what do we
     do about that?
                   And I will slash overlay with this notion of
     opportunity for all.  How does everyone in this country,
     both get served and also be part of this revolution where
     they get to be the one serving?  How do I get to have my
     stake and be an entrepreneur in this incredible revolution?
     And how do we make sure that everybody comes along?
                   Now, those were the kind of themes that I heard
     come out of a lot of things people were saying.  This whole
     notion of convergence as a huge overlay, and I think
     globalization is the same way, brings up questions around,
     is there a statutory issue that we need to talk about, or is
     it a regulatory issue we need to talk about?  Are things
     that need to change in the jurisdiction of the Commission to
     do certain things given the convergence of technologies?
                   Likewise, with the globalization of our enter
     enterprise, are there things that we have jurisdiction
     already to do that we're not doing?  Or that are doing and
     we shouldn't be doing?  Or is there something more we should
     say to Congress, "Look, we think this is the way the
     industry is going, but we really don't have the authority to
     do what it is we think that needs to be done."  And I think
     those are huge, big broad things.
                   So, where to start?  I think if we start with
     convergence, that we'll get off on a sort of historical,
     sociological, economic argument.  But let's assume for a
     moment convergence, and maybe let's look a little at this
     competition deregulation issue.
                   And I want to just throw out these questions.
     Well, what rules should stay?  What rules should go?  When
     do we know that there's competition?  Should there be some
     sort of test?  Should we be looking at data?  How do we get
     that data?  Is there a benchmarking approach we should take?
     And oh, by the way, then what do we do when see it?  So, let
     me just start there.  Go ahead.
                   MR. NEEL:  To the issue of what's competition, and
     benchmarking is a scary thought to us because the '96 Act,
     in particular, rejects the concept of marketplace
     penetration or any kind of metric test and so on.  I mean,
     you set the rules and the states set the rules to determine
     a process for disputes between competitors.  And if you
     trust your rules and if you trust the states in the
     arbitration of those rules, then it seems to me that that's
     what represents a marketplace that is open for competition.
                   One of the criticisms we've always had is that it
     seems that you tend to be more concerned about enabling
     competitors, as opposed to competition.  But once the rules
     have been set, it seems like that should be a benchmark.
     And it's very dangerous to start thinking, "Well, if AT&T's
     not in that business, then there's no competition," which
     has been suggested in the past by some.  So, it's a very
     dangerous thing and a real concern of ours because it takes
     you down a track that at least an incumbent could never get
     out of.
                   MS. BROWN:  Somebody else?
                   MR. ASKIN:  I'd actually like to respond to that
     for a second.  I want to get back to the concept of rights
     without remedies being no rights at all.  And the
     competitors at this point still don't have the resources to
     compete in every state against, you know, an entrenched
     monopolist.  And it seems like the only forum most of the
     competitors at least on the common carrier side have is the
     FCC.
                   We've got a lot of folks that are trying to deploy
     innovative services on a national scale, and for them to
     have to run around arbitrating disputes all over the country
     is just uneconomical and too difficult particularly when the
     monopolist has been entrenched in those states and has, you
     know, basically a lot stronger authority over state
     commissions.
                   MS. BROWN:  But you're not necessarily disagreeing
     with Roy that there are rules that ought to be enforced, and
     that's going to be the test of whether there's competitive
     opportunity?
                   MR. ASKIN:  I agree that the rules exist and
     again, the rules -- there has to be a way of effectuating
     those rights.  And I think the FCC should be the mechanism
     by which those rules are enforced.
                   MS. BROWN:  Alan?  Alan, has this cool thing, you
     know, so do that, because it helps me find you.
                   MR. CIAMPORCERO:  Yeah, I wanted to say I'd be --
     it's always better to have more data and for a long time,
     the LEC industry has been asking the Commission to collect
     more data about CLEC's.  But actually I don't think --
     that's not what I want to recommend because I feel like that
     could go off into its own world of collecting and analyzing
     data like Armis reports who -- you know, somebody reads
     Armis reports, but I don't think any of you guys do very
     often.
                   What I -- I think you actually have in the
     Commission the expertise, I think you understand the data a
     whole lot better than maybe you all know.  And part of the
     problem is it's scattered around.  And I think it -- the
     separation of the bureaus is a real villain here.  I'm not
     expecting you to mush the bureaus together into one big
     bureau.
                   I know people will still have separate jobs, but
     there's got to be some kind of office, and I think something
     you can do fairly quickly.  Maybe it's what Pepper does or
     could do.  Somebody to make sure that each of these -- your
     product, which are these decisions, that they take into
     account things that are going on in the other bureaus, and
     they take it into account specifically and explicitly.
                   I think that's absolutely critical.
                   The other thing that would -- this is just a
     personal point that I think would also help, and you do very
     quickly, is change the way that the Commission writes
     decision.  Whoever invented this -- all these numbered
     paragraphs -- maybe it was Henry Geller.  I don't know.  But
     whoever invented it, it's time to get rid of it and write
     these decisions as a court of appeals would write them in a
     coherent way in English that people could understand.
                   I know there are administrative law issues, but
     you can put that in an appendix.  Let's start doing that
     right away making sure somebody reviews all the decisions of
     the bureaus for consistency before they get to the 8th
     floor, and making sure somebody writes the things in a way
     that people can read and understand in less than four hours
     times for each decision.
                   MS. BROWN:  David?
                   MR. TURETSKY:  I think it's critical that the
     Commission monitor what's going on in terms of competition
     and whether people have choices.  I don't see how you can
     look at a marketplace and understand where there's market
     power and when there's a need to regulate unless you do
     that.
                   Roy, I think, was talking about a very focused
     point when he talked about what Congress intended.  I think
     he was talking about one issue that he didn't identify,
     which was long distance entry.  He thinks, I think, that
     Congress didn't want you to do market tests there.  And let
     me put that side because Congress never told you not to look
     at putting long distance entry aside.  For decisions about
     deregulation and how much regulation where you've got
     flexibility, Congress never told you to ignore market power,
     market share or any of those things.
                   If regulation really is about how many choices
     there are, whether people have choices, or whether there's
     some kind of market power that because of whatever reasons
     is sustained and can be used in a way that's anticompetitive
     or bad for consumers.  You've got to look at that kind of
     information.  You may not use it for every purpose equally.
     So I'm trying to sidestep the debate that Roy's talking
     about.  But you have to have that, and you have to analyze
     that in order to make intelligent decisions.
                   I can't think of a worse regulator than one that
     doesn't know the marketplace that it is dealing with and to
     what extent choice is there.  And I don't think that's the
     FCC today, incidentally.  I think the FCC does understand
     that.  But it's important that it continue to develop the
     tools to do that so it can see when deregulation is the
     right course.
                   MS. BROWN:  Jonathan?
                   MR. SALLET:  Yeah.  I also want to -- I understood
     your question not to be asking us our view of statutory
     interpretation.
                   MS. BROWN:  Yeah, I didn't mean to do that.
                   MR. SALLET:  So I'm not going to refer to the
     statute, nor am I going to suggest I'm confined by whatever
     a statute might mean in answering your question.
                   It seems to me in looking at whether there are
     competitive markets, there are a number of facts to look at.
     What percentage of a market is addressable by more than one
     competitor?  Not which is won, because it shouldn't be a
     question of whether somebody actually gets a customer, but
     to turn it the other way.  Do a large percentage of the
     customers in a marketplace have a choice?  That's one
     indicia of competition.
                   Another indicia, which seems to me important is
     our people in the marketplace engaged in the kind of profit-
     pursuing behavior that one would expect in a competitive
     market?  Let me give you an example.  People who own
     facilities -- for all the talk about convergence, people who
     own facilities have two obvious means of making money off
     those facilities:  retailing and wholesaling.  Now, it
     doesn't mean that everybody will pursue an open-platform
     model.  In the computer industry, we saw quite a divergence
     in strategies between one computer company who decided to
     maintain a closed system, as it were, and another that
     pursued at the time a more open model.
                   But it does seem to me that if one sees across an
     industry, not just in terms of a single company, a desire to
     not take the profits that are available from wholesaling
     one's facility, then that indicates that other competitors
     in the sector don't have much access to essential facilities
     necessary to reach goals.  It's only one indicia, but it
     seems to me it's a particularly important one.
                   We have seen, for example, in the long distance
     industry companies simultaneously acting as retailer and
     wholesaler.  This is an issue that seems to me that ought to
     be looked at just as one of the factors in any market to see
     whether or not markets are competitive.
                   As to your question about what kind of rules
     should survive?  I think the word you used -- the adjective
     was the core rules that ought to exist even when a market is
     competitive.  I would suggest that one -- all one can do is
     to note three broad categories is because they ought to
     change.  But they, all three, I assert, will exist.
                   There should always be a set of rules ready to
     address or addressing, continuing vestiges of market power,
     either to guard against its formation, say, through merger
     review, or to look at manners in which while a market is
     still -- is competitive in many parts, nonetheless, still
     reliant on certain facilities for the delivery of services
     for their market power rules.
                   Secondly, in any market, consumer protection
     rules, particularly those that go to information are
     appropriate.  And third, the purchase of social goods is
     just one rubric for the term universal service and whatever
     policymakers wish to decide is appropriate for universal
     service.  The purchase of social goods will, by definition,
     not be efficiently performed by even a competitive
     marketplace.
                   So, it seems to me these are the three broad
     categories that one should pursue, although I note that you
     could probably go into some disagreement around the table
     about what particular rules should be enforced in each
     category.
                   MS. BROWN:  Jerry, I'm going to go to you for the
     broadcast side on this.
                   MR. FRITZ:  Let me answer it by talking about the
     implications on the Commission in both its structure and its
     activities, because I think that's what this is all about.
     Why are you changing this agency you want to react to the
     changed circumstances?
                   It's going to differ, as you say, from industry to
     industry.  It is set by statute in certain cases.  For
     example, in broadcasting, you have to review the ownership
     rules every two years.
                   What is it you're looking at?  Basically, it's
     four essential criteria across all industries.  Number one,
     the number of players.  Number two, the number of choices.
     Number three, the market power, whether it's the LEC's, the
     broadcast networks, or as Preston Padden said, the
     gatekeepers, the resulting gatekeepers.  And number four,
     access to offerings, whether it's how many people have
     digital television sets, what the Internet penetration is,
     but access to the offerings of communications.
                   You have to look at those four criteria in
     relation to the numbers when the rules were adopted.  And
     that's the job of the policy divisions of the bureaus,
     however they are reconfigured, and I have some thoughts on
     how you can reconfigure those.  But it gets it analyzed.
