Introduction
It's great to be here and a part of this program. I
see that you have a number of fine speakers on
your agenda, for example, Bruce Mehlman from the Technology
Administration, and Marsha
MacBride, who is substituting from Bryan Tramont from the FCC. You also
have a number of
Members of Congress from both sides of the aisle who are well qualified
to speak on these
issues.
It's been less than a week since hurricane Isabel passed through
Washington, and we're not done
talking about her yet. Hurricanes like Isabel prove the point about
developing strength through
adversity:
- The hurricane showed how information (including weather
information given by
the Department of Commerce's National Weather Service, a part of NOAA)
and
advance planning can help people address difficult situations and come
out
relatively unscathed. (Thousands of lives were lost in the past where
the
government did not provide warnings of hurricanes, for example in
Galveston in
1900 (12,000 lives lost) or later in an era of radio communications, in
the Great
Unnamed New England hurricane of 1938 (700 lives lost).)
- Even the terrible hurricane of 1933 had the unexpectedly good
result of opening a
new channel through the barrier reef at Ocean City Maryland. In one day
that
storm created an opening to the waters behind, saving about $200,000
planned for
a channel and creating new economic opportunities for the city.
In the technology and telecommunications sectors, it seems the
competitive environment is one
continuous hurricane. First we had the technology and telecom lead the
recession - -the popping
of the telecom bubble - - terrorist attacks that further challenged our
economy - - a wave of
corporate scandals largely centered in telecommunications and
technology - - and then two wars.
However, I don't need to remind anyone in this room how important
telecommunications is to
the vitality of the economy, and what a challenge the past few years
have been. Enterprises
struggle constantly in the winds of innovation and the currents of
economic change. In the midst
of these challenging times, the government has several legitimate roles
to fulfill, from providing
information, to fostering competition, and in some places, like
spectrum policy, providing the
fuel to keep the motors running.
So-called "disruptive technology" is an important part of the mix.
Although the term is
relatively new and has evolved quickly, it has come to refer not to the
disruptions something like
a hurricane can cause, but to a new product or service that disrupts an
industry and eventually
wins most of the market share. While the term may be new, the reality
is not. It was at work
when Japanese automakers seized market share in the 1970s, for example,
through the
simultaneous engineering approach that they pioneered.
Going back further still, the father of the electric light bulb, Thomas
Edison, fought in vain to
protect the dominance of his direct current electric system against the
superior alternating current
developed by Serbian-Croatian immigrant Nikola Tesla and promoted by
George Westinghouse. Edison, an opponent of executions, designed the
first electric chair as a way to demonstrate the
dangers of AC; some say at least part of his motivation was
competitive. Despite the genius of
Edison, the world would have been a far different place without the
disruption caused by AC. I
saw that from experience having just had my electricity restored last
night!
In fact, throughout history one disruptive technology has supplanted
another. A horse may have
beaten the steam locomotive "Tom Thumb" in 1830, but that didn't stop
railroads from being
disruptive to stagecoaches and canal boats. Jet airplanes were
disruptive to the railroads. CD
and DVD were disruptive to audio and video cassettes. And so it goes.
It is vital that today's government policymakers understand the
appropriate role of the
government. As the President said when releasing the Administration's
Technology Agenda in
2002: "The role of government is not to create wealth; the role of
our government is to create an
environment in which the entrepreneur can flourish, in which minds can
expand, in which
technologies can reach new frontiers."
Under the leadership of Secretary Don Evans, the Commerce Department
has addressed a
number of technology and telecommunications issues. This work involves
a number of
Commerce organizations, including the Patent and Trademark Office, The
Technology
Administration, and the National Telecommunications and Information
Administration, or NTIA,
where I serve as Acting Assistant Secretary.
The work of these agencies encompasses issues that parallel the
public policy interests of the
CCIA. For instance, the PTO has done some very good work with respect
to the intellectual
property issues presented by the DMCA and in other contexts.
For NTIA specifically, the challenge is to create and implement
national policies that will
promote the health and stability of the telecommunications sector, but
not at the expense of
exciting new "disruptive" technologies that are arriving rapidly at the
doorsteps and desktops of
U.S. consumers and businesses. The policies also must also reflect the
new realities of the
security and defense needs of the country.
