Remarks of Walter B. McCormick, Jr. …

                         Remarks of Walter B. McCormick, Jr.
                             USTelecom President & CEO
                                To Rural TeleCon '07
                           Springfield, IL--October 16, 2007


Thank you, Doug, for that introduction and for the fine work of the Illinois
Telecommunications Association, on behalf of communications providers in this state--
and their customers and the opportunities our companies are making possible with their
investments today.

I also want to thank Lieutenant Governor Quinn and Ryan Croke of his staff for the
invitation to join you here this evening.

What an extraordinary event. I don't think I've seen anything quite like it: The focus on
the needs of rural communities and rural communications providers. The emphasis on all
the different kinds of innovation that broadband is making possible today--health care,
education, the environment, along with the many economic opportunities.

I appreciate what you're doing here. And, I appreciate what the RTC is taking a stand
for: ubiquitous broadband. Helping businesses of all sizes--no matter where they put
down roots--be full participants in the information economy. Promoting greater
understanding of what all these promising applications require in terms of sophisticated
demands on network infrastructure.

These are critically important conversations--complex and technical at times--but
essential to ensuring our nation can fully capitalize on the broadband opportunity.

As we gather here tonight, in 2007, we are at the dawn of the information age... the
information revolution ... the information-based economy.

Not only are we witnessing dramatic change, we are also witnessing an increase in the
pace of change. The way in which our children relate to their world is fundamentally
different than the way we related to our world at their ages. Walk on any college
campus, and compare the experience today with the experience of when you were a
student. It may betray my youthful looks, but when I was in college there were no cell
phones, no laptops, no Wi-Fi, no cable, no satellite, no Internet. Indeed, for seniors in
college, just four years ago when they were freshman there was no Facebook or
YouTube.

And, the Internet has changed politics. No one has made that more clear than Illinois
Senator Barack Obama. Look at the funds he has raised through the Internet! Similarly,
the Internet campaign that Hillary is running ­ that that she has to run ­ wasn't possible
when Bill ran in '92.




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Telecommunications technology has made all this possible. And, as people have done
throughout history, we marvel at what technology makes possible: new ways to entertain
ourselves, to engage the world around us, to expand our friendships, and to be more
productive at work.

We live in an extraordinary new golden age, where the new technology of broadband is
opening up endless opportunities: for our economy; for entertainment, of course; but also
for education; for health care ­ especially in rural areas; for a cleaner environment; and
for new job opportunities.

So, the timing is propitious for this conference, for this dialogue. It is important that we
have the right policies in place to continue to advance our nation's interests in the
information age.

We need partnerships ­ strong relationships and innovative thinking across the public
sector, the private sector and academia. And, we need forums like this that bring us all
together to focus on the future: how we get there, and how we realize its full potential.



And so, if there's a theme today, I think it is this: How do we make the opportunity of
broadband real for every American? How do we go about, as you put it in your program,
"capturing the promise" that broadband holds out to us all?

Let me suggest to you that the answer starts with investment, with policies that encourage
the billions of dollars of capital necessary to build a true broadband nation.

In that regard, there is good news to share.

Broadband service providers will invest some $70 billion this year to expand and upgrade
North American communications infrastructure. This is private investment, not taxpayer
funds. And, this distinguishes U.S. policy. Unlike some countries, our broadband
deployment is being financed largely through private sector investment. U.S. policy has
been aimed at removing barriers to entry, to opening broadband to market-based
competition, and to inviting investment in diverse technologies.

And, as a result, Americans enjoy the most competitive and diverse broadband market in
the world.

Today, cable, telecom, wireless, satellite, even power and municipal partnerships are all
in the mix and new technologies are joining the competition, it seems, almost every day.

This competition, this consumer choice, is the kind of communications marketplace that
America deserves. But, all of us recognize that even more needs to be done. And,
therefore, we are pleased that even in these politically divisive times in Washington, there
is real bipartisan consensus around the importance of broadband to our nation's future.



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Speaker Nancy 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."

The President has called for universal broadband.


And, what it will take for universal broadband deployment is this: even more investment.

Consider that by 2010 the web traffic generated by 20 homes --just 20 homes--will
equal the capacity demands expected of the entire Internet in 1995.

So, we need investment, and policies that encourage the kind of enormous investment
that will be necessary to keep pace with America's ever growing "need for speed."

The US has today one of the largest broadband populations on earth--about 60 million
households--rivaled only by China. And, broadband adoption is growing fast, with a
21% leap just in the past year.

What drives broadband investment?

Entrepreneurism.

Broadband video certainly is one big driver of the investment we see today. The
opportunity to compete with cable the opportunity for those who invest in deploying
broadband to offer over broadband everything that broadband can offer.

