I'd like to visit today about the role of wireless telecommunications in addressing an issue that has begun to stimulate thought in Washington and of which I imagine we will hear a great deal in the coming campaign year. The issue is the so-called "Digital Divide."

The term "Digital Divide" refers to concerns there will be information and technology haves and have-nots in our society. It is an issue that is defined both in terms of income and geography. President Clinton, for instance, addressed the economic issues this way, "We know from hard experience that unequal education hardens into unequal prospects. We know the Information age will accelerate this trend. . . . History teaches us that even as new technologies create growth and new opportunity, they can heighten economic inequalities and sharpen social divisions. That is, after all, exactly what happened with the mechanization of agriculture and in the industrial revolution."[i]

Representatives of rural America in Congress are concerned about the availability of innovative and competitive telecommunications in non-urban areas. Senator Tom Daschle (D-SD), for instance, told a congressional forum on this topic, "These new services are not only transforming how we live, but they are fueling rapid changes in the worldwide economy. This country can’t afford to let a ‘digital divide’ put rural America at a significant economic disadvantage. The more Americans who are able to take part in the telecommunications revolution, the stronger our economy – and our society – will be."[ii]

The Chairman of the Federal Communications Commission, William Kennard, has pledged to use his agency to redress the telecommunications shortfall to Native Americans and other minority groups, "I and my colleagues on the Commission are determined to find a way to bring basic phone service and all of the advanced services that Americans are beginning to enjoy in this country to all Americans, including not only Americans in our cities and our more affluent suburbs but also to our rural areas, Indian reservations, inner-city communities."[iii]

While some describe the challenge as the Digital Divide, perhaps there is a better description. At a time when we are appending the prefix "e" to connote the electronic nature of an activity, I believe what we are talking about is e-Quality – the quality of all Americans' access to the telecommunications that facilitate the Electronic Age.

Our national leaders are – appropriately – trying to be responsive to the tumultuous changes in the means by which we all communicate. We know from history that such change is not unique to our times. I enjoy the study of history because, in large part, it is the study of change and how societies dealt with that change. Napoleon's admonition to his lieutenants to study the great campaigns of the past is wise counsel for us today as we search for both inspiration and instruction.

The great historical metaphor for today's challenges, to my thinking, is the American Civil War. That conflict was about change – caused by the frictions from the transition out of the agrarian age into the industrial age. Today we are living through the frictions of the movement from the industrial to the information age. The Civil War is also relevant because it was the last great war lead by common people like us. At the start of the war the United States Army was 15,000 men commanded by four general officers. Four years later over 1000 men – clerks, lawyers, and businessmen – had worn general's stars. How did they do it and what does that suggest to us?

We share something else with Civil War leaders. They, too, were constantly confronted with technological change. Unlike us, however, how they dealt with that change had life and death consequences.

These are among the reasons that prompted me to write Leadership Lessons from the Civil War: Winning Strategies for Today's Managers. I would propose today to do what I did in the book: apply the leadership lessons from battlefields 140 years removed to the challenges of today, especially the challenge of e-Quality.

A principle lesson from the Civil War is the importance of embracing change. The e-Quality issue is driven by today's telecommunications changes and cannot be solved with yesterday's tactics.

Robert E. Lee lost the Battle of Gettysburg because he ignored the changes occurring around him. Will this be our fate as well, or can we learn from his lessons? Napoleon conquered Europe and the US won the Mexican War using tactics designed to overcome the shortcomings of the smoothbore musket. Because the round musket ball bounced from side to side down the smooth gun barrel, then when it emerged behaved aerodynamically like a pitcher's curve ball, men didn't even sight their weapons. Tactics dictated that troops march in parade formation to within about 100 yards or so and fire in volley – masses of lead that relied on statistical probability more than accuracy to do their work.

