SUMMARY NII Open Access Hearing Sunnyvale, California, May 13, 1994 Introduction In the Clinton Administration's policy blueprint, National Information Infrastructure: Agenda for Action, released September 15, 1993, the National Telecommunications and Information Administration (NTIA) was directed to convene a series of public hearings designed to "gather information on the best characteristics of an expanded concept of Universal Service." The first two hearings focused on the future of universal service. In Albuquerque, New Mexico, on December 16, 1993, NTIA focused on the needs of rural communities. Then in Los Angeles, California, February 16, 1994, NTIA shifted to an urban setting. The third hearing in Durham, North Carolina, on April 27, 1994, changed the focus of the first two hearings to discuss how to promote access to the National Information Infrastructure (NII) to best meet the information needs of our citizens. At each hearing, NTIA received testimony from state and local governments, public interest groups, industry and academia on issues relevant to an expanded concept of universal service. Summaries of these hearings are available on the Information Infrastructure Task Force (IITF) computer bulletin board. The IITF bulletin board can be accessed by calling (202) 501-1920 using a personal computer or modem. For access through Internet, point Gopher client to iitf.doc.gov or telnet to iitf.doc.gov and login gopher. Comments may be sent by e-mail to nii@ntia.doc.gov. Sunnyvale Hearing On May 13, 1994, NTIA and the California Public Utilities Commission (CPUC) conducted a public hearing on the topic, "Innovation and the Public Interest: Open Access to the Information Society." In this fourth hearing, NTIA changed its focus slightly from the previous hearing to examine how to promote open access to the NII to best include the public interest and entrepreneurial community. The hearing board for the Sunnyvale hearing included Deputy Secretary of Commerce David J. Barram and Assistant Secretary of Commerce for Communications and Information Larry Irving; CPUC Commissioners Norman D. Shumway and Jesse J. Knight; and Commissioner Andrew J. Barrett of the Federal Communications Commission (FCC). Over 250 public attendees were present, and the board heard testimony from 50 participants, including 20 scheduled panelists. Opening Remarks Serving as moderator, Assistant Secretary Irving opened the hearing by introducing the Mayor of Sunnyvale Frances Rowe. Ms. Rowe asked the federal policymakers and regulators to keep in mind the role of the city as "the frontline of public service" when developing the NII. Ms. Rowe then introduced the hearing board. Secretary Irving thanked Mayor Rowe and the City of Sunnyvale for their help in organizing the hearing. Secretary Irving also summarized the topics discussed in the previous hearings. He ended his opening remarks by posing the following questions: How do we ensure that providers (small, entrepreneur, public, corporate, and university providers) can meet the needs of the people that they serve? How can we ensure that consumers can exchange information and become providers? And, whether transport providers should be obligated to provide access and what are the legal and practical barriers to such access? Deputy Secretary Barram noted the importance of Silicon Valley as a large source of the technology. He explained the difference between universal service in the development of the NII, (making sure everyone is connected) and open access (how we use the connections). Also, he stressed the importance of open access as an important part of the long-standing national policy embodied in the First Amendment, to promote a diversity of ideas and fair competition in the free flow of information. Deputy Secretary Barram closed his remarks by posing the following questions for discussion: Who has access? Who does not? Who are the information providers today? How are they able to reach consumers? What factors help or hinder network access for information providers and users? How can we remove obstacles so information flows freely from information provider to transport provider to user and back again? And, what is government's role in ensuring access and spurring innovation? Commissioner Norman D. Shumway of the California Public Utility Commission noted the importance of the hearing. He said that the biggest challenge to the NII is how to offer maximum amount of choice and how to integrate different uses. Commissioner Jessie J. Knight presented three main points for consideration: foster relentless innovation, promote diversity in the range of services, and ensure affordable and widespread access to California's public network. Federal Communications Commissioner Andrew C. Barrett acknowledged NTIA's work in putting together the hearing. PANEL 1: Who has access? Who doesn't? M. Strata Rose, UNIX & Network Consultant, SysAdmin & Internet Information, Virtual City Network Project, stated that in terms of pure physics, bandwidth should be infinite. She noted that there are no physical laws, unlike with spectrum, that preclude creating additional bandwidth. She equated the personal computer (PC) to the telephone, but noted that a PC could supply a lot more, such as pictures and text, as well as audio signals. The