I am delighted to be here today to talk to you about Building Smart Communities: A New Framework for an Americas Information Initiative.

The premise of my paper is that the world has been flattened by the force of technology and economics -- the real effects of the telecommunications revolution if you will -- and in its wake we are witnessing a rebirth of an age-old concept of the "city-state" or more precisely, the "region-state." These new quasi-governmental entities, like the ancient city-states of Athens, Sparta and Rome, have the power -- some would call it innate sovereignty -- to control their future in this new world order; but only to the extent they recognize that information is power in this new age, and information technology, the tools of wealth creation.

To be successful these "city-states" must in some way model themselves after Singapore's "Intelligent Island," or San Diego's "City of the Future" (a project I will discuss further today) and in so doing, bring everyone, and every sector of the community into the effort. Hence the term "Smart Communities."

One would have to be a recluse living in solitary confinement not to know that there is indeed a revolution taking place everywhere in the world given the convergence of technology, the technology of telecommunications, and economics, the economics of a global economy. And in the wake of this convergence, power is being realigned and wealth redefined. These two global trends -- the realignment of power, and the redefinition of wealth -- again propelled by the convergence of technology and economics, will likely permeate life and work throughout the world, well into the 21st century.

Let me be more specific by providing a certain historical context. Take Abraham Lincoln, one of America's well-known presidents. In addition to ending the Civil War between the North and the South, he is also widely credited with abolishing slavery. A lawyer and well-known orator, in fact he had a very squeaky voice, and probably would not survive as a modern day media figure. At his most famous address in Gettysburg, Virginia in 1863, there were some two thousand people in attendance, according to published reports.

But there was no radio or television. No audio/visual systems. No public relations agents, or "handlers" or advance men, as they are called today, to tell us what the President was likely to say outside of Gettysburg well before the actual event. As a consequence, not many people knew of the so-called "Gettysburg Address." Yes, there were bits and pieces picked up by the daily newspaper, the Gettysburg Gazette, and a handful of other newspapers, but it was months and years before the full impact of that historic address was known throughout the world.

Fast forward one hundred years to 1963. The place is Dallas, Texas. John F. Kennedy is shot, and within twenty-four hours, two-fifths of the world's population, or 2 billion people knew, read, heard or saw replays of the assassination. Fast forward again to just the last few years. Let your imagination quickly review the events that pop to mind: The fall of the Berlin Wall; the war in Bosnia; the tragedy in Tiananmen Square; the opening shots of the Gulf War, and in all likelihood you were there, or could have been, along with four-fifths of the world population, 4 billion people.

You were there because CNN was there, UPI was there, the Spanish International Network was there. You were there, thanks to a vast network of satellites orbiting at twenty-two thousand miles in space, underseas fiber optic cables, wired and wireless networks, cellular phones, palmtop and laptop wireless computers. Thanks to this electronic nerve system which spans the globe, there is nothing of importance that happens anywhere in the world that isnÃt instantly reported everywhere.

The global village Marshall McLuhan first talked about is here. It's not the world community he envisioned perhaps; but nonetheless, a new mosaic is taking place and as I mentioned earlier, some very definite trends are becoming clear.

First, there is a major realignment of power taking place in the world. No government, no matter how popular or dictatorial, can set its nation's public policy agenda. No, it is world public opinion that does that.

As Charles Wick, Ronald Reagan's Director of USIA once pointed out: "How else could a dock worker in Poland, not a General, create that great force for change, Solidarity? How else could an ordinary housewife aspire to the dreams of her country and rise to be President of the Philippines? How else could a black woman say no to the ravages of apartheid, and the world stop and listen?"

This power of the people to shape public opinion and thus public policy is clearly evident in last year's U.S. Congressional election; the elections in Mexico; and even the race for Governor in Tokyo and Osaka, and most recently the general election in India. In a larger sense, people everywhere in the world are garnering power as never before. And, are beginning to exercise it.

A major redefinition of wealth is also taking place. Walter Wriston, former Chairman of Citibank, likes to point out what happened when Great Britain entered into an agreement with the People's Republic of China for control of Hong Kong. "Trading screens began to light up all over the world," he said, "and the traders began to trade. Their trades -- like a global plebiscite -- reflected world public opinion that it wasn't a good treaty." Overnight, billions of dollars left Hong Kong. "Information," Wriston believes, has replaced gold as the new monetary standard. In the post-industrial information age it is information or knowledge that is the new wealth. And it is information technology that are the tools of wealth creation.

