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Chairman Hundt's 12/12/96 Speech

December 12, 1996

FCC Chairman Hundt Outlines 1997 FCC Agenda;
Procompetitive, Deregulatory Framework Is Goal;
Lists Major Issues, FCC Streamlining Efforts

FCC Chairman Reed Hundt today outlined the 1997 FCC agenda, outlining actions for the Commission next year. Hundt spoke at the Institute on Telecommunications Policy and Regulation sponsored by the Practicing Law Institute and the Federal Communications Bar Association.

In his speech, "Charting a Course for Competition," Hundt said the Commission should have three general goals for 1997: "(1) Make sure all communications markets move from monopoly to competition; (2) Secure the public interest in communications; and (3) Get rid of all the rules not necessary to reach these other two goals with a red-hot rule burning party."

Hundt said, "With the 1996 Telecommunications Act, Congress sought to break down all barriers to competition in all communications markets. That Act is our charter. Congress said it sought to establish a 'procompetitive, deregulatory' national policy framework. That is our mantra as we continue to move forward." He said, "The challenge the Commission faces in the next 18 months is to implement this vision, to take the steps necessary to promote the public interest, and to usher in the digital information age."

Hundt noted that competition in communications markets is not inevitable, and added, "There should be no mistake: we want competition, not co-opetition. We want a fully competitive war, not a standoff in which incumbent companies warily eye each other, but never really enter each other's markets. We have a big job in front of us in creating the opportunity and incentives for competition," he said.

Hundt added that "there are signs that we should be worried." Citing recent reports of declining telco interest in providing video competition and declining cable interest in providing telephony services, he said, "No wonder respected Sanford Berstein analyst Tom Wohlzien, in describing the potential battle between the cable industry and the phone companies, concluded, 'we may have the forming of a detente.'" Hundt said, "Detente is not what the Telecommunications Act of 1996 was supposed to be about."

Hundt continued, "Nor should we expect the transition to competition to be entirely smooth or fully and voluntarily undertaken by the incumbent companies who see their 'home' market positions threatened. Those companies will seek to respond, both in the competitive arena and by testing our resolve to stick to a pro-competition path. The importance of maintaining a clear and sustained commitment cannot be overstated."

Hundt described a number of major efforts the Commission would undertake in 1997 to move markets to competition. These included:

Removing economic barriers to competition by reforming access charges and universal service and by assuring new entrants can obtain fair prices when they buy, lease or connect with the incumbents' network.

Removing legal barriers to competition by preempting regulations that impose undue burdens on telecommunications carriers resulting in an ability to offer services.

Removing operational barriers to competition by completing work on number portability, and access to poles, conduits and rights-of-way.

Stimulating innovation by encouraging increased access to more bandwidth.

Reforming the Commission's spectrum policy to be more market-driven by, to the greatest extent possible, permitting open entry and allowing maximum technical and service flexibility.

Opening and liberalizating international telecommunications regulation through the WTO negotiations and reform of the international accounting rates system; and

Completing the Digital Television proceedings in a way that maximizes broadcasters abilities to respond to changes in technologies and markets, thus enabling broadcasters to compete in new markets, which is necessary to preserve free TV in a digital age.

Hundt also described numerous ways the Commission should act to protect the public interest. These included:

Keeping basic phone service low-priced;

Ensuring that all schools, regardless of income or location are able to share in the benefits of the Information Age;

Incentivizing markets to increase the access to telecommunications equipment and services to all;

Making information on educational programming accessible to parents;

Improving candidates' access to the public airwaves;

Defining clear and reasonable public interest obligations for Digital Television and DBS;

Responding to the Congressional request for an inquiry into liquor advertising on television; and

Making sure the communications needs of the public safety community are met.

While most of the actions discussed by Hundt directly result from tasks given to the Commission by Congress, Hundt listed several initiatives not mandated by the Act but critical to implementing a competitive, deregulatory framework.

He suggested that the FCC should explore the possibilities transferring responsibility for collections of the debt owed by auction winners away from the FCC to others. "These new businesses should have the ability to negotiate with bankers just as companies do everyday. But the FCC is ill-suited to act as a banker."

The list of new initiatives described by Hundt also included:

Developing legislation to allow more flexibility for unlicensed spectrum;

Streamlining experimental authorization for spectrum use; and

Removing barriers to use of smart antennas.

Hundt said that the FCC was still carrying out the largest single workload ever given to an independent agency by Congress. At the same time, he said, the Commission needs to move forward with steps that will make the agency as fair, dedicated and effective as the best organization in the private or public sector in the world. He said, "The Commission is working to reform many aspects of the Commission's procedural rules to streamline our processes, to make them simpler and easier to understand, and to ensure fairness in our procedures."

Hundt noted how the Commission has been able to eliminate numerous functions by recognizing that market changes eliminated the need for those jobs to be done. He cited numerous streamlining initiatives including: moving to electronic filing for licenses and applications; instituting computer license granting systems; allowing more application certification for routine applications; streamlining equipment authorization program; speeding up the complaint processes; and eliminating unnecessary reports.

Hundt said, "We need to make sure the Commission focuses its resources on the policy tasks, not on administration. In this regard, over the last three years, we reduced the size of the Office of the Managing Director from 16% of the FCC to 9%, even while the Office was picking up major new responsibilities, such as collecting and accounting for the fee and auction revenues collected by the FCC." Hundt noted the Commission also needed to consolidate the agency in a single new building at the Portals.

Hundt summarized planned agency action on issues of interest to a wide variety of industries that are part of the trillion dollar information sector of the economy, and said he would release a memorandum detailing the proposed 1997 agenda on issues affecting the broadcast, telephony, cable, wireless, satellite and computer industries.

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Last updated: 12 December 1996 ha