[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
THE NTIA REAUTHORIZATION ACT OF 1999
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TELECOMMUNICATIONS,
TRADE, AND CONSUMER PROTECTION
of the
COMMITTEE ON COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
MAY 11, 1999
__________
Serial No. 106-55
__________
Printed for the use of the Committee on Commerce
------------------------------
U.S. GOVERNMENT PRINTING OFFICE
56-610CC WASHINGTIN : 1999
COMMITTEE ON COMMERCE
TOM BLILEY, Virginia, Chairman
W.J. ``BILLY'' TAUZIN, Louisiana JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas RALPH M. HALL, Texas
FRED UPTON, Michigan RICK BOUCHER, Virginia
CLIFF STEARNS, Florida EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio FRANK PALLONE, Jr., New Jersey
Vice Chairman SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania BART GORDON, Tennessee
CHRISTOPHER COX, California PETER DEUTSCH, Florida
NATHAN DEAL, Georgia BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma ANNA G. ESHOO, California
RICHARD BURR, North Carolina RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California BART STUPAK, Michigan
ED WHITFIELD, Kentucky ELIOT L. ENGEL, New York
GREG GANSKE, Iowa THOMAS C. SAWYER, Ohio
CHARLIE NORWOOD, Georgia ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma GENE GREEN, Texas
RICK LAZIO, New York KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming TED STRICKLAND, Ohio
JAMES E. ROGAN, California DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois THOMAS M. BARRETT, Wisconsin
HEATHER WILSON, New Mexico BILL LUTHER, Minnesota
JOHN B. SHADEGG, Arizona LOIS CAPPS, California
CHARLES W. ``CHIP'' PICKERING,
Mississippi
VITO FOSSELLA, New York
ROY BLUNT, Missouri
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland
James E. Derderian, Chief of Staff
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Telecommunications, Trade, and Consumer Protection
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL G. OXLEY, Ohio, EDWARD J. MARKEY, Massachusetts
Vice Chairman RICK BOUCHER, Virginia
CLIFF STEARNS, Florida BART GORDON, Tennessee
PAUL E. GILLMOR, Ohio BOBBY L. RUSH, Illinois
CHRISTOPHER COX, California ANNA G. ESHOO, California
NATHAN DEAL, Georgia ELIOT L. ENGEL, New York
STEVE LARGENT, Oklahoma ALBERT R. WYNN, Maryland
BARBARA CUBIN, Wyoming BILL LUTHER, Minnesota
JAMES E. ROGAN, California RON KLINK, Pennsylvania
JOHN SHIMKUS, Illinois THOMAS C. SAWYER, Ohio
HEATHER WILSON, New Mexico GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING, KAREN McCARTHY, Missouri
Mississippi JOHN D. DINGELL, Michigan,
VITO FOSSELLA, New York (Ex Officio)
ROY BLUNT, Missouri
ROBERT L. EHRLICH, Jr., Maryland
TOM BLILEY, Virginia,
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Crawford, Kenneth C., Director, Oklahoma Climatological
Survey, University of Oklahoma............................. 66
Irving, Hon. Larry, Assistant Secretary for Communications
and Information, Department of Commerce.................... 6
Miller, Harris, President, Information Technology Association
of America................................................. 52
Rogers, James A., Retired Representative, United Parcel
Service.................................................... 60
Ross, George E., Assistant Inspector General for Auditing,
Department of Commerce..................................... 42
Skinner, Colonel Richard W., Assistant Deputy Secretary of
Defense, Space and ISR Programs, Department of Defense..... 48
(iii)
THE NTIA REAUTHORIZATION ACT OF 1999
----------
TUESDAY, MAY 11, 1999
House of Representatives,
Committee on Commerce,
Subcommittee on Telecommunications,
Trade, and Consumer Protection,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 p.m., in
room 2123, Rayburn House Office Building, Hon. W.J. ``Billy''
Tauzin (chairman) presiding.
Members present: Representatives Tauzin, Deal, Shimkus,
Pickering, Markey, Luther, and Dingell (ex officio).
Also present: Representative Upton.
Staff present: Mike O'Rielly, professional staff member;
Cliff Riccio, legislative clerk; and Andy Levin, minority
counsel.
Mr. Tauzin. The Subcommittee on Telecommunications, Trade
and Consumer Protection will please come to order. I would like
to thank you all for being here for the hearing on the NTIA
Reauthorization Act of 1999.
This hearing is an opportunity to take a look at a
discussion draft of legislation that tries to help reform NTIA
to be more efficient and better equipped to handle the better
changing world of communications.
NTIA is a small Agency within the Department of Commerce.
Some of the NTIA's core functions include serving as the
President's principal advisor on telecommunications matters--I
thought the Vice President did that--signing and managing
spectrum for Federal users, representing the United States on
telecommunications trade matters, and NTIA also administers two
active Federal grant programs.
Congress last authorized the agency 7 years ago, and this
committee held a hearing on the agency's reform 2 years ago.
Let me say at the outset that I believe this discussion draft,
which all of you have received and focused your testimony on,
is just that, a discussion draft upon which we hope to base
some dialog. And I want to thank the members who worked very
hard to make this possible--Mr. Upton, Mr. Deal and Mr. Shimkus
in particular--and offer to them again the assistance of the
Chair in coming to some agreements on the bill.
The NTIA Reauthorization Act of 1999 will be introduced in
the House soon, and changes between now and then could reflect
the exchange that we have today. If there are problems that you
have with the discussion draft, now is the chance to make them
known and to suggest changes as may be the case.
The draft does several things. First, it authorizes
appropriations for NTIA operations. It was therefore imperative
to have its head of operations, my good friend, Larry Irving,
here to discuss the entire draft as well as the overall reform
effort.
Second, it deals with the spectrum management function of
NTIA. We have an opportunity to hear from a representative of
the Department of Defense to talk about something other than
Kosovo, to talk about the spectrum management of NTIA and how
his agency as well as representatives from UPS will discuss
with us how spectrum management by NTIA actually aids the main
competition to their business and serves the agencies for whom
it is designed to serve.
What the draft does is to statutorily require NTIA to
receive full reimbursement from the other Federal agencies for
the spectrum management duties that NTIA performs. A very
important issue of spectrum management reimbursement or lack
thereof has been an ongoing problem, and even though NTIA has
improved on this, right now the other agencies will only pay
about 80 percent of what they owe. I wonder how the IRS would
react if you or I decided to pay 20 percent less in taxes this
year and claimed there is just no way that I can give you the
rest, so do without it.
The discussion draft sets up a mechanism to find the value
of the lab in Boulder, Colorado and see if there is an interest
in the lab's purchase.
Fourth, the draft establishes a road map for the future of
NTIA. The draft requires GAO and the Inspector General, who is
represented here today, to conduct studies into the long-term
efficiency of the agency and, in turn, for NTIA to report to
Congress its final plan for reform. It is important to note
that the discussion draft does not mention the grant programs
that operate under NTIA, its largest expenditure in the area of
largest controversy.
It is my hope that this hearing should examine whether
these programs are already allocated on similar programs in
other Federal agencies. If my memory serves me correctly, it
was Chairman Bliley who mentioned in our last hearing on this
issue that there is evidence of grants given to entities who
compete against private firms. This issue is one certainly we
ought to review today. At the very least, there is room for
improvement in this area.
At the end of the day, the American public and this
subcommittee will be more educated on the question of whether
targeted reform of NTIA is necessary, justified, and beneficial
to American taxpayers. I want to thank the witnesses here
before us in advance and look forward to their testimony.
The Chair is now pleased to recognize the ranking member of
the full Commerce Committee, the gentleman from Michigan, Mr.
Dingell, for an opening statement.