One year after the Mexican War, however, a Frenchman – Claude Etienne Minie – developed a rifle that could be used in combat. The rifled groves inside the weapon's barrel gave the bullet a spin; the projectile also emerged with more force behind it, enabling it to go farther with greater accuracy. When Lee ordered Pickett's Charge on the last day of Gettysburg, he sent 15,000 men using smoothbore tactics on a path that crossed in front of 40,000 Union rifles. Before the men could form to fire a volley they had been decimated by the accurate, long range Union rifles. Fifteen thousand men began the advance, only 150 made it to their objective. Lee rode out amongst the men limping back to the Confederate lines saying, "It is my fault, it is all my fault." Indeed it was. Robert E. Lee had failed to recognize and embrace the changes that were occurring around him.

Modern wireless industry leaders Craig McCaw, John Stanton and Dan Hesse did not make Lee's mistake. Their history is one of recognizing and embracing change. The question policy makers face is, how will they deal with the change brought by Messrs. McCaw, Stanton, Hesse and others?

For more than 50 years the solution to telecommunications for rural and lower income Americans has been to tax one group of consumers in order to pay a subsidy to certain telephone companies that provide service to these targeted groups. This was how we won the last "war" and overcame the "Dialtone Divide." But is this the best model for overcoming today's challenges – or is it the 21st Century equivalent of Lee's blunder at Gettysburg, perhaps with equally disastrous results?

When the income-transfer phone subsidies were put in place in the 1940s telecommunications meant the telephone company. Today the wireless industry has changed the face of telecommunications. Wireless was the first segment of telecommunications to have full, facilities-based competition. Today that competition is flourishing with 62.5 percent of Americans able to choose from at least five different wireless carriers for their service. Is it any wonder that wireless prices have fallen 60 percent in the last 8 years while customers have soared past the 80 million mark?

Wireless growth has also brought to America an unprecedented improvement in public safety. Consider the two groups of target Americans for whom e-Quality poses the greatest challenges. In the inner city wireless is cutting down on crime. Through COPP (Communities on Phone Patrol), the wireless industry has donated wireless phones and airtime to 13,000 neighborhood watch groups. Those 13,000 patrols are making streets safer by reporting 52,000 crimes and emergencies each month. In rural areas wireless is delivering urban-quality emergency communications; 50 percent of the United States, principally rural areas, is without 9-1-1 service – other than via wireless.

Looking at e-Quality in rural America one is tempted to ask why our government has resisted policies that have proven so successful when implemented by Third World governments. Next month I have the privilege of visiting on stage at the CTIA convention with Nelson Mandella. When apartheid came to an end in South Africa it fell to the Mandella government to deliver telecommunications to the townships. The fastest and least expensive way to accomplish this was with wireless; and the ANC government embarked upon an aggressive rural wireless initiative. There are many things we can learn from Nelson Mandella – here is one. Our government should be equally as bold and innovative when it comes to delivering competitive telecommunications to similarly situated rural areas. Throughout the Third World wireless telecommunications is connecting remote populations. The United States should be smart enough to learn from these Third World countries.

If South Africa is an illustration of bringing telecommunications to remote areas, consider how Northern Ireland provides an example of wireless closing an income-based telecommunications gap. For years my wife and I have been active in the peace process in that that small province. We have many friends in the North, but because of their economic struggles many of our friends cannot afford telephones in their homes. When we needed to reach them we would call someone else who would go to the phoneless home and schedule a time for them to come over and receive a call from us. Being cut off from communication this way makes it doubly hard to climb the economic ladder. For instance, how does an employer get in touch with someone without a phone?

A few months ago we were back in one of those phoneless homes. They still couldn't afford the charges for a wireline phone, but now they had a wireless phone and the ability to keep its cost below that of the wireline. Calling party pays meant that anyone (such as the boss) could reach them, but on the caller's nickel (or pence as the case may be). Their outgoing expense was controlled by a prepaid card – every month they knew how much they could spend on outgoing calls and they regulated it just as they regulated how much was spent on food.

Around the world wireless is bringing telecommunications to those who for economic or geographic reasons have been left out. Yet policy makers in the United States cling to yesterday's monopoly-based concepts instead of learning from today's international experiences. Progress will not be built around expanding subsidies to monopolies. Progress will come only when technology and competition are allowed to flourish.

* * *

The vibrant competition in wireless has had a result beyond more subscribers with lower prices and greater safety, however. That competition has stimulated innovation in non-voice services. Wireless networks have become digital networks and the throughput capability of those networks is starting to soar. Wireless has thus become part of the solution to the delivery of e-Quality in Internet access.