                   Once it's analyzed, you have to do something with
     it if it's changed.  And that I think is the frustration of
     many people in all the industries that you have the
     information but you're not doing anything with it.
                   The implications on your structure and activities
     are critical because it fundamentally results in a sliding
     scale of waivers.  You can come up with a general waiver.
     You can own one or two broadcast stations in a market.
     There is going to be a necessity for a waiver because things
     change over time.
                   I know Roy Stewart doesn't like waivers, but
     essentially, that's what you're going to end up unless you
     adopt wholesale duopoly, for example, you're going to have a
     set of waiver criteria.  That's harder for you because it
     requires more manpower.  It requires on a case by case
     analysis, unless their presumptive waivers are automatic
     waivers or things like that.
                   But to analyze competition, because it's not --
     one day it's a monopoly, the next day it's competition.
     It's a sliding scale.  So, you're going to have to adopt a
     regime of granting waivers, information that's analyzed by
     the policy division, and then a criteria of waivers so that
     you can move along toward a deregulatory environment.
                   MS. BROWN:  Thank you, Jerry.  Michael, do you
     want to add?
                   MR. ROBERTS:  I have to jump between my wireless
     hat and my broadcast hat.  My broadcast hat is on at the
     moment.
                   When I first went on the air with my very first
     television station in 1989, we had permission as a result of
     the FCC to be carried by all cable companies.  Shortly
     thereafter, the courts took it away.  And what we noticed
     around the country, a number of independent stations like
     mine, small stations, were, in fact, taken off of the local
     cable operators.  And it wasn't until the must-carry
     provisions came back that we were able to get past the
     gatekeepers again and come back on.
                   Actually I have to qualify that.  My station was
     not taken off due to some relationships we had with the
     local people.  But many were.  And we lobbied hard to
     protect the must-carry provisions during that year with Mr.
     Donovan and also NAB, and of course, Jim Winston, to make
     that happen.
                   Now, let's look down the road a moment.  We have
     DVD coming or DTV coming along.  And our spectrum may be
     more than one signal.  We may have several opportunities
     there.  And the question becomes now as we plan in the
     future if we have six signals, if you will, or two, more
     than one, will we have must-carry protection?  How should we
     plan our companies today as they come on the air through a
     digital system five years from now?
                   Should we be aggressive and
              assume that we're going to be carried over cable, or
     should we not?
                   MS. BROWN:  What kind of things do you need from a
     regulatory agency or not need from a regulatory agency to
     start to make those business kind of decisions?
                   MR. ROBERTS:  We need clarification that all of
     our DTV signals will be carried through a must-carry
     provision.
                   MS. BROWN:  So you want a rule?
                   MR. ROBERTS:  Yes.
                   MS. BROWN:  Okay.
                   MR. ROBERTS:  Thank you.
                   MS. BROWN:  Tom?
                   MR. TAUKE:  Well, I -- if we can change hats, I'm
     trying to think of this not as a Bell Atlantic guy, but I'm
     thinking of it in terms of the way I tried to think about it
     when we focused, and when I was in public life looked at
     railroads and trucking and natural gas pipelines and a
     variety of other industries.  And what kind of common rules
     can you look toward?
                   I think the first question you asked -- I'm going
     to address three areas.  The first was, how do you know when
     markets are open?  And I think it's tough to say that there
     is a clear standard in knowing when markets are open, but
     the first and most important test is, can somebody else do
     business in the market?  Can somebody else get in?
                   And I think that when you are looking at market
     entry, you have to be able to say that somebody else can get
     in.
                   Now the question that then faces the regulatory
     agency is, did you try to establish the path by which
     somebody gets in, or do you simply try to ensure that
     individuals have the -- or entities have the ability to
     enter that market?  And that gives you a direction as to
     what kind of regulation you are going to impose, whether you
     are more trying to resolve disputes, or whether you are
     going to try to have proactive, if you will, definitional
     regulation of this is the way it has to occur?  But I think
     market entry is the big key to knowing when markets are
     open.
                   The second thing that I think you need to look at
     when you are looking at regulation is, are customers
     empowered?  And when I say customer empowerment, I'm not
     talking about, do they have enough information to make the
     right choice, although that is important.  What I'm talking
     about, are customers empowered to make choices?  Or, put
     another way, is somebody using their position in the market
     to deny customers choice?
                   So, putting it in our industry for a moment, am I
     as a -- the guy has the wire to the home, am I prohibiting
     customers from choosing different long distance carriers?
     Am I, as the person who has the pipeline prohibiting people
     from getting their gasoline for their filling station from
     various sellers of gasoline?  Am I trying to control what
     goes in and what comes out at either end?
                   And I'd suggest in our industry, and there are
     different rules for different industries, but in our
     industry, ensuring that we have standard interfaces so any
     CPE can plug in, and ensuring that anybody can put their
     content in on the other end in simplistic terms is essential
     to ensuring that I'm not leveraging control of one segment
     of the market in order to eliminate customer choice in
     another segment.  So I think those two things are essential
     for open markets.
                   The third point I wanted to make is relating to
     regulation.  And that is, there are different kinds of
     regulations.  We talk about deregulation, open markets,
     deregulation.  But I think that is far too simplistic.  I
     know of no industry, frankly, that is deregulated completely
     in the country.  There is always some form of regulation.
                   But, first, it seems to me, you have to have a
     bias against economic regulation.  And that is, that you
     shouldn't be trying to control prices.  You certainly
     shouldn't be getting into the internal mechanisms anymore of
     companies about how you establish your accounting systems.
     Get rid of a lot of that stuff, the internal stuff.  And you
     should, instead, be looking at outcomes, the outcomes.  So
     get rid of the economic regulation.
                   And I think that if you focus instead on ensuring
     that the regulation is designed to make certain that markets
     are open in the two ways I described, that then you will
     have the right kind of regulation, and then there'll
     probably be some consumer protection things besides, which
     we'll get into.
                   MS. BROWN:  Thank you, Tom.  John?
                   MR. ROSE:  The gentleman two down from me
     mentioned four criteria:  number of players, number of
     choices, market power and access to offerings.  I would like
     to add a fifth choice to that.  And that would be the size
     of the player in the market or the size of the company.
                   And the reason for that, if a small company has
     the same level and same cost of regulation as the large
     player does, then that translates in increasing costs to the
     consumer.  And I'd like to add to that the size of the
     player should have some sort of streamline regulation or
     less regulation.
                   MS. BROWN:  Zeke?
                   MR. ROBERTSON:  Thank you, Kathy.  My assumption
     is that virtually everyone around this table here is
     searching for a way to how to move from where we are to
     something closer to a competitive market in virtually every
     area allowing everyone the same opportunity or as close to
     the same opportunity as possible.  And that's what I want to
     talk about as an idea.
                   You asked the question of how do you deregulate?
     I would suggest to you in all cases, you don't have to
     deregulate to have a competitive market.  If everyone plays
     by the rules, notwithstanding the gentleman here from
     OPASTCO, I'm not suggesting that a large company and a small
     company all across the world may be in exactly the same
     position, but certainly in a given market area where
     similarly situated companies of equal size and capability
     are offering a similar service, that's where I think you at
     the FCC have an opportunity to not have one set of rules for
     one particular company, and another set of rules for another
     particular provider.
                   I know you're restrained by Title II and Title VI
     of the Communications Act.  And all I'm suggesting is that
     as a goal, as an objective in this process in your
     retooling, you try to use a series of thinking to get in
     areas, in situations, by service, by geographic area as
     close to parity.  When no regulation is necessary for either
     one of them, then let all of it go, but you don't have to go
     all the way to deregulation.  But make the rules the same
     such that the consumer has an opportunity to have more than
     one capable provider by service, by geographic territory or
     whatever.
                   The tools, I believe, you already have, Kathy.  It
     includes 706, Section 706 of the Act.  I think you have the
     ability to use Section 10, forbearance.  I think you have
     the ability of your binding of review, which is technically
     a part of Section 10.
                   So my suggestion to you is, and we have talked
     about this, you and I before.  One of the things that you
     can do that doesn't necessarily require any legislative
     control or whatever, I'm saying if we concentrate on finding
     the areas where the rules can be leveled, let the market
     work.  That's the best way to get "a competitive market".
     Then, deregulation will be easier.
                   MS. BROWN:  Mike?
                   MR. CALI:  I thought I'd make two points.  The
     first brings us back to the issue of certainty.  The
     Commission has a long history in dealing with assessing
     market power.  The indicia for doing so include market share
     movements of market share over time.  They also include
     alternatives and a wide variety of issues.  The Commission
     has addressed this in the past, and they know how to address
     it going forward.
                   The important thing for the marketplace is to
     ensure all participants know what the rules are.  No one
     carrier is going to receive flexibility.  Is it going to be
     based on a set of rules even absent competitive entry or
     absent market share shifts?  Or is it going to be after
     there's some demonstration that market share has eroded?
                   Secondly, this concept of parity in a converting
     environment, and there may be restrictions on what you can
     do and what you can't do.  I think again you go back to the
     fundamental point is less, to whether cable companies and
     wireless companies and wireline companies are being
     regulated the same and by the same bureau, as to whether
     each is being regulated least consistent with its market
     position and market power in the public interest.  And that
     can be done.
                   The Commission can move forward in that way, but
     again, it needs that standard or rule by which it will
     assess.  Does this company have market power?  Do I still
     need to regulate?  If I do, what are the right regulations?
     Is there actual demonstrated need for regulation?
                   MS. BROWN:  Let me try -- I know.  Let me try to
     ask yet another question to see if we can broaden this, and
     let's go to this notion of rules.  And we talked a little
     bit about -- I used the word core rules.  But, what are the
     rules that have to remain?  And Tom's point that almost
     every industry has rules of the road.  And so, what does
     that look like?
                   But then let's juxtapose that with this
     enforcement notion and talk a little bit about, well, do you
     make policy an enforcement, or are you enforcing rules that
     are clear and understood and best made in a rulemaking, and
     thus, you're enforcing them?  Or is there something else
     that happens in your enforcement process?
                   And then I'd like a little discussion on this
     notion of, should it be adjudicatory?  Should we look at
     this ALJ process again, and/or should we think of what --
     and you have to remember, I'm from New York.  Don't cringe.
     But a collaborative -- a more collaborative kind of
     approach, where the industry really sits down and tries to
     work out some things in perhaps a less informal manner to
     try and get to resolution.