Mr. Dingell. Thank you, Mr. Chairman. I commend you for
holding this hearing and appreciate the fact that we are going
into the question of the reauthorization of NTIA which has not
for some time been reauthorized. The agency has been acting
without express authorization since 1994, and I commend you for
your efforts to remedy that unfortunate situation.
Mr. Chairman, I believe you join me in supporting the
important functions that NTIA reforms. It is a well-run agency,
thanks in good part to the fine leadership of Larry Irving who
was associated intimately with this committee over the years.
When writing legislation, the committee often calls upon NTIA
to conduct studies and make telecommunications policy
recommendations. We rely on that agency because it has a well-
deserved reputation for conducting balanced and thorough
reviews.
In fact, NTIA was recently tapped by this committee to
perform an important study on the impediments to cable TV
competition in rural markets. You, Mr. Chairman, were quite
forthright in explaining to the reporters why the committee
made that selection. You said, ``There is confidence in this
committee with the NTIA that does not extend to the FCC.'' I
wonder why it is this committee does not hold such high
enthusiasm for the FCC, but certainly I understand why it is
that we approve of the activities of NTIA. And I certainly
can't agree with you more.
For that reason, Mr. Chairman, I am somewhat troubled by
the so-called discussion draft now being circulated. I hope
this draft is merely a first cut made by the staff, because it
contains some apparent serious defects. First, it contains no
funding for the Telecommunications and Information
Infrastructure Assistance Program, or the TIIAP. TIIAP is
arguably the most effective information technology grant
program available today. The program provides seed money for
nonprofit groups for the best and most creative projects that
might otherwise never get off the ground. It is a tremendous
success story that has touched community-based organizations
all over the country, many no doubt in districts served by
members of this committee. Congress has consistently
appropriated funds to this program for each of the past 5
years, and certainly there is no evidence to suggest that such
funding should be curtailed.
My hope, Mr. Chairman, is that the elusive TIIAP program
was a simple oversight in the drafting process, and that matter
will be corrected.
Second, the draft contemplates sales of NTIA's research lab
in Boulder, Colorado to a private entity. Privatization on many
occasions makes great sense. For example, it may be done to
gain operating efficiencies. It may be done to recoup value for
the taxpayers. It may be done because the investment is no
longer useful for its intended purpose. I am not sure that any
of these reasons apply in this case. In fact, the sale of this
facility may actually reduce efficiency and lose value to the
taxpayer.
I look forward to hearing from the witnesses today on these
and other topics relative to NTIA's reauthorization. It is a
critically important responsibility of this committee, and I
look forward to working with you and Chairman Bliley to fashion
a bill we can all support. Thank you again for holding this
hearing and for initiating a very important process. I yield
back the balance of my time.
Mr. Tauzin. I thank the gentleman.
The Chair now yields to Mr. Upton.
Mr. Upton. Thank you, Mr. Chairman. We all appreciate this
hearing on NTIA. One of the important duties of our committee
is to conduct oversight hearings on departments and agencies
under our jurisdiction.
It has been a number of years since the NTIA was last
reauthorized, so I believe today's hearing will provide the
subcommittee with important information regarding the workings
of the agency and how it is addressing telecommunications
issues that truly face our Nation.
I am also looking forward to a discussion of the grant
program under the agency's direction and the process by which
Federal funding has been allocated to recipients around the
country. Although the formal NTIA bill is close to being
introduced, the discussion draft that has been circulated
should in fact serve as a good starting point as this committee
seeks to develop a bill that is fiscally responsible,
bipartisan, and in the best interests of the American people. I
yield back the balance of my time.
Mr. Tauzin. I thank the gentleman.
Mr. Shimkus is recognized for an opening statement.
Mr. Shimkus. Thank you, Mr. Chairman.
I appreciate you calling this hearing today, and I would
like to also thank Chairman Bliley and yourself for allowing me
to be part of the working group on reauthorization. I am proud
of the work we have done, especially the issue that we have
sorted through, our discussion draft that we have before us
today. While it does not address all of NTIA's programs or the
concerns voiced by members of the working group, I believe it
is a very good start in the reauthorization of the agency.
Mr. Chairman, I am specifically interested in the grant
programs and how we can make them work efficiently, especially
TIIAP. Additionally, there is an ever-present issue of the
duplicative nature of the grant program that I think we need
and should address. These grants allow many organizations to
gain access to new technologies, and most of the time these
grantees work hard to fulfill their obligations under the grant
contract.
Additionally, I believe that the good that comes from the
grant program should continue. However, there are programs with
TIIAP that we need to take a close look at before any
authorization language is added to the bill. I realize that the
IG has reviewed some of the grants that have had problems, and
also NTIA's grant process. I will be following that up with
questions in the question period. While NTIA has recognized
some of these problems and tried to correct them, more can
still be done to make these grant programs even more
beneficial.
Thank you for holding this hearing, Mr. Chairman, and I
look forward to today's testimony.
Mr. Tauzin. I thank the gentleman.
[Additional statement submitted for the record follows:]
Prepared Statement of Hon. Nathan Deal, a Representative in Congress
from the State of Georgia
Thank you, Mr. Chairman, for holding this hearing today regarding
reauthorization of the National Telecommunications and Information
Administration (NTIA). As a member of Chairman Bliley's task force to
reauthorize NTIA under the Department of Commerce, I appreciate your
attention to this important matter.
I believe the draft bill before our discussion today is a good
baseline from which to examine NTIA. While we held a hearing on the
agency in 1997, and studies have been conducted to look at individual
components of NTIA programs and grants, we must gain perspective for
the agency as a whole. Thus, as we advance further into the age of
telecommunications, I agree it is pertinent to examine the agency
overall.
Perhaps one of the most significant tasks of the NTIA is managing
radio spectrum for the federal government. We must ensure that national
departments and agencies have access to the spectrum necessary for
public safety measures, education, and consumer protection, while
avoiding interference over the radio waves. For example, our military
and air traffic controllers greatly depend on adequate and reliable
spectrum to succeed in their government functions. I look forward to
hearing from Col. Skinner of the Department of Defense on this issue
today.
Spectrum management must be efficient. I am pleased that the
discussion draft of legislation would require NTIA to receive
reimbursement for all spectrum management functions conducted for other
federal agencies. As you know, previous appropriations bills in
Congress have asked that NTIA recoup only 80 percent of reimbursement
costs. The provisions of the draft bill would provide NTIA with a
statutory requirement that it not conduct such work without
reimbursement at 100 percent. Such a provision would also allow
agencies the time to comply with such additional costs, as NTIA would
not collect associated fees until October 1, 2001. We can improve in
this area--we must ensure that NTIA is reimbursed by other federal
agencies at a rate of 100 percent for spectrum allocated. It is not
fair for NTIA to subsidize other government entities at rates of up to
20 percent.
We should also encourage the use of spectrum provided by the
private sector or commercially available service providers by
government entities if appropriate and less costly. At the same time,
we must also promote fair and competitive opportunities for businesses
competing with government for spectrum services. I hope to learn more
on this issue from Mr. Jim Rogers of UPS here today.
With improvements made in these areas, increased funds will allow
NTIA to better able perform its overall responsibilities of spectrum
management, informative telecommunications policy, development of a
national telecommunications and information infrastructure, and
performance of research in telecommunications sciences.
Once again, thank you, Mr. Chairman, for drawing your attention to
this issue. I look forward to the testimony from our witnesses as well
as to working with the committee on reauthorizing a forward-looking and
efficient NTIA for the 21st century.
Mr. Tauzin. And the Chair is now pleased to introduce the
panel. As is usually the case, we try to have a large panel,
for two reasons: One, nobody sits around here for the second
panel, and so we try to get it in on the first panel and the
Chair ends up by himself with the second panel. So I decided to
punish all my members by making them sit through the first
panel, but they didn't show up to be punished.
