THE WHITE HOUSE
OFFICE OF THE VICE PRESIDENT
CONTACT : 202/456-7035
FOR IMMEDIATE RELEASE December 21, 1993
Thank you. It’s a great pleasure to be here. I still have jet lag, though — nature’s way of making you look like your passport photo.
I’m happy to be home. And I’m particularly happy to be talking about telecommunications to people whose lives will be shaped by the changes ahead for us.
I’m pleased to announce today that at the beginning of the year, President Clinton will present to Congress a package of legislative and administrative proposals on telecommunications. Today, I want to talk about the future we envision.
But I’d like to start by talking about an incident from the past.
There is a lot of romance surrounding the sinking of the Titanic 91 years ago. But when you strip the romance away, a tragic story emerges that tells us a lot about human beings — and telecommunications.
Why did the ship that couldn’t be sunk steam full speed into an ice field ? For in the last few hours before the Titanic collided, other ships were sending messages like this one from the Mesaba : "Lat42N to 41.25 Long 49W to Long 50.30W. Saw much heavy pack ice and great number large icebergs also field ice."
And why, when the Titanic operators sent distress signal after distress signal did so few ships respond ?
The answer is that — as the investigations proved — the wireless business then was just that, a business. Operators had no obligation to remain on duty. They were to do what was profitable. When the day’s work was done — often the lucrative transmissions from wealthy passengers — operators shut off their sets and went to sleep. In fact, when the last ice warnings were sent, the Titanic operators were too involved sending those private messages from wealthy passengers to take them. And when they sent the distress signals operators on the other ships were in bed.
Distress signals couldn’t be heard, in other words, because the airwaves were chaos — willy-nilly transmissions without regulation.
The Titanic wound up two miles under the surface of the North Atlantic in part because people hadn’t realized that radio was not just a curiosity but a way to save lives.
Ironically, that tragedy that resulted in the first efforts to regulate the airwaves.
Why did government get involved ? Because there are certain public needs that outweigh private interests.
Today, as divers explore the hulk of the Titanic, we face a similar problem. A new world awaits us. It is one that can not only save lives but utterly change and enrich them. And we need to rethink the role of government once more.
How do we balance private needs and public interests ? It’s important in discussing the information age that we discuss not merely technology, but communications. Because from communications comes community. Not long ago, when travel was very difficult, communities were small and communication was personal and direct. It was between families, neighbors, business partners.
Then the means of travel improved, moving us all away from each other, and making communication more difficult. Until recently, if an immigrant came to the United States, whether from Russia, or China, or England, it meant saying goodbye to one’s parents and never having a conversation with them again.
But these days, technology has brought us closer together. I read a little while ago of a family scattered all over the world. More than a hundred different members keep in touch through the Internet. They keep people informed of births and deaths and graduations. Children in more than half a dozen countries feel like they know each other — even though they’ve never met.
It is important in focusing on what’s ahead in communications, to zero in not on the technology, but what we use technology for.
No one says "Let’s use the telephone. " They say, Let’s call Grandma."
We havn’t always kept that in mind.
When the telephone was invented, stockbrokers in London said "Who needs so many telephones, we have messenger boys."
It didn’t take long to see that there were some things messenger boys couldn’t do — transmit both ends of a conversation, for example. We figured out new uses each time the telephone changed, from big wooden boxes on the wall, to desk phones, to ones with long cords ... to the car phones and cell phones that allow us to talk while we drive or walk.
We will do this again with the changes in store over the next decade — one of the biggest changes the human species has ever faced.
Most people today are primarily receivers of information. We watch TV. We listen to radio.
In this decade we will transmit more and more as well.
We’ll send and receive, not just on the telephone but across the full range of the new technologies. We’ll turn from consumers into providers.
In a way, this change represents a kind of empowerment. The quality revolution in the factory treats each individual as a source of added value. The communications revolution recognizes each individual as a source of information that adds value to our community and to our economy.
After all, interactive TV doesn’t just mean yelling at the television when the referee makes a bad call. It means holding a business meeting without leaving your living room.