question is "How much bandwidth does the average person need?" Should this person have access to full motion video, or is simple text adequate? Rex Mitchell, Vice President, Regulatory Planning and Policy, Pacific Bell, maintained that access was good and getting better. He called for free and open competition, to the maximum extent possible, in the provision of telecommunications services, and noted that legal and regulatory barriers that prevent competition should be removed. Where regulation is necessary, he believed it should be applied in an equitable manner. Furthermore, he believed that the one area where regulation may be appropriate is in interconnection, and in addressing what standards and functions should be used. He noted the enormous and beneficial effects of lifting the MFJ restrictions. Dan Pulcrano, President, Virtual Valley, Inc., equated a newspaper editor to a content provider, and called the "infobahn" both a threat and an opportunity. Small newspapers, when competing with large conglomerates, need a level playing field, according to Mr. Pulcrano. His newspaper had been denied access on many networks, so the paper bought its own server and started posting many different things, and had enabled many diverse groups to get on-line. He noted that the new telecommunications age should not shut out the small guy. Leslie L. Vadasz, Senior Vice-President, Intel Corporation, claimed that the most important access point was the PC, because of its interactive nature. More and more PCs are being used in homes, he noted. To more effectively use the PC as a communications device, however, more bandwidth is needed. He called for the rapid introduction of ISDN. Milton Chen, Ph.D., Center Director, KQED Center for Education and Lifelong Learning (CELL) KQED-TV, Inc., pronounced that public broadcasters are an essential component of the NII. He focused on some important questions, such as, what society intends to do with information technology, who are we, what do we seek to become? Mr. Chen asserted that the most important thing for information technology is community building. Legislation that mandates a public right of way on the NII is essential. Commercial use of the public switched telephone network and spectrum should help fund the public right of way. Other important questions that Mr. Chen pondered were on such matters as clearance of intellectual property rights, resolving difficulties in human access, and educating the public so they can see value in these services. Kari Peterson, Executive Director, Davis Community Television, Secretary Alliance for Community Media National Board of Directors, and President, Davis Community Network, noted the importance of the Public, Education and Government (PEG) channels in providing barrier-free communication for all groups. She cited as an example the fact that many immigrant and minority groups have produced programming, helping to create localism and build community. Ms. Peterson called for a ten percent (10%) set-aside of all bandwidth for PEG channels, as well as additional funding for outreach and training, and dedicated production facilities. Henry Der, Executive Director, Chinese for Affirmative Action, claimed that the current definition of "universal service" is inadequate, and should include "affordable access to the intelligent network." Also, he called for the term "services" to be defined by law. Mr. Chen noted that information technology can and should prevent further social stratification. If access is purely market-driven, however, then he feared that many will be disenfranchised. Without government intervention, according to Mr. Chen, information technology will not inherently foster access, and will continue to benefit only the rich. Thus, he called for more government subsidies and other types of support. Questions from the Hearing Board Deputy Secretary of Commerce David Barram asked the panelists how government would fund all these subsidies -- through an increase in taxes, or some other government fund? Chen recommended a statutory fee on commercial broadcast use of the spectrum and a tax on television and radios. Peterson suggested that the cable model was useful and advocated franchise fees. Audience Comments Liz Kniss, Mayor of Palo Alto, spoke about the City of Palo Alto being accessible to the public through the internet. Marianne Mueller, representing herself, stated that public access can be facilitated by funding libraries so that librarians can be trained to use the Internet and other services on the NII. Catherine Hung, West Valley - Mission Community College District, suggested that the government should help unite small service providers so that they may work together; recycle outdated equipment; and continue its social vision of focusing on the community. Bob Roy, Wireless Communications Alliance, expressed concern that one service may dominate the NII. He also believes that the convergence of cellular, paging, telephone, and other systems will lead to more efficient uses of the NII. Mark Roest, NGIN Research, expressed concern that there will be a division of information haves and have nots on the NII. He would like to see the NII architecture reflect reality and pointed to the Dewey Decimal System working for libraries, as an example. Dave Crocker, representing