                   And we've seen this here on any number of
     standards issues, broadcast issues, and you know, even some
     pricing issues that we tried to do a little bit here/ -- and
     I'm going to hold this for a minute because all those issues
     go to the speed question, which I think we want to raise in
     the second part of our discussion, and what you do about
     notice and opportunity and input.  But hold those notions
     and just talk a little bit more theoretically about this
     enforcement rule thing.
                   Anybody?
                   MR. WEINGARDT:  Well, obviously, you have to
     support an ongoing enforcement role.  And I'll just pick
     examples.  I'm not going to -- I'm not here to promote one
     of them, but just as an example.  I mean, Congress said in
     '96 that getting access to the networks is going to be a lot
     easier than it should have been.  And that's called
     interconnection.  It's no longer -- you have a right to
     interconnect, not if FCC says so and the states say so, and
     you go through that process.  They reversed the paradigm.
                   And yet, a paging company in Tuscaloosa, Alabama
     and a PCS in Walla-Walla, Washington, and you name it, ask
     for interconnection from a BOC or whoever the ILEC is in
     that community.  And the answer is "No" or, "We'll get back
     to you," or "We have a backlog and we can't respond to you."
                   The theoretical concept of whether you sit down,
     work it out first, go to the states or whatever is, I think,
     irrelevant, because we're just no policemen.  There's
     just -- I mean, I know Michele faces that in her particular
     area, and I'm not picking on you, Michele, but what do you
     do?  You know, we think clear rule, violation.  They said,
     "No to interconnection," or they said, "See us next year,"
     or, "You have to follow this 38-page document."
                   There's nowhere to turn for a relatively quick
     response, whether it's an ALJ or a Commission employee
     empowered as an ALJ, a fact-finding person who will not be
     overturned unless there is clear evidence of corruption or
     incompetence, I think is irrelevant to that person in
     Tuscaloosa, Alabama.
                   MS. BROWN:  Well, let me throw this into the mix.
     What if contracts -- I've said this before and gotten in
     trouble once or twice.  What if contracts looked much more
     like supply contracts that had liquidated damages and self-
     enforcing provisions, and that the role of government
     perhaps is not to set those, but to make sure they are set
     before they're approved, for instance?  Just a thought.
                   Who was up?  The end of the table.  Sorry.
                   MR. KOUTSKY:  I just have a -- you posed earlier
     the difference between a collaborative or a litigation-type
     process.  I actually think they really serve two different
     purposes.  The collaborative -- and we've been involved in
     both of them one way or another.
                   Collaboratives are really good means of -- it's a
     different approach to rulemaking, in essence, to take what
     would be a rule and to really clarify what particularly
     needs to be done.  That's why we see in this whole plethora
     of collaboratives on OSS.
                   You know, the Commission originally ordered
     electronic bonding on December 31, 1996, I think was the
     deadline, and we're still kind of in this whole process.  So
     I think the collaboratives really make a lot more sense as
     an adjunct to the rulemaking process.
                   In terms of resolving disputes, I don't think they
     ever will work to resolve disputes, in principal part
     because not everyone can go to collaboratives all the time.
     And the point about what does the paging company in
     Tuscaloosa do?  I doubt if they're going to be at even the
     state capital to participate in the collaborative about the
     interconnection negotiation process and how can we fix it.
     And I don't think that's going to help, either.
                   This is where I touched on the more adjudicatory
     role, whereas, that's really more of a fact-finding, truth-
     seeking type mission.  How do we find out those facts?
     That, you know, in our grand Anglo-American tradition is
     discovery, subpoenas, motions to compel, testimony, even
     sometimes.
                   MS. BROWN:  Well, let me ask you this.  In a
     commercial environment, would you want a quicker means of
     dispute resolution?
                   MR. KOUTSKY:  Well, that actually can be quick,
     too.  One of the things that the Commission or that the
     statute did in the common carrier context was to talk about
     interconnection arbitrations and having states deal with
     that process.  And most states probably when they saw the
     Act, probably figured, "How am I going to do this in nine
     months?"  Right?
                   And most states have actually stepped up to the
     plate and not all.  And some have done different types of
     processes.  But I think that you can actually manage -- and
     this doesn't have to be before a judge.  It can be before a
     AAA arbitration panel, too.  It doesn't have to necessarily
     be before -- in a grand scheme.  And I think the very basic
     doctrines that we were all taught in law school -- probably,
     more than half of us are lawyers here -- about how you find
     evidence and how you prove a point and getting access.
                   You know, what is exactly somebody's procedure for
     installing an unbundled loop?  There's a written document
     that's somewhere.  That doesn't necessarily come out in
     collaborative process, and you can't actually require
     that -- I'll defer to Melissa on this.  But how are you
     going to get to the bottom of what I call the truth-seeking
     function?
                   MS. BROWN:  Brian?
                   MR. FONTES:  Brian Fontes --  I certainly think
     the core responsibilities includes spectrum management,
     allocation, licensing and maintaining the integrity of the
     spectrum that's been licensed.  In other words, preventing
     interference.
                   In terms of how to deal with enforcement, in
     looking at the ALJ approach, for those of us who are old
     enough to remember, the old ALJ processes here, you know,
     this can be a multiyear activity.  And frequently was a
     multiyear activity, to be quite truthful about it.  So
     that's clearly a process that if you want to use it as an
     option, go ahead and use it, and I wish you luck in a
     competitive environment.  So there's got to be other ways to
     resolve conflict or disputes.
                   I think the enforcement activities, you know, if I
     visualize what's the role of the enforcement bureau -- I
     don't see it getting mired down in interference problems or
     complaints with coordinating among local government agencies
     for antenna siting or anything else to that nature.  I think
     that'll probably still remain or should remain the function
     of the bureau.
                   I think the enforcement activities in the
     enforcement bureau should look at the broader issue in terms
     of the ability of competition to work, market failure,
     addressing those broader context issues that will determine
     the success or failure of a competitive market.  So I think
     that there's a very real difference in the types of
     activities the enforcement bureau would be engaged in.  And
     I also would hope, too, that certainly the opportunity to
     come in and to work together with all parties involved in
     any type of enforcement action short of an ALJ procedure,
     would be a real viable option.
                   MS. BROWN:  Alan?
                   MR. CIAMPORCERO:  I just wanted to say that I
     think the purpose of the Commission in enforcement ought to
     be -- the goal out to be, what can we do, or should we do
     that's different from what courts do?  That the value in the
     Commission is that they don't have to do what courts do.  We
     don't need more rules.  The enforcement bureau ought to
     bring a suit like the Justice Department if it's got an --
     you know, a problem that won't go away, a bad actor that
     won't go away.  But, that's not what the Commission should
     do.  No more rules.  Don't make this thing any more like a
     court.  Go the other way.  Let the courts handle that.
                   MS. BROWN:  Andrew?
                   MR. PAUL:  I just wanted to add something to what
     Brian said because I think he's getting to a very important
     point, which is a question of how do you enforce a policy as
     a policy rather than making it more specific than an
     adjudicatory function?  And I can't answer that question
     here or right now.
                   But, I think we've got to go back again and say to
     ourselves -- now, this addresses the speed issue.  If the
     consumer is the person who's going to benefit from all of
     this at the end -- we're all sitting here saying, "What is
     my company or what is my industry going to get out of this?"
     But if it's really in the end the consumer who's going to
     benefit from this, I think that speed or some kind of a
     facilitating mechanism that will enable the consumer to be
     the beneficiary is going to be the right way to do it.
                   And also, secondarily, from a business
     perspective, if there is going to be a change made or
     there's going to be some kind of policy enforcement that's
     going to involve one company or an industry to do something
     different, that company has a right to know sooner rather
     than later how and when it's going to have to redesign a
     particular business practice.
                   MS. BROWN:  Preston?
                   MR. PADDEN:  I would just echo -- you're going to
     be really challenged by the need to make decisions in an
     expeditious fashion.  And I would stay as far away from ALJs
     and adjudications and lawyers as you possibly can.  I mean,
     I was in the Commission room when the Commission voted to
     move from comparative hearings to lotteries for the major
     market cellular applications.  And you could hear this groan
     go up from the communications bar in the room, but there is
     no question this Commission got service out to the American
     people infinitely faster because of that decision.  And I
     would urge you to stay away from all that stuff.
                   MS. BROWN:  Michele?
                   MS. FARQUHAR:  I completely agree with Preston's
     point, and also, I want to argue and kind of building on
     what Andrew was saying that the FCC should not shy away from
     getting involved in an informal way before anybody even has
     to file a formal complaint or an informal complaint or a
     rocket docket complaint with respect to where the rules are
     clear, and they're being violated, and talking through that
     issue with the parties so we don't have a situation where
     parties are forced to file complaints when they really
     shouldn't have to in the first instance.  And the Commission
     should just clarify the rules for all the parties involved.
     The parties can hear that out and make their own decision
     whether they want to go forward.
                   MS. BROWN:  Let me just ask you, though, in a
     market that is largely unregulated and a supplier has a
     problem with his customer and vice versa, who do they go to
     and what do they do to solve the problem?  And should we
     start thinking that way in this industry?  Jerry?
                   MR. FRITZ:  You have an excellent example of how
     that's done in the mass media context today.  During a
     political campaign, if a particular candidate, when Mr.
     Tauke was running, if he had a problem with one of my
     television stations and he couldn't access, he can call the
     political branch, and the political branch puts the two
     parties together and said, "Here's the rule.  Do it."  With
     the threat of Commission sanction behind it.  So, there
     is --
                   MS. BROWN:  But they would still be coming to the
     Commission, that example you're giving me.
                   MR. FRITZ:  And certain things will have to come
     to the Commission.  Enforcement of spectrum interference,
     when pirates -- pirate radio people come up and our
     television stations are being interfered with, we have to
     come to some place.
                   Enforcement bureau has two primary functions:  a
     police function and a dispute resolution function.  The
     police function is to enforce the rules that exist, the
     interference rule and a spot check on compliance with rules,
     because the Commission has any number of dockets that said,
     "That we will deregulate, and we will spot-check to make
     sure your public file is right or whatever."  So, you have
     two functions from a police concept.
                   The other one is dispute resolution.  Preston is
     right.  We don't need more lawyers, but you need a rocket
     docket.  You do need fast dispute resolution.
                   MS. BROWN:  I want to move to some other
     questions, but I don't want to -- Jonathan?
                   MR. SALLET:  Can I take 10 seconds?
                   MS. BROWN:  Yes.
                   MR. SALLET:  Here's an advantage of an ALJ system.
     Just by views of Preston and Michele who know this area
     better than I do.  It dedicates resources to enforcement.
