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Remarks of Assistant Secretary Victory at the Latin American Wireless Industry Association (ALACEL) Summit Meeting of the Presidents of Latin American Mobile Carriers

The Politics of Telecommunications in Times of Crisis
November 26, 2001
Speech by Nancy J. Victory
Assistant Secretary for Communications and Information
U.S. Department of Commerce

Latin American Wireless Industry Association (ALACEL)
Summit Meeting of the Presidents of Latin American Mobile Carriers:
The Politics of Telecommunications in Times of Crisis

November 26, 2001

Good afternoon. It is my pleasure to join you today to take part in your discussions to promote the growth of wireless telecommunications systems and services in our hemisphere. In light of the events of September 11th, the topic of this meeting - The Politics of Telecommunications in Times of Crisis - is very timely. As demonstrated by the widespread use of mobile devices by both public safety officials and individual citizens throughout the events of that tragic day, wireless communications has become even more integrated into our daily lives. As we go forward in our post-September 11 world, the importance of communications will only continue to grow as we seek to keep our citizens safe and to stay in touch with family and friends during such trying times.

Also reinforced by these tragic events is the need for closer international coordination. Now more than ever it is clear that the future of the United States is closely tied to the future of our global partners, in particular our hemispheric neighbors. All Americans and all citizens of the Western Hemisphere benefit when our closest neighbors are peaceful, stable, and enjoying strong economies. Recognizing this, the Bush Administration is working to extend the benefits of the North American Free Trade Agreement to the entire Western Hemisphere. In addition, President Bush has introduced a number of initiatives that aim to strengthen democracy, facilitate free trade, and promote human capital development throughout the Western Hemisphere. Among these are:

· the Free Trade Area of the Americas (FTAA), which will extend the benefits of free trade to countries throughout the Hemisphere;

· the Third Border Initiative, which focuses on deepening the cooperation between the U.S. and the Caribbean on issues such as HIV/AIDS, disaster migration, and law enforcement;

· the Andean Regional Initiative, which is aimed at promoting stability and democracy in the Andean region through democratic institution building and counter-drug programs;

· the creation of three Centers for Teacher Excellence in the Hemisphere to boost teacher quality and the quality of instruction in the classroom by linking educators from around the region using Internet Portals; and

· the Inter-American E-Business Fellowship Program to give young professionals the opportunity to learn information technology while working at U.S. companies.

While the successful implementation of these initiatives can help enhance economic development and security of our region, I believe our efforts to work together should extend also to collaboration on key telecommunications issues. One of the ways we can achieve this is to strive for closer hemispheric coordination on spectrum allocation - and that's what I would like to talk with you about today.

Importance of Wireless Communications to the Americas. The Bush Administration is a believer that new technologies and the deployment of new networks are crucial to global economic growth and our citizens' well being. We are especially pleased to note that this ideal is being realized in Latin America where, thanks to the investments of companies such as yours, the number of wireless subscribers has risen from 59,000 subscribers in 1990 to nearly 60 million users today. In fact, wireless penetration has, in some parts of the region, surpassed wireline penetration. Through the deployment of new technologies and networks, wireless communications has enabled millions of citizens to benefit from basic telephone services for the very first time.

The advancement and proliferation of wireless communications in the region has also helped in responding to national emergencies and tragedies. In the United States, this was demonstrated most recently on September 11th by the wireless phone calls made to family and friends from passengers aboard the hijacked planes, by public safety workers attempting to keep abreast of the latest developments, and by thousands of others who were simply calling to let their loved ones know they were all right. Similar experiences have been reported in the region during and after such tragedies as Hurricane Mitch in Honduras and the crash of a charter plane in Argentina.

In addition to providing a mechanism to reach previously underserved areas in the Americas and providing crucial communications during times of crisis, wireless communications are playing an even greater part in the broader economic development of the region. As the U.S. wireless market continues to grow, the market in Latin America - widely recognized as the next big market for wireless services - is projected to rise from its current $15.5 billion to $39.2 billion in 2006. Consequently, I believe that, as a region, we must continue to embrace the widespread proliferation of these technologies and do what we can to support their advancement through closer coordination and system harmonization.

The Importance of Spectrum to Wireless Communications. At the crux of the development of these new wireless technologies is the need for spectrum. As you are all aware, spectrum - the backbone of wireless communications - is an already heavily encumbered resource. In my brief four-month tenure as the head of the National Telecommunications and Information Administration (NTIA), spectrum issues have been at the forefront of my priorities and the object of my personal attention.

One of the challenges placed before me has been to begin a review of the overall spectrum management policy in the United States. During this time of crisis, this task has become increasingly more important as I am forced to weigh carefully the demands of homeland security with those of the wireless industry and consumers. What I have discovered in short order is that a practical approach must be taken to develop spectrum policy. While I certainly have much work still to do in this spectrum policy review, certain basic principles have become apparent:

· First, spectrum policy must recognize that it is not practical to try to anticipate consumer demand or technological development - policies should be flexible to allow service growth and evolution. Such an evolutionary, technology neutral approach to spectrum licensing allows companies the opportunity to upgrade their services when market forces demand it.

· Second, spectrum policy must recognize the practicalities of running a business - certainty and predictability of regulation is essential to a company's ability to grow and succeed. The continued development of wireless services in the region requires that additional spectrum be offered in a non-discriminatory, transparent manner in order to secure further and sustained investment.