It means that people at home can use their television not just as entertainment but as an active tool.
These changes have neither come overnight or out of the blue. Rather, they are the outgrowth of a steady series of changes encompassing much of our history.
It used to be that nations were more or less successful in their competition with other nations depending upon the kind of transportation infrastructure they had. Nations with deep water ports did better than nations unable to exploit the technology of ocean transportation. After World War II, when tens of millions of American families bought automobiles, we found our network of two-lane highways completely inadequate. We built a network of interstate highways. And that contributed enormously to our economic dominance around the world.
Today, commerce rolls not just on asphalt highways but along information highways. And tens of millions of American families and businesses now use computers and find that the 2-lane information pathways built for telephone service are no longer adequate.
It is not that we have a shortage of information. Indeed we often find now that we have a lot more than we know what to do with.
John Stuart Mill, who lived through much of the 19th Century was said to be the last man who knew everything. Since his time, no matter what your field, you have to resign yourself to the fact that a great deal will take place completely outside your awareness.
Take the Landsat example. We’re trying to understand the global environment, and the Landsat satellite is capable of taking a complete photograph of the entire Earth’s surface every two weeks. It’s been doing that for almost 20 years.
In spite of the great need for that information, 95% of those images have never fired a single neuron in a single human brain. Instead, they are stored in electronic silos of data.
We used to have an agricultural policy where we stored grain in Midwestern silos and let it rot while millions of people starved to death. We now have an insatiable hunger for knowledge. And the data sits rotting away — sometimes literally rotting by remaining unused.
Part of the problem has to do with the way information is configured and presented. Someone once said that if we tried to describe the human brain in computer terms, it looks as if we have a low bit rate, but very high resolution. For example, the telephone company decided a few years ago that seven numbers were the most that we could remember. That’s a low bit-rate. Then they added three.
On the other hand, we can absorb billions of bits of information instantly if they are arrayed in a recognizable pattern within which each is related to all the others — a human face, or a galaxy of stars.
In order to communicate richly detailed images that allow us to comprehend large volumes of data, we need to combine two technologies. Computers have an ever-growing ability to transform data into recognizable images. And we are making greater use of them every year.
But to communicate these images among ourselves, we need networks capable of carrying those images to every house and business. We know how to do that technologically, but we have to unscramble the legal, regulatory and financial problems that have thus far threatened our ability to complete such a network.
In the few places where this capacity now exists we are already using them to communicate in ways that enrich and even save our lives.
We use it with Matthew Meredith, a six year old boy who recently underwent a bone marrow transplant. His doctors recommended that he shouldn’t begin his classes at Randolph Elementary School in Topeka. So the school and local telephone company teamed up to bring first grade to him through two-way video services and a television camera.
Matthew was able to take part in class. He used a fax to hand in class assignments. And the kids in his class got a glimpse of videoconferencing technology that will be common in a few years.
In West Virginia, doctors are using the Mountaineer Doctor Television Project to link to specialists at West Virginia University. A while back, for example, two-month-old Zachary Buchanan had an irregular heartbeat. Using the network, his family doctor sent an image of his heart to a pediatric cardiologist 100 miles away. His diagnosis : the condition wasn’t serious — and he didn’t have to travel halfway across the state for treatment.
All of these applications enhance the quality of life. Because they do, they will spur economic growth.
After all, even the quickest glance at the telecommunications sector of the economy shows what it means for jobs. Over half of the U.S. workforce is now in information- based jobs. The telecommunications and information sector of the U.S. economy accounts for more than 12% of the GDP. And it’s growing faster than any other sector of our economy.
What about dollars ?
Last year total sector revenues exceeded $700 billion. And we exported over $48 billion of telecommunications equipment alone.
When AT&T sold the first cellular phone, they said there would be 900,000 of them by the year 2000.
Well. We have 13 million now. And it’s still 1993. The predictions for mobile telephone users for the year 2000 now total 60 million.
This kind of growth will create thousands of jobs in the communications industry. But the biggest impact may be in other industrial sectors where those technologies will help American companies compete better and smarter in the global economy. Today, more than ever, businesses run on information. A fast, flexible information network is as essential to manufacturing as steel and plastic.