     Whatever answer you come to about use of dispute resolution
     or ALJs or any other way of proceeding -- and I don't
     disagree about the dangers of ALJs -- you've got to focus on
     the resources that are available for enforcement and not
     just the process of enforcement, because right now we have
     circumstances where people have a lot of responsibilities
     for ongoing rulemaking for generalized policy and for
     specific enforcement actions.  And I think -- I just would
     like to note the resource issue is a critical, practical
     need in any avenue of enforcement.
                   MS. BROWN:  Len, I think I lost you.
                   MR. CALI:  Thank you.  It's really just an aside,
     but a very important related aside.  Increasingly, the
     Commission may find it wants to reassess its public policy
     positions which is critically important and apart from the
     enforcement context, but routine applications for authority,
     routine license transfers, even routine waivers that are
     consistent with prior practice should not be held up while
     the Commission reviews its public policy positions.
                   It may well be warranted that public policy
     changes, but if a carrier cannot move and the market's
     moving, but the carrier cannot move because one of its
     requests, whether it be an application or a transfer or
     waiver, is being held up while the Commission reviews
     policy, there is a problem.
                   MS. BROWN:  Zeke?
                   MR. ROBERTSON:  Very briefly to answer your
     question on should you start moving more like other
     industries, how much of this should the FCC continue to do?
     My belief is that where there is a valid contract executable
     and could be handled by a court of law, there are other
     vehicles by which people could get relief.  And therefore, I
     think that could take a great burden off of you.
                   In situations where simply someone is claiming a
     rule violation or whatever, you have to deal with it.
     You're the appropriate place.  So I think -- I would suggest
     to you where there is a contract, where there is something
     to be executed by another agency or the courts, you should
     shed it.  Get to the things that just deal with your rules.
                   MS. BROWN:  Robert?  And this will be the last on
     this if -- oh, okay.  Sorry, Tom.  We'll get to you.
                   MR. MCDOWELL:  Just real briefly back to the
     resources argument.  Tied into that is deadlines regardless
     of whether it's the ALJ model or something else, if you have
     tight, quick, rocket docket-style deadlines, that's going to
     benefit everybody if the industry moves with great speed.
     But that's also going to benefit the entrepreneurs who don't
     necessarily have the resources to win long, drawn out wars
     of attrition against bigger entities.
                   You can go quicker than a court of law.  You're
     the expert agency.  All you have to do is reform your
     process and you can get these things out the door a lot
     faster.
                   MS. BROWN:  Tom?  The last on this, Tom.
                   MR. TAUKE:  You did ask the question about should
     the enforcement process be tied to a rulemaking process, and
     I think that it's important that enforcement not be
     rulemaking.  That enforcement should be simply looking at
     outcomes, assessing penalties if outcomes are not achieved,
     but it should not get into the business of defining the
     methodology by which the outcome is achieved.
                   MS. BROWN:  Thank you.  I'd like to put another
     question out on this vision thing, take about 10 minutes
     with it, and then shift to this efficiency and structure
     question that we asked just to sort of finish up.
                   But, I'd like to talk for a minute about this
     issue of how this economic revolution, this technology
     revolution, this telecommunications revolution reaches all
     Americans, both the customers throughout the United States,
     and those citizens who are receiving services now in a
     ubiquitous way, and how do we ensure that as this pie grows,
     that all of our people are able to participate as
     entrepreneurs, as new vendors, as new owners, as new workers
     in this revolution?  And what, if anything, does the FCC
     have to say about that or do about it?
                   Anyone?
                   MR. CIAMPORCERO:  I just wanted to say the first
     thing I think is that we ought to have -- is to approach
     this with a respect for the past.  In this country, we've
     got the best communication system in the world.  That was
     the result of a good policy, 40, 50, 60 years of a very good
     policy.  I'm not going to get into the future because I
     would be prejudiced, but respect what has happened, and that
     we've done it right.  And keep that in mind as we go
     forward.
                   MS. BROWN:  Could you say a little more about what
     that policy is?
                   MR. CIAMPORCERO:  The policy of you know, moving
     hell or high water to have universal service at an
     affordable level for people.
                   MS. BROWN:  David?
                   MR. DONOVAN:  I think for us, some of the
     frustration has been that the Commission has done a superb
     job at promoting competitive services in other areas with
     different economic structures.  In order to help competition
     in local phone companies, everyone celebrated cable
     clustering, which is terrific from that standpoint.  Of
     course, it does have an impact on the broadcast model, as
     well, which I really don't think was given a whole lot of
     weight in those decisions.
                   The bottom line is, is that if you want to have an
     advertiser-based free system, you have to also understand
     that we are competing day to day with someone that has two
     revenue streams that is pulling away eyeballs, pulling away
     advertising and revenues.  And if you want to keep the free
     system going forward, which I think really solves a lot of
     problems for you all, is you go forward with universal
     service, you have to recognize that we do compete with these
     people.
                   And some of the broadcast specific rules that you
     now have really have to be not only reexamined, but frankly,
     relaxed.  In particular, you know, I'm looking at the local
     ownership rules, which I think most -- a lot of efficiencies
     can be harnessed if you permitted common ownership in the
     same market.
                   At the same time, I think we all have to be
     sympathetic to Jim's concerns, as well.  Participation is
     important.  The policy such as the tax certificates and what
     have you worked very well in this country, and frankly,
     should be brought back.  I don't think there's any dispute
     among that.
                   But I am very much afraid that if we don't permit
     sort of relaxation of the economic aspects of this industry,
     the service, which really comes to the core of what people
     need in this country, the ability to access top quality
     information and programming, will suffer on a going-forward
     basis, not to mention the ability to take this industry to
     the next digital step, because there are a lot of entities
     out there that right now the economics just aren't there to
     do it, particularly among the smaller broadcasters.
                   And so, I wish you would in a going-forward basis,
     look at your broadcast industry specific rules and work very
     hard, frankly, to relax them so we can compete in the
     multichannel environment.  Mr. Pepper knows this.  He wrote
     an article in '91 about this whole issue.
                   MS. BROWN:  Jim?
                   MR. WINSTON:  If you look at the broadcast
     industry, as I mentioned before and as David pointed out,
     there were policies in place to promote minority ownership.
     And those were policies adopted by the Commission after
     extensive consideration of the industry that was before it
     in the late '70s.
                   What was recognized was that specifically in the
     broadcast industry, and as industries converge, it's going
     to be interesting to see how -- whether someone will look at
     the converging industries in the same manner.  But the whole
     concept in broadcasting was that the broadcast industry is
     the mechanism by which the American public asserts its First
     Amendment rights, and that if we are going to have a free
     and open exchange of ideas in this country, then the
     broadcast industry has to reflect the American population in
     terms of who controls the airwaves.
                   That concept has fallen in disfavor among some in
     Washington now, and we've seen those policies falling apart.
     So I guess the question is, is the Commission in a position
     to be able to influence reopening that debate?  I know the
     Chairman has been trying to, and he's been meeting a lot of
     stiff opposition in trying to do so.
                   I guess the question here is, is there any
     possibility for the people in this room see some reason for
     including that in the debate as we talk about convergence,
     as we talk about all these industries competing with one
     another?  Is there a recognition that the American public is
     not a monolith, and that technology is in the control of
     those who have access to capital to take control of that
     technology?
                   So if we're going to talk about this industry in
     that fashion, then there should be something in this
     discussion that says for those who don't have access to
     capital, for those who don't have the ability to take an
     idea from the initial stages to business fruition, is there
     some role for the Commission in that process?  Is there some
     ability for the Commission to influence the access to
     capital?
                   Right now, the Commission has a telecommunication
     development fund, which is a nice idea, which has yet to
     move beyond the idea stage in terms of producing some
     results.  So it seems to me that that's one of the issues,
     the tax certificate that David talked about, which, of
     course, requires congressional action to bring back, is
     another that had some ability to bring diversity, a
     viewpoint of diversity of voices to the industry.  I would
     think that's another area that this group should look at.
                   And specifically because we're talking about
     convergence, it seems to me that it's time to talk about a
     tax certificate in a context broader than broadcasting
     because the delivery of information to the home is now
     becoming a business much broader than broadcasting.
                   MS. BROWN:  Thank you.  John?
                   MR. ROBERTS:  I'd like to echo what the gentleman
     said about universal services.  Policies of the Commission
     in the past have worked really well for universal service
     and rural areas.  And we believe that the Commission should
     continue to take that care.  And one way of taking that care
     is to make sure all the policies of the Commission, not just
     those directly with the universal service or the universal
     service fund, that they're coordinated together to make a
     really coherent policy that works well.
                   MS. BROWN:  Thank you.  Michael?
                   MR. ROBERTS:  Thank you.  I think Jim and Dave
     brought up some issues that are dear to my heart.  And I
     think we have to put -- it's a structure.  It's a skeleton,
     but let's put a little meat on it and apply the reality.
                   The reality is, are there television stations and
     radio stations available to even be purchased?  Number one.
     You have DTV licenses that are going out, but eventually
     analog licenses that'll be returned that may subsequently
     may be sold again or used again in some way.  How might you
     approach those licenses in a more aggressive way to allow
     for the diversity that we're looking for here?
                   Clearly, we have a disproportionate impact going
     on.  There are many less folk owning broadcast stations than
     watching broadcast stations, from that standpoint.
                   You have rules today that have allowed for one
     radio station company to dominate a market, just literally
     dominate a market.  And I'm on Jim's board of directors, and
     I've watched a number of those radio -- black-owned radio
     stations look to potentially either going out of business
     because the competition's just too great, or they had to
     sell in order just to survive financially.
                   In the television industry, you have the duopoly
     issue that's before you.  You were seeing LMAs all over the
     United States, and fellas who were out getting around the
     rules and owning more than one station in the market.  And
     if you change the duopoly laws and allow them to own more
     than one, that's going yet again to dry up the opportunities
     for minorities to own television stations.
                   So, I think you have to look at the real meat here
     and determine, what are we talking about?  Are there
     licenses that are even available, and what would be the
     incentive to sell them since there is no more spectrum, per
     se, to sell them to minority individuals?  What would be the
     benefits for the seller to sell to them?  That's where you
     get into the tax credit issues and perhaps some others.
                   I raise the question of foreign ownership.  For
     example, what if a Canadian television company interested in
     coming in could team with a minority, we might allow them to
     move to say, 40 percent ownership.  And they would back that
     minority-owned business person and allow them to own 60
     percent.  But we would have the financing necessary to buy a
     much larger, perhaps a network level operation in some of
     the larger markets.  Little concepts that I'd like for you
     to bounce around, Kathy.