· Third, spectrum policy must recognize the practicality of limited government resources that cannot respond as quickly as the market - policies and requirements that are not necessary should not be imposed or should be eliminated if they exist.

· And finally, spectrum policy must recognize the practicalities of current spectrum use and the difficulties of changing the hand that we've been dealt. This doesn't mean we shouldn't be bold and aggressive in pursuing new and creative ideas for spectrum management. But, it does mean that, in doing so, we have the added challenge of figuring out how to transition from the current plan to any new spectrum management approach - and whether the benefits of such a transition outweigh the costs, particularly in a time of crisis.

The advancement of technology throughout the hemisphere places similar spectrum demands on all of us. Therefore, I am sure that the U.S. is not alone in its review of spectrum management policies. The global nature of communications requires that we all work together in this process by listening to each other and learning from our past successes and failures.

Status of U.S. Process to Identify Additional Spectrum for Advanced Wireless/3G. The challenge of managing the crowded spectrum to make room for promising new services is embodied in the current 3G debate. While finding appropriate spectrum for third generation wireless services is challenging for all nations, it is especially vexing for the United States. Nevertheless, the Bush Administration remains committed to meeting the challenge of finding the spectrum needed to serve the private sector's needs as well as those of our critical defense and national security services.

On October 5th, we made some progress in this direction by announcing that NTIA, the Department of Defense (DOD), the other Executive branch agencies involved in the 3G debate and the Federal Communications Commission (FCC) had agreed to a plan for conducting an assessment of the viability of making certain identified spectrum available for 3G services. This assessment will focus on the 1710-1770 and 2110-2170 MHz bands by NTIA and the FCC, respectively. This narrowed focus reflects a realization of the practicalities of the time frame within which spectrum needs to be made available, and the limited resources available to participate in the assessment in the near term. We expect to complete this assessment by the late spring of 2002. It will allow us to determine what our next moves will be with respect to an allocation for Advanced Wireless Systems, such as 3G, in the United States.

In addition, the FCC has embarked on a series of rulemaking proceedings to address advanced wireless spectrum requirements. These include proceedings to explore the possible use of mobile satellite spectrum for terrestrial use and the reallocation of some TV spectrum. Most recently, the FCC released an order that adds a mobile allocation to the 2500-2690 MHz band to make it potentially available for both advanced mobile and fixed terrestrial wireless services. The additional flexibility for use of this spectrum could lead to an evolutionary development of advanced wireless services in the 2500-2690 MHz band based on market forces.

As the United States' continues down this path to identify additional spectrum for 3G services, I firmly believe that the need to harmonize our decisions within the region is a key component of our domestic discussions. While we hope that you, our neighbors in the Western Hemisphere, will consider the bands we are currently studying, we will be consulting with you for your ideas on the best way forward.

Need for Better Hemispheric Coordination. While I have just laid out some of the things the United States is doing to figure out how to make room for new wireless services in the already crowded radio spectrum, I must emphasize that this type of planning cannot be done in a vacuum. International coordination, especially hemispheric coordination, is essential to arrive at the best solution that will benefit all. Clearly, wireless communications do not recognize borders so, at a minimum, coordination is necessary to prevent interference. But there's more. Coordination permits the development of economies of scale in the manufacturing and development of wireless systems, something which will benefit consumers in all of our nations through lower service and equipment costs and greater service and application diversity. A coordinated approach will also help to ensure that communications essential to our newly focused security and safety concerns are realized.

As a first step toward improving our hemispheric coordination, the Bush Administration is improving the U.S. government's own internal coordination. As you know, historically the United States international telecommunications policy activities have been divided among three entities: NTIA, the FCC and the State Department. This tripartite structure can be a bit daunting to our neighbors and friends interested in sharing ideas. To make it easier for this information sharing to occur, FCC Chairman Powell, the State Department's David Gross, and I have been working hard to develop a more thoughtful, coordinated U.S. government approach that appears seamless and fully integrated to our neighbors.

We will also be reaching out more frequently and directly to our neighbors in the Western Hemisphere to share ideas and exchange information about telecommunications policy and spectrum management. For my part, I plan to get to know and engage in an ongoing discourse with my counterparts in the various countries within this region. I have already reached out to the north, meeting with Canadian Assistant Deputy Minister for Spectrum, Information Technologies and Telecommunications, Michael Binder, earlier this month. I plan to have similar discussions with telecommunications officials of countries to the south in the upcoming months.

The U.S., through NTIA, also plans to organize a communications policy workshop for Caribbean telecommunications regulators to be held during the spring of 2002. We envision that the workshop will address spectrum management and licensing issues, among other topics. We hope this event will be a forum for exchanging lessons learned and tackling together some of the challenging communications policy issues we all face.

In addition, beginning next year, the U.S. hopes to intensify regional coordination as a part of our WRC preparations. This will involve our active participation in upcoming meetings of CITEL and the ITU. At all of these events where our paths cross, the Bush Administration will be focused on listening - listening and learning from you, our neighbors, as we share ideas.

Conclusion. The utility of wireless communications is now widely recognized for its effect on economic development. The recent events in the United States, and earlier throughout the region, have underscored the importance of wireless services. Now it is the obligation of policymakers and regulators to work with industry to ensure efficient spectrum management and service regulation so that wireless communications are available wherever and whenever needed. These objectives are best achieved through coordinating closely with our hemispheric neighbors. By working together and sharing ideas and experiences, we are better able to arrive at solutions that benefit all.