That is the reason, I would argue, that Singapore -- a city-state the size of San Diego -- launched its aggressive plan, IT 2000, also known as the "Intelligent Island" project. By wiring every home, school, office, hospital, businesses large and small, connecting every institution to every other and educating their populous nation, Singapore hopes to leap-frog well into the next millennium as an international information region, an intelligent hub, if you will, for the emerging Pacific. That is why, too, Japan some years ago launched a two hundred and fifty billion dollar initiative, now up to four hundred billion dollars by last count, called Technopolis and Teletopia, for telecommunications utopia. Both initiatives are designed to do for their more populous nation, what Singapore plans to do for its relatively smaller "city-state." That, of course, is what gave birth to the Clinton Administration's National Information Initiative.

Today, almost every developed country has its own national information strategy, whether it is called a National Information Initiative, or a National Information Strategy such as France's Telematique or Informatique, launched in the mid-70's. The goal is the same: to mobilize resources and intellectual capital to transform the way life and work is done within the region; and in the process to attract the new, valuable, high tech information-sensitive jobs, and to create a skilled workplace to take advantage of the movement toward a "global information economy," an economy based, not so much on agriculture or manufacturing, but on the production, storage, transfer and dissemination of knowledge or information itself.

More recently, following on the heels of the launch of the U.S.' ambitious National Information Initiative or NII, Vice President Al Gore went to the ITU's Plenipotentiary Conference in Kyoto to launch a GII, or Global Information Initiative. It was a heroic and bold effort -- although not much appreciated by those lesser developed nations who, but for a small percentage of their population, still don't have telephone service.

But the larger concern I have is not that NIIs or a GII are faulty or ill-timed. It is that such lofty global or national policies won't work. Why? Because of the reverse flow of power taking place in the world. What we need is to have local and regional communities -- however we define them, those governments closest to the people -- take ownership of this effort to transform the region, to build their local information infrastructures and in the process, the city-states, and region-states of the new economy.

What I would like to do in the time allowed is, (1) tell you a little of the San Diego story -- what we have done and are doing -- and the lessons we learned; (2) provide some background on the work of the SDSU International Center for Communications for the State of California -- particularly, to develop a SII or Statewide Information Initiative based on the importance of "Smart Communities" and lastly, (3) relate that to what must be done throughout the Americas if we are all to succeed, not just survive in the wake of the emerging global information economy and society.

Our San Diego effort started five years ago with an observation that 65 of our top 100 cities in the U.S. were dying today because "cities" are no longer functional. Cities prospered because of their locations aside major transportation routes or because they developed profitable specialities in the American industrial economy. But "telecommunications" -- telephones, faxes and the electronically-linked computer -- make it possible for service-sector firms to locate anywhere, and many are therefore moving out of downtown business districts.

Some had argued that San Diego would never be a major economic power because our city is not a "headquarters town." The fact is that, with today's communication capabilities, it really does not matter where corporate headquarters are located. We have entered a new post-industrial information age and, because of advances in telecommunications, as companies become global -- with a presence almost everywhere in the world -- corporate decision-making is becoming increasingly local. Sony Corp. calls it "global-localization," and headquarters, if they exist at all, are on a jet plane over one ocean or another, but constantly in motion.

Sadly, San Diego doesn't yet have an international airport, but we are finding it has some very unique assets. San Diego, with more personal computer users than any other county in the world, has the interactive, intellectual underpinning critical to becoming a city for the Global Information Age. With three major universities, a major naval installation and a robust high tech and biotech community, it is not surprising that the county also has more high-tech alliances with foreign partners than any other county. Because of its hilly terrain, the region also has an unusual amount of fiber and cable in the ground connected directly to individual homes and businesses. Taken together, San Diego has the ingredients to be an information, intellectual capital.

Given our geographic locations and our links with Mexico and the Pacific, and the recent passage of NAFTA -- seen by many as more exciting than the unification of Western Europe because of the vast economic potential -- San Diego realized it could take a giant step forward by adopting an aggressive telecommunications plan of development.

Thus we started the process in 1992 by bringing together, under the Mayor's auspices, a committee of twenty-four very senior executives and community leaders from both the telecommunications and computer industries to be sure, but importantly, every sector of the economy likely to be most impacted: health care, education, business and government itself.

