Good afternoon. It is an honor to appear here before you to discuss the issues surrounding broadband Internet services. We have surely come a long way. It was not too long ago that Ken Olsen, the founder of Digital Equipment Corporation, said that "Why would anyone need a computer at home?" Today, over 50% of Americans have a personal computer, and 90% of them are accessing the Internet. Broadband technology is the next evolutionary step of the Internet. When I say broadband, I am talking about high-speed Internet access. Put simply, broadband is the difference between using a common garden hose and a high-pressure fire hose. I know that broadband issues are rapidly moving to the forefront of the consumer, business and technology agendas of the States you govern.

The Internet has been called the most important invention in communications since the printing press, and it will have a profound impact on how we interact with one another. The decisions and policies that are formulated today will have an enormous impact on the future of this communications medium, not only in your States, but globally. The rapid growth and expansion of communications technology throughout the globe has led to a highly intertwined market. According to a recent study, the Internet economy is projected to reach $507 billion this year! That is more than the $300 billion telecommunications industry and almost as much as the $750 billion publishing industry. The Internet economy is certainly behind some of the dramatic growth in the NASDAQ.

The deployment of broadband technology in particular will lead to an even more vibrant e-commerce world Today, less 2 million Internet users are using broadband services. This is less than 3% of all Internet users in North America. However, by 2004, it is predicted that there will more than 25 million high-speed households in the US. This rapid increase will drive service revenues from $580 million to over $7 billion in the next five years.

That is why it is critical that chief executives understand the potential of broadband, and the issues surrounding its development and deployment. By holding this working session, you are demonstrating your understanding of the importance of advanced communications services. As someone who wrestles with these issues everyday, I applaud your foresight.

As I stated before, broadband refers to high-speed Internet access that allows fast delivery of voice, video and data services.

What it means in practical terms is download times that are up to 100 times faster than the speeds you are used to.

Recently, USA Today conducted a study on Internet download times.

They measured download speeds of a regular dial-up telephone modem and the download speed of broadband modems using the movie Titanic as the example. Titanic ran for 3 hours and 14 minutes in the theaters.

The results were astounding. A regular dial-up modem (like the one most of us have at home) took over 42 hours to download "Titanic."

By contrast, the download time using a broadband modem was 9 minutes. That's amazing!

If that is what broadband technology can do for entertainment, imagine the possibilities for commerce, education, and healthcare.

Imagine a world where everything is connected. Where a small business in rural America can thrive and serve customers anywhere in the world.

Imagine the improvements in health care in rural and remote areas when doctors there are connected to the best medical resources in the world and have access to experts in any medical field, regardless of geographic barriers.

Imagine the educational opportunities for our children. Virtual field trips to the Louvre, the Amazon, the Nile, and even the Pacific Ocean. The ability to read books from any library in the world. The ability to communicate with other children around the world, from Bangor to Bangkok, from the Carolinas to China, from Georgia to Guam.

Imagine your home. A refrigerator that has the ability to sense when you are running low on milk and that will send e-mail to you to remind you to pick some up on the way home. Or better yet, it will contact an e-grocer, who will send you the supplies you need.

Before these dreams can become reality, broadband services must be deployed. Broadband is currently being deployed in two forms: the cable modem, and digital subscriber lines offered by phone companies. Soon, we expect broadband deployment in wireless and satellite technologies. The deployment of broadband has sparked a national debate over access to delivery systems. Currently, the debate is focused on access to the cable platform.

Today's debate started at the local level, when the city of Portland, Oregon decided to deny a franchise transfer unless the cable company agreed to allow open access to its broadband platform for unaffiliated Internet Service Providers. The cable company sued the city, and the case is now before the Ninth Circuit Court of Appeals.

The debate over broadband access is one of the most hotly contested and vigorously fought issues in communications today. Advocates on both sides of the issue are spending millions of dollars. We are seeing ballot initiatives, and intensive lobbying campaigns on the local, state, and federal level.

Some say this debate is about open access. Others claim it is forced access.

You hear the sound bites: Open is good. Closed is bad. Forced is bad. Regulate. Don't regulate.