So far 18 states ­ covering about 60% of the US population ­ have put video franchise
reform legislation on the books, including Illinois last June.

I want to commend the legislature here and Governor Blagojevich, for recognizing that
competition, increased consumer choice, and investment are good things.

New video and entertainment services are quite popular. But the truth is: They are at the
surface of broadband's full potential for our economy and for our quality of life.

Consider this:

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

Health Care: This is a topic we all care about. Secure, automated medical records can
save lives and dramatically control costs. Broadband can make possible a revolution in
patient care.



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Just imagine the peace of mind knowing our aging parents can get the care they need
from the comfort of home with advances 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 let them use innovative, interactive new tools.
We have the ability to let them truly explore the world from wherever they live.

We need a cleaner environment, and we want to spend less time on the freeways and
more time with our families.

Broadband-enabled telecommuting options can create opportunities for parents who want
to stay close to home, keep more cars off crowded freeways and reduce our dependence
on foreign oil. America's 3.9 million telecommuters already are saving 840 million
gallons of gas each year. That's real energy conservation.

And, our information economy? Broadband can bring its opportunities 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.

The companies I represent are extending broadband's reach. And, America is beginning
to see the results.

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.

But we still have progress to make in rural America. Rural America is home to about
20% of the US population, spread across 80% of our nation's land mass. That's a real
economic challenge. And, this is where partnerships with the government--the right
kind of partnerships that encourage investment--become very important.

There is an appropriate role for government. Government can help us understand the
challenge from all angles ­ the investment and financing hurdles, and technology, literacy
barriers.

So we appreciate leaders in Washington ­ leaders like Senator Durbin and his Connect
the Nation legislation ­ that bring us all together to reach toward helpful, workable
solutions. Connected Nation, as many of you know, is an effort to encourage public-
private partnerships to map broadband penetration, to identify gaps, and to work to solve
the "chicken and egg" problem with regard to broadband deployment in sparsely
populated areas.

Similarly, the Farm Bill this year recognizes an appropriate role for government by
including provisions that improve the federal broadband loan program to prioritize areas
with no broadband service and to make rural loans and grants accessible to a broader
range of companies.



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Government policy can help stabilize the financial fundamentals in our industry, such as
reform of intercarrier compensation and universal service support.

And, government can take care to do no harm.

Don't tax the Internet. We are working to prevent Internet taxation and to extend the
Internet Tax Moratorium.

It is inconsistent with the national goal of achieving universal broadband penetration to
raise the price of access ­ by as much as 20%. Yet that's just what could happen at the
end of this month. We have a tax-free Internet today. But, the current moratorium
expires on November 1st. It is important that Congress act expeditiously to extend it.
We tax things that we want to discourage the consumption of, like tobacco and alcohol.
We should not be taxing where we want to increase consumption.

And, finally, don't regulate the Internet.

As if taxing the Internet weren't a bad enough idea, we now have folks who want to
regulate it. Instead of a free-market Internet, they would like the government to manage
the Internet.

They call it net neutrality. It's a clever term. But there's certainly nothing neutral about
it.

And it's a solution in search of a problem.

Consumer prices for broadband access are coming down. As a result, more and more
Americans are logging on. Speeds are picking up as a result of competition and
investment. The Internet is open and freedom reigns. We can go wherever we want on
the Internet--to the content of our choice--whenever we want it.

Innovation is driving new applications and services. By every yardstick, we are
advancing in the right direction.

In this environment, initiating government regulation and management of the Internet...
there just isn't a more anti-innovation policy.

So far, cooler heads have prevailed. The federal agencies of expertise when it comes to
competition policy and consumer protection ­ the Federal Trade Commission and the
Department of Justice ­ have stepped forward to say that Internet regulation is a bad idea
for consumers and for our economy.

We are also beginning to see a wide array of constituencies banding together: groups that
represent diverse interests that have so much to gain from rapid, robust advances in
broadband capacity and innovation; groups representing Americans with disabilities;



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education and health care groups; senior citizens and minorities; emergency first
responders; rural organizations and many others; all warning against the danger of
Internet regulation.

This is an issue that could negatively impact each of these constituencies. It could
negatively affect us all, our economy, and the pace of innovation in our society today.

We need to stand together to make sure people understand what is at stake.

If you want to learn more about this issue or get involved, I encourage you to visit
NextGenWeb.org.

There you'll find information about the promise of broadband and innovative public-
private partnerships that are helping make it a reality.

You'll also hear directly from a growing community of leaders from across our country
who are raising their voices to speak out against Internet regulation.

At the end of the day, our position is simple: 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.

We are proud to help make this progress possible, and we look forward to working with
all who share our goal of making the promise of broadband real for all Americans.
Thank you.

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