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REMARKS BY U.S. COMMERCE SECRETARY WILLIAM M. DALEY
PRESS CONFERENCE ON COUNCIL OF ECONOMIC ADVISERS'
TELECOMMUNICATIONS INDUSTRY REPORT
Washington, DC
February 8, 1999

[Text as Prepared for Delivery]

When President Clinton and Vice President Gore came into office, they knew that information technology and telecommunications would drive the American economy of the future.

So, we developed a policy blueprint to make sure that our National Information Infrastructure would be the most vibrant, competitive, and efficient in the world. We want American consumers to have the maximum number of choices, at the lowest possible cost. The report we are releasing today shows that we are making good progress in achieving those goals. And we couldn't think of a better day to be releasing our study.

Three years ago today President Clinton signed into law the 1996 Telecommunications Act. It is one of the most pro-competitive bills approved by Congress in a generation. And it passed by overwhelming majorities in both the House and Senate.

Our policies, and this landmark act, are producing huge benefits. Competition is up. Private investment is up. And prices are down. In fact, the report shows that the telecommunications industry has grown beyond our wildest dreams. There is not a single forecast that we have made about the growth of this industry that hasn't been broken. Needless to say, this doesn't say much about our forecasting abilities. But it obviously shows the power of competition and market forces.

Let me give you a couple of numbers that tell the economic story. Sales of telecommunications equipment and phone service topped $400 billion in 1998 -- a near doubling since 1993. One million of the 18 million new jobs created since then, is related to telecommunications. The industry itself has generated over 200,000 new jobs. It contributed to creating another 800,000 in data processing. And we're not even counting the effects on hiring in the software and computer businesses.

Today there are some 400 publicly-owned telecommunication companies. That's double the number in just five years, and does not include hundreds of new private companies that are jumping into the market.

And, since 1993, our exports of telecommunications equipment nearly doubled to $25 billion. And I am happy to report that this is one product area where we have a big trade surplus. American consumers are the big winners in all of this.

Long-distance rates have plunged. Consumers who make as little as $10 worth of long-distance phone calls a month can now take advantage of special low-priced calling plans. Until recently, these discount plans were only available to high-volume callers. But now, just about everyone with a telephone is benefitting from lower prices.

Today, 1 in 4 Americans has a wireless phone. That's a 60 percent increase in just the last two years. And one day, it won't matter whether you're calling on a cell phone or a regular hard-wired phone -- the price and quality of a call will be the same.

Competition is also coming to local markets. People living in Arlington, Massachusetts, for example, now have three companies to choose from for local phone service: MediaOne, Bell Atlantic, and RCN. And we now have the prospect that this facilities-based competition will expand broadly around the country, bringing the benefits of choice to more consumers.

But critics are right that it has taken too long for consumers to benefit from competition. The problem, in part, has been that the industry and the FCC have been tied up in lawsuits. There was uncertainty until just two weeks ago about the scope of the FCC's authority to carry out the intent of the law to open up local markets.

Following the Supreme Court ruling on the FCC's authority, we expect to see more competition in local markets around the country, as the FCC moves quickly to enforce market opening regulations.We must also keep looking for ways to open local telecommunications markets, and create more consumer choice. This includes removing government barriers to competition. And we must develop more effective universal service policies. We will not be satisfied until everyone -- rich or poor -- has access to affordable services. That is why we have the e-rate program and other universal programs.

Access to state-of-the-art communications services is more critical than ever. People need them for education, for business, for entertainment. We must do everything we can to prevent a digital divide among people. At the end of the day, what this is all about is making it easier for people to communicate. It means being able to call for help when your car breaks down on a deserted highway. It means a college student being able to call home or send an e-mail to her grandmother.

It means a high school student can easily tap the Internet to research a term paper. Let me make one final point. E-commerce will be the growth engine for our economy well into the next century. This industry may be an infant today, but in the years to come E-commerce will grow up to be a giant in the global economy.

The telecommunications industry provides the information highway for E-commerce to grow. It is the way E-commerce gets done. But for our E-commerce to thrive, our trading partners must also have good telecommunications.

When I go overseas, I encourage them to adopt policies like we did in 1993, and to pass laws like we did three years ago. Many countries have embraced pro-competitive policies. And I hope more will do the same.