himself, stated that there needs to be a level playing field for consumers and service providers of the NII. He also recommends the Internet model for the NII. John Powell, Association of Public Safety Communication Officials International, expressed concern for state and local rights. He said that part of the spectrum should be allocated to state and local governments, so that public safety services, such as fingerprint scanning, may be utilized. Norman Jayo, Editor, Media Arts and Information Network, stated the need for everyone to be "media literate," in order to utilize the NII. He is especially concerned with training low income persons. Charles D. Evans, HFV-TV, Independent Rural Cable TV, expressed concern that the NII will take longer to implement in the rural areas because of the possible increased cost to connect a rural rather than a denser urban area. PANEL 2: What factors would help or hinder network access for information providers and users? John F. "Jeff" Rulifson, Director, Technology Development Group, Sun Microsystems Computer Corporation, stated that intellectual property rights are hampering the development of graphical user interfaces (GUI). He called for barrier-free access and barrier- free GUIs. Also, he believed that the industry standards-setting bodies will not be able to resolve this problem. Therefore, the federal government should use its purchasing power, post a list of barrier-free interfaces, and require agencies to buy from that list. Leslie Saul, Public Policy and Education Projects Manager, Smart Valley, Inc., called public institutions, like libraries and schools, "information equalizers," and noted that these institutions should be the focus of the NII. She claimed that there are attitudinal barriers to access and used the example that parents are worried that emphasizing information technology may degrade the "three Rs." She also acknowledged that children sometimes do access "bad things." Stephen Adams, Founder, Adamation, Inc., advocated a three-tier system of access pricing, similar to the first, second and third class tiers of the U.S. Postal Service. He stated that he would like to see a dialtone for high capacity use. In talking about access disparity, he noted that the PC may not be the proper metaphor. He noted that millions of inner-city youths, who had never used a PC, had similar amounts of processing power in their Nintendo and Sega games, and suggested that such devices might serve as a model for providing access. Susan G. Swenson, President, CEO, Cellular One, said that the cellular industry was replicating the landline network, but not replacing it. She noted that most of the barriers for the cellular industry have been regulatory and she used, as an example, the fact that it takes about 13 months to get a cell site permit. She also stated that standards are preventing access and that she was not sure of what government's role should be in setting standards. She noted that a cellular industry consortium worked to develop standards for data packet switching, which was a good example of industry overcoming barriers. Bill Mitchell, Director, Electronic Publishing, Mercury Center, San Jose Mercury News, declared that the big challenge is determining what type of compelling content will draw people to the NII. He theorized that once the content is compelling, people will be drawn to use the NII. Deborah Kaplan, Director, Division on Technology Policy, World Institute on Disability, expressed the need for equipment manufacturers to develop NII products for the disabled. She stated that, if such design factors are considered up-front, outfitting the NII for the disabled need not be expensive. She termed this concept "Universal Design." Lastly, she called for the Administration to encourage and promulgate guidelines for inclusion, and for the FCC to respond to disability concerns. Audience Comments Dianah Neff, City of Palo Alto, expressed concern that service providers and users will be hesitant to use the NII if security issues are not resolved. Also, she called for training, so that people can get comfortable with technology used on the NII. Edward J. Radkowski, Northern California Health Care Technology Alliance, stated that health care costs can be significantly lowered if there are interactive, on-demand networks on the NII, which can provide a patient's complete medical history. However, Mr. Radkowski would like the government to regulate the telephone companies so that they do not have access to highly confidential medical records. Gary Shultz, Multimedia Research Group, stated that a barrier to the development of the NII may be lifted by allowing telephone companies and cable operators to be broadband carriers. Also, he felt that entrepreneurial service providers should be encouraged on the NII. Dennis Bugdahl, College of Siskiyous, expressed support for the open access principle, but believes that the cost of phone service in rural areas is a barrier. Ralph Gillman, Sunnyvale, Calif., stated that one barrier to deployment of the NII is the conflict over whether telephone companies or cable companies will control access to the NII. Also, he believes that this problem can be solved by allowing more user control of regional projects. Judy Clark, Computer Professionals for Social