<p>By Edward J. Markey. Representative Edward J. Markey (D-MA)
chairs the House Subcommittee on Telecommunications and Finance.
</p>
<p> George Orwell's nightmare of a totalitarian regime that
twists advanced technologies into the ultimate tools of
repression did not come true. On the contrary, just the opposite
has occurred. Rigid political controls on the flow of
information proved unsustainable in a world of copying machines,
faxes, satellite dishes, and video recorders. As the means of
producing information has become more available, more
accessible, and more pervasive, it has been increasingly
difficult for the next generation of Goebbels and Stalins to
keep information solely in their control.
</p>
<p> At a certain point, we need to accept victory in the Cold
War and begin to deal with its consequences, for while our
traditional foes, the Soviets, are paralyzed by unprecedented
internal and economic turmoil, and while we in Washington are
paralyzed by the budget crisis, our traditional allies--Japan
and Western Europe--are already beginning an assault on the
world marketplace. They have recognized what we have not: that
the resources defining success in the Industrial Age--natural
resources, heavy manufacturing capabilities, and manpower--have given way to the resources of the Information Age--high-tech manufacturing capabilities, scientific and technical
knowledge, and instantaneous transmission of information and
resources across national boundaries.
</p>
<p> It is clear that telecommunications and its associated
technologies will be to the future what coal and steel were to
our past and oil is to our present--the essential fuel of the
21st century. Our competitors already have recognized the
shifting global economic and political forces and have seized
the initiative in a number of industries--especially
telecommunications. They are already in the seventh inning of
a tightly fought ball game, while we are still arguing over how
to get to the ballpark.
</p>
<p>New standards
</p>
<p> Both Japan and Western Europe are today investing heavily in
emerging telecommunications technologies such as high
definition television (HDTV), supercomputers, optical fiber
networks, and artificial intelligence. Both have developed plans
to direct public and private sector efforts aimed at promoting
their success in these technologies, because both know that
telecommunications technologies will be the infrastructure of
the Information Age. European and Japanese efforts in this field
are coordinated and stimulated by direct and indirect
government activities, including public regulation and tax
policy, direct subsidies, and even government procurement.
</p>
<p> For example, the British are investing billions of dollars
and have allocated 200 megahertz of frequency spectrum to the
development of the next generation of cellular phone
technology. France's government-owned telephone company has
invested almost $2.5 billion since 1981 in network improvements,
including the free distribution of "Minitel" terminals to
consumers across that country.
</p>
<p> In addition to such efforts at the national level, European
governments are working together on common strategies for
dealing with entertainment programs that will be transmitted
over the broadcast and cable systems of the future. Television
programs are already being developed that anticipate the time
in 1992 when the 12 nations of the European community will be
united in a single mass television market of 325 million people.
At the same time, the European Community has adopted several
directives aimed at harmonizing their telecommunications
policies and markets, including directives to establish a
European telecommunications standards institute, a pan-European
digital cellular radio communications network, common standards
for introduction of Integrated Services Digital Networks (ISDN)
in EC member countries, and restrictions on the U.S.
entertainment industry's access to the EC market.
</p>
<p> At this point, it remains unclear whether the EC's actions
will result in a substantial opening of its telecommunications
market--valued at $14 billion--to U.S. suppliers, or whether
the regional telecommunications market established by EC-92 will
be a "Fortress Europe" in which U.S. firms are largely walled
out.
</p>
<p>Japanese synergy
</p>
<p> In Japan, we're seeing even more aggressive efforts to take
on the United States in key sectors of the international
telecommunications market. With government support and
encouragement, Japan's Nippon Telephone and Telegraph Co. has
embarked on a massive $240 billion capital improvement program
aimed at bringing sophisticated voice, data, and video services
to every business in Japan by the early 1990s.
</p>
<p> The Sony Corp. purchased Columbia Pictures in order to
obtain a source of entertainment "software" to go with its new
video Walkman and obtain an edge in the coming battle over
high-definition television. Sony's strategy was simple: use a
combination of new programming, new products, and its newly
acquired 2,700-title film library to whet the appetites of U.S.
consumers for Sony's HDTV technologies, which would in turn
dominate the global marketplace.
</p>
<p> Not to be outdone, Japan's Matsushita Corp. is now
attempting to buy MCA in order to pursue a similar strategy of
mating its vast hardware empire (including brand names such as
Panasonic, Technics, and Quasar) with MCA's huge video software
library. The important policy question raised by both the
Sony-Columbia and Matsushita-MCA deals is not if foreigners
control the broadcast rights to our beloved cultural icons such
as "The Big Chill," "Wheel of Fortune," "Jaws," or "ET," but who
controls the technology markets of the future.
</p>
<p>Just do it
</p>
<p> Meanwhile, America has been engaged in an arcane and
eye-watering debate over industrial policy--what it is and
isn't and whether it poisons the crystal springs of capitalism.
The industrial policy debate has been waged largely in think
tanks and academic forums. It holds little interest, I believe,
to the American people. Americans are not ideological, they are
pragmatic--they want to do what works.
</p>
<p> The problem we have today is that we lack a coherent
national telecommunications strategy, a telecommunications trade
policy, or even an effective telecommunications corporate
strategy. What we have is a patchwork quilt of regulatory, tax,
trade, and anti-trust policies that frequently work at cross
purposes, and a telecommunications industry that needs to focus
more on long-term investment in emerging technologies and
infrastructure.
</p>
<p> While the Japanese and the Europeans have special government
ministers with jurisdiction over telecommunications policy, the
United States spreads telecommunications jurisdiction among
several often obscure agencies in the executive branch and
allows a single federal district court judge to set de facto
national policy for seven of our nation's largest
telecommunications firms on the basis of the anti-trust decree
that broke up AT&T.
</p>
<p> While our competitors have been formulating comprehensive
plans for bringing sophisticated voice, data, and video
services to all homes, the U.S. government is funding a $2
billion program for supercomputer research and a high-speed data
transmission network that would link elite university research
institutes and Fortune 500 companies. It is the equivalent of
constructing an eight-lane highway superhighway only for owners
of luxury cars.
</p>
<p>Geopolitical red herrings
</p>
<p> All too often, U.S. economic interests have been sold down
the river because of foreign policy considerations. At the
height of the Cold war, there was a certain logic to the
argument that issues of war and peace, capitalism and communis
