cr> Jim Lehrer interviews Reed Hundt (at length)


Richard Moore

I find this interesting, as it reveals the level of mentality and "cyber
vision" of some of the flunkies behind the Deform Act.  Notice that
technocrats don't need to be able to think, only to act from an
appropriately inculcated world-view -- sort of like Asimov's religionized
automatons in "I, Robot".


Date: Sat, 17 Feb 1996
Sender: •••@••.••• (Michael Richard Woolley)
Subject: COMMUNICATIONS and the new laws-rules-regulations

The following are segments about communications from "The News
Hour with Jim Lehrer"
        [Michael's comments are shown in brackets below.  -rkm]

Unfortunately, I have MCS (multiple chemical sensitivities) and
"live" in a van without packet radio or any other good
communication system so I'm hard to reach.  You can send replies
to cyber-rights or (•••@••.•••) and
I will eventually contact him.  Apologies for the spamminess.

                                        NEW CONNECTIONS

           [Image]                      FEBRUARY 8, 1996

A new era in telecommunications began today when President Clinton signed
the Telecommunications Act of 1996. (Margaret Warner reports on the signing

JIM LEHRER: Now, to the man who has much responsibility for making all of
this work. He's the chairman of the Federal Communications Commission, Reed
Hundt. Mr. Chairman, welcome.

REED HUNDT: Thank you very much.

JIM LEHRER: Many words have been used today and before to describe what
this bill or this law means to telecommunications in this country. Tell us
in your words in an overview what this means.

MR. HUNDT: I'd call it the "Invest in America Act,"
        [bizarre characterization]
...because the purpose of this bill is to open all communications markets
to competition
...and all the businesses as a result of that will be investing even more in our
communications sector.  The second investment we'll be making is in job
creation, because that competition
        [The new technology makes the jobs, the only way competition
has an effect is in taking power from stupid-evil capitalists and
private bureaucrats (good people will try to do the right thing
no matter what the decision-making system, private or public).]

...will cause overall a growth in jobs. And the third investment that this
new law makes is in our children because this new law makes real the
promise that the President asked us to all arise to in the State of the
Union in '94 and again in '96, specifically the promise to put
communications technology in every classroom of every school of every
county in this country [non-sequitar].

JIM LEHRER: So this--the words--the sweeping words are justified?

MR. HUNDT: The sweeping words are justified. The communications sector is
the big driver of our economy right now. It makes productive all of our
businesses. It's a seventh of the economy going to a sixth, going to a
fifth, to get right our policies in this part of the economy is crucial to
the country's success in the 21st century.

        [After reading all this interview, I don't think he is capable
of handling these responsibilities.  He seems to have very little
understanding of computers and electronics, as well as economics
(though he likes to spew inapplicable market theory).]

JIM LEHRER: All right. Let's go through some of the specifics
and, for instance, the first one, long distance, local phone
companies can get into each other's business. They can just go do that

MR. HUNDT: No. As you can well imagine, it's necessary for the FCC to write
detailed rules of competition in order to give people a chance to compete
in the currently monopolized Bell Company markets. That's a big job we have
to do at the FCC in the next six months.

JIM LEHRER: Six months?

MR. HUNDT: Six months for writing the rules of competition in the local
telephone market.

        [He doesn't get the concept!!!  The concept is connection of
nearly all computers to the internet backbone. Voice is a small
part.  Mr. Hundt is either living in the past and doesn't
realize that the new telephones are just computers connected to
the net or is being deceptive to so the telecom companies can
sell a proprietary telephone package in a low competition

JIM LEHRER: So if somebody wants to--is interested in the possibility, not
necessarily the reality but the possibility of their being able to choose
between two local phone companies, the one that's there now and another one
that's coming in, how long--conceivably how long could that be in the best

MR. HUNDT: Businesses can go into these markets right away, and you're
going to see some people get started right away,

        [huge capital is required to put in infrastructure, but in
reading the rest of the interview, he's not talking about more
conduits, rather some kind of competition between packages.
Bureaucratic bullshit.]

...but to really be successful in competing with the Bells, any business,
whether it's a long distance company or cable company is going to need us
to write rules of competition that allow the new entrant to connect to the
existing networks, to allow the new entrant a real chance to compete.

        [He's all mixed up.  "Existing networks" need to be connected to
the internet backbone.  Maybe he has some confused idea of the
hardware in a network.  He seems to have this crazy
"package"-"services" mentality.]

JIM LEHRER: The key to it is there's not going to be a--there's still only
going to be one line coming into your house, right?