Responsibilities, advised the panel to look to community and local networks, as well as large networks, when designing the NII. Helen Hernandez, representing an Encino government affairs firm, expressed concern that minorities and women will not have access to ownership of service providers. She also stressed the need for all Americans to receive training, in order to become familiar with the technology used on the NII. Solomon B. Hill, Computer & You program, Glide Memorial Church, expressed concern about what type of access the homeless will have to networks. He stated that providing homeless children with access to network technology will empower these children. However, the benefits derived from giving homeless children access will not be known until the children can engage in communication through the network. Peggy Lu, Net Manage Inc., stated that security on the NII is her primary concern. She believes that there must be development and implementation of technology that would guarantee that information and payment for services is kept confidential. PANEL 3: What is government's role in ensuring access and spurring innovation? David S. Holub, President of Operations, hooked (a small Internet Service Provider), called for the government to assure small businesses that they will have equal access to the mechanisms that deliver the information services to the public. Mr. Holub's main concern was that small businesses will not survive economically and technologically, if the federal government spends too much time working out rules to regulate telephone, video, and hybrid service providers. He stressed that the government has a role in maintaining competition among service providers, including competitive access providers (CAPS). Jim Bidzos, President, RSA Data Security, Inc., advocated the use of encryption and digital signature, in order to protect and authenticate electronically-generated documents. He urged the government to adopt this technology. Edward M. Spivak, Regional Vice President, First Pacific Networks, Inc., called for the government to pass and/or lift regulations, in order to allow full competition for two-way broadband services. He claimed that this would enable the service provider to bring down the cost of service, which will in turn result in the expanded deployment of services in rural areas. Specifically, Mr. Spivak called for unbundled rates for interconnection and for the government to expedite the rulemaking and appeals process. Lastly, he urged Congress to clarify the legislative intent of new laws (particularly, which are federal and state powers). Elaine Lustig, Staff Attorney, Corporate and Regulatory Affairs, GTE California, Inc., declared that government regulations should foster the development of a combined free enterprise/common carrier model in the telecommunications industry. She explained that this would require service providers to set their prices according to the underlying costs and market conditions for each service. She called for regulations to be lessened where there is competition. Where there are no service options, she called for the implementation of price caps, in order to prevent the service provider from pricing its services above the cost-based price. Ms. Lustig claimed that price caps would prevent the subsidization of other services, as well as allow other service providers to enter the market. She also stressed the importance of the following points: Regulatory parity; the common carrier model; assurance of open access to all information providers; and minimal regulations (in order to encourage service providers to deploy high capacity technology). John Siegal, Senior Vice President, Chris Craft/United Television and Chairman of the Television Board of Directors of the National Association of Broadcasters (NAB), stressed the need for the FCC to review and modify the national and local broadcast ownership rules, in order to promote competition amongst and between telcos, cable television operators, satellites, broadcasters, and other media. He expressed concern over the concentration of access to information and supports the "in-region buyout" prohibition (which prevents telcos from acquiring more than a five percent interest in an existing non-affiliated cable system in its service area). He also supported protection of competition through policing and imposing penalties on anti- competitive behavior; protection of regional programming; regulation of telcos as cable television operators, if they offer video programming; and provision of video programming by telcos on a common carrier basis. Dale Bennett, Regional Vice President, TCI Cablevision of California, Inc., stated that the government should encourage competition between multiple service providers, provide consumers with choice and access, protect consumers from monopolies, and spur innovation. He called for lifting all legislative barriers preventing competition in the local exchange market. Lastly, Mr. Bennett urged the government to establish the same regulations for telcos and cable companies providing the same service. John Gamboa, Executive Director of Latino Issues Forum and Co- chair, Greenlining Coalition, expressed concern that minorities, especially the Hispanic community, will be left out of the NII. He called for the