The Bush Administration is pursuing aggressively the macro-economic
and technical policies
that lay the groundwork for our economy today. For the rest of my time
today, I'd like to talk
about a half dozen or so of the many areas in which have achieved
success so far and in which
we plan to make improvements for the future - - Internet taxation,
ENUM, radiofrequency
spectrum use, IPv6, and cybersecurity.
•Internet Access Tax Moratorium
One of the easiest and most unfortunate ways for a government to
stifle innovation and slow
growth is to impose taxes. It's worse when a tax is on an important new
segment of the economy
or the most advanced version of a product and worse still when it isn't
just one tax but confusing
and possibly overlapping taxes. The moratorium on Internet access taxes
has served us well, and
the Administration worked to keep that moratorium in place.
President Bush and Secretary Evans firmly believe that less regulation
and lower taxes are a
recipe for prosperity. A few days ago the Administration underscored
this commitment for the
fourth time this year through its strong support for H.R. 49, to make
permanent the moratorium
on taxes on Internet access, regardless of the speed of that access,
and on multiple or
discriminatory taxes on electronic commerce.
As Commerce Secretary Evans and Treasury Secretary John Snow said
when H.R. 49 passed the
House last week, keeping the Internet free of such taxes will create an
environment for
innovation and will ensure that electronic commerce will remain a vital
and growing part of our
economy.
•IPV6
Another Internet related issue which is moving quickly is Internet
Protocol Version Six (IPv6).
This next-generation Internet Protocol could pave the way for the
emergence of a host of new
Internet capabilities by providing a vastly expanded number of
addresses for Internet-connected
devices. In addition, it may facilitate improved security and reduce
operational expenses for
Internet users. As with any development, however, there are different
views on the costs and
benefits of deploying a new protocol. The federal government must be a
policy maker and an
informed consumer as IPv6 matures.
Very soon, the Commerce Department will announce the launch of a
federal government Task
Force to study how deployment of IPv6 could positively affect
competitiveness, security, and the
needs of Internet users.
The Task Force, called for in President Bush's National Strategy to
Secure Cyberspace, released
early this year, will be co-chaired by the Commerce Department's
National Telecommunications
and Information Administration (NTIA) and the National Institute of
Standards and Technology
(NIST) and will operate in consultation with the Department of Homeland
Security and other
federal offices and agencies.
The Task Force will examine the benefits and costs of the new Internet
Protocol and the federal
government's role in its deployment. It will seek input from the
public, and from government and
industry experts on a number of issues relating to IPv6 deployment.
•Electronic Numbering (ENUM)
Straddling the line between Internet
and telecommunications issues is ENUM. This, as you may
know, is a protocol that maps a telephone number from the
public-switched telephone network to
the Internet's Domain Name System, and vice versa. This protocol would
allow a person to be
contacted by e-mail, telephone, fax, or cell phone through use of any
single identifier: whether it
is a telephone number or email address.
NTIA has played an active role in the
International Telecommunication Union's Study Group 2,
which is working on the finalization of the proposed ENUM protocol. The
U.S. supports a global
tree under e164.arpa, as long as it allows for competition wherever
possible, promotes
interworking between different approaches and systems, and encourages
innovation.
While NTIA believes that
ENUM holds a lot of promise for consumers and businesses alike, we
have not yet "opted in" to the global tree (unlike several E.U.
countries including the U.K. and
France). There are a number of steps the U.S. must consider before we
opt in. First, unlike other
country codes, the U.S. has the added complication of coordinating with
the 18 other countries
that use Country Code 1 in order to opt in to the global domain.
Second, we want to be sure that
any implementation satisfies pro-competitive and pro-consumer
principles, such as maximizing
security and privacy. Finally, we are also exploring appropriate
mechanisms to select an
administrative and technical contact for the Tier 1 provider or
providers.
Industry is taking the lead on
several of these points, such as selecting the most effective
mechanism for selection of the Tier 1 provider(s). The U.S. government
is supporting these
industry efforts and will work with industry to be sure that ENUM is
implemented most
effectively in the U.S. The overriding goal is to marry the best of the
Internet (flexibility,
adaptability, and breadth) with the best of the telephone system
(simplicity, market penetration
and acceptance, and reliability) - - and NOT to create the "Bride of
Frankenstein" by combining
telemarketing with spam!