Today, I want to put aside all the rhetoric, and talk about the reality.

The debate over broadband access is a transitional one. It is a debate about the means, not the ends. We must keep that in mind when discussing this issue. For example, cable modems, DSL, wireless and satellite technologies are the means. The ends are all of the benefits these transport systems will bring to Americans.

Most importantly, the debate is about whether the federal government should mandate the usage and dictate the terms and conditions of access to the cable platform.

When a consumer signs up for cable modem service, the cable operator will usually provide Internet access through a wholly or partially owned or affiliated Internet Service Provider, or ISPs.

ISPs that are not affiliated with cable operators want to obtain direct access to cable platforms under the same terms and conditions as affiliated ISPs.

A few local franchising authorities, such as Portland, have begun to require cable companies to "open up" their platforms for unaffiliated ISPs before they approve franchise transfers.

The issue is under review by a number of states and local governments, and by the 9th Circuit Court of Appeals in the Portland case.

As the FCC reviews this issue, we keep two important touchstones in mind at all times: the consumer and competition.

First, there is the consumer.

At the FCC, we are guided by a simple question: Is this good for the American consumer?

The first thing we look at is whether our policy will benefit the American consumer and promote the public interest.

Second, we look at competition. The 1996 Telecommunications Act directed the FCC to encourage competition in the communications marketplace and mandated deregulation.

We believe in competition. We believe in the ability of the market to solve problems. And we believe that competition is in the best interests' of the consumer.

With consumers and competition as our guideposts, the FCC has chosen not to regulate at this time, and to monitor this nascent and growing industry as it develops.

We are forbearing from regulation at this time because we believe that this is the quickest way to get this technology deployed.

FCC Chairman William Kennard has clearly stated the his four goals for bringing broadband services to Americans:

Fast deployment-- Our challenge today is to make broadband happen and make it happen fast. The faster we can get broadband services to all Americans, the faster they can participate in this new economy.

Ubiquitous deployment-- We have to make sure that all Americans have access to broadband in our country. If the full promise of this technology is to be realized, it must be deployed everywhere. It must reach the inner cities. It must reach the rural farmhouses. It can not be allowed to become another symbol of the digital divide. It can not become another way to separate the haves from the have-nots. Broadband can not be allowed to become a barrier --- it must be a bridge.

Competitive systems-- We want to see multiple broadband pipes: cable modems, DSL, wireless, and satellites. The challenge for us is to make sure we are creating a regulatory environment that is technology neutral so we get as many players on the field as possible. Competition is developing between the telephone companies and the cable companies. This is just the beginning. At the beginning of 1998 there were 50,000 cable modems in service in America. At the end of 1998 there were 500,000 - a ten-fold increase. By the end of 1999 there were over 1 million cable modems in service. This deployment of cable modems has spurred the deployment of DSL, and this competition has resulted in lower prices and greater choices for consumers.

We want to ensure that openness continues-- Openness allowed the Internet to thrive and produce innovation in both content and technologies. Technologies that are transforming society.

To regulate at this juncture would be to say that the market has failed before the market has been given a chance.

However, we are very mindful of the risks associated with a policy of regulatory restraint. Risks such as the threat of monopoly of Broadband, or the creation of an irreversibly closed system.

These concerns led the Chairman to encourage parties to this debate to come together and negotiate an acceptable solution. Late last year, AT&T and MindSpring reached an agreement in principle which would open up AT&T's systems when their exclusive contracts expire in 2 years. And recently, the heads of AOL and Time-Warner publicly committed to openness.

We have been encouraged by these developments. However, these are only first steps. Much more is needed. Unless more is done to ensure that a monopoly does not develop and closed systems are not built, these announcements are just rhetoric. We will be vigilant to ensure that this industry moves beyond the rhetoric, and makes openness a continuing reality.

If you haven't already, many of you will have to face this issue in the very near future. We want to work together with you as this debate moves forward. As the only agency with regulatory authority over all potential broadband technologies, we are uniquely situated in this debate. Despite what advocates for both sides will tell you, it is not an easy issue to deal with. However, by working together, we can bring these services to all Americans, and ensure the continuing growth of this emerging industry.