government to make service providers demonstrate that low income persons will not be excluded from the NII. Summary Remarks by the Hearing Board Commissioner Jesse Knight CPUC asked the panel what the CPUC must do to prepare itself for the NII. Mr. Bennett expressed his desire for TCI to be able to enter the marketplace that the CPUC regulates. Mr. Siegal commented that he does not want TV signal carriage over cable or telephone wires to resemble MCI's struggle to enter the long distance telephone market. Ms. Lustig noted that the CPUC's regulatory process of long hearings with large participation is detrimental to the deployment of the NII, because it delays action. Mr. Gamboa stated that the CPUC must get input from minority grassroots organizations and believed that the CPUC's intervenor payment system has punished the Hispanic community, because it has not allowed the community to comment, as it wishes. Ms. Lustig added her desire for a less contentious system. Deputy Secretary of Commerce David Barram asked Mr. Spivak whether HFS allows cable companies to interconnect with other cable companies and telephone companies. Mr. Spivak answered that the technology is available and claimed that broadcasters, too, can interconnect with cable. Mr. Bennett commented that TCI can also interconnect, but regulations are holding up interconnection. He noted that TCI could not interconnect on a switched basis, because cable delivery of telephony remains impermissible. FCC Commissioner Andrew Barrett asked the panel whether there can be interconnection by satellite. Mr. Bennett said that it is technologically possible for one-way interconnection, but that two-way interconnection has not been explored. Mr. Holub expressed his interest in knowing whether newcomers will be able to interconnect. Assistant Secretary of Commerce Larry Irving asked whether there was opposition to the four principles Ms. Lustig presented. Mr. Bennett wanted to know how content will be treated. Mr. Siegal added that telcos carrying video programming should be subject to must carry regulations. He did recognize that broadcasters could pay a fee to video carriers in order for them to carry their programming. Also, he believed that all free programming services for consumers must be carried by all video providers. Mr. Irving asked Ms. Lustig what responsibilities should information providers have with regard to interconnection with classrooms and schools. Ms. Lustig responded that information providers already do offer free services to schools. Mr. Irving also asked the panelists for their thoughts on availability/provision of navigational tools. Mr. Bennett commented on the TCI project with Sega to develop less expensive navigational tools. Mr. Spivak commented about the need to have low cost navigational tools by pointing to the U.K., where First Pacific Networks sells their processor for $10. Mr. Siegal expressed his concern about where the device providing access to service is located. He said that he does not want there to be a headend gatekeeper; instead, access to information should be a memory device located at the home. Audience Comments Mr. Richard Pettinato, CEO of Media Captioning, expressed concerned over his eligibility for a NTIA/TIIAP grant as a for- profit organization. Mr. Irving addressed his concerns by encouraging him to form a partnership with a non-profit organization in order to qualify for the grants. Mr. Landon Noll, Council Member - City of Sunnyvale, encouraged the government to adopt cryptology and develop standards for its use. Mr. Stan Kawzynski, Sunnyvale City Council and League of Cities, expressed the League's support for competition, but would like cities to regulate providers in a way that is similar to the franchising agreements with cable operators. Mr. Kawzynski added that cities should be allowed to regulate video providers locally, because these providers use rights-of-way. Mr. Steve Cisler, Apple Library of Tomorrow, expressed concern about the lack of government attention to training novice users and to interfacing with low power providers. Ms. Lynn Purvis, Sierra Planning Organization, expressed concern that rural America will not have the economic resources to participate in the NII. Mr. Thomas Long, TURN, questioned what the cost of the NII will be and if it is worth the price. Mr. Michael Morris, TCG, stressed the need for local competition. Ms. Mary Clair Sprot, California Library Association, urged continued governmental funding for libraries, so that they can provide access to the NII, as well as training. Mr. Joe Hamilton, Fremont Union High School District, advocated that schools should have low, or no, cost access to the NII. Ms. Jean Kwan, Board of Directors of Oakland High School and representative of the Asian-Pacific Community, expressed concern about access to the NII by low-income schools and children. Mr. Tim Hyland, Oracle, encouraged government to include entertainment applications on the NII. He said that novice users, who fear technological innovations, will be drawn to entertainment applications and, eventually, may tap into educational applications. In closing, Mr. Irving thanked the panel and audience witnesses, members of the hearing board, and technology demonstration participants for their contribution to the hearing.