October 1, 2007
I appreciate the opportunity to join you today. What a day you’ve already had with appearances by Governor Strickland and Congressman Space.

Your state is giving extraordinary leadership to this country at such an important moment in its evolution. One of those areas of leadership is to advance the nation’s broadband future and the opportunities it brings to all Americans. This goal is essential to the economic, security and quality of living aspects of our nation. It will take real leadership to advance policies that encourage investment and innovation.
So I appreciate this opportunity to come together and talk about how we get there.

Your state’s leadership to advance these collective interests, both here and in Washington, does not go unnoticed.

Governor Strickland…who understands the central importance of broadband and is working hard to ensure its opportunities are available to everyone here in this great state.

And, your new Congressman, Zack Space, is already making his mark, emerging as a leading voice for rural broadband deployment. It’s an essential cornerstone of a successful US innovation policy. It needs a strong champion. And, it has one in Congressman Space.
He understands that constructive approaches can make a real difference in people’s lives….sustainable solutions that encourage investment in our broadband future.

Ohio has a bumper crop of leaders in the industry as well. Your incoming Chair, Mike Conrad of Champaign Telephone, is currently serving on USTelecom’s Executive Committee and Board of Directors. He is also a leader by his service on our USTelecom Leadership Committee where he serves as Chair of the Nominating Committee. This committee will soon be taking nominations for new members and I hope that if any of you are interested in this you will talk to Mike.

The companies have made great strides over the past year with the recent culmination of our Executive Business Forum in San Jose earlier this month. Mike has made extraordinary contributions to our industry and its central role in the US digital economy.

USTelecom’s current chair Skip Frantz, the Chairman of Windstream, lives in Arkansas, but he’s 6th generation Ohioan. And, Ellen Martin, of Embarq. Both OTA and USTelecom are fortunate to share some very important leaders of our industry.

Finally, your state association, with it’s 112 year history, the first telecom association established in this country, with more than 40 telecom providers, serves as an example of how strong our industry is on the local, state and national levels.

If there is a theme this morning…. It is broadband deployment and the associated enrichment of people’s lives. Broadband service providers will invest some $70 billion this year to expand and upgrade North American communications infrastructure. Unlike other countries, our leadership has been established largely through private sector investment. In no small part, due to government decisions that opened broadband to market-based competition and investment from diverse companies, Americans enjoy arguably the world’s most competitive and diverse broadband market…

with cable, telecom, wireless, even power and municipal partnerships all in the mix…and new choices joining the fray it seems almost every day.

We need to encourage deployment and investment and, where necessary, partner with government agencies and others to reach all Americans. Even in these divisive times, there is real bipartisan consensus emerging on the importance of broadband. Speaker Pelosi’s Innovation Agenda calls for “affordable broadband access for all Americans.” The Republican High-Tech Task Force wants “widespread deployment and use of broadband technology.”

By 2010 the web traffic generated by 20 homes —just 20 homes—will equal the capacity demands of the entire Internet in 1995. And, as long as we continue policies that encourage investment, this broadband usage is good news. The US has one of the largest broadband populations on earth—about 60 million households—rivaled only by China. That’s a 21% leap in broadband adoption just in the past year .

Broadband video certainly is a big driver of investment today. So far 18 states – covering about 60% of the US population — have put franchise reform legislation on the books. We’re grateful to Governor Strickland and the state legislature for doing just that here in Ohio…

recognizing the benefits to consumers of real competition and the incentive these reforms create for greater broadband investment. Another 9 states—representing another 20% of Americans—have introduced bills this year. So we hope to continue making progress in this area.

That said, entertainment is just one small piece of the puzzle. The truth is: We have barely scratched the surface of broadband’s full potential—for our economy and for our quality of life. Think of this…

The employment growth that is possible with universal broadband? 1.2 million US jobs.

Health care, a topic we all care about. Secure, automated medical records can save lives and dramatically control costs. It can make possible a revolution in patient care. And, imagine the peace of mind knowing that so many of our aging parents can get the care they need from the comfort of home with regular in-home health monitoring.

On the education front, we can put bright, curious young minds together with our best teachers, no matter where they live and use innovative, interactive new tools. They can truly see the world from whatever part of the country they are in.

We want and need a cleaner environment. More sophisticated telecommuting options can create opportunities for young parents who want to stay close to home…
keep more cars off crowded freeways…and reduce our dependence on foreign oil. The 3.9 million telecommuters we already have in the US are saving 840 million gallons of gas each year.