                   MS. BROWN:  David, did you want to --
                   MR. DONOVAN:  I promise I'll be brief.  I think
     there's a couple of things that are important.  Broadcasting
     does not exist by itself.  All of us here at this table know
     that.  We're all competing against one another.
                   If you're looking at a mechanism to enhance the
     diversity of the ownership structure, and that mechanism is
     to put an artificial restraint on the entire industry, in my
     particular instance, the ownership restriction, what you end
     up doing essentially is sending capital to other video
     industries.  I don't think in the end that helps anybody.
                   In today's free -- in the market of today's free
     over-the-air television market, to have -- to pursue a
     policy to the nth degree where you have every single
     individual owner may be wonderful in a perfect world.  It
     may be desirable.  But what it means is is that the service
     that's being provided to the consumer goes down.  And the
     evidence of LMAs across this country, frankly, I think,
     proves it.  Every single one of those LMAs has improved
     service to the communities that they are located in.
                   MS. BROWN:  And now, I'm going to ask you to make
     sure we don't argue --
                   MR. DONOVAN:  Exactly.  That's why I want to
     abstract this to a more general discussion.
                   I think what it means, though, is that you have to
     -- if you're trying to promote a goal, whether it's
     diversity ownership or any other Commission goal, you have
     to look at where the capital is going to go.  And imposing
     restrictions on one segment means money goes elsewhere.  To
     impose rules on the ownership of two stations in the market
     means Jerry's boss, Mr. Allbritton, takes his resources and
     starts a cable channel, to which people have to pay to see.
                   MS. BROWN:  I'd be very interested in folks'
     reaction to Jim's notion that a tax certificate should go
     further than just one segment of the --  Patricia?
                   MS. MAHONEY:  Thank you.  I, actually -- I wanted
     to respond to both of your original questions and first, to
     respond as Chair of the Satellite Industry Association and
     then secondly, to respond as a past national president of
     American Women in Radio and Television, if I could.
                   How does the revolution reach all Americans?  That
     is happening.  I don't believe that we have what you could
     call universal service with free over-the-air television
     because geographically, not everybody can receive it.  But
     with satellite, eventually, you will have the ability --
     well, with satellite, for the first time, you do have the
     ability of all Americans to eventually become beneficiaries
     of the communications revolution, whether its DBS, DARS,
     wireless, voice data, and eventually, broadband Internet
     services.
                   With respect to Jim's point, I think that on
     behalf of, or as former leader with an organization that
     fought for many years for tax certificates and preferences
     for female ownership, that I think it was generally known
     and accepted that the tax certificate program was the one
     that was really beneficial because that's where you had an
     opportunity to get potentially good stations.
                   But I think when I spoke earlier that one of the
     roles of the FCC has beyond the regulatory role, providing
     leadership, expertise, resources, and support, I think this
     is an area where because access to capital is the issue,
     where the FCC can have a role.
                   And I think back in the early '80s when especially
     Commissioner Dawson took a leadership role in convening and
     having conferences that brought together bankers such as
     Commissioner Ness and brought together program suppliers and
     all different aspects of -- was primarily video and audio
     media, that it resulted in an information flow and
     inspiration and education that ultimately led to ownership
     opportunities.
                   Maybe not everybody can own a station, but maybe
     they learned that they could own a program production
     company or some -- and they made good contacts through these
     conferences.  So I think that there are things that the FCC
     can do.  As much as I hate to say it, I don't think that
     it's likely that there are going to be -- well, certainly
     there won't be comparative preferences anymore, and I don't
     think there'll be other programs that will benefit women.
                   But educating the financial community will
     benefit, I think, everybody.  All services, certainly in the
     satellite area where the financial community may not be as
     sophisticated as we are, and needs to hear the expertise of
     the Commission of the technology, of the risks involved and
     issues like that.
                   MS. BROWN:  Thank you.  Michele?
                   MS. FARQUHAR:  The problem, as you know with
     bringing advance technologies to the rural areas is that
     there really only -- it's very expensive.  And there really
     are only a few ways to make that work, including subsidies
     and the universal service program, in particular, or to
     encourage greater competition or some combination of the
     two.  And the problem is that at the moment, we really only
     have one incumbent being subsidized in these areas.  And
     it's going to take even more subsidies to bring them up to a
     level of providing the advanced services that rural
     customers are beginning to demand and need.
                   And so the Commission and the state commissions
     need to work more aggressively in finding new combinations
     to encourage subsidies and new entries for other
     technologies and providers who can bring more benefits to
     rural consumers.  And that may require looking at other
     types of ways to subsidize.  It could be grant programs.  It
     could be tax certificates.  There could be any number of
     tools out there that have not been looked at yet because
     people have been very caught up in the universal service
     debate in that one form.
                   But the Commission should be open to looking at
     ways so that during this hiatus while the Commission has put
     the rural areas on hold in terms of universal service
     reform, there could be other ways to still encourage
     competitive entry and get that advance service out to the
     rural consumers.
                   MS. BROWN:  Thank you.  And I think Preston, and
     then I'd like to move you to some more mundane things like
     process.
                   MR. PADDEN:  I just wanted to say I believe there
     is widespread industry support for a broadly applicable tax
     certificate program.  And I think everyone would agree that
     profit maximizing free market forces will achieve any goal,
     any goal infinitely faster than any bureaucratic attempt to
     make it happen.  So I think the government ought to decide
     what it thinks the proper social goals are, and then arrange
     the economic rewards of private market activity to favor
     those results.  And I think you'll achieve them faster than
     any attempt by the agency to force it to happen itself.
                   MS. BROWN:  Thank you.  Go ahead.
                   MR. SHARK:  I've been searching for a way to get
     into this discussion, only the sense that as I said earlier
     in my one minute comment, we represent really the
     nonconsumer wireless areas, the small business carrier.  But
     now we're in the nuts-and-bolts area, so maybe I can make a
     contribution there.
                   If there is one thing that I heard throughout this
     discussion is this whole issue of timeliness of getting
     decisions made.  And I think most of us would agree we'd
     rather deal with a bad decision than no decision.  And at
     least that's something you can say and fight against or
     argue against or appeal.
                   And so, I think the one thing that I would like to
     recommend that I think would go a long way in the next
     century, is to really have a system, maybe call it something
     like universal filing and tracking system.  And I'm sure
     some of your computer people are already thinking along
     those lines.  But it would help all of us, I think, if we
     had a tracking system that when an item is filed, that we
     know where it is, who has ownership for it, what is the
     priority, and what is the path
                   I can't think of anything more important than
     something like that on the nuts and bolts area, because
     things get lost.  And when I look at some of the issues that
     you have raised in your paper about losing good staff when I
     talk to the good staff, and there's so many of them, they
     don't have ownership.  They have a lack of incentive.  It
     goes from one desk to another.  When people from the outside
     call in, it's lost.  It's gone.  Or, it's at someone's desk.
     We have no response as to when.  No accountability as to
     what the path is.  No sense of what the priority is.  "Well,
     it's a congressional mandate.  We can't get to that right
     now."
                   If that was something on the Internet, and I think
     the FCC has been terrific on getting more and more on the
     Net.  If that's something that we could look at, then we
     would have a common point from which to see where we are at
     any given proceeding, see the path.  In other words, how
     many desks does it have to go to?  How many bureaus?  How
     many people have to sign off on it?  What priority is it?
     Why is it given the lowest priority?  At least then,
     somebody has an opportunity to argue for it or see why it
     isn't a higher priority.
                   And what is the date?  When is this thing going to
     come out?  I mean, if I can track a package from
     Springfield, Virginia out to California on my Net -- on my
     computer, there's no reason why we can't do it in this
     building right here.
                   MS. BROWN:  Well, this is a great segue out of the
     wonderful conversation we could keep having about the vision
     of the future and the industry, to how can we do better.
     And so, let's take another 15, 20 minutes to talk about how
     can we do better.  And I'll just say some of the things I've
     already heard you say, so that perhaps you don't have to
     repeat them.  And then, maybe talk just for the last little
     bit of our time together about any structural kind of
     recommendations you might have.
                   Here's what I've heard thus far.  Speed is a huge
     issue.  Speed.  So I've heard suggestions that we ought to
     have more deadlines.  And whether they be statutory
     deadlines or perhaps our own internal regulatory deadlines,
     I heard you say that was a good thing.
                   I heard you say that the sunshine rule may be a
     barrier to discussion and thus resolution of an issue.  I
     heard people say they would rather have a decision then not
     have a decision.  And that's very interesting since I've
     seen how decisions are sometimes not made by pressures that
     are not only internal, but sometimes external.  And so,
     it'll be interesting to think about that.
                   I also heard folks talk about our ex parte
     proceedings, and I guess I have a bias here.  Is this one on
     one ex parte kind of regime that we have a helpful one?  Is
     it one that causes more time because other parties don't
     know what the other party said, and so, how can they
     respond?  Is that something we ought to look at?
                   Then I heard someone raise issues about our remand
     proceedings.  And I would be interested in hearing anything
     more about your view of what ought we be doing on remand.
              So, that all went to speed.
                   I then heard issues about -- and I think Alan just
     raised it -- about sort of process and tracking, and where
     are things?  And what's the priority level?  And who has
     them?
                   Then I heard some folks talk about regulatory
     costs, which I would be very interested in hearing a little
     more about.  Let's assume you do have to do filing or you
     have to do tracking.  Is there a way to reduce costs around
     this?  And one suggestion obviously is to do more on the
     Net.  And you know, how could we actually effectuate that?
                   And then I heard someone say, "Yeah, we hear all
     this great talk about competition and deregulation, but
     basically, are you walking the walk?"  You know, what are
     doing here to actually get that done?
                   So, those are the process issues I heard.
                   And then I heard some structural things, which I
     would hold except I know you're going to jump into this
     anyway, so I might as well tell you what I've heard already.
     I heard that the international bureau is a good thing.  I
     heard that people need to walk and talk across bureaus.  I'd
     be interested in hearing whether people really think that
     requires a total reorganization or whether it requires a
     different kind of process, because you can do things by
     process or by organization, structure process.  And a lot of
     organizations flip back and forth, sometimes at a fantastic
     rate about how they try to get at those things.
                   And I heard some thing on the mass media side that
     would suggest that there's some real relationships between
     the cable and mass media bureaus that ought to be explored.
     I would be interested in hearing similarly on the sort of
     telecom side.  And then, for those of you at the table who
     don't want to be regulated at all, but sort of come into the
     convergence milieu, "What about you?"