•Radiofrequency
Spectrum Issues
Of all telecommunications issues,
the issue of radiofrequency spectrum has commanded the bulk
of my energy and focus since coming to Washington. Spectrum policy - -
by which I mean the
policies and the many decisions regarding the who, what, where, when,
and why of spectrum
access, is an area that Secretary Evans identified as having great
potential for government action
and for having a positive effect on economic and national security.
NTIA manages all spectrum use by Federal
government departments and agencies, which puts
NTIA in the middle of many spectrum debates. There is much more to it
than that. Spectrum is
an input to not one but several industries.
It is easy to overlook how pervasive
spectrum use is. The radio spectrum is a part of everyone's
daily lives, whether they think about it or not. That cell phone in
your pocket uses radio
frequencies identified at an international conference, allocated to the
service, and licensed to a
carrier by the FCC. If you're on a Wi-Fi wireless network at your
office, at a coffee bar including
more than 2100 Starbucks, or at home, or you are sending signals on
spectrum the FCC has
allocated for unlicensed use. More broadly, spectrum is the basis for
over-the-air television and
radio, satellite communications, and other commercial and business
applications. It is crucial to
the work of police and fire departments, it is essential to air and
ground transportation systems, is
used by NASA for such things as Galileo and to bring us the views from
the Hubble Space
Telescope. As important as any of these, it is used by the military for
everything from two-way
radios, to precision guided weapons to radars. Recently, the Wall
Street Journal called the
military's use of GPS - - Global Positioning System - - the "core of
its might." In military terms,
spectrum is a force multiplier that ensures when we send our men and
women into harm's way: it
is not a fair fight.
While the wireless industry, along
with the entire telecommunications industry, was hurt by the
burst of the technology bubble and high-profile corporate fraud, in
wireless the lines are still
pointing upward, if not perhaps not as steeply as once expected. In a
relatively short period of
time, we've seen the growth of the U.S. mobile wireless industry: 148
million customers, more
than $75 billion revenues and $120 billion capital investment and more
than 200,000 employees.
This is an area in which disruptive
technologies are poised to move in. We've heard a lot about "Wi-Fi" unlicensed technology. Some analysts have questioned the
business models for Wi-Fi
and pointed out that Wi-Fi service revenue for 2003 will "only" be
about $20 million to $60
million. Equipment sales for 2003 are projected to be $1.5 billion.
What is the big deal about a
technology generating less than $2 billion in activity today in the
overall $763 billion
telecommunications market? The CEO of Intel has noted that 15,000
access points sold per day
is a faster adoption rate than was seen with cell phones. The important
thing is not what Wi-Fi is
today, but what Wi-Fi and the host of other advancing wireless
technologies -- whether Wi-Max/802.16 or Third Generation or
Ultrawideband or something else - will mean in the future. The great
possibilities lie in the combination of new chip technologies, new
battery technologies,
and availability of spectrum, which together are leading to a
revolution in the transmission high-speed data and voice communications.
The Federal Government has
traditionally decided who would use spectrum and under what
conditions. New approaches to leave behind command and control
regulation in favor of
flexibility and market-driven decisions do not eliminate the Federal
Government's role in this
area, particularly because of the extensive use of spectrum for
national defense, public safety, and
other important government missions. As Secretary Evans told me shortly
after I arrived at the
Department of Commerce: "Given a choice between economic security and
national security . . .
Do both!"
The Bush Administration already has a
proven track record in spectrum issues, and there are
more successes in the pipeline. This Administration has cut the
proverbial Gordian Knot on the
tangled issues of spectrum for Third Generation licensed services and
Ultrawideband technology. Keep your eyes open for exciting developments
at 70 - 80 GHz and more unlicensed spectrum
below 4 GHz.
Most
recently, U.S. delegation at 2003 World Radio Conference was successful
in reaching
agreement at so-called "5 GHz" band, that in essence doubles the amount
of spectrum available
for unlicensed services like Wi-Fi. The Administration moved this
issues from a dead stop in
May 2002, to an agreement on a U.S. position by February 2003, to
worldwide agreement in July
at the end of the WRC in July.
I was pleased
to see that the CCIA supports the Administration's spectrum relocation
fund
legislation. If passed by Congress, the legislation would take the
place of the current law, which
requires winning bidders to negotiate directly with federal entities
upon the close of an auction
and to pay the agencies directly for their relocation costs. This
process would provide more
certainty for both Federal and commercial entities in the auction of
reallocated Federal spectrum.
