COMMENTS BY JOHN YOUNG, CHAIR, SMART VALLEY, INC.

[David Farber <farber () central cis upenn edu>]

  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.