                   And then, finally, I heard people say that somehow
     the staff needs to feel more empowered to actually get
     things done for you.  So that's the sort of things I've
     already heard.  Build on that or add more.  I just wanted
     you to know that I've got that, and then ask you for any
     further discussion on this.
                   Jerry?
                   MR. FRITZ:  Kathy, kudos to the staff and the
     organization that you've done so far.  Mary Beth Richards
     and her people have moved the Commission significantly along
     toward a more efficient process, and I think the goal where
     you're heading is absolutely correct.
                   You asked a question in the written questions, how
     would you prioritize the FCC's current workload?  And I
     would give it these six priorities:  number one, licensing,
     number two, licensing, number three, licensing, number four,
     interference protection, number five, elimination of
     regulatory artifacts, and finally, number six, promotion of
     your statutory goals, which frankly, you're not going to be
     changing.  And those statutory goals include things like
     preserving universal free over the air television.
                   That having been said, there are some other
     things, some specific suggestions that I'll make aside from
     the ones that you've already articulated like getting --
     proposing to the Congress to get rid of the Sunshine Act.
     It's a terrible waste of Commission resources and time and
     decision-making.
                   Engineering certification outsourcing.  You can
     save a substantial amount of time and license processing if
     you will go to a certification process for outside
     engineers, giving them the complete ability to give a
     certified engineering statement.  That has to be coupled
     with enforcement so that if they're wrong, more than one or
     two times, they lose their certification, because that's
     your only check on getting accurate and complete
     information.  It works in the CPA industry.  It will work in
     the engineering industry, as well.  That will substantially
     help in terms of your overall number of people employed at
     the Commission.
                   Time limits on application, we have suggested for
     a long time bar codes for application processing so that we
     can monitor that on the Net.  The same could be true for
     your agenda items, so that people wouldn't constantly call
     you and find out where their agenda items are.  Once they're
     in the system, they can be coded and we could track which
     offices, especially on a circulation system.
                   Number three, common integrated forms and a single
     point of contact.  It makes no sense for us in the
     broadcasting business to have to go to the Mass Media Bureau
     to get our broadcast license, go to the Wireless Bureau to
     get our auxiliary license, go to the International Bureau to
     get our satellite uplinks, go to the Wireless Bureau to get
     OFS in a different bureaucracy, and go to OET in combination
     with Mass Media for DTV or Part 68.  There needs to be a
     common licensing bureau.
                   And I know that's where Mary Beth is taking the
     agency.  In terms of the Wireless Bureau, you need a
     licensing bureau.  I don't care where you locate it, but
     there needs to be a common licensing bureau that has common
     integrated forms so that we can go to one-stop shopping on
     everything from CARS applications to auxiliary applications.
     This is an extremely inefficient process the way it's being
     done cross-bureau.
                   Another suggestion, exemption from SES pay grade
     levels to attract competent managers.  You can petition to
     the government to get that SES exemption to get competent
     people, and I would urge you to do so.
              Greater discretion for all managers to hire competent
     people would also go a long way to get you to people that
     you need.
                   I will stop.  I have a set of suggestions with
     respect to this licensing bureau, a streamline mass media
     bureau, a telecom bureau and adjunct offices, but I'll wait
     and give other people a chance.
                   MS. BROWN:  And I'll invite anyone at the end of
     this to give me in writing, frankly, anything else they'd
     like to.  Brian?
                   Let me just remind folks for your own time, it's
     about 20 to five.  So, if you could keep your comments to a
     time limit so that everybody gets an opportunity, I think
     that'd be good.  Brian?
                   MR. FONTES:  I'll be very brief.  I think yourself
     and Jerry both have articulated some very exciting,
     interesting concepts and streamlining.
                   There's just a couple of other points I'd like to
     make.  In a competitive industry, whenever there's
     information sought by that industry before the Commission,
     the industry has to go, in my case in parallel track,
     seeking confidentiality for the information, and then
     submitting the information that the Commission has
     requested.
                   In a competitive environment, it's very important
     to recognize the nature of the confidentiality and the
     market sensitivity of the information that is submitted.
     And so, you may want to take a look at how you allow for
     confidentiality of information from those who represent
     competitive industries across the board.
                   Then, a challenge.  I think that Congress did give
     the FCC a great opportunity through the exercise or the
     ability to exercise forbearance.  The challenge would be to
     have each of the operating or functioning bureaus identify
     at least three areas in which they believe that they can
     forbear.  I think that in that process, you do a lot.
                   First off, you, obviously, forbear from regulation
     that no longer needs to be in place.  But secondly, I think
     you begin the process of understanding the reliance on
     competitive markets and the opportunity to use your
     enforcement power to assure that the competitive markets are
     functioning.
                   And like Jerry, I will also provide a list of
     other issues.
                   MS. BROWN:  Thank you, Brian.  Brent?
                   MR. WEINGARDT:  I agree with Alan.  No decision --
     I mean, a bad decision is better than no decision.  I think
     a second decision delayed is even worse.  We would like a
     hard look at the recon process.  Either doing away with it,
     which might sound extreme, or really shortening it.
                   One, put yourself under a deadline or go up to
     Congress and suggest there should be a deadline.  Two, don't
     have to respond to every matter.  What's the term?  Position
     denied is the term, because without that petition denied,
     courts won't act.  We don't have final say.  I mean, it's
     one thing to bust your butt to get the first report and
     order out.  Your clients are happy.  And then, two years
     later, say, "Oh, we just lost at recon,"  Or, "We got to
     modify at recon," or whatever.  Then, the court case starts.
                   And I've used the process, but I can't live with
     it.  I mean, I think it's absurd that we have a recon
     process that really destroys all the hard work in the first
     report and the second report and the third report.  And I
     know it might require statutory change, but that's one
     really worth looking at.  I'd like to hear what the other
     folks have to say, because it works both ways.
                   MS. BROWN:  I'd be interested as well if folks
     started getting, you know, no new issues raised.  This has
     already been addressed, denied.  You know, what the reaction
     would be.  It'd be very interesting.
                   Go ahead.
                   MR. SEIFFERT:  Sure.  I was just going to build on
     the conformity assessment body and endorse that
     wholeheartedly.  It would certainly improve the
     manufacturers' and vendors' lives if we could streamline the
     duplicative process.  It's happening internationally.  TIA's
     worked for MIA negotiation all over the world along with the
     FCC.  We certainly would like to see the FCC allocate the
     proper resources to get FCC staff to these negotiations over
     in other parts of the world.  It's certainly going to make -
     - get our product out the door a lot faster and tapping the
     market is critical to the industry if the life cycle is
     shortened every day.
                   MS. BROWN:  David?
                   MR. ZESIGER:  I'd just like to echo Brian's and
     Brent's comments and really reinforce the effectiveness that
     you can have in moving forward more quickly using tools like
     the forbearance process.  We've just been through that and
     it was a very successful process.  And you know, I think
     that that's something -- as much as these larger issues are
     important and necessary to get the word out on, if we could
     take some time to have discussion on what kind of timeframe
     are you going to be able to keep up with the changes in the
     industry.
                   There's some things you can do right now as almost
     a quick damage control kind of quick intervention to free
     things up and to move people into a more competitive posture
     as you did with some of our companies.  And just to
     underscore the immediate effect of that or impact of that, I
     had a call today from one of my companies who commented on
     some of the things that were done earlier this week by the
     Commission in the forbearance issue refile.  And he said to
     me somewhat puzzled, "Well, I've been up talking to my
     marketing and operational folks.  And frankly, the ball's in
     their court now.  We've got to move them.  And we've called
     their bluff."
                   And this is a real company with a real service
     they're going to be providing.  And it moves -- it changed
     dynamics within a company.  And that kind of thing you can
     do right now using the tools you already have, that's
     Section 10, Section 11, Section 706, which were cited
     earlier.
                   MS. BROWN:  Andy?
                   MR. PAUL:  I want to take what Jerry said about
     cross-bureau process and just raise it to a little -- a
     slightly more "macro" level, if you will.  And that is --
     and, I want to be very careful how I say this because I
     don't want to be critical, but I do want to try to
     illustrate in a general fashion what I think is something
     that should be paid attention to.
                   And that is, one bureau may decide that a
     particular action or a particular type of proceeding or a
     direction with regard to a industry would be a healthy one
     without consulting another bureau, which may have either the
     competitive responsibility or the developmental
     responsibility for that industry and without overlaying on
     its decision the policies that have already been decided
     for.
                   And I don't want to get too specific because there
     are already some proceedings that implicate that, but I can
     give you an example of something that happened say, seven or
     eight years ago when microwave users were moved out of the 2
     gigahertz band because they wanted to make way for LMDS.
     And there was a proposal to put them into the -- into a
     satellite downlink band because there was a conception that
     perhaps technologically that could be done.
                   But no consideration was given to the competitive
     policy with regard to the satellite users and downlinkers in
     that band, what effect it would have on subscribers to
     satellite television, and what impact it could have over
     what that kind of interference would have overall to the
     development of a competitor.  And I'm just saying that is an
     example of -- I would say a lack of communication or say,
     lack of overlay of policies that have been established by
     the Commission which are very, very important.
                   So, I just want to leave that out there as a
     potential for things to happen that I think you'd want to
     look at.
                   MS. BROWN:  As you're thinking about this in
     talking to me, if you could also just someone address this
     ex parte issue and also the very paper-intensive processes
     of this Commission, which seem to me that all of you are
     writing paper.  I can't imagine that you're all reading each
     other's paper.  I know I don't read all of the paper that
     you're all filing, and so, I'm relying a lot on summaries of
     what your reading.
                   And then, the question being, do you hear each
     other?  So that in a situation -- just let's take this
     example that one part of the industry would understand and
     know that another part of the industry is being affected so
     that you get some dialogue on that.
                   So if anybody has a view of that, I'd be also
     interested.
                   Michele?
                   MS. FARQUHAR:  Three quick points.  One, with
     respect to time limits and deadlines, which Western had
     mentioned earlier.  They should also have teeth so that one
     way to approach that is to say that something is granted
     unless the Commission acts within a certain amount of time.
     And I know that's very difficult to set up a process like
     that.  But, in most cases, it would work.  And in most cases
     where the Commission has dealt with processes like that in
     the past, they've met that goal.
                   Second, is to cut off the ex parte process, going
     to the question you just asked, and maybe have fewer --
     allow for fewer meetings after the papers have been filed
     and say that only -- you can have so many bites of the
     apple, and that's it.  And I know, that too, is very
     difficult to implement, but that's one way.  Or, have one or
     two big meetings that would bring all the parties together
     and invite all the relevant participants at the FCC to give
     them a chance to hear the parties.  But, difficult as it is,
     it may not bias as much parties who are based outside of
     Washington who have less resources to lobby the FCC.
