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Subject: COMMENTS BY JOHN YOUNG, CHAIR, SMART VALLEY, INC.
To: svp@eitech.com
Item Subject: CPUC
The following is the written submission to the California
PUC. John's verbal remarks followed this pretty closely.
We sent them copies of the Council on Competitiveness Report
on 21st Century Infrastructure, the Smart Valley vision
paper, and copies of the Harvard Business Review article
on Singapore.
Seth
----------------------------------------------------------
CALIFORNIA PUBLIC UTILITIES COMMISSION
HEARING ON CALIFORNIA'S TELECOMMUNICATIONS INFRASTRUCTURE
COMMENTS BY JOHN YOUNG, CHAIR, SMART VALLEY, INC.
July 1, 1993
Introduction
Good afternoon President Fessler and distinguished members
of the Commission. I want to thank you for this opportunity
to meet with you. I also want to thank you for allowing me
to attend this meeting by videoconference, greatly
contributing to my productivity by saving me a trip to
Sacramento, and to my quality of life by giving me more time
with my family. This use of communications technology to
support workstyle and lifestyle improvements is exactly what
the Smart Valley plans to promote.
I am speaking to you today as the Chairman of Smart Valley
Inc., but today's topic is one I have been tracking for
several years. The telecommunications industry and the
proposed "data highway" represented important business
opportunities for me as CEO of Hewlett-Packard, until I
retired. Earlier this year the Computer Systems Policy
Project, which I co-founded, issued a paper strongly
supporting the development of a national information
infrastructure. I am currently the co-chair of a Council on
Competitiveness task force on 21st Century Information
Infrastructure. We issued our first report last month.
Information infrastructure is more than communications,
computers and databases. It is an engine for economic
competitiveness and jobs, and it can help us address social
concerns. Increasingly, people and companies will decide
where they want to live and work based on the quality and
richness of the information infrastructure.
Today I will talk about the Smart Valley, a community based
program to build an advanced, regional information
infrastructure. I hope this will be the first of many
meetings between us. Your actions will have a major effect
on our chances of success.
Smart Valley
The Smart Valley concept emerged from Joint Venture: Silicon
Valley, a broad coalition of business, community and
government leaders. Over 2,000 people from every part of
the Valley participated in task forces to find solutions to
our declining economy and deteriorating quality of life.
Housing prices are too high, the cost of doing business is
too expensive and our schools are not meeting our needs.
Smart Valley is one of fourteen major initiatives designed
to meet those challenges.
Smart Valley is a grass roots effort to upgrade the quality
of the communications infrastructure and provide new
information services in the Bay Area. Our vision is to
build an electronic community by developing an advanced
information infrastructure and the collective ability to
take advantage of it. We want to provide Silicon Valley and
the Bay Area with the communications infrastructure it needs
to play a leadership role in the 21st century information
age.
Already groups of people and organizations are coming
together to develop projects that take advantage of wide
area networks.
* The City of Cupertino and the Tech Museum of San Jose
are developing on-line community information services
to provide electronic access to city governments and
local schools. You will be able to register for
classes, send e-mail to your child's teacher or file
for a building permit.
* Tandem, Hewlett-Packard, 3Com, Pacific Bell and Silicon
Graphics are collaborating to develop a how-to manual
for tele-work. Tele-work, in all its forms, gets cars
off the roads and reduces worker stress levels
dramatically.
* Several townships are collaborating to develop a Bay
Area-wide digital map for a variety of public works
projects, such as planning roadway extensions, studying
traffic patterns and planning for affordable housing.
* Tele-Communications Inc. is experimenting with using
one of their headends as a server for multi-media
educational materials. They plan to send audio visual
materials over their cable to every classroom at a
Sunnyvale middle school. Teachers will have total
control, as though the VCR or laser disk player were in
their room.
These are a few of the grass roots projects we are tracking.
We expect to see dozens more by the end of the year. We are
particularly excited by Pacific Bell's CalREN proposal to
provide free use of a range of advanced communications
technologies for pilot applications for up to two years.
The technology needed for most applications projects already
exists. As you may know, the island nation of Singapore has
taken advantage of existing communications technologies to
develop applications that are transforming its economy. The
time to register a sole proprietorship has dropped from 30
days to 1; patients can be admitted to government hospitals
in one minute. We do not need to wait for technological
breakthroughs. Today's challenge is learning how to use
communications to rethink our operations and develop new,
more effective solutions.
The role of Smart Valley Inc. is to facilitate and encourage
such projects. We will not have funds to invest. Our small
staff will collect educational materials, support the
development of a technology roadmap and work with the
applications projects to ensure their success. We will
assist with project proposals and grant applications. We
will also become more expert in public policy issues so we
can contribute effectively to policy discussions at the CPUC
and State legislature.
Smart Valley Inc. is just getting started. We have a board
of directors. We are interviewing candidates for the
position of president, raising funds for operations and
looking for office space. We will keep you posted on our
progress.
Policy Issues
The actions of the CPUC can dramatically help or hinder the
success of Smart Valley. Regulations affect the
availability of high speed communications lines and advanced
services. Regulations also affect the pricing of those
services, increasing or reducing their spread.
Telecommunications regulation is a complex field. I cannot
pretend to any level of sophistication in this area. But I
would like to offer two comments and make an offer for
future collaboration.
Two of the lessons we learned in the computer industry have
a direct bearing on the challenges you confront.
First, technologies evolve at an unbelievable pace. In the
year 2000, the cost of a computing cycle will be about one
one hundredth (1/100) of what it is today! The typical
product life cycle is now well under two years. The
implication for telecommunications policy is to avoid
getting locked into any single delivery system as the one,
right and true way. New and attractive choices that better
meet the needs of the users will continue to appear.
Second, the customer and the industry are best served by
open systems and standards. The transition to open systems
has been traumatic for the computer industry, but the result
is a more competitive market with greater interoperability.
This means more innovation and new products that increase
ease of use, lower prices, and allow cheaper and better
service and support. Open systems and interoperability are
also important to telecommunications policy. Open systems
will encourage the growth of information services.
Increased competition will reduce prices.
Finally, I want to make you an offer I hope you will find
hard to resist. I want to offer the Smart Valley as a place
for the Commission to experiment with innovative, new
approaches to telecommunications regulation. Let us work
together to establish an experimental regulatory zone in the
Bay Area, a region where regulations can be modified to
allow the rapid deployment of new technologies and services,
a place where we can study the effects of new regulations
and policies before implementation for the rest of the
State. With your help we can solve the challenges of
universal access and low rates while building the advanced
communications infrastructure California will need to
compete in the 21st century.
Thank you for your attention. I look forward to your
questions and to further discussions in the near future.
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