MR. HUNDT: No. There's no telling how many lines there will be.

        [Deceptive.  This is a major problem.  By making this large
number of lines assumption, he can espouse the competitive market
theory he enjoys so much.  Below he acknowledges that the number
may be very small.  In actuality, few new lines will be added.]

JIM LEHRER: Is that right?

MR. HUNDT: There aren't going to be any rules on these things. We're all
going to have to get used to the fact that the future is not going to be
predictable, and it isn't going to be set by the big government model

        [Sure!  Companies can go out and dig up the street in any
arbitrary manner without gov't.  Hilarious!

        [Then he demonizes gov't, as is politically correct in some
circles, particularly big business circles.  He gives no details
about why gov't is bad in this case.  He doesn't acknowledge that
gov't communication policy has been perversely influenced by the
telecom companies in the past.  He doesn't note that internet is
a gov't project that is almost three decades old -- it's the
telecom companies and their bought regulators that are dinosaurs.]

JIM LEHRER: In other words, you could have a telephone line for long
distance calls, you could have a telephone line for local calls?

MR. HUNDT: You could. It's probably not likely. I think what's

        [So here he admits that all this competitive rhetoric doesn't
apply to what customers really want:  more bandwidth-time at
lower cost!]

...more likely in some homes is that you'll see different
companies come to you and offer bundled products. They'll say, try me, I'll
sell you your cable service and your local phone service and your mobile
phone service and your long distance and I'll give you the whole package at
a real nice price, and then somebody else will say, no, no, try me, I'll
give you the same package, and I'll give you a coupon for VCR tapes as
well. I mean, that's the kind of competition we're likely to see. There's
no telling how many actual wires or connections people will extend to your
house. The first thing you'll see when the rules really get written and
people really get started is that there will be different kinds of product
offerings presented to customers.

        [He's really an anti-competitive "packaging" nut!!!  The first
place any new conduits will be installed is in dense financial
districts where the profits are highest.  Suburbs will take a
while.  The inner city and rural areas will be last, if ever.]

JIM LEHRER: Now, the second thing is that they can also use their telephone
line for video. Is that--is that ability already there in the telephone
line? Is this going to require something new as well?

MR. HUNDT: Well, lots of invention is necessary before it's economically
practical to use a cable line and the telephone line to deliver the
opposite service, but what this bill says, I guess what this law says, is
go ahead and invent, there are not going to be any legal prohibitions on
what you can do with your invention.

        [He seems only to understand the market innovation model, not
the scientific research model.]

JIM LEHRER: So a cable company that wants to go into the
telephone business, they--let's say in a city, a particular cable company
has already wired this city for cable, and what's involved in their going
into the telephone business as well?

MR. HUNDT: Well, of course, today's cable line isn't going to deliver a
telephone call because it wasn't built to do that. So they would have to
rebuild that line, or the cable company would have to go out and contract
with a wireless company and offer you wireless service. Now, you're going
to see all of these things happening. You're going to see cable companies
in alliances with wireless companies and offering you wireless and cable.
You're also going to see cable companies knocking on your door saying, buy
this little box, it's called a two-way modem, it'll give you Internet
access over your cable line. That's going to be a big hot product that
you're going to see.

        [Maybe.  A better design would be to use cable for the backbone to
remote and wireless from remote to backbone.  Nearly always
much, much more data is going from shared memory to the remote

JIM LEHRER: Why? Why is that going to be such a big deal?

MR. HUNDT: Because Internet access is a booming market, because--

JIM LEHRER: That's already been proven. That's already there.

MR. HUNDT: Well, we're finding it out right now.

        [Gee, how surprising!!!  People want the best system to
communicate data, not the highly profitable silly "services" and
"packages" that telecom companies want to foist on them.]


MR. HUNDT: We didn't know it a year ago, but we're finding it
out right now, and the main thing about this law is that it
permits us at last to open the doors to uncertainty, but also to invention
and creativity, so it isn't going to be government that's going to be
answering the questions you're asking me. It's going to be competition in
the marketplace that's going to answer these questions.

        [Again he shows he doesn't understand the economics of research
and education.]

JIM LEHRER: But you still have to write all these regulations. Isn't that
kind of a--isn't it an oxymoron, we're going to deregulate this industry
but nothing can happen until you all write the regulations?