The recommendations the committee developed were too numerous to share with you today. I do, however, want to tell you what our overarching observations and conclusions were, and then specifically address those areas that merit every region's focus and attention.

I. The lack of a consensus-making spirit may be the Achilles heel of the free enterprise system. Cooperation must co-exist with competition.

As we looked around the world, in Singapore, Japan, Taiwan, Germany and France, we saw governments which have a national information policy and a plan for aggressively embracing advanced communications and information technology; and which seem to have reached some semblance of an agreement on the importance of cooperation. Private and public sectors were working together to develop an infrastructure worthy of the post-industrial information economy. In San Diego, however -- like many cities throughout the U.S. -- at almost every level of the government, we were adversaries, it was the cable companies versus the telcos; it was the private sector versus the public sector; it was one ideological battle after another.

Personally, as a lawyer with Morrison & Foerster, and a product of the free enterprise school of management, I'm a great believer in the adversarial, free enterprise system. Today, however, I believe that we have pushed the envelope too far. It seems that everything is in litigation. We have embraced competition and deregulation as ends in themselves. We have eschewed the "vision thing" as just another industrial policy.

Now, facing competition for scarce capital, together with the urgent demands of the global market place, we must find ways to work together in concert, in partnership, through one alliance or another, to create not just the information highways of tomorrow, but the information goods and services which will provide the real wealth and growth in our economy.

II. The task before us is not just about building new communications infrastructures. It is about re-engineering our national institutions and transforming our institutional ways of thinking.

The debate over infrastructure really isn't about how we get the City or the State or the Nation wired, as much as it is how we transform the way we work and live.

Unless we can bring the full benefits of these advances in telecommunications to businesses large and small, government and the non-profit sector, and individual consumers, we will fail to capitalize on the genius the technology affords us. Importantly, we must find ways to energize, excite and involve whole communities: librarians, school teachers, health care providers and other workers, young and old, indeed every sector of our economy and society. This is what both Singapore and Yokohama (cities and city-states about the size of San Diego, by the way), are doing. They have launched aggressive efforts to bring their various publics into the dialogue. I believe the efforts underway in those cities will largely depend on how successful they are in reaching out beyond the major traditional users and suppliers of telecommunications and information technology.

In San Diego for example, we have -- in a figurative sense -- about completed the job of "wiring" the city. Fiber optic wire has been laid by the telephone company, and the four cable operators in the area, of course; but also by the Water Utility, SDG&E, UCSD, SDSU, the U.S. Navy and many others, in cooperation with so-called alternate service providers. I suspect other cities might discover similar patterns of distribution.

The question for us however, is not whether the city gets wired, but whether those various networks are interconnected and interoperable; and whether the combined transmission capacity all those systems represent -- particularly those public and commercial systems -- is accessible and affordable for the broadest possible array of services to the broadest number of people. These clearly are the more serious issues facing us. While it would be premature and indeed, presumptuous to say the least, for me to suggest any answers today, it is clear that structurally we can begin to develop a mechanism for dealing with those issues. And if we can't, then for cities to exercise their municipal powers, and create a broadband communications utility -- privately run and privately managed, but clearly for the benefit of the entire community.

III. We need a new "Federalism" and a new Federal/State/Local partnership for the development of public policy in the vital area of telecommunications.

Although I have spent a fair amount of my life as a regulator and policy maker at the Federal level, I have never believed that Washington, D.C. is any fountain of wisdom on these issues, and trickle down government in the area of telecommunications simply has not worked. We've all seen gridlock on too many issues out of Washington and other national capitals. Telecommunications is no exception.

President Clinton and Vice President Gore might have a grand and thoughtful vision of a national information infrastructure, however I believe it's what happens in the last geopolitical subdivision -- the cities and local municipalities -- that is most important. It is there, after all, where the responsibility for delivering services to the consumer ultimately rests. And it is the cities and counties that must develop their own telecommunications policy and begin shaping telecommunications decision-making within their jurisdiction. I don't mean to suggest this should be done independent of the State or Federal laws or regulations. To the contrary, I do believe it requires a new dialogue, a new federalism if you will. Indeed, I would suggest that a federal, state and local dialogue is long overdue, and a slightly more formal process for developing policy in this area is ripe for action.

Against that background, San Diego and now through SDSU's International Center for Communications on behalf of the State of California, is focused on several broad areas. Again, in the interest of time, let me mention three areas of interest and concern to everyone: (1) education, (2) health care, and (3) the delivery of government services.