A
technological trend that I believe will emerge to continue to challenge
our spectrum policy
foundation, as well as raise other significant policy issues, is
sensors. The ability to make
extremely small computer chips that use the spectrum to communicate
with one another (coupled
with the advancements in battery technology) will create a world with
exponentially more
emitters or "users" of spectrum that will be in constant communication
with one another rather
than tied to a human. The applications are very exciting for our
economy and enriching our lives,
but spectrum policy today is poorly suited to allowing their operation.
In the larger
picture, NTIA is undertaking an initiative started by President Bush in
an Executive
memorandum in June to examine how the radio frequency spectrum is used
and managed in the
United States. This initiative will bring together the government users
of spectrum - - including
the Departments of Defense and Homeland Security - - the FCC, OMB and
others to examine
both the processes and the institutions responsible for managing this
resource.
•Cybersecurity
Pervasive
throughout all policies of this Administration are concerns about
security of this
Nation. Technology and telecommunications are no exception. National
security and economic
security are a continuing and growing concern across the Administration.
Millions of
people were affected by the Blaster and Sobig worms that came one upon
another this
past August. The Blaster worm (formally known as the "MSBlaster" or
"W32/Blaster" is thought
to have infected 500,000 computers worldwide. Estimates are that it
cost approximately $1.3
billion to correct and in lost productivity. Sobig (in its several
variants) is generally
characterized as the fastest virus yet to spread on computers; yet
detection efforts were able to
reduce significantly its potential damage.
Although, fortunately, these particular worms had only a minor to
moderate effect on the
operations of companies, government agencies, and individuals, the
episodes demonstrated again
how dependent all of us have become on computers. Even limited attacks
can cause tremendous
losses of productivity.
Last
year the White House issued the National Strategy to Secure President's
Cyberspace, a
report that identified the security and privacy risks of
telecommunications. This report identified
the need for private and government resources to combat the growing
threats to cybersecurity and
called for a commitment by all parties to work together on security
issues. I am very encouraged
by what I am hearing about industry's response to that call.
The Bush
Administration has taken some very real, very specific steps to deal
with attacks and
challenges to our cybersecurity:
- The
Administration created the National Cyber Security Division of the
Department of Homeland Security's Directorate of Information Analysis
and Infrastructure Protection.
- The Administration issued
Homeland Security Presidential Directives that
coordinate and help organize the cybersecurity efforts of federal
agencies,
state and local governments, and the private sector.
- As I mentioned above,
following a recommendation from the National
Strategy, the Department of Commerce's NTIA initiated an IPv6 task
force
which will examine the strengths, weaknesses, and economic
consequences of IPv6.
- U.S. industry has
increasingly come forward to assist in these efforts, ranging
from new practices, such as Dell Inc.'s decision to sell products with
industry-recommended security settings installed at the factory before
shipment, to
activities designed to disseminate best practices that network
operators, service
providers, and equipment manufacturers can employ to prevent or recover
from
cyber attacks, to an increased willingness to report attacks when they
occur,
helping both industry organizations and government agencies to track
the sources
and request assistance from officials in other countries.
In the
Wi-Fi arena, I am very encouraged by what I am seeing in the
development of 802.11(i)
and its ability to address the security issues present in current Wi-Fi
equipment.
It is often
the role of the government to raise the caution flag on security and to
call on industry
to provide robust, economic, and timely solutions. There is a lot at
stake. Whether government
or private sector, we are all Americans who are called to lead the
world economically and to
defend our homeland.
•Conclusion In closing, I want to observe that preparations for hurricanes and typhoons require creativity, adaptability and preservation of critical assets. There is a lot the government can do, but a lot depends on individual effort and ingenuity. Storms will make landfall. Disruption is certain. Planning gives way to execution. The government must execute its mission. Reports, plans, approaches, models, paradigms - - whether they are at home or abroad, in our economy or in military conflict - - are necessary to focus resources and attention to goals. But, as we have seen over and over again, our best laid plans consistently fail to take fully into account the true breadth of American genius and our indomitable entrepreneurial spirit. New technologies will leap forward and challenge old ways of thinking, and together we will continue to lead the world.
Thank you.
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