Virtually every business and consumer in America will benefit dramatically from the telecommunications revolution. I see even Santa Claus is now on the Internet with his own E-Mail.
If we do not move decisively to ensure that America has the information infrastructure we need every business and consumer in America will suffer.
What obstacles lie ahead in this rush to the future ? Many of them lie in the system we have created over the last 60 years.
Systems of regulation that made sense when telephones were one thing and cable another, may just limit competition in a world in which all information can flow interchangeably over the same conduits. To understand what new systems we must create, though, we must first understand how the information marketplace of the future will operate.
One helpful way is to think of the National Information Infrastructure as a network of highways — much like the Interstates begun in the ’50s.
These are highways carrying information rather than people or goods. And I’m not talking about just one eight-lane turnpike. I mean a collection of Interstates and feeder roads made up of different materials in the same way that roads can be concrete or macadam — or gravel.
Some highways will be made up of fiber optics. Others will be built out of coaxial or wireless.
But — a key point — they must be and will be two way roads.
These highways will be wider than today’s technology permits. This is important because a television program contains more information than a telephone conversation ; and because new uses of video and voice and computers will consist of even more information moving at even faster speeds. These are the computer equivalent of wide loads. They need wide roads. And these roads must go in both directions.
The new information marketplace based on these highways include four major components :
* First, owners of the highways — because unlike the interstates, the information highways will be built, paid for and funded by the private sector ; * Second, makers of information appliances, like televisions, telephones and computers, and new products of the future that will combine the features of all three ; * Third, information providers — local broadcasters, digital libraries, information service providers, and millions of individuals who will have information they want to share or sell ; ...and most important, * Fourth, information customers, justly demanding privacy, affordability and choice.
At some time in the next decades we’ll think about the information marketplace in terms of these four components. We won’t talk about cable or telephones or cellular or wireless because there will be free and open competition between everyone who provides and delivers information.
This Administration intends to create an environment that stimulates a private system of free-flowing information conduits.
It will involve a variety of affordable and innovative appliances and products giving individuals and public institutions the best possible opportunity to be both information customers and providers.
Anyone who wants to form a business to deliver information will have the means of reaching customers. And any person who wants information will be able to choose among competing information providers, at reasonable prices.
That’s what the future will look like — say, in ten or fifteen years. But how do we get from here to there ?
This is the key question for the government.
It is during the transition period that the most complexity exists and that government involvement is the most important.
It’s a "phase change" — like moving from ice to water ; Ice is simple and water is simple, but in the middle of the change it’s mush — part monopoly, part franchise, part open competition. We want to manage that transition.
And so I am announcing today that the Administration will support removal, over time, under appropriate conditions, of judicial and legislative restrictions on all types of telecommunications companies : cable, telephone, utilities, television and satellite.
We will do this through both legislative and administrative proposals, prepared after extensive consultation with Congress, industry, public interest and consumer groups, and state and local governments.
Our goal is not to design the market of the future. It is to provide the principles that shape that market. And it is to provide the rules governing this difficult transition to an open market for information.
We are committed in that transition to protecting the availability, affordability, and diversity of information and information technology, as market forces replace regulations and judicial models that are no longer appropriate.
On January 11, in Los Angeles, I will outline in more detail the main components of the legislative package we will present.
Today, though, I want to set forth the principles upon which it will be based.
There are five.
First, encourage private investment.
The example of Samuel Morse is relevant here. Basically, Morse’s telegraph was a federal demonstration project. Congress funded the first telegraph link between Washington and Baltimore.
Afterwards, though — after the first amazing transmission - — most nations treated the telegraph and eventually telephone service as a government enterprise.
That’s actually what Morse wanted, too. He suggested that Congress build a national system. Congress said no. They argued that he should find private investors. This Morse and other companies did. And in the view of most historians, that was a source of competitive advantage for the United States.
We are steering a course between a kind of computer-age Scylla and Charybdis — between the shoals of suffocating regulation on one side, and the rocks of unfettered monopolies on the other. Both stifle competition and innovation.