In a knowledge-based economy, it is clear that knowledge or information itself, and the ability to produce, store, transfer and disseminate that knowledge is fundamental to economic development. These skills are forcing us to rethink traditional notions of education, how it is defined, what an educated person is, and importantly, the delivery of education as well. Yet in many ways, education hasn't changed since the 13th century. Students are still herded into the classroom, and teachers stand in the middle of the room delivering education mouth-to-ear. It isn't long before the students start losing interest, usually about after the first ten minutes. We know their interest goes up as does "learning efficiency" as James Dezell, former president of IBM's Education Division put it, when we show a picture or provide audio-visual stimulation. We know, too, that learning efficiency goes off the chart when the student asks a question or begins to interact. Multimedia computing and Internet access clearly provide such interactivity.

For years, in our zeal for excellence in math and science, art and music, were cut out of the school curricula. Now we are beginning to learn that putting arts back in the classroom inspires overall student achievement, lowers dropout rates, strengthens multicultural understanding and even helps students with disabilities succeed. Importantly, it may provide the creative skills our young people so desperately need and will need to succeed in an information-based society. And, we are learning it enhances math and science prowess. Multimedia integrates those disciplines nicely.

But this is just the beginning. Schools and universities everywhere must find ways of creating new programs that cross the lines between disciplines, cultures and institutions. The world has changed and schools and their students, and future employers demand broadbased, interdisciplinary, international curricula that produce a different and more relevant learning experience. The old curricula bounded by discipline and tradition, constrained by fixed schedules and limited to assigned space, must be re-evaluated and the tools of telecommunications -- fiber optics, multimedia, high resolution video, video conferencing, cable and satellite networks -- must be employed to provide distance learning and extended access to research, resources and colleagues across the city and across the world. Accordingly, a focus on education and linkages to central libraries and other educational resources within the community are vitally important. Indeed, in San Diego, a major committee for "Smart Libraries" with state of the art technology in multimedia, virtual reality, and Internet access providing linkages thoughout the region, has been designated a high priority.

Health care is another critical area that merits attention. In the U.S. alone, for example, 40 billion to 80 billion dollars a year could be saved using advanced communications technology for the routine transfer of laboratory tests and the more orderly collection, storage and retrieval of patient information. But this is just the beginning. Health care is essentially a knowledge or information intensive business, and the health care industry is heavily dependent on and comfortable with information technologies. It is clear that information technology must be used to increase efficiencies, not just on the cost side of the equation, but to redefine health care itself.

For example, consumers of health care are relatively uninformed. Some might even say ignorant of their own bodies. This ignorance contributes greatly to the cost of health care, and is a major barrier to shifting the emphasis from cure to prevention. But the biggest near-term problem, at least in the U.S., is that the system used by hospitals, physicians and laboratories throughout the country, are a hodgepodge with little standardization and very little interoperability.

The shortage of primary care physicians further contributes to the scarcity of health care delivery. Fortunately, again telecommunications can and should play a central role in a new health care environment in three broad areas: (1) through creation of a health care utility linking all the facilities, laboratories, educational health care organizations and others responsible, including the insurance carriers in a system allowing for the routine transfer of information of any kind, at any time, anywhere; (2) establishment of a sustained program of consumer education, empowering the citizens to assist with their own diagnosis, and to provide remote delivery in some instances of health care itself; and lastly, (3) through a vigorous re-examination and redefinition of primary care, with an eye to eliminating the problem of a shortage of primary care physicians, but importantly, taking the first step toward using the sophisticated tools of telecommunications, not only for telehealth, but telemedicine as well.

Convergence of technology and economics has certainly had its toll on the structure of business. In the face of global pressures, business and industry worldwide are going through an agonizing process of reengineering themselves, redefining their core missions, and reallocating resources to match the disciplines of the marketplace. Businesses worldwide are competing for a shortage of capital and consumer spending. No institution, no business large or small is exempt from this new paradigm. Government is no exception.

All over the world governments are being asked to do more, but with less. Taxpayers already overburdened, are unwilling to increase the costs of government. The answer, again, is telecommunications. In order to increase efficiency and reduce costs, but importantly to make government more accessible, it is imperative that governments look for ways of transforming the way services are delivered and to use technology on a daily operational basis to enhance governmental productivity.