The second thing is that it gives us an opportunity to have
an exchange among you, and I want to encourage you in that
regard. As I introduce you, let me ask you, please, to remember
that your written statements are part of the record so you
don't need to read us a statement. I wish you would engage us
in a conversation, perhaps engage each other in a conversation,
and challenge each other to comment as we go through so we can
get a full educational experience today.
Larry, you are an old friend of mine and this committee, I
echo the comments of Mr. Dingell. I have always had great
confidence in you personally and the way you have conducted
your agency. There is no hostility here. Please know that. The
bill is a draft bill, and the idea of leaving out the grant
programs was designed for you to come in and prove to us that
they ought to be added and how they might be reformed to make
them better. So it is with that approach that we welcome you to
the committee.
Again, let me introduce The Honorable Larry Irving,
Assistant Secretary for Communications Information; Mr. George
Ross, Assistant Inspector General for Auditing, representing
the Department of Commerce; Colonel Richard Skinner, the
Assistant Deputy Secretary of Defense for Space and ISR
Programs; Mr. Harris Miller, President, Information Technology
Association of America; Mr. Jim Rogers, Retired Representative
of the United Parcel Service; and Mr. Kenneth Crawford,
Director, Oklahoma Climatological Survey, University of
Oklahoma.
I suspect that we will learn a lot, and I invite you to
present your testimony. We recognize first Mr. Irving.
STATEMENTS OF HON. LARRY IRVING, ASSISTANT SECRETARY FOR
COMMUNICATIONS AND INFORMATION; GEORGE E. ROSS, ASSISTANT
INSPECTOR GENERAL FOR AUDITING, DEPARTMENT OF COMMERCE; COLONEL
RICHARD W. SKINNER, ASSISTANT DEPUTY SECRETARY OF DEFENSE,
SPACE AND ISR PROGRAMS, DEPARTMENT OF DEFENSE; HARRIS MILLER,
PRESIDENT, INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA; JAMES
A. ROGERS, RETIRED REPRESENTATIVE, UNITED PARCEL SERVICE; AND
KENNETH C. CRAWFORD, DIRECTOR, OKLAHOMA CLIMATOLOGICAL SURVEY,
UNIVERSITY OF OKLAHOMA
Mr. Irving. Thank you, Mr. Chairman. Let me thank you and
members of the subcommittee for holding this important hearing.
Having served as Assistant Secretary for NTIA for the last 6
years, I have seen our role continue to evolve. As
telecommunications becomes more and more important, information
technology becomes more and more important.
Just last week, Alan Greenspan stated that technological
innovation is responsible for the Nation's phenomenal economic
performance--and that is his word. Mr. Greenspan noted that the
newest innovations which we label information technologies are
beginning to alter the manner in which we do business and
create value, often in ways not readily foreseeable even 5
years ago. And having served in this job for 6 years, I can
tell you almost nothing I am doing today did I think I would be
doing 5 years ago.
The reality is information technologies and
telecommunications represent $1 trillion of the $7 trillion
economy. One-seventh of our national economy is
telecommunications information technology. Our expertise in
information and telecommunications sectors are helping resolve
critical questions of our global economy. We are trying every
day to do more with less.
In addition to the daily functions that NTIA has, we have
taken a new function over the past year. We are working
actively across the administration on electronic commerce
issues, issues such as domain names, on-line privacy content,
how to get more broadband access built out. We cosponsored
international telecommunications summits, including the Latin
American Telecom Summit and the China-U.S. Telecom Summit where
U.S. industry had a chance to meet with Chinese and Latin
American officials to talk about opening up those markets.
We served a lead role at the International
Telecommunications Conference and at the Plenipotentiary
Conference in Minneapolis. And thank you for your support of
the ITU Plenipotentiary.
We are taking the lead, pursuant to the President's
directive, on the Critical Infrastructure Protection
Initiative. Just as Y2K threatens problems for our Nation's
economy, so do attacks on our Nation's telecommunications
information infrastructure. We are very dependent upon them.
And that is just the beginning of all of the things that we
have to do. We are pleased that this committee and other
congressional committees have asked NTIA to conduct five or
more studies, and also to staff the congressionally appointed
Children's On-line Protection Commission within the next year.
Pending legislation would give us responsibility for three more
studies.
And at the same time as our responsibilities are mounting,
our staffing levels have been decreasing. Since 1994, we have
gone from 361 full-time employees to 267, more than a one-
fourth decrease. And in our fiscal year 2000 budget, we sought
an increase in our staffing levels in a budget of $17.2
million, primarily because of Critical Infrastructure
Initiatives and to help public broadcasters as they move over
to digital television.
Let me turn to our concerns with the discussion draft.
First, the funding level of $7.9 million is well below the
$17.2 million requested and would not provide, we believe, the
funds for new initiatives or programs such as the staffing for
the CIP program or the Children On-Line Protection Act
Commission.
My second concern is the privatization of the lab. We
believe that would eliminate a critical Federal resource. There
is unparalleled expertise in these laboratories supporting
NTIA's spectrum management and telecommunications functions. It
provides our office spectrum management and those we serve in
that office with critical research expertise and it conducts
research for many other Federal agencies. My concern is if you
get rid of NTIA's labs, the people we support will go out and
create their own duplicative labs, and in many instances,
because security clearance is needed and specific subject
matter expertise, there are not private labs to do this job.
The laboratory recently helped this committee with regard
to the Satellite Home Viewers Act. There was no independent lab
that wasn't doing similar work for someone who had a vested,
commercial interest in how the SHVA turned out.
We have also assisted the FCC as they were doing digital
television. Again, because of the impartial interest of those
labs, we were able to give an objective view, and those labs
are cost efficient. We follow the Economy Act, and we only
charge for costs incurred. If the lab were privatized, Federal
agency users would either increase their research budgets or
pay higher rates to private businesses. No savings to the
taxpayer; and, moreover, there are very few assets to be sold.
Most of the assets are the tremendous human resources in those
labs. We have very few physical resources that can be sold to a
private sector entity.
For those reasons, external and internal reviews have
concluded that NTIA's labs satisfy a compelling need for a
centralized, cost-effective, unbiased Federal facility.
Mr. Chairman, I have three studies dating back to Dave
Markey and Al Sikes that I would like to present the committee
with regard to privatization initiatives that preceded me.
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Mr. Irving. A third concern that I would like to raise is
that it doesn't authorize TIIAP. That is a merit-based,
competitive matching grant program that disadvantaged
communities across this Nation are taking advantage of. We are
doing things in health care, public safety and delivering of
better public services, and I don't make decisions in
Washington except as to what should be funded.
What particular grants come to us, those are locally
driven. There is tremendous national interest in this program.
We have 14 applicants for every one that we fund, and today you
will hear from Oklahoma about how this grant saved lives just
last week in Oklahoma across that State.
I have worked with Congressman Upton on projects in
Kalamazoo and I remember speaking over a teleconference when
that grant was awarded. We have worked closely with you, Mr.
Chairman, with regard to Nicholls State. We talk about
connecting schools and libraries; what about those men and
women who work on oil rigs who need further education? TIIAP
has provided educational facilities, and is doing things with
health care in the State of Louisiana.
Today, Mr. Chairman, there is a front page USA Today
article on one of our grant programs. It is talking about
parents adopting on-line. Four years ago, 5 years, NTIA gave a
grant, and there is a fuller story in the inside section, about
adoptions on-line.
[The article follows:]
[USA TODAY]
Online Adoption Sites Forge Unlikely Links
By Marilyn Elias
They were hardly members of the Most Likely to Be Adopted club. In
fact, if it hadn't been for the Internet, they might never have found
homes.
Six-year-old Abel had been kicked out of Head Start for aggression.