The Clinton Administration believes, though, that as with the telegraph, our role is to encourage the building of the national information infrastructure by the private sector as rapidly as possible.
Second, promote and protect competition.
I’ve talked about highways. All roads once led to Rome. But how many lead to each home ? One, or two, or more ? Whatever the answer, the same principle should apply : we should prevent unfair cross-subsidies and act to avoid information bottlenecks that would limit consumer choice, or limit the ability of new information providers to reach their customers.
We can see aspects of this question in the debate over the powers of the Regional Bell Operating Companies ; in the passage last year of the Cable Act of 1992 ; in the proposal to "open up" the local telephone loop.
Third, provide open access to the network.
Let’s say someone has an information service to provide over the network. They should be able to do it just by paying a fair and equitable price to the network service provider.
Suppose I want to set up a service that provides 24 hours a day of David Letterman reruns.
I don’t own my own network, so I need to buy access to someone else’s. I should be able to do so by paying the same rates as my neighbor, who wants to broadcast kick-boxing matches.
Without provisions for open access, the companies that own the networks could use their control of the networks to ensure that their customers only have access to their programming. We have already seen cases where cable company owners have used their monopoly control of their networks to exclude programming that competes with their own. Our legislation will contain strong safeguards against such behavior.
Mitch Kapor, the founder of Lotus, and head of the Electronic Frontier Foundation, has spoken about the need for the national information infrastructure to be an "open platform." The IBM PC is an "open platform" that any software programmer can use. They can develop software to run on the PC and if they developed a "killer applications" like Mitch did with Lotus 1-2-3 — they could make millions of dollars.
In the 1980s, thousands of programmers developed thousands of different programs, which have increased the productivity of our businesses, helped our children learn, and helped us balance our checkbooks.
We need to ensure the NII, just like the PC, is open and accessible to everyone with a good idea who has a product they want to sell.
This is essential if we are to have many information sources on it.
Fourth, we want to avoid creating a society of information "haves" and "have nots."
You know, the original expression "haves and have nots" comes from Cervantes.
But we’re not tilting at windmills here.
This is the outgrowth of an old American tradition.
Broadcasts, telephones, and public education were all designed to diminish the gap between haves and have nots.
In the past, universal service meant that local phone companies were required to provide a minimum level of plain old telephone service for a minimal price. State and federal regulations provided for subsidies to customers in poor and rural areas.
The most important step we can take to ensure universal service is to adopt policies that result in lower prices for everyone. The lower the price the less need for subsidies. We believe the pro-competitive policies we will propose will result in lower prices and better service to more Americans.
But we’ll still need a regulatory safety net to make sure almost everyone can benefit.
In the past it was relatively simple to fund universal service. The local phone companies were regulated monopolies that could be required to provide lifeline services. As more companies enter the market — as many of the regulations are removed — we have to find new ways of doing the same thing.
Just last week, the National Telecommunications and Information Administration of the Department of Commerce held a hearing in New Mexico to examine just that question. Our bill will incorporate the findings from the hearing and others. It will reaffirm this Administration’s desire to see that all Americans benefit from the National Information Infrastructure.
As we think about the future of universal service, we as a society ought to think about what kind of service and on what group of people we must concentrate.
Schools — and our children — are paramount.
The new head of the FCC, Reed Hundt, recently said, "there are thousands of buildings in this country with millions of people in them who have no telephones, no cable television and no reasonable prospect of broadband services. They’re called schools."
When it comes to ensuring universal service, our schools are the most impoverished institution in society.
Only 14% of our public schools used educational networks in even one classroom last year. Only 22% possess even one modem.
Video-on-demand will be a great thing. It will be a far greater thing to demand that our efforts give every child access to the educational riches we have in such abundance.
The recent article in the Washington Post on the proposed video communication network in the D.C. area is a wake-up call to all of us concerned about "electronic redlining." If we allow the information superhighway to bypass the less fortunate sectors of our society - even for an interim period — we will find that the information rich will get richer while the information poor get poorer with no guarantee that everyone will be on the network at some future date.