And, our information economy? Broadband can bring its reach into any community, leveling the playing field, creating jobs and fueling the entrepreneurial spirit of our nation. It’s a big opportunity, nowhere more so than in rural America.

We are extending broadband’s reach. African American home broadband adoption has nearly tripled in the past two years, going from 14% to 40% . 66% of Latinos with home Internet access now use broadband .
We have the most progress still ahead of us in rural communities, where deployment costs are so much higher. In rural America about 20% of the US population is spread out across 80% of our nation’s land mass. With that comes high costs for deployment. Here, there is a particular role for government. There’s room for more public-private partnerships that get at the diverse challenges holding back further broadband adoption.

While we work to extend the reach of broadband, we need to make sure that the government programs we do have are operating as effectively as they can. Here significant credit is due Congressman Space.

He was a key player in the House passage of the farm bill, sponsoring an amendment to enhance the Department of Agriculture’s rural broadband loan program. Congressman Space’s amendment ensured this program is doing everything it can to help bring private investment to more rural communities….extending the terms of government loans, reducing duplicative red-tape…making it easier to actually secure these loans. This is something we haven’t had enough success with so far in this young program’s existence. Congressman Space’s amendment will help change that.

Another extremely important issue that could have a tremendous impact on broadband access in this country is the Internet tax moratorium.

You don’t increase broadband access by raising the cost of broadband by 20%. But that’s just what would happen if your customers see Internet tax bills. We have a tax-free Internet today. But the current moratorium is set to expire in precisely one month. Reflecting the overwhelming views of their constituents, most of our leaders in Washington agree that it needs to continue, but we have to move quickly to get the legislation passed; through the House and the Senate and to the White House.

A strong pipeline of investment also requires an overall healthy, stable and growing industry. One of USTelecom’s primary policy goals is to protect the integrity and stability of intercarrier compensation.

We’ve been aggressive in urging the FCC to shutdown various arbitrage schemes that threaten to erode the existing access charge regime. We’re also working hard to shore up the future of universal service…making sure all these new competitors are contributing their fair share into this national commitment…and also making sure there is discipline on the distribution side, so we can keep the growth to sustainable levels. It’s complex, technical work…but important work. We may be in a new digital era. But the importance of keeping all Americans connected has grown, not dissipated. And, we are working to craft practical solutions.

You have heard about efforts to not only tax the internet but regulate it. Some call it net neutrality.
Good try on their part, but what they are really calling for is net regulation. There is a good story out there. For consumers, prices for broadband access are coming down while speeds are picking up. You have the freedom to go where you want to go on the Internet—to the content of your choice—what you want, when you want it. Innovation is driving new applications and services almost every day. We believe regulating the internet, when there is simply no compelling reason to do it, would be the most anti-innovation policy ever.

So far, cooler heads have prevailed. Not only do you see the Federal Trade Commission and the Department of Justice stepping forward and saying this is a bad idea for consumers and for our economy, you also see a wide array of constituencies banding together…
groups who represent people who have so much to gain from rapid, robust advances in broadband capacity and innovation…folks representing Americans with disabilities….education and health care groups…senior citizens and minorities…emergency first responders…rural organizations, and many more.

This isn’t a small company/large company issue. This is an issue that could affect each of these constituencies… in fact could affect us all. We need to stand together to make sure people understand what is at stake for innovation, consumer choice and extending broadband’s reach.

If you want to learn more about this issue or get involved, I encourage you to visit our website—nextgenweb.org.

There you will find information about the promise of the broadband future…about the innovative public-private partnerships that are helping make it a reality across America…and you’ll hear a wide array of leaders raising their voices to speak out against regulating the Internet.

On all of these vital issues, our messages for the both the advocacy and business worlds are about the importance investment and deployment. We want policies that welcome everyone who is willing to invest…policies that embrace a diversity of technologies and companies and content. We believe that broadband has a revolutionary potential to advance not only our economy, but our lives…education for our kids…health care for our parents…a cleaner environment.

We are proud to help make this progress possible, and we look forward to working closely with all of you, your Governor, Representative Space and leaders in Washington, to help our nation make the most of the broadband future.

I want to thank you again for allowing me to be a part of the discussion here in Ohio and wish you all the best for a successful conference.

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