His foster parents said he shredded curtains in fits of fury, and he
still was not toilet-trained.
Joshua had attempted suicide by age 7. Social workers described him
as aggressive, probably retarded.
Breauna, 14, survived severe abuse from parents said to be in a
satanic cult. Her social worker doubted any family would adopt her.
She'd soon start on an ``independent living'' track, preparing to live
on her own at 18 with Social Security payments for those with
disabilities.
But all three youngsters were adopted by American families in the
past few years. And after some bumps along the way, all three appear to
be thriving in their new homes.
Abel, Josh and Breauna joined families in other states who saw
their photos and personal profiles on the Internet.
Net listings first appeared in 1995 with a few dozen hard-to-place
kids shown on a Web site established by the National Adoption Center
and Children Awaiting Parents, two national agencies that find adoptive
homes. Now there are 1,600 youngsters at the site, largest in the USA.
Thirty-seven states have created sites since 1995, typically
listing children they've been unable to place locally. Last month, the
federal government announced plans to create a Web site by 2001 for all
U.S. kids awaiting homes through public agencies.
``The Net is the best tool we have,'' says Carolyn Johnson,
executive director of the National Adoption Center. Many youngsters
adopted from FACES, the center's site, ``weren't likely to have ever
found homes,'' she says.
The Net's capacity to dissolve state lines instantly, linking
children to prospective parents everywhere in the USA, could make it a
key asset for meeting the challenges ahead, says Carol Williams of the
Children's Bureau at the U.S. Department of Health and Human Services.
About 8,000 U.S. youngsters now need adoptive homes. But that
number could double or triple in the next two years, Williams says. A
1997 federal law shortened the time kids can remain in foster care
without plans for a permanent home. As youngsters become available more
rapidly, the need for families is expected to grow, and so must the
pool of prospective parents.
The new government site will not deliver adoption nirvana for
parents seeking a pink-faced infant, Williams cautions. The vast
majority of youngsters shown online will be over 3 years old. Many will
have disabilities--physical, intellectual or emotional. Some will be
part of package-deal sibling groups. A significant number will be
racial minorities, Williams says. But the site will improve the chances
that these difficult-to-place children will find parents who want them.
Instant access to children's photos and profiles through computers
doesn't mean instant adoption, experts emphasize. It's not like
ordering books from Amazon.com.
Just as in traditional placements, parents must have a home study
done by an agency in their state to ensure they can provide a safe,
healthy environment. The child's social worker then considers whether
the family would meet his needs.
Texas, the largest state site, with 532 kids shown, started
offering short video downloads in March. An adorable 3-year-old shows
she can sing her ABCs. Other kids tell about their interests. ``It
humanizes children, especially those with disabilities,'' says Ella
Zamora of the Texas Adoption Resource Exchange.
``When you see that child's face and hear her voice, you may decide
you don't want to adopt a kid like that. But sometimes people have
stereotypes--a child with cerebral palsy is a certain way--and when you
see the child, you realize your perceptions were not true.''
Texas adoptions increased in fiscal 1997-98 by 76% from the average
for the three previous years. It was among the largest rises of any
state, ``and the Internet was an important factor in that,'' Zamora
says. Inquiries soared from 1,100 in 1996 to 9,555 in 1998, ``and the
big jump came from families looking on the Net.''
For Illinois children, Net outreach has helped place brother/sister
groups, including three black siblings recently adopted by a Virginia
family, says Marilyn Panichi at the Adoption Information Center of
Illinois.
Families adopting through the Net typically visit a child several
times, including overnight and longer visits, and the child might visit
in the family's home before the decision to adopt is made.
Social workers sometimes prefer that their adoptable kids stay in-
state.
This resistance to letting go of children is among the areas that
need work at the state level before the federal Web site goes up, says
Williams of the federal Children's Bureau. More social workers will be
needed, too, as family inquiries increase, and costs will be shared by
the federal and state governments, she says.
Some critics see the most serious drawback of using the Internet to
expand special-needs adoptions not in the Net itself, but in human
failure to inform adoptive parents about what they'll face when they
adopt older children or those with disabilities.
Candor about the extent of kids' problems has increased the past 20
years. But, concedes Williams, ``full disclosure is something we
continue to work toward. Most state agencies expect their staffs to
provide full disclosure, but it continues to be a concern.''
Sometimes children don't even tell all that's happened to them
until they've been in a safe adoptive home for years.
In other cases, the travails and placements are so labyrinthine
that the child is already adopted by the time a state's bureaucratic
machinery untangles and presents the long story of the child's life.
That's what happened to Jim and Heide Thatcher of Pleasant Grove,
Utah. They adopted 14-year-old Breauna, severely abused by parents said
to be in a satanic cult. Records of her last four years were readily
available. But Breauna had been in the Thatchers' home for more than
three months before they received her full file.
``They had tried to describe the extent of her abuse. But you go in
so optimistic, thinking you can handle anything,'' Heide Thatcher says.
Breauna even had a court-appointed advocate who kept asking the
Thatchers if they were sure they could handle the teen.
As it turns out, they almost couldn't. Breauna wrestled with
bipolar disorder, took up with a bad crowd and even attempted suicide.
But with the Thatchers' help, she has turned a corner. Now she's a
college-bound 10th-grader with better than a B average who says her
friends are ``preppies.''
Sometimes adoptive parents feel they were fully informed but still
faced crucial challenges. Laurie and Jon LeBar of Hot Springs, S.D.,
found 6-year-old Abel from Texas and 7-year-old Joshua from Illinois on
the FACES site. They had to persist in teaching both boys to talk out
their anger rather than harm themselves or others.
But both were receptive, and two years after adoption they're
happy, amazingly well-adjusted kids, Laurie says. The LeBars have
adopted several other youngsters of varied races through their initial
Net contact. ``I don't regret it a bit; they're a joy,'' Laurie says.
``We are really living our dream. We've got a big house out in the
country, and we've got this great multicultural family. It's awesome.''
To increase these Net-initiated adoptions will cost the government
more upfront. The federal Web site alone is expected to cost $1.5
million to set up, then $1.25 million a year to run, though HHS hopes
for private contributions.
``You're either going to pay now or pay later,'' says Ann Sullivan,
adoption program director at the Child Welfare League of America.
Youngsters in serial foster care fare poorly as adults in terms of
mental health, education and employment. About 20,000 U.S. youngsters a
year turn 18 without having been adopted. ``We don't talk about
(adoption) costs. We talk about investment.''
And there's something besides dollar signs to consider in launching
Internet recruitment sites.
``Ethically and morally, the state is the parent of these
children,'' Sullivan says. ``I don't see how we can do less than
everything possible to find good homes for them.''
Mr. Tauzin. How did you manage that?
Mr. Irving. We have good public affairs people. Ken Johnson
has been helping me out.
But the amazing thing is that over 5 years we have been
able to do things. We talk about the critical need to make sure
that parents know about adoption opportunities and adopting
children are known across this country; we do that on-line with
a small, less than $200,000 grant. You will hear about other
important grant proposals.
And just today, I picked up an e-mail, noting while we are
getting lots of awards nationally, we are getting international
acclaim. The Bangemann Awards has a TIIAP grantee, the Erickson
Awards has a TIIAP grantee as nominees. I know that I have got
to finish up.
We are working closely with the Department's Office of
Inspector General to make these grant programs better, more
efficient and run better.
I also want to talk about the spectrum management. The 80/
20 split in our estimation is the correct split, and the reason
is that it does not make me a wholly owned subsidiary of my
clients. By having the 20 percent that the taxpayer pays--many
times I am fighting the Department of Defense, fighting
Transportation or Interior over a decision that I have to make.
When somebody pays your bills, they believe they have a lot
more influence over your decisionmaking process, and we never
want to get to a fully 100 percent our clients are paying our
bill.