We cannot relax restrictions from legislation and judicial decisions without strong commitments and safeguards that there will be a "public right of way" on the information highway. We must protect the interests of the public sector.
That’s essential in building the information highway. That’s essential in providing affordable services for public education, public health and government.
The less fortunate sectors of the population must have access to a minimum level of information services through subsidies or other forms of a public interest tithe.
Fifth and finally : we want to encourage flexibility.
After all, flexibility and adaptability are essential if we are to develop policies that will stand the test of time. Technology is advancing so rapidly, the structure of the industry is changing so quickly, that we must have policies broad enough to accommodate change.
Even though the Communications Act of 1934 could not anticipate many of the technological changes of the last 60 years, it was flexible enough to allow the FCC, state regulators and the successive administrations to deal with those changes without rewriting the act every few years.
As the Administration develops its legislation we are trying hard to follow the example se by the authors of the 1934 Act. We are trying hard to enunciate key principles of policy, identify which government agencies will implement that policy, and then leave many of the details to them.
I don’t want to sound like I’ve thought all these ideas up. The fact is, in Congress, several important pieces of legislation have already been introduced.
I’ve already mentioned the Brooks-Dingell bill in the House. It, and the Markey-Fields bill represent major steps forward, not to mention more than a year of hard work by other Congressmen including Congressman Boucher and Congressman Oxley.
In the Senate, Senators Danforth and Inouye have introduced a major piece of legislation. Senator Hollings is working on another.
Between now and the beginning of the next session, we’ll be continuing our dialogue with Congress, industry and public interest groups to formulate our proposal for legislative and administrative action that will clear the way for the communications marketplace of the future. And part of that effort will be to continue to publicly enunciate what we want and how we will achieve it.
With high-level Congressional support, a growing consensus in industry, and leadership from the President, we have a unique opportunity. We can eliminate many of the regulatory barriers on the information highway — and perform the most major surgery on the Communications Act since it was enacted in 1934.
We will do it by avoiding both extremes : regulation for regulation’s sake, and the blind adherence to the dead hand of a free market economist. We will do it with the principle that has guided so much of the Administration’s efforts over the last year : the urgent need to create flexible, responsive government.
It’s fitting that this address is being delivered here at the National Press Club. Almost every form of communication is present here, in this room. I’m talking to you orally. Some of you are taking notes — others are typing on laptops. Some of you will publish your observations through the use of printing presses, others though television or radio reports. People tuned into C-Span are watching on television. Still others are listening over a prototype of the NII — the Internet.
All of these forms of communication bring us together — they allow us to participate in a virtually instantaneous dialogue. They will allow us to debate, and then to build a consensus, on the nature of the information infrastructure, on the details of legislation, on the nature of regulation.
But, even more, as I said at the outset, these methods of communication allow us to build a society that is healthier, more prosperous, and better educated. They will allow us to strengthen the bonds of community and to build new "information communities."
The challenge is not, in the end, the new technology. It is holding true to our basic principles. Whether our tools were the quill pens that wrote and then signed the Declaration of Independence or the laptop computers being used to write the constitutions of newly-freed countries . . . better communication has almost always led to greater freedom and greater economic growth.
That is our challenge. That is what this Administration— and the nation — will achieve.
There’s a story about Michael Faraday, the inventor of the electric generator. Once he was showing Benjamin Disraeli through his lab, taking great pleasure in demonstrating the effects he could produce. And at the end of the tour, Disraeli said, "Well, what good are all these things ?"
Faraday answered, "What good is a baby ?"
If we take the narrow view, it looks like telecommunications is well out of its infancy. But if we cast our eyes ahead a few decades — or centuries — we see that it’s barely out of diapers. We need to look ahead, to protect it when it needs protecting, but not get in the way when it needs to walk alone.
Like those wireless operators should have done in the North Atlantic, we should be alert to where the collisions could be. And we shouldn’t hesitate to chart a new course.
If we do that, then much more than the telecommunications industry will grow strong. This country and much of the human race will, as well.
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