Deputy Secretary's Speech

Deputy Commerce Secretary David A. Sampson
Keynote Address to U.S. Chamber of Commerce, Continuity of Business Summit
Washington, D.C.

Good morning and thank you all for coming. On behalf of President Bush, welcome to Washington, DC. I'm delighted to be here today at the U.S. Chamber of Commerce.

I have great respect for Chambers of Commerce, as I was the President and CEO for the Arlington, Texas Chamber of Commerce some years ago.

I want to first thank all of you for your leadership. I am pleased to see such strong interest that clearly shows desire to maintain business continuity both from those here and those listening via satellite. You provide an extremely valuable service to your customers and to the nation day in and day out.

Retail sales are a major part of our economy, and many of you here today represent retailers. Your ability to carry on after a natural disaster or other emergency is vital to both the local and national economies. And when the unexpected happens, it can be a matter of life or death as citizens scramble to get what they need to survive.

The key task before us today is to begin thinking about communications systems in a completely different way.

The Case for Diversifying Backup Communications
In the aftermath of the 9/11 terrorist attacks, the 2003 electrical power outage in the Northeast and Hurricane Katrina in 2005, we have learned that businesses need to have alternate plans for operating should a disaster occur.

And this is not unique to physical disruptions. Consider what a major avian flu outbreak with the potential to impose quarantine on literally millions of workers would mean for traditional communication systems and specifically to your business.

But let's consider the scope and impact of weather disasters, which occur with all-too-regular frequency.

Take a look at the map of the United States behind me (for those listening via satellite, I'll explain what we're looking at).

It's a map of the U.S. that shows the number and locations of weather disasters over the past 25 years that inflicted over $1 billion in damages. And it's color-coded to show which parts of the U.S. have been hit the hardest.

Such maps highlighting the most vulnerable areas of the country indicate where future planning must be initiated to deal with future disasters. It should be no surprise to anybody that the most storms were in the Southeast and Gulf Coast states, and the fewest in the upper Midwest and Southwest states. But as you can see, virtually every state in the union has been struck by a weather-related disaster at one time or another.

All told, over the last 25 years, these storms caused over $500 billion in damages--over half a trillion dollars. And this does not account for smaller storms that cause less than a billion dollars worth of damage.

The second graphic is a table showing the lives lost and the economic damages caused by the five worst storms. Hurricane Katrina, of course, tops the list with more than 1,800 deaths and well over $100 billion.

This, better than anything, shows that the stakes are indeed very high.

Now consider the impact of a natural disaster on the local infrastructure. Roads are flooded. Bridges damaged or knocked out. The power goes out. Communication links go down. Take for instance the:

• N.E. Power Blackout: The electrical power outage that took place in August, 2003, affected 50 million consumers and businesses throughout eight Northeastern states and a Canadian province.

Power was not restored in some locations, such as Detroit, until several days later.

• 9/11 Attacks: Approximately 14,000 businesses and 20,000 residential customers in the vicinity of the World Trade Center progressively lost telephone service. Nearly 300,000 voice circuits were affected.

More than 1,300 optical fibers were lost, and high-capacity, high speed data circuits were also disrupted. 160 cell sites became inoperable due to a loss of power.

It took a week to restore full communications capacity.

• Hurricane Katrina: As a result of Hurricane Katrina, more than 3 million customer phone lines were out of service, with more than 1,000 cell sites damaged and out of service.

In addition, multiple long-distance switches and high-capacity service trunk lines were damaged.

Some capability was restored within days to support emergency responders; however, many customers did not have service restored for several weeks.

What's To Be Done
The critical lesson is that in the wake of a terrorist attack, a natural disaster or a major outbreak of the flu, businesses must be prepared for continuity of operations--or "COOP," as we call it in government. Businesses, especially retail outlets, must continue to operate: replenishing shelves, paying employees, taking care of your customers. This, of course, will not be "business as usual." It will be based on a pre-planned, sophisticated communications strategy to ensure your economic security and ability to survive.

It is extremely important for the commercial sector in this country--particularly the retail sector--to acquire resilient, diverse communications capabilities.

At some point in every 24-hour cycle, each of us is a consumer of essential goods and services that must be supplied to ensure the orderly economic structure of our lives with food, medicine, household operation or repair, gasoline, and cash. Accordingly, the ability of retailers to continue directly affects all of us.

This Summit's focus is distinct from cooperative efforts between the public and private sector to restore critical infrastructure. Businesses that own, operate or maintain critical infrastructure are already working in close coordination with the Department of Homeland Security.

The Commerce Department--with the National Telecommunications and Information Administration (NTIA) in the forefront--focuses on supporting continuity of business and disaster recovery efforts for businesses that complement efforts to restore critical services, such as electrical power, roads, and housing.

Our efforts today focus on continuity of business and disaster recovery communications when traditional wire line, wireless and Internet capabilities all fail or become saturated with users.

In such emergency situations, you have to rely on other communications capabilities, mainly satellite links, or point-to-point and broadcast radios.

Unfortunately, we don't have data that tell us what backup communications companies have in place or plan to use in an emergency. But we do know that banking and financial institutions have resilient backup communications, including satellite capabilities. And it is reasonable to assume that diversifying backup communications systems is greater among large companies than in medium- and small businesses.

In solving this problem, we're concerned less about the choice of equipment and more about whether businesses have backup equipment available to provide diverse communications capabilities. After today, I hope we'll learn a lot more about what businesses are doing and planning.

Closing
Disaster recovery and continuity of business are very challenging problems. But the solutions begin with making estimates of current and projected "take-up" costs, and making a realistic "business case" for investing in diverse communications.

I urge all of you to look at this forum as a marketplace of ideas where, as business leaders, you look into the future and plan alternatives to protect your businesses and help preserve the American way of life.

Thank you for being with us this morning and realizing the importance of diversifying your backup communications systems and planning for the future of our businesses and our country.

I would also like to thank the U.S. Chamber of Commerce and the Satellite Industry Association for teaming up with the Commerce Department in raising this issue and bringing this important message to businesses throughout the United States.

Thank you very much.