But the second important issue is by the time the
appropriations process starts in October and Defense gets their
money and gives it to us, there is a timing problem. That 20
percent ensures that we can continue doing the things that we
need to do in our agency while we are waiting for the checks to
be cut at Defense, Coast Guard, and Interior and other places
across the administration.
Those are my primary concerns, Mr. Chairman, but we look
forward to talking to you. I appreciate again your holding this
hearing this afternoon.
[The prepared statement of Hon. Larry Irving follows:]
Prepared Statement of Hon. Larry Irving, Assistant Secretary for
Communications and Information, National Telecommunications and
Information Administration
Mr. Chairman and Members of the Committee: Thank you for this
opportunity to testify today on the reauthorization of the Department
of Commerce's National Telecommunications and Information
Administration (NTIA).
Today, I would like to describe NTIA's unique role in developing
and advocating policy in the telecommunications and information
technology sectors; summarize our FY 2000 Budget Request; and highlight
our key programs and initiatives. I have also attached to my testimony
two appendices. The first is NTIA's Comments on the Discussion Draft
``NTIA Reauthorization Act of 1999.'' The second is a list of Recent
Congressional Studies for NTIA and Potential Studies Proposed by
Congress.
introduction
NTIA's Unique Role
NTIA is the principal adviser on telecommunications and information
policy issues in the Executive Branch. In this role, NTIA helps develop
and present the Administration's position on these issues before the
Federal Communications Commission (FCC) and other domestic and
international fora. NTIA's goal is to assist the Administration and
Secretary of Commerce William M. Daley in promoting the role of the
nation's telecommunications and information industries by creating more
job opportunities, enhancing U.S. competitiveness in the global
economy, and ensuring that all Americans benefit from the digital age.
NTIA is unique among Federal government agencies. The agency's
expertise encompasses every aspect of telecommunications and
information technology. In addition to advocating the Administration's
positions on domestic and international issues, we also manage the
Federal use of the spectrum; resolve complex technical issues through
cutting-edge research in our laboratories; administer infrastructure
grants to promote the development of a widely accessible information
infrastructure; and manage grants to help public broadcasting maintain
their infrastructure and transition to the digital age.
NTIA's role in these areas is more important than ever, given the
ever-increasing significance of the telecommunications and information
technology (IT) sectors to our nation. Today, these technologies are
driving this country's economic growth. The White House Council of
Economic Advisors recently determined that revenues of communications
services and equipment companies rose over 60 percent in the last five
years. Over a third of real domestic product growth in the past three
years has come from IT industries. More than 7 million people are now
employed by IT industries and earn wages that are almost two-thirds
higher than the average for all private sector jobs. And, investments
in new technologies--including computers, satellites, wireless devices,
and information processing systems--account for over 45 percent of
total real business equipment investment.
New technologies will shape our economy even more significantly in
the 21st century, particularly with the growth of the Internet and
electronic commerce. Today, some 160 million worldwide are going online
to shop, invest, trade, and e-mail, according to Nua Internet Surveys.
That figure is expected to increase to 320 million by the end of next
year. As more people and businesses connect online, the ``virtual
marketplace'' will become commonplace. Electronic commerce among
businesses is expected to grow more than fifteen-fold in the next few
years, from $64 billion in 1999 to $980 billion in 2003, according to
International Data Corporation analysts.
The heightened importance of the telecommunications and information
sectors has engendered new and pressing policy development and advocacy
needs. NTIA is using its expertise, leadership, and vision to address
these urgent new questions.
In order to sustain the rapid development of our information
infrastructure, NTIA is considering ways to promote the deployment of
high-speed broadband networks, and to insure that information and
telecommunications services are available and affordable for all
Americans. We are facilitating the development of electronic commerce
(``e-commerce'') by addressing new questions of consumer privacy,
security, and domain name management. We are also working with other
nations to promote a market-driven, flexible and decentralized, and
technology-neutral approach to e-commerce policy. And, we are
coordinating efforts under the federal Critical Infrastructure
Protection (CIP) plan to ensure that our telecommunications and
information infrastructures are secured against physical and cyber
attacks.
NTIA's management of the federal use of radio spectrum is also
promoting public safety and competition. As the managers of federal
spectrum, we are trying to improve efficiency, increase private access
to spectrum resources, and plan for future spectrum needs, including
those relating to public safety. These goals will become ever-more
important as global uses of satellite and wireless devices increase.
We are also working to open up wireless and wirelined markets to
competition, both domestically and internationally. NTIA helped secure
the success of the World Trade Organization (WTO) Agreement on basic
telecommunications services in March 1997. Nearly 70 countries,
representing approximately 95% of the world's telecommunications
revenues, agreed to liberalize their telecommunications markets under
that Agreement. NTIA is now working to ensure, among other things, that
the signatories comply with their countries' regulatory principles in
implementing the WTO Agreement.
NTIA's expertise in these areas will help resolve some of the
critical questions in our global economy. The demands on our expertise
and personnel are growing rapidly, however, as the telecommunications
and information sectors take on increasing importance. Virtually every
day, we address new technologies and new issues. The importance of
these issues is reflected in the increasing number of requests we have
also received from the White House, the Department of Commerce, other
Federal agencies, and Congress. At the same time, our staffing levels
have declined in recent years. In 1994, NTIA had 361 employees; today,
we have 267. NTIA's budget request for FY 2000 should provide necessary
resources to help us respond to the increasing number of demands and
challenges as we enter the new digital economy of the 21st century.
Overview of FY2000 Budget Estimates
Let me start by giving an overview of NTIA's proposed FY 2000
budget. NTIA's budget request for FY 2000 is $72,369,000, with a
staffing level of 336 FTEs. This represents an increase of $23,604,000
over NTIA's FY 1999 funding level and an increase of 48 FTEs. NTIA is
seeking $17,212,000 for Salaries & Expenses (S&E). This includes
increases for enhancing Federal radio spectrum management; upgrading
our telecommunications research facility; implementing World Trade
Organization requirements; and implementing the Presidential Critical
Infrastructure Protection (CIP) program. NTIA is also requesting
$20,102,000 to fund the Telecommunications and Information
Infrastructure Assistance Program (TIIAP), and $35,055,000 to fund the
Public Telecommunications Facilities Program (PTFP). The PTFP request
is part of an Administration initiative with the Corporation of Public
Broadcasting to assist broadcasting stations during the transition to
digital broadcasting.
This funding will help NTIA maintain and augment its existing
programs, which support the development of the nation's information and
telecommunications sectors. I would now like to describe highlights of
these, and other of NTIA's programs, which are critical to the
continued development of our telecommunications and information
technology sectors.
highlights of ntia's program operations
Domestic Policy
NTIA's domestic policy activities support NTIA's responsibilities
as principal adviser to the President on telecommunications and
information policies. The goal of these activities is to enhance the
public interest by generating, articulating, and advocating creative
and influential policies and programs in the telecommunications and
information sectors.
While NTIA believes that open markets, competition, and industry
development serve the public interest, NTIA also works to ensure the
public interest in other ways. Foremost among these issues are those
related to access to basic and advanced telecommunications services,
the ability for people to control indecent or violent information
coming into their homes, the transition to digital television, and
encouraging minority participation in telecommunications. NTIA has also
played a significant role in promoting electronic commerce and
developing Internet policy, discussed in a separate section below.
Throughout its existence, NTIA has developed and advocated policies to
support the public interest in many areas such as these, and will
continue to do so.
NTIA frequently files comments with the Federal Communications
Commission (FCC) to represent the Administration's position on a broad
range of matters. This year, for example, our filings included comments
on the broadcast ownership rules; ``truth-in-billing'' on local
telephone bills; the definition of ``over the air signals'' for
purposes of the Satellite Home Viewers Act; guidelines to promote the
deployment of broadband services; and tariffs relating to digital
subscriber loops (DSL).