MR. HUNDT: Here's the change. For 60 years, the FCC and its counterparts at
the state level have been the supervisors of monopolies. We've been
regulating the prices. We've been looking at the books. We've been telling
them what they could do and what they couldn't do, and that era is over.
It's just like what the President said in the State of the Union when he
said the era of big government is over. Our role now is not to be the
supervisors but to be sort of the judges of competition, to write some
simple, fair, clear rules that'll make competition real and not just
rhetoric, but, otherwise, to get out of the supervisory role and let
businessmen and businesswomen make the decisions they need to make in
competition in the marketplace.

        [This statement only makes sense if there is really lots of
competition.  Again, the reality of communication-memory
economics says that making all the duplicate infrastructure
doesn't make sense.  I'd guess he's in his "package" mentality
with many competitive packages.  Of course, this is the way the
telecom companies want him to think -- all they care about is
profit, to hell with the community.]

JIM LEHRER: What's the single most difficult and important rule that you
must write and assume?

MR. HUNDT: Can I give you two?

JIM LEHRER: Sure. Give me--

MR. HUNDT: The first is this. Over the next six months, we need to get
right the country's policies for allowing different companies to connect to
each other's networks.

        [They all connect to the internet backbone, stupid.  Inter-net
IS the network of networks.  That's where the name came from.
That's the way it was designed.  That's what Compuserve, AOL,
Genie, etc., etc. finally figured out after they tried to foist
their anti-competitive schemes on customers.]

JIM LEHRER: Explain what that means.

MR. HUNDT: All right. For example, Bell Atlantic, great
company, has this huge network all over this region around
Washington and a bunch of other states.

JIM LEHRER: But it's still--it's local, mostly local telephone, right?

MR. HUNDT: It's all local telephone.


MR. HUNDT: It reaches essentially 100 percent of all homes, and they make
and receive 99 percent of all the telephone calls made in this area. Now,
if I want to go into the telephone business against Bell Atlantic, I might
be able to sell that service to you, but you want to be able to connect the
line I just sold you to the Bell Atlantic network, so that you could make
the call but have it go to a Bell Atlantic customer. You don't want to say,
well, you can't call anyone, because you're the only customer--because
you're on my phone company.

        [He's really out of it.  We went through these arguments in the
design of internet years ago (about two decades).]

JIM LEHRER: You're on one company and I'm on another.

MR. HUNDT: Yeah.

JIM LEHRER: But I want to call you.

MR. HUNDT: So you need to have the lines connect. You need to have two
competing networks connect. Everybody knows that you need to do it.

JIM LEHRER: So you have to come up with a rule that doesn't hurt Bell
Atlantic, at the same time helps the competitor compete against 'em?

MR. HUNDT: That's exactly the challenge.

JIM LEHRER: How in the world are you going to do that?

MR. HUNDT: Well, we're going to ask everybody their views, we're going to
force 'em all to debate it in front of us, and we're going to make a fair
call within six months.

JIM LEHRER: So the idea, though, is that Bell Atlantic will take a hit.
We're using Bell Atlantic as an example, but Bell Atlantic takes a hit,
because they have to share that, and, and potentially be competed
against--but they have free--if they want to go and go into the long
distance business, but that's a whole different ball game--how in the world
are they going to go into the long distance business overnight?

MR. HUNDT: Long distance is a different challenge here. Now,
what we're saying is, Bell Atlantic, you have a monopoly
network, and you need to open it so people can connect to it. That's a
narrow market.

        [Huh?  Open it how?  More twisted-pairs?  This is all


MR. HUNDT: As to long distance, we're saying, Bell Atlantic, as soon as you
comply with these fair rules that open your own market, then we'll consider
letting you into the long distance business. Now, that was the basic
compromise that the law reached. That's what got the big votes in the House
and the Senate, and that's what we have to implement.

JIM LEHRER: But as a practical matter then, let's move on to say AT&T--

MR. HUNDT: Sure.

JIM LEHRER: Or Sprint, or one of the long distance companies. What do they
get in exchange for letting say Bell Atlantic--do they have to let Bell
Atlantic come in and use some of their lines and some of their switches and
networks and stuff?

MR. HUNDT: When Bell Atlantic or any telephone company demonstrates that
it's complied with the basic rules of opening themselves to competition,
then they get to go into long distance. What the long distance companies
get out of this is the chance to compete in the local phone markets where
they have been prohibited over the last ten years.

JIM LEHRER: But how does, as a practical matter, how does Bell Atlantic get
into the long distance business without going into business with one of the
existing long distance companies, without having to wire the whole country?