One area ripe for exploitation is the way in which government interfaces with its citizens, its consumers if you will. If you are looking for the school nearest you, in search of government employment, or a permit to do business, you could wander forever through the halls of bureaucracy -- or for that matter, the local telephone directory -- without much success. Increasingly, however, kiosk-based systems are being deployed to integrate many government services to provide a common face of government to the extent possible. Email and electronic bulletin boards are being used to make government officials more accessible, and electronic payments systems are being deployed to enhance the process by which the normal everyday relationship between the citizen and their government are conducted.

By far the biggest opportunity lies in the deployment of "privatization" and the development of private/public partnerships. In many countries, governments are already selling off their national monopolies, airlines, railroads, electric utilities to the highest bidder, then pocketing the cash to reinvest elsewhere simply to service their national debt. However, many others are struggling to rebuild existing infrastructures, bridges, roads, and airports, by joining hands with private enterprise in the financing and often in the managing as well. According to economist Sharon Kahn, more than $50 billion dollars in partnership-funded projects are already in the works.

In most cases, the government isn't getting out of the business entirely. If the public welfare is at stake, governments are merely redefining their responsibility to provide public services in forming partnerships with industry to deliver them. This partnership approach holds great promise to deliver the new infrastructure and the new services of the information age. San Diego recently undertook a first step with something euphemistically called "InfoSanDiego," a joint venture between the county and NCR and Maxwell Laboratories, to provide citizens throughout the region with a quick and user-friendly way of getting all kinds of information about county and city services, whether education, transportation or health care. Other private users are joining forces to put their information on the system as well. NCR and Maxwell, and the county and city are truly venture partners, with NCR and Maxwell contributing the computer software and the kiosks, and the county and city providing most of the information. Both will benefit and both will be part of the enhanced revenue stream derived from the joint access and sale of both government and commercial services.

Similar experiments with privatizing the delivery of government services are taking place in other cities throughout the country, and the development of truly private/public partnerships on a broad scale are beginning to emerge.

New York, for example, has the most aggressive. Called Metrotech, it is a $500 million, 16-acre urban research and office park that is being developed by Brooklyn Polytechnic University in cooperation with the State of New York and various businesses in the region. Metrotech will create 14,500 new jobs, while retaining more than 500 existing jobs in the area. New York Telephone and the New York Teleport, which is the largest such facility in New York, will support Metrotech's high-speed communications needs with fiber-optic networks. It is this immediate, direct access to optical fiber and broadband communications which led the Securities Industry Automation Corp. to locate in the park. For the same reason, investment banks Morgan Stanley and Goldman Sachs also moved recently to downtown Brooklyn, just blocks from the site.

I realize that I have just scratched the surface. The design of a public policy framework to encourage the development of "Smart Communities" -- encouraging local and regional collaboratories -- is of fundamental importance to every nation.

Let me conclude by referring to a study completed in 1992 by SDSU's International Center for Communications which preceded our work for the City of San Diego, and the State of California. The study concluded:

1. That the world is moving swiftly toward global interconnectivity;

2. Economic and social rewards will go the the cities and regions that organize themselves to participate effectively in the information-led economy that is emerging; and

3. Those areas that do not choose to follow this path will be left behind.

The study put it succinctly: "There is a tendency to see communications issues in national and state terms to the neglect of the pivotal role of the city or region, where responsibility for the whole community is finally lodged. The city's purview encompasses all elements of the business, the farmer, the average citizen and family as well -- to assure access to the business, professional, educational, health and social benefits that are the promise of a universally accessible, advanced communications infrastructure."

I know there are those who doubt the value of such bottom-up efforts, or question the leadership role of government in developing new local information infrastructures. I am not a Pollyanna about all of this. As I've said before, it's still early in the process to predict how and where San Diego will come out, or how a similar plan on a statewide level will unfold. But it should, indeed it must engender new cooperation between the private and public sectors. It must engage all of our publics, particularly those who are in a position to benefit most by these new infrastructures. Indeed, if we are successful, it will be because we will have spawned a cornucopia of new alliances -- often between competing companies, and between government and industry.

This is not a question of private versus public ownership -- indeed, the state could agree to "privatizing" the system and create a private/public corporation limiting the role of the state in the management of the system. This is not a question of capitalism or socialism either. It is a question of economic survival. If the information highways are not built, the information goods and services will simply not be forthcoming. And the genius of our enterprise and the promise of a better, more productive way of life denied.

Thank you.