As mentioned above, NTIA is also increasingly called upon for its
telecommunications expertise. We assist the White House and other
Federal agencies in implementing the pro-competitive goals of the
Telecommunications Act of 1996, addressing issues relating to new
technologies, and promoting affordable access to the nation's growing
information infrastructure. NTIA also will be an integral part of a
congressionally mandated commission on Internet content as a result of
the Children's Online Protection Act.
Promoting Competition--NTIA continues to work towards eliminating
barriers to competition in the telecommunications industry while
protecting consumers. Throughout NTIA's twenty-year history, this
agency has been at the forefront of pro-competitive telecommunications
issues. Among other things, we contributed our expertise to debates
concerning first passage, then implementation, of the
Telecommunications Act of 1996. This Act required the FCC to adopt
regulations regarding such things as access charges, universal service
to rural and other areas, interconnection, and broadband services. NTIA
filed comments in each of these areas.
Going forward, NTIA will continue to articulate policies on a host
of issues surrounding new, better and lower priced communications
products and services. We are continuing to advocate policies that spur
innovation, encourage competition, and create jobs. NTIA will suggest,
for example, ways to encourage the availability of new services to
rural and underserved communities and will identify impediments to the
growth and vitality of industry sectors.
Addressing New Technologies--New technologies and new competitive
providers are also spawning new questions in domestic policy. Foremost
among these issues are those related to the growth of the Internet, the
transition to digital television, and the widespread availability of
wireless communications devices. NTIA has met these challenges in
various ways. We often focus our limited resources on identifying and
analyzing ``over-the-horizon'' issues well before they become widely
known even among telecommunications professionals. One such issue is
that of ``Internet telephony,'' the use of the Internet or Internet
Protocol, in place of traditional long distance telephony. NTIA
sponsored a forum in 1997 to bring together technical and industry
experts with policymakers. In comments to the FCC that same year, NTIA
took the view that this technology should be allowed to grow and
therefore should not come under full common carrier regulation.
The intersection of industry sectors is also raising additional
sets of issues regarding technological convergence. The telephone
network, for example, is increasingly used to transmit data, and the
television provides viewers access to the World Wide Web. As a result,
we are seeing varied and unique combinations of previously discrete
technologies. Such convergence presents major challenges to the
existing regulatory infrastructure, and NTIA is examining new
regulatory issues and challenges.
Competition, Diversity, and the Public Interest in Mass Media--NTIA
has been active in mass media issues as well. Several years ago, we
promoted inclusion of provisions in the 1996 Telecommunications Act
calling for a voluntary television ratings system and the requirement
that all new television sets be equipped with a ``V-Chip.'' NTIA
believes that the V-chip, in particular, will help parents choose which
television programming is suitable for their children. As the first
television sets containing the V-Chip become available this year, we
will lead efforts to monitor implementation of the V-Chip requirement.
NTIA has also worked to advance policies to protect and extend the
public interest in many other contexts as well. We believe that, as
with other telecommunications services, robust competition in the video
services markets will serve the public interest by providing consumers
with greater choices, lower prices, and better services. Thus, for
example, we wrote to the FCC last year regarding the matter of delivery
via satellite of television network signals to households unable to
receive local broadcast signals. We urged the FCC to adopt a definition
and measurement of ``over the air grade B signal intensity'' to promote
consumer choice and competition. More recently, NTIA helped develop the
Administration position on pending legislative proposals to modify the
Satellite Home Viewer Act.
In developing mass media policies, competition often supports the
additional goal of providing a diversity of voices to be heard by the
American people. NTIA has been monitoring trends towards concentration
in the ownership of radio and television stations. The
Telecommunications Act of 1996 relaxed broadcast ownership rules and
directed the FCC to review the public interest merit of remaining rules
every two years. In February of this year, NTIA wrote to FCC Chairman
Kennard supporting relaxation of some broadcast ownership rules while
maintaining others.
NTIA's involvement with the mass media also extends to new
broadcast services, such as the upcoming transition to advanced
television. Most notably, NTIA served as Secretariat for the
President's Advisory Committee on the Obligations of Digital Television
Broadcasters, which presented its report in December 1998. In the role
of secretariat, NTIA did not direct or influence the recommendation of
the committee. NTIA was pleased to be a part of this consensus-building
process, which brought together experts from the broadcasting industry,
the public interest community, and academia to look at the future of
television. Now that the work of this committee is complete, NTIA plans
to continue policy development in this field.
Minority Ownership--Another of NTIA's goals is to enhance minority
participation in telecommunications. NTIA's Minority Telecommunications
Development Program (MTDP) is undertaking specific efforts in this
regard, including: (1) directing ComTrain, a training program to assist
new minority commercial broadcast owners; (2) disseminating information
and conducting seminars on ownership opportunities in
telecommunications (3) developing and commenting on legislative and
regulatory proposals that promote minority ownership in
telecommunications; (4) working with industry, and other government
agencies on initiatives to increase public/private sector assistance to
minorities interested in ownership of telecommunications businesses and
services; (5) promoting TELECAP, a study of capital development
strategies for minority investment in telecommunications; and (6)
tracking minority ownership in broadcasting. NTIA will also continue to
analyze policies that affect minority participation in
telecommunications.
Universal Access--Ensuring universal access to communications and
information networks also remains a high priority for NTIA. We have
been leading efforts to redefine universal service to
telecommunications services to ensure that rural Americans have access
to the same new services being offered in urban and suburban America.
Over the past 40 years, rural Americans have gone from about 60 percent
having basic phone service to 94 percent today. This is due in large
part to our commitment as a nation to universal service policies.
NTIA has undertaken numerous activities to promote universal
service. In the 1995 and 1998 Falling Through the Net reports, NTIA
documented the relatively low penetration of telephone connections and
computer and modem ownership in rural and inner city communities. In a
1996 filing with the FCC, we recommended that the Commission set a
national subscribership goal for the year 2000 to ensure that the
telephone penetration level for all segments of society will be at
least equal to the national average existing as of November 1996. As
the Telecommunications Act of 1996 continues to be implemented, NTIA
will continue to be a strong advocate for rural and underserved
Americans, undertaking research, filing comments with the FCC, and
participating in a variety of fora to ensure that these communities
have access to these services, and the opportunities they provide, at
reasonable rates.
NTIA has vigorously argued for the connection of schools,
libraries, and other ``community access centers'' to the National
Information Infrastructure. This step is integral to making access to
advanced telecommunications and information services more readily
available. Technology will be central to the mission of our nation's
schools in our country. Numerous studies demonstrate the advantages
afforded to students who have access to this technology. As the
President has clearly stated, in order to succeed in the 21st century,
our children must attain technological knowledge and tools. NTIA
continues working to ensure that these tools are broadly available to
the public.
Electronic Commerce
In addition to the domestic policy issues listed above, NTIA is
playing a pivotal role in the Administration's cross-cutting efforts to
develop electronic commerce and Internet policy. NTIA has been at the
forefront of these issues, both domestically and internationally. We
were a key participant in the development of the Administration's
electronic commerce policy, reflected in A Framework For Global
Electronic Commerce, issued in July 1997. Since then, NTIA has been a
key participant in the White House's Electronic Commerce Working Group
on such issues of broadband deployment, online content, domain name
management, and consumer protection. Finally, NTIA has also played a
leading role internationally by representing the United States
government at bilateral discussions and at international fora. We have
advocated the tremendous benefit of the Internet and electronic
commerce to other nations' economies, as well as the merits of a non-
regulatory, market-driven approach to the development of electronic
commerce.
Domain Name Management--Since July 1997, NTIA has also been the
lead agency responsible for implementing the President's directive to
privatize the management of Internet domain name system (DNS) functions
and increase competition in the registration of Internet domain names.
The Statement of Policy on the Management of Internet Names and
Addresses, which resulted from extensive public consultations, invited
the private sector to create a new, not-for-profit corporation to
undertake management of DNS functions and was universally well
received. The private sector responded by creating the Internet
Corporation for Assigned Names and Numbers (ICANN) to assume this
management responsibility.
Currently, NTIA is working with ICANN under a Memorandum of
Understanding to develop the procedures and steps necessary to complete
a smooth and stable transition from the government to the private
sector by September 2000. NTIA is also working with ICANN and Network
Solutions to introduce competition in domain name registration
services. On April 21, 1999, ICANN announced the names of 34 companies
that have been accredited to begin registering names in the .com, .net
and .org domains within the next 60 days. We believe that this
competition will result in lower prices, greater choice, and better
registration services for all users of the World Wide Web and we look
forward to our continued work on these issues.
We have had numerous discussions with the staff of House Commerce
Committee Chairman Bliley on the progress being made on this issue, and
will continue to keep them informed of developments in this area.
Privacy--NTIA has also been at the forefront in addressing privacy
on the Internet. We played a leading role in encouraging private
industry and privacy advocacy groups to develop and adopt effective
codes of conduct and technological tools to protect privacy on the
Internet. Following extensive consultation with the private sector in
January 1998, NTIA and the Department of Commerce issued The Elements
of Effective Self Regulation for Protection of Privacy, which expresses
our view that effective self regulation involves substantive rules, the
means to ensure that consumers know the rules, that companies comply
with them, and that consumers have appropriate recourse when injuries
result from noncompliance.
In June 1998, the Department of Commerce held a public meeting on
privacy, coordinated by NTIA. Although industry was somewhat slow to
take up the self-regulation challenge, there are signs that business
leaders are beginning to understand the need to take decisive action on
privacy. For example, the Online Privacy Alliance (OPA), a consortium
of information technology companies and industry associations,
representing over 80 global corporations and associations, requires its
members to adopt and post privacy policies consistent with OPA
guidelines and participate in a self-regulatory enforcement mechanism
provided through third parties such as BBBOnLine and TRUSTe. We will
continue to closely monitor their progress.
NTIA has been involved in examining other issues of domestic
privacy. For example, NTIA has met with leaders in the area of online
profiling by Internet advertisers and is planning a meeting in July
1999, in collaboration with the Federal Trade Commission (FTC), to
examine the issue in a public forum.
Controlling Indecent and Violent Content--NTIA will continue to
examine policies that empower parents and other individuals to control
the nature of information that comes into their homes, particularly
that which is indecent or violent. NTIA supports the free flow of
information over the Internet or through television and radio. It
therefore has directed its policy positions towards developing tools to
allow individuals to determine the types of material they receive.
NTIA has helped promote online content initiatives, such as ``green
spaces'' to help parents and others find Web sites suitable for their
children. We were designated as the Secretariat for the
Congressionally-appointed Child Online Protection Act (COPA)
Commission. We look forward to working with the Commission in producing
a report on child online safety issues.
All of these efforts take on new importance, following the
senseless killings at Columbine High School in Littleton, Colorado.
NTIA will continue to work on national policies to help citizens
control the type of information their children receive, while not
impinging on fundamental free speech rights.
Consumer Protection--Another critical issue is online consumer
protection. We know that consumers will be reluctant to shop on the
Internet unless they feel confident that they will get what they pay
for online and that redress will be available if they do not.
Therefore, NTIA has facilitated private sector outreach in developing
US policy in this area.
NTIA is working both domestically and within a number of
international fora to foster the development of effective consumer
protections for consumers participating in electronic commerce. In
cooperation with the FTC and other government agencies, we have also
helped to shape the policy debate in the Organization for Economic
Cooperation and Development (OECD) regarding the development of
guidelines for online consumer protection. The issue of online consumer
protection intersects with many other e-commerce issues in which NTIA
is active, such as jurisdiction, privacy, security, and authentication.
NTIA provides an important broad perspective on these issues when
formulating policy approaches for electronic commerce consumer
protection.
International Advocacy--Finally, as the representative of the
United States government, NTIA has been working to build international
consensus for a non-regulatory, market driven approach to the
development of electronic commerce. We know that the Internet allows
its users to exchange ideas and to experience the freedom of public
speech of political expression, unlike any other medium before it. In
many parts of the world, including Asia and Eastern Europe, the
Internet is used by citizens to promote and spread the values of
democratic government. Our efforts to promote greater use of the
Internet and other new technologies should also facilitate the
promotion of democratic values.
NTIA is actively engaged in discussions, both bilaterally and in
international fora, to ensure that the ``rules of the road'' for the
Information Superhighway are pro-competitive, empower end users, and
avoid establishing artificial impediments to the conduct of global
electronic commerce over the Internet. NTIA led the U.S. negotiations
on Internet and electronic commerce issues at the International
Telecommunication Union's (ITU) Plenipotentiary Conference in November
1998. NTIA has also been a leader formulating best practices for
Internet infrastructure deployment in developing countries.
International Policy
In addition to Internet and e-commerce issues, NTIA plays a key
role on a range of other important international matters. As the
representative of the U.S. government, we are working to attain an
international consensus on open, competitive telecommunications policy;
develop international satellite communications policy; and open foreign
markets to U.S. industries. NTIA's efforts in these areas are spurring
the development of the telecommunications and information sectors on
both a national and global level.
International Telecommunications Policy--NTIA continues to play a
lead role in promoting and building international consensus for open,
competitive telecommunications networks, which creates opportunities
for U.S. businesses abroad and offers market-based solutions to close
the digital global divide.
We are a strong advocate for liberalization and privatization both
in developed and developing country fora. For example, NTIA promotes
implementation of the World Trade Organization's (WTO) Basic Agreement
on Telecommunications, which calls for the liberalization of signing
nations' telecommunications markets. We have also helped develop and
implement training workshops for foreign telecommunications regulatory
authorities, which focused on implementing the WTO Basic
Telecommunications Agreement and covered a range of issues, including
interconnection, spectrum management and universal service. NTIA has
also served as a U.S. Vice-Chair at both the ITU World
Telecommunications Development Conference in Malta and at the
Plenipotentiary Conference held in Minneapolis last November. In our
view, the ITU conference would not have been such a success without the
Federal support provided by the Congress.
Additionally, we have sponsored several international
telecommunications summits in cooperation with the Telecommunications
Industry Association (TIA) and the International Trade Administration
(ITA). These summits bring together government officials and
telecommunications industry representatives to discuss major policy
matters affecting specific regions. They provide a unique opportunity
for foreign government officials and business representatives to meet
privately with senior U.S. telecommunications industry representatives.
Currently, NTIA is planning the fifth Latin American
Telecommunications Summit (LATS). Industry participants report that
previous LATS have facilitated millions of dollars in sales and
invaluable contacts with Latin American government and industry
representatives. In March 1999, NTIA, TIA and ITA also collaborated on
the second China-U.S. Telecommunications Summit (CATS) in Guangzhou,
China, where 32 U.S. companies met with Chinese telecommunications
officials, and Chinese telecommunications and IT companies. One company
reported that the summit provided ``immediate opportunities that may
not have developed without the summit'' and that they ``were approached
with proposals for joint ventures and set plans for further high level
negotiations for deals that could run into hundreds of millions of
dollars.''
In addition to our activities in international fora, we have also
pursued other steps to open markets to U.S. companies. Recently, NTIA
helped assess the anti-competitive impact of Deutsche Telekom's
interconnection policy. Working with U.S. companies seeking to enter
the newly-liberalized German telecommunications market and with other
agencies, NTIA found that certain changes made market entry by new
service providers more difficult. NTIA has supported efforts to bring
about appropriate corrective action.