                   And finally, one way to restructure the bureau is,
     if you are going to reorganize them, might be around their
     missions, as opposed to even their functions, so that you
     might have a bureau that deals with competition and with
     universal service, with public safety, with spectrum
     planning, with enforcement, with licensing, et cetera.  And
     within those bureaus, they can look at individual slices of
     the industry.
                   But, one problem right now, it's only the
     Commissioners, the Office of Plans and Policy, the General
     Counsel and you, Kathy, who are looking at issues from an
     overarching, holistic context, taking into account
     convergence.  And everybody else is looking at a slice of
     the industry here at the FCC.
                   MS. BROWN:  All right.  I'm just going to try and
     go around.  Patricia, I still see you, but I'm going to go
     this way.
                   MR. WEINGARDT:  I think I'd like today to extend
     an invitation to the Commission to perhaps come out with a
     notice for implementing deadlines on a variety of perhaps
     all of the kinds of proceedings.  You have might have
     petition for declaratory ruling, petition for rulemakings,
     et cetera.
                   And even in that, you could just sort of start the
     ball rolling, let's say, within 90 days after reply comments
     are received, "We will have an answer for you on such and
     such a date," and fix those.  Obviously, there are going to
     be come exceptions where you're going to need more time in
     compelling circumstances, but I invite you to do that
     perhaps as a result of this meeting, because that does seem
     to be one area where all the diversion interests here are in
     agreement.
                   Secondly also, regarding tracking, we've heard a
     lot today about empowering consumers.  Heck, let's empower
     your staff a little bit, too.  Let's have one person who is
     the shepherd of various proceedings or a particular
     proceeding whom we can contact, someone who knows where it
     is.  It can be electronically, as well, of course, on the
     Net, but one human being, as well.  Empower that one
     employee as much as we want to empower consumers.
                   MR. ROBERTSON:  Kathy, very quickly, you have to
     understand that most of the people sitting around this table
     are lawyers, and they get paid for filing paper.  And so, it
     goes to the gentleman from Disney.  I mean, this is a
     reality we have to face.  And so, if you're paid for it, and
     your client's willing to do it and can be convinced that
     your interests have to be protected, that will take place.
                   The other thing that you need to know, and I think
     you recognize, is that I'll bet there's not a single person
     sitting around this table that hasn't been contacted by your
     staff and asked to file a position on those particular
     dockets.  So it's not -- it's not necessarily something that
     we all want to do.  And I'm not -- you know, I'm not dissing
     the lawyers, but I'm just saying that's the way our world's
     set up.  If we can figure out some way to move beyond that.
                   MS. BROWN:  Well, that goes to my other question,
     that if there's a decision-maker who needs input, are there
     ways of getting input that are not onerous or are cumbersome
     or burdensome to you?  The input is needed, so how's the
     best, most efficient way to get it?
                   Larry, welcome.
                   MR. SARGEANT:  Thank you.  On three points, first,
     efficiency.  Part of being able to be more efficient is
     going to be dictated by where you can bring the resources
     and where you bring the focus.  And so, I would suggest that
     instead of the Commission looking to do more, it should look
     to do less.  And more and more decision are turning on, does
     the Commission have jurisdiction, or doesn't the Commission
     have jurisdiction?
                   So rather then looking to expand your
     jurisdiction, and I would say never again use 4(i).  Look to
     do those things that you must do, that the statute says you
     must do this, rather than looking for those things you might
     be able to do depending upon whether a court defers to the
     expertise of the agency.  So that would be one.
                   On the issue of cross bureau versus structural, I
     think it's inevitable because it is just human nature that
     as long as you have bureaus tied to particular segments of
     the industry, people who work in those bureaus are going to
     have a certain ownership for what goes on in that industry.
     And there will be policy determinations related to that
     segment of the industry that they will have a bias towards.
                   In a truly converged world where the whole goal is
     to bring in all the factors across multiple industries, I
     don't think cross-industry processes work as well as having
     people come to the table understanding that their mandate is
     to look across all industries and not have an ownership
     interest in any one industry.
                   On the issue of ex parte, I don't know that we can
     avoid the paper.  One of the things I was struck with when I
     first came to Washington in '86 and was a trial lawyer
     before that, this agency doesn't differentiate argument from
     evidence.  And as long as you allow argument, you will have
     an inundation of paper.  It's just unavoidable.  I'm not
     arguing for going to evidentiary hearings because that is
     problematic in and of itself.  But I do think we could be
     more diligent in differentiating real evidence from argument
     because there's an awful lot of argument but often very
     little evidence.
                   MS. BROWN:  Thank you, Larry.  David?
                   MR. TURETSKY:  There are a couple management
     challenges in the questions that are out there as we talk
     about moving toward, you know, greater convergence or cross
     bureau dealings and the rest.  Let me just share with you
     one observation I made, in dealing with a situation where
     there was cross-bureau responsibility a couple years ago.
                   I was very surprised that the bureau that didn't
     seem to have the pen ultimately, but was charged with the
     responsibility for helping develop the item really didn't
     view it as serious a commitment as all the other work before
     them, because it didn't clear away the things that were on
     their plate.  It didn't seem like that was what they were
     going to be evaluated on and the like.
                   And so, as you try to cross lines and you don't
     dissolve the actual bureau lines, important management
     challenge is how to keep responsibility and accountability
     in the places that you want it so that all of the groups
     involved take it just as seriously as each other group.  And
     that's not an easy thing.  In business, you know, we
     struggle with that, as well.
                   Second kind of management issue is this deadline
     issue.  And it sounds great.  We're all sitting here saying,
     "Boy, you got to get those decisions out.  Pump it out.  Set
     the deadlines."  Well, what I learned in government was
     there are resource issues.  Every time I told one of the
     sections that I wanted to get these two items out in a
     certain time, you know, I respected the managers who had the
     courage to come back to me and say, "Well, that means that
     we won't get these other two things out."
                   So it's a resource and priority issue, and we
     shouldn't pretend that it isn't.  And so, if we want those
     decisions made pretty quickly, we either better come to
     grips with what you shouldn't be doing, and I know plenty of
     people around the table probably will argue what you
     shouldn't do, or we've got to support resources for the
     agency so they have enough resources to do that.
                   So I want to speak to support the resources to do
     that, because it involves choices.  It doesn't involve just
     do it.  It involves choices, every one of those decisions.
                   The last point on the paper and ex parte and the
     rest is, you know, it's a big industry, and there's going to
     be a lot of paper filed.  I don't really see any way
     realistically around that.  There are times that I have been
     disappointed because I realize that unless you follow up
     with a visit, it seems like your paper may have been read at
     one level, but never comes to the attention of any other
     level.  And that's disappointing.
                   And it's also disappointing when in a major
     proceeding, you're getting right near the time that everyone
     knows the decision is going to come, and you know, you get
     word back that you've got to get into the FCC to lobby about
     this particular issue, which wasn't even covered in the
     pleadings because there's now this compromise on the table
     that looks nothing like anything that was proposed before.
                   So there's this whole animal that's come to life
     that you got to go address at the last minute that's not
     reflected in those papers.  And I'll admit just as a
     participant occasionally, that's a little bit frustrating
     because the smaller companies get the impression that
     something's gone on that doesn't have quite as much light of
     day on it as the papers that were filed.
                   MS. BROWN:  Thank you.  Brian?
                   MR. FONTES:  This is on the ex parte issue.  I
     absolutely agree with everything you just mentioned.
                   One thing that may be helpful in the ex parte and
     just focusing the information that comes in to the
     Commission is when the staff has an opportunity to read the
     record, and if they do have specific questions, post those
     questions to the parties that filed in the record, so that
     the comments that come back, either in the form of ex parte
     or reply comments, whatever, is more focused to the
     information that's needed.
                   MS. BROWN:  Patricia?
                   MS. MAHONEY:  Yes, speed is the huge issue.  It's
     most important in licensing and especially on transfers and
     assignments.  And one thing I wanted to mention, that I was
     recently in a meeting that involved a bureau other than the
     International Bureau, and a bureau I hadn't had recent
     experience with where the staff person expressed the opinion
     that a written decision would be required by the staff even
     in an uncontested situation.
                   And from my broadcast days, I would say if it's
     uncontested, there's no need to have any decision, just get
     it done.  Just grant it.  The time's up.  Time for recons or
     review past.  Time to grant the application.  That would
     definitely speed things up.
                   I think reconsideration is important often to
     correct the record, but what happens is after the petitions
     for recon are filed, that it seems to be that there is a big
     rush to get the decision out, so the recons come.  So that's
     something that starts on a new timeline and it'll be handled
     a couple years later.  And so, like Brent says, you know,
     everybody's operating for a couple years on the premise of
     the rule is one thing, and then, all of a sudden it changes.
                   In the situation of applications for review, it
     seems that, unless the rules have changed recently, that the
     rules were written to be almost like a petition for cert.
     That you would write a small application for review, and a
     cert. would be granted or denied.  Review would granted or
     denied.  If it was granted, then you would file a brief.
     We've gotten away from that, so there's a longer period of
     time to act on applications for review.
                   If, for recon and review, if you got fast
     decisions out, these are the only issues that were
     mentioned, review denied or recon denied, and that's it.
     Then that lets the parties know that a decision has been
     reached and they can move on from there.  They can decide if
     they want to go to court.  They can decide, if it's a staff
     decision, to take it to the Commission.
                   And on the status -- on tracking, I don't think
     that you need to know all the details that have been
     suggested, but certainly need to know when you can expect
     action.  Now we have this open proceedings report and the
     releases.  That's great, but it doesn't really tell you
     anything other than that the proceedings are open.  It would
     be good if it told you when you expect them to be closed.
                   That's what people want to know.  This is men,
     women, banks.  Everybody wants to know.  When can we expect
     this to happen?
                   On ex parte contacts, we recently participated in
     a way of handling that that I thought was -- showed
     innovation, and everyone agreed that it was fruitful.  And
     that was all the applicants were brought in.  There was a
     meeting, discussed the things that the bureau was
     considering before it was going to release an NPRM.  And
     then, it gave everybody essentially a week to come in and
     meet independently and discuss -- they didn't make anybody
     say what their opinion was on the record or at this meeting,
     but come in and your ex parte meetings, and you had a week
     to do it.
                   I think they should have the freedom to do things
     like that, that are innovative and should be encouraged to
     do things.