MR. HUNDT: Well, lines run everywhere so you can make alliances, you can
build your own systems, you can partner up. Finding potential opportunities
to build networks is not really going to be the problem here.

        [So now he's admitting it -- we aren't adding any competition, we
are just playing bureaucratic and financial games!]

JIM LEHRER: Partner up. All right. Is it possible say for a Bell Atlantic
to partner up with an MCI, partner up with a large cable company, or a
local cable company, and maybe a, an on-line company and do it all one big

MR. HUNDT: What you're asking here is the question of the moment. All the
different businesses are trying to figure out which alliances are best for
them in the competition that is exploding as of about five hours ago. And
it is definitely occupying everybody's late-night hours in the headquarters
of the companies and the Wall Street financiers are trying to figure out
which venture is the best one to bankroll, and this is the excitement and
the exhaustion of competition.

        ["Package" competition, not useful competition to optimize
bandwidth-time price and quantity.]

JIM LEHRER: But what, the question--there is nothing, no rule that you're
going to write that's going to prevent that from happening, is that right?
In other words, this law says that such, that these partner up things under
any combinations are possible?

MR. HUNDT: Well, the Department of Justice and the FCC are going to do
their darnedest to make sure that we don't let monopolies get
re-constituted. But having several different, lots of different businesses
compete to build national or regional networks and compete against each
other, that's a good thing. That's more choice, and that gets back to what
I was saying before, that's investment, that's jobs, and then the second
thing you let me say I can tell you was the most important part was the
part of the law that gives us the ability for the very first time to create
incentives that will guarantee that communications technology is in every
classroom of every school in the country. Now--

JIM LEHRER: How do you do that?

MR. HUNDT: Well, we haven't developed all the techniques yet, but the law
gives us a range of different tools. This is a very important provision.
Credit needs to go to Senators Rockefeller and Snowe and Kerrey and Exon
who authored it on the Senate side. Acknowledgements need to go to the
President who asked for it in the State of the Union and if you let me say
so, we need to hark all the way back to Sen. Gore, now our Vice President,
who talked 20 years ago about building the information highway from
Carthage, Tennessee, to the Library of Congress. For the very first time,
we have a law that permits us to create incentive schemes that will give
companies a financial motivation to put their networks right into

        [Handwaving.  Seems every time Jim asks him a question which gets
to the fundamental errors in this package competition philosophy,
he spews a little competitive market theory (always assuming that
magically it applies).  He also is confused about CHOICE. Choice
is absolutely necessary for the market to function well -- the
more choice, the more competition, the more efficiently the
market functions.  The very competitive market gives workers as
little as possible and forces good decisions.  Choice **ISN'T**
some wonderful by product of using the market.]

JIM LEHRER: Wow! We've just scratched the surface here, but
before we go, the V-chip thing, this is something that, all
right, the law requires all new television sets to have V-chips. Let's say
that I have a TV set and I have small children, I dont want 'em to watch
violence tomorrow, can I go out and buy a V-chip and put it in my TV?

MR. HUNDT: Well--

JIM LEHRER: My existing TV?

MR. HUNDT: You can go and do that, but what's missing right now is a
commitment from broadcasters to give us ratings about their shows. It's
still necessary for somebody to describe the show in this cyberspace world
of transmissions so that the chip in your TV can identify it as
inappropriate for kids. Now, that's one of the--

JIM LEHRER: The chip is actually--oh, oh, this is dirty, boom, turn it off?

MR. HUNDT: The chip will read whatever information is sent to it, so if the
broadcaster says this show is inappropriate for kids, too much violence,
then the chip would turn it off. Now, what we're talking about here is very
simply let's give parents the power to choose and something to choose.

JIM LEHRER: But do those chips exist now?

MR. HUNDT: Yeah. The chips exist.

JIM LEHRER: And so what does not exist is the stuff that the chip has
to--bad word--that the information that the chip has to read in order to

MR. HUNDT: Exactly right.

JIM LEHRER: Is the chip expensive?

MR. HUNDT: No. The chip isn't expensive, but it really will
only be truly affordable when it is in every television so
that the economies of scale will lower the price to a dollar or two. But,
as I said, the missing element here is the country needs broadcasters to
say, yeah, if the technology is there, we will give you the information, we
will voluntarily describe our shows the same way the movie industry
describes the movies.

        [Why not use software?  There are already many screening programs
around.  He doesn't even mention it.  A competent teen will get
around the V-chip.  Covering up?]

JIM LEHRER: Mr. Chairman, thank you, and good luck. MR. HUNDT: Thanks a


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