NTIA is also supporting the U.S. wireless industry in proposing
multiple standards for third generation (3G) wireless systems. NTIA is
advocating the industry's position through the ITU and is further
advocating that other governments similarly support the outcome of the
ITU deliberations. NTIA and other agencies have successfully obtained
assurances from the European Union Commission that the European Union
member states will respect the recommendations developed by the ITU for
3G systems and offer licenses on a technology-neutral and non-
discriminatory basis.
Finally, NTIA has been an active and longstanding advocate for
reform of international accounting rates (i.e., those charges paid by
U.S. carriers, such as AT&T, Sprint and MCI WorldCom to foreign
carriers to terminate traffic at the foreign destination). NTIA seeks
to lower accounting rates by bringing them in line with cost. We have
helped shape U.S. advocacy and outreach efforts at the ITU, where
member countries are seeking to reach an agreement on accounting rate
reform. In 1999, NTIA has been concentrating its efforts on
transitional arrangements for lesser and the least developed countries,
which may need more time to adjust their rates to international
competitive market pressures.
International Satellite Policy--NTIA also continues to play a
pivotal role in the development and implementation of the U.S. policy
objective of increasing competition in the international satellite
communications sector.
On April 15, 1999 Inmarsat was privatized, completing a process
begun over 5 years ago. We expect that INTELSAT itself will be fully
privatized in the next several years. Throughout, NTIA has advocated
policy changes to increase global competition in the international
satellite communications sector. Iridium recently stated that it is
able to offer service in 150 countries and expects this number to
increase to 230 by year end. Moreover, ICO Global has, as NTIA
consistently insisted, issued an initial public (stock) offering
diluting control by former Inmarsat signatories and two U.S. firms (TRW
and Hughes) have become strategic investors in ICO. The United States
government, with NTIA's leadership, has pursued a procompetitive
outcome in the face of opposition from other nations, and we are
confident of achieving a similar result with INTELSAT's privatization.
As a result of the International Anti-Bribery and Fair Competition
Act of 1998, NTIA will be conducting a study of any advantages accruing
to the intergovernmental satellite organizations (INTELSAT and
Inmarsat; the ISOs) as a result of their unique status. NTIA's report
will examine any advantages affecting market access which result from
government ownership, government contracts to the signatories,
favorable tax or regulatory treatment for the signatories or from use
of the ISOs' privileges and immunities. The study will be included in
the Secretary's report to Congress.
Spectrum Management
Another of NTIA's chief roles is to manage the radio frequency
spectrum that is used by Federal agencies in satisfying their
legislatively assigned missions. In this role, NTIA processes the
Federal agencies' requests for frequency assignments; provides
Executive Branch leadership in coordinating both current and future
spectrum requirements among the Federal agencies and with the FCC;
develops and promotes positions at Treaty Conferences and other
technical and management fora of the International Telecommunication
Union regarding United States spectrum management interests; and
supports specialized administration initiatives that are designed to
achieve specific improvements in areas such as air traffic safety,
federal spectrum management procedures, protection of critical
infrastructures, and public safety.
The fundamental goal of spectrum management at NTIA, as it is
worldwide, is to avert potential interference between users and to
ensure that spectrum is available for future needs. NTIA's spectrum
coordination is therefore critical to the success of air traffic
control, national defense, national resource management, and other
vital government functions.
Nevertheless, further coordination efforts are essential,
particularly for public safety purposes. The horrific incident in
Littleton, Colorado last month demonstrates the need for further
coordination among communications systems. We understand that a number
of the local, state, and federal agencies lacked interoperable
communications systems, making the coordination of a response more
difficult. NTIA will be looking more closely in the coming year at new
ways to manage spectrum to help coordinate public safety efforts.
Satisfying Spectrum Needs--NTIA continues to coordinate the
spectrum needs of the Federal Government by processing frequency
assignment requests by some 53 Federal agencies. NTIA processes 300 to
400 such requests daily through an automated screening process to
correct errors in the data and ensure conformity of rules and
regulations and through a coordination process with Federal spectrum-
using agencies via the Interdepartment Radio Advisory Committee (IRAC)
to ensure interference free operation. In addition, NTIA also certifies
spectrum availability of approximately 60 to 70 new major
radiocommunications annually.
NTIA also provides leadership for and manages the activities of the
IRAC, a body of representatives from twenty major Federal agencies. The
IRAC has provided valuable advice to the Executive Branch on numerous
spectrum policies and issues for the past 75 years. NTIA has maintained
a constant relationship with the FCC both through the IRAC and directly
to ensure compatible operations. This is especially important today
since the vast majority of the spectrum is no longer divided into
exclusive private-sector and Federal-sector bands, but is shared by all
users in the United States.
Spectrum Efficiency--The Federal Government constantly seeks to
modernize its radiocommunications, increase the amount of information
transmitted per unit bandwidth, and expand the use of more efficient
digital technology and the use of private sector radiocommunications.
In order to improve Federal spectrum use, NTIA uses the following
management tools. First, NTIA requires that every Federal Government
user requesting a frequency assignment determine whether its need can
be met by a private or commercially available service provider. This
policy has helped encourage consideration of commercial services by
many Federal Government agencies, including the Department of Defense.
Second, we promote the use of new spectrum efficient technologies.
The Federal Government is a leader in developing new spectrum-efficient
techniques such as narrowbanding, digital modulation, and spectrum
sharing as well as in the use of the highest quality spectrum-efficient
equipment. These techniques will lead to nearly double the number of
frequencies available for land mobile communications. NTIA has required
that all Federal users move to more efficient 12.5 KHz equipment for
mobile communications by 2005 or 2008, depending on the frequency bands
in which they operate.
Third, NTIA collects fees from Federal agencies for its spectrum
management services, pursuant to Congressional mandate. Congress
initially directed NTIA to begin a process to collect fees from federal
agencies in the FY 1996 Appropriations bill for NTIA. At the same time,
Congress reduced the amount of direct appropriations to NTIA by the
amount of the fees. Because of serious difficulties in collecting fees
in FY 1996, Congress subsequently passed a law directing Federal
agencies to cease using the spectrum if such fees were not paid. Based
on this legislation, NTIA and the Federal agencies entered into
agreements in which the agencies agreed to pay their prorated share.
These fees cover 80% of the Spectrum Management's funding requirement.
Although we continue to experience some delay in payments because of
the different methods of payment within the Federal agencies, NTIA has
received the requested funds from the agencies. We are pleased with the
progress that has been made with this program.
Increasing Private Sector Access to Spectrum--NTIA continues to
work with the FCC, the private sector, and Federal agencies to promote
sharing of spectrum, where feasible, with private sector users. Since
1978, NTIA has coordinated the reallocation of more than 5,000 MHz of
spectrum to exclusive private use or greater shared use with private
sector entities. This is a significant amount of spectrum--today's
entire wireless telephone system, including cellular and personal
communications systems, is allocated only 170 MHz.
Spectrum reallocation and reimbursement--Over the past several
years, NTIA has begun to reallocate 235 MHz of spectrum from Federal
Government use to the private sector. The process for identifying
spectrum for reallocation was based on a two year study which took into
account two major factors: (1) the impact on the Federal agencies, in
terms of mission, costs, and potential reduction of services to the
public, and (2) the benefits expected to be realized by the public.
Based on the extensive planning and coordination with the FCC,
government agencies, and the public to produce this report, NTIA
identified an additional 35 MHz of Federal spectrum to transfer to
private use. NTIA has already reallocated 195 MHz of the previously
identified spectrum. The remaining spectrum is scheduled for auction by
the FCC by 2002, in accordance with the Balanced Budget Act of 1997.
NTIA has also recently transferred spectrum to the private sector
to support satellite