                   I don't think there's talking across bureaus.
     Maybe there is on some things, but recently there was an
     issue where -- or there's a situation where two NPRMs came
     out on the same day.  One bureau was common to the two, and
     then each one involved another bureau.  And I think that
     people who have looked at the two and realized they both
     exist think that they are going in completely different
     directions.
                   And then, finally, definitely interested resources
     are an issue.  We don't understand why some bureaus have the
     ability to hire from the outside and other bureaus don't.
     And we think if there is a time when there's an ability to
     hire from the outside, it should apply to all bureaus.
                   And I guess that's about it.
                   MS. BROWN:  Thank you.  Does anybody -- go ahead.
                   MR. SEIFFERT:  Sure.  I'd just like -- since we're
     talking about resources and we've talked about convergence
     and how technology is moving everything and converging
     everything together, I think something we haven't touched
     on, and I know Bob probably has -- certainly cares about
     this and has tried to work in the Commission to hire more
     technologists, engineers, business savvy folks that have
     been out there.
                   And I don't know we do a better job helping you
     all track people that can help.  Maybe speed up the
     decision-making process because they know the industry.
     They're better educated.  They understand the technical
     complexities.  It certainly affects our folks when we work
     with the OET guys, and they do a wonderful job.  But they're
     overworked.  And it delays again the path to market.
                   MS. BROWN:  Is there anything that wasn't asked
     that's on your mind that you walked in here and wanted to
     say and didn't get to say?  Jonathan?
                   MR. SALLET:  In the discussion about Commission
     process, paper, no paper, the evil of lawyers, the relative
     malevolence of lawyers -- I'll tell you what I think is the
     problem I see in the Commission decision-making.  It's the
     difficulty in getting issues joined.  Getting two sides or
     14 sides to address the same question, whether it's factual,
     legal or policy at the same time in front of a group of
     decision-makers who are all focused on the issue at that
     point.  That is a major managerial challenge, I think.  The
     Commission does the best it can, but it's a big challenge.
                   I would suggest that whatever you do to
     restructure the agency, you keep that as a paramount
     concern.  Let me give you three examples it might be done
     without restructuring bureaus, although that might be a good
     idea in and of itself.
                   The bureau -- the Commission, relatively rarely,
     brings different sides to a dispute into one room at one
     time.  I've been part of processes where that's been done a
     couple of times in the last year.  And in all of those
     instances, we have found it useful, because it inevitably
     forces issues to be joined because somebody across the table
     is making a point that you've got to respond to.
                   Secondly, to deal with the issue that David
     Turetsky rightly raises, and this mostly occurs in sort of
     legislative type proceedings, rulemakings where there's a
     big issue on the table, and then someone comes up with a
     compromise down the road.  Nothing illegitimate about that.
                   I would personally like to see the Commission use
     more notice proceeding, but very short comment periods.  In
     other words, if you're halfway down a process and somebody's
     coming with a suggestion that seems to have merit, but that
     really wasn't noticed and comment on it, put out a notice
     and give people 10 days to respond to it.  It's a
     transparent process.  It lets everybody come in and it just
     says, frankly, "Look, this is an idea we're not going to
     tell you would have been legally infirm to go forward."
     But, we are going to say, "We're going to put it out for
     everybody."
                   The third, I think is Brian's suggestion, which is
     very good and goes to the same point, which is, in a
     proceeding where there are just critical questions, post
     five questions.  Give everybody a relatively short period of
     time on the Net.  Set up a chat room for interested parties,
     so that lawyers who are running short of papers will still
     have something to do, perhaps.
                   But this will also help join issues because it
     will tell people where the Commission or the bureau is
     heading.  It will focus people's attention and in a
     relatively short document.  I mean, you know, one way to do
     it is, for example, say you can't submit anything to the
     Commission that's not in Powerpoint.  That's the way we talk
     internally in our companies anyway.  What the heck?  But, it
     would in short answers, actually get people to talk to each
     other.
                   So these are just three suggestions, but they go
     to what I have seen to be really the central challenge to
     decision-making in the Commission.
                   MS. BROWN:  Anyone else?  Yes, Alan.
                   MR. CIAMPORCERO:  I just wanted to agree with
     that.  I think that the biggest problem is being ambushed by
     disputes -- by evidence or arguments that you don't even
     know are going on.  And I think another way to address that
     is try to have something like this for every major docket, a
     few weeks before sunshine, so we all know what everyone else
     is arguing.  But I absolutely agree.  It's very hard to
     fight the phantom that goes in and out before you when you
     have very little idea what they say.
                   And the ex parte notifications never work.
     They're never sufficiently detailed.
                   MS. BROWN:  Well --
                   MR. ROBERTS:  Can I just say this hopefully in
     conclusion?  Would you allow those of us lawyers around here
     who are interested in drafting other thoughts to be
     submitted as official record to this meeting at a subsequent
     date?
                   MS. BROWN:  Yes.  But be careful!  Let me go
     through my closing remarks and tell you what I hope will be
     follow-up here unless someone else has something more they
     want to add today.
                   First of all, I just want to thank you all very
     much for the quality of the discussion.  You know, when you
     embark on these things and we talk to staff, the question is
     always to put you, well, is this just for the record, or is
     it for real?  And I just want to assure you that this is
     very much for real.  I thought we heard a lot of things
     today that were actually very helpful to us and some
     frankly, new recommendations and thoughts that I think we're
     going to take back and look at right away.
                   But beyond that, if we mean what we say and say
     what we mean, then we mean we want to be more responsive to
     the folks we serve, both consumers in general, the American
     public and also the American industry that we serve here in
     all the difference facets.  And so, we really truly want to
     know how we can do better.
                   We think -- I think that we probably have one of
     the most expert professional staffs in Washington.  I don't
     know about all you, although I know about a bunch of you
     because you were here, but -- you know, when one recommends
     well, what federal agency would you ever want to go work
     for, the FCC is very, very high on the list because just as
     the level of expertise that's here, the level of
     professionalism, integrity, and really the heart of what we
     do here.
                   So we come to this with a really deep appreciation
     for our own professionalism.  And being professionals, our
     need to sort of meet the challenges of the future.  And so,
     that's what this discussion is about.  How can we best meet
     the challenges of the future and do better with what we have
     now?
                   And we intend to take all of this input.  We have
     today's forum.  We will have a consumer forum, which I
     invite any and all of you to come and attend on June 2.  We
     will then have another meeting with sort of the academics,
     sort of organizational types, you know.  Given this kind of
     thing, how do you think about organization and efficiency?
     And then, we will have one more internal meeting, which we
     haven't noticed, but that I will hold with our folks
     internally to talk about how to think about the future, and
     how to put together what ultimately will be our own
     strategic plan that we will give to Congress.
                   We do it both for ourselves and of course, for
     Congress in the whole reauthorization process, so that they
     have our best thinking on this.  Certainly, the Congress is
     doing its own thinking on this and its own exploration.  But
     we felt we should give them our best thinking.  And our best
     thinking has to be informed by the people we serve.  So,
     again, I really thank you very much for participating today.
                   We had set up -- is it a Web site or an e-mail
     address?
                   MS. SOCKETT:  It's a new FCC at FCC.gov.  It's an
     e-mail.
                   MS. BROWN:  So it's an e-mail address,
     newfcc@fcc.gov to accept any other further remarks you would
     like to give us.  We feel this is an open way for you to see
     it.  Under the Government Performance Review Act, we are
     authorized to take input from all of our customers, if you
     will, all the folks who we serve, and it will be there for
     you to take a look at.  So, we don't have to notice it, if
     you will.  We can take that input, and you can have a good
     look at it.  So please feel free to add to your remarks if
     you'd like.
                   What you have given us today, there's a transcript
     of.  I don't think it's fair to say you won't see your
     particular piece in our report.  You know, such and such
     person from such and such said this.  But I hope you will
     see that we will take the input and in our report try to be
     responsive to that.  And we will also certainly say that you
     participated with us.
                   There's some things that you mentioned that we
     obviously do not need to wait for a report to Congress to
     think about.  And as some of you well know, we've been very
     busy trying to meet with various segments of the industry
     and consumer groups to see what we can get done now to use
     the tools we currently have to try and do the kinds of
     things that the Chairman, frankly, has told us to do.  And
     that is to streamline, to think about convergence, to think
     about new and better ways to do things, to be innovative, to
     ensure that we have the widest possible input for our
     decision-making.
                   So, even as we go through this process, I hope we
     can continue this dialogue.  We will continue talking with
     you.  All of the bureau chiefs, all of the offices are well
     involved in this process.  We have met together.  We will
     keep meeting together.  We are collaboratively putting
     together our strategic plan.  It is not Dr. Pepper and I
     sitting writing it, but rather -- rather, all of our bureau
     heads and offices who are together putting together a plan
     that we hope will reflect what we heard today, which is,
     frankly, an extraordinarily exciting future.
                   So, again, I thank you all for being here and
     please make sure -- our phones, you know what they are.  And
     it's fcc.gov.  You can reach us anyway on e-mail.  So,
     thanks to each and all of you.
                   (Whereupon, at 5:10 p.m., the hearing concluded.)
     //
     //
     //
     //
     //
     //
     //
     //
     //
     //
     //
     //
     //                        REPORTER'S CERTIFICATE
     FCC DOCKET NO.:      N/A
     CASE TITLE:   A NEW FCC FOR THE 21ST CENTURY
     HEARING DATE: May 20, 1999
     LOCATION:            Washington, D.C.
         I hereby certify that the proceedings and evidence
     are contained fully and accurately on the tapes and notes
     reported by me at the hearing in the above case before the
     Federal Communications Commission.
     Date:   __5-20-99_           ___Joel Rosenthal____________
                                   Official Reporter
                                   Heritage Reporting Corporation
                                   1220 "L" Street, N.W.
                                   Washington, D.C. 20005
                       TRANSCRIBER'S CERTIFICATE
         I hereby certify that the proceedings and evidence
     were fully and accurately transcribed from the tapes and
     notes provided by the above named reporter in the above case
     before the Federal Communications Commission.
     Date:   __5-28-99_            ___Nancy McHugh_______________
                                   Official Transcriber
                                   Heritage Reporting Corporation
                       PROOFREADER'S CERTIFICATE
         I hereby certify that the transcript of the
     proceedings and evidence in the above referenced case that
     was held before the Federal Communications Commission was
     proofread on the date specified below.
     Date:   __6-1-99__            __George McGrath______________
                                   Official Proofreader
                                   Heritage Reporting Corporation