We all know how Moore's Law ordains that the processing power of microchips will double and the cost fall by half every 18 months. As a result, the kind of computing horsepower that used to be in special rooms behind glass walls now fits in the palm of your hand. Moore's Law is killing off personal computing as we know it. We need look no further to see Moore's Law at work than Bill Gates' recent career decision. Mr. Gates, an architect of the PC era, resigned as CEO of Microsoft in order to concentrate on the non-PC future.

In a further indication that times have changed Nomura Securities recently forecast that by 2002 the largest computer company in the world in terms of units shipped would not be Dell or Compaq, but Nokia![iv] Moore's Law has turned the phone into a computer. Defining Internet access – and thus e-Quality – in terms of desktop computers connected to wires is looking in the rear view mirror. The Palm V, for instance, has a processing capability of 2.7 MIPs and costs less than $500; in 1985 the IBM 3083 Modex CX mainframe has a processing capability of 2.4 MIPS and cost $605,000 for the processor alone. Does that put things in perspective?

The wireless industry is on an aggressive path to provide high-speed data delivery to these portable devices. Before we talk about the high speed networks being built, however, let's address the bad rap that wireless data gets today. "It's too slow," is the common refrain. Put that in perspective. When you and I first signed up to AOL we did it via dialup phone lines with a blistering 1200-baud speed. Remember upgrading to the 12.6 kb modem and then to 56 kb? Steve Case built a very nice business and consumers found plenty of applications at twisted pair speeds.

Here's an even better perspective. When you take your laptop on the road, get to your hotel room and plug it in, what do you get? The throughput is in the 20's and the price is astronomical – and you're thrilled to be able to communicate with your network. Today's wireless networks deliver 9.6 to 14.4 effective throughput – with mobility. Let's not become "Baud Snobs." The kind of throughput you need to read emails, calendars and the like from anywhere is available today.

Third Generation wireless is improving on that capability. Next year digital wireless networks will be delivering around 64 kb. About a year and a half later Third Generation technology will be delivering 384 kb in a mobile environment and over two megabits fixed.

Japan – utilizing 9600-baud technology – has already demonstrated that wireless devices and networks hold the key to e-Quality. Business Week reported that while Japan has lagged behind the US in Internet penetration, subscribers are signing up to wireless Internet access at a rate of 450,000 per month "often bypassing home computers altogether."

Let me reiterate that last line – "bypassing home computers altogether" – and draw the analogy back to South Africa. Third World countries are skipping the stringing-of-copper phase of telecommunications and jumping straight to wireless. Similarly, a First World powerhouse like Japan is skipping the wired Internet phase and jumping straight to wireless. As Bob Dylan said, "You don't have to be a weatherman to know which way the wind's blowing."

e-Quality can be delivered at high data rates to handheld devices at a cost that pales in comparison to the cost of providing wired PC connectivity and that same connectivity also happens to reduce the cost and improve the service for traditional voice telephony. The path is thus opened if policy makers want to take it.

* * *

Let's go back to the lessons from the Civil War one last time. My favorite chapter in Leadership Lessons from the Civil War is the last lesson – "If You Can't Win…Change the Rules!"

Since war began it had been fought from fixed lines defending fixed positions. This tradition advantaged the larger and better equipped Union army; thus the Confederate had to do something about it. They changed the rules, putting uniformed guerilla troops behind the enemy lines for the purpose of diverting Union forces from the front. The best of these units was that commanded by Col. John Singleton Mosby. His apparition-like ability to strike and then disappear earned him the name the Gray Ghost and the Union-occupied area across the Potomac from Washington became known as "Mosby's Confederacy." Each night the planks would be taken up on Chain Bridge across the Potomac for fear that Mosby would infiltrate the Federal capital.

Not only did Mosby change the rules by eschewing front lines, he also changed the rules of cavalry engagement. US Army doctrine held the saber was the most efficient weapon for use by cavalry. Mosby forbade his men to use sabers and armed them with six-shooters. "My men were as little impressed by a body of cavalry charging them with drawn sabers as though they had been armed with cornstalks," Mosby said.

The results of Mosby's changing the rules are legendary. He kept thousands of Union troops away from the front chasing and guarding against him. He forced the Union cavalry to change their doctrine about sabers. No other Confederate officer was mentioned more often in Robert E. Lee's reports. "Hooray for Mosby," Lee once wrote, "I wish I had more like him."

The rules are made by the incumbent for the purpose of reinforcing his or her position. Progress is made when the incumbent is challenged by someone changing the rules.

Craig McCaw changed the rules when he pioneered the ability of a wireless phone to follow you anywhere in a nationwide wireless network. Now he's busy changing the rules again with Teledesic, an "Internet in the Sky."

Dan Hesse changed the rules when he developed the Digital One Rate Plan – any call from anywhere to anywhere for the same low price. This has had an impact on the ability of wireless to deliver e-Quality to the target populations. Dan Hesse ordained the "death of distance" as a concept in wireless telecommunications. Imagine the impact this can have in rural America where much more of the average consumers’ telephone bill is made-up of intrastate toll calls. Similarly, Dan Hesse's low cost, "big bucket" rate plans have encouraged airtime to be used for wireless data.

John Stanton changed the rules by actually delivering competitive telecommunications to rural areas where doctrine held it couldn't be done. What a wonderful idea – bringing urban-like competition to rural Regent, North Dakota's 268 residents. The citizens of Regent received improved service, and the citizens of Regent also saw their phone bills go down, not only because the monthly fee for wireless was less, but also because the death of distance meant they no longer paid long distance charges just to call the next county.

For his leadership, John Stanton received a sharp stick in the eye from the local telephone monopoly. In the first week of competitive telecommunications for Regent the wireline monopoly cut off service to the wireless company's subscribers. It took the good work of the FCC and the state PUC to get the citizens of Regent who wanted the benefits of competition reconnected.

The experience in Regent has shown that competition works to benefit rural Americans. When the wireline phone company finally recognized the answer didn't lie in cutting off the new competitor, it began to act competitively and in November 1999 lowered its prices – offering lower monthly access charges, an expanded local calling area, new long distance rates, and discounts off monthly internet access.

With that story as a background one would think that policymakers would rush to embrace Regent-like initiatives. Not so. Though Western Wireless has sought permission to provide competitive Wireless Residential Service as an Eligible Telecommunications Carrier from states like Kansas, New Mexico, Oklahoma, and South Dakota, it has experienced delays of a year of more, or outright rejection by the state commissions. What is holding back e-Quality to the rest of rural America? The Rules! Today in rural American the rules favor the incumbent monopoly telephone company. At the very same time new technology has destroyed the rationale upon which those rules were based. It is time to go back to the Civil War lesson and change the rules.

* * *

e-Quality is an important responsibility of our national policy makers and of our industry. It simply will not be resolved by applying old monopoly-based thinking to new competitive markets. It will not be resolved by ignoring new technology and fighting this "war" with the tactics that worked last time. It will not be resolved if we ignore experiences outside our borders.

We must embrace the benefits of technological change. e-Quality isn’t monopoly phone companies protected by government policy. e-Quality isn’t even a wire into the back of a PC. And most certainly, e-Quality isn’t clinging to the same old rule.

Endnotes

[i] REMARKS BY THE PRESIDENT AT MASSACHUSETTS INSTITUTE OF TECHNOLOGY 1998 COMMENCEMENT, June 5, 1998, at http://techlawjournal.com/agencies/slc/80605clin.htm.

[ii] "Daschle Tells National Conference that Entire Country Has Stake in Helping Rural America Gain Access to High-Speed Internet Services, Mitchell Native Helps Press Case to Erase ‘Digital Divide’ at Daschle Event," Press Release, October 27, 1999.

[iii] Opening Statement of FCC Chairman William Kennard, at the Federal Communications Commission Public Hearing on "Overcoming Obstacles to Telephone Service to Indians on Reservations," March 23, 1999, Chandler, Arizona, appearing in the hearing transcript at http://www.fcc.gov/Panel_Discussions/Teleservice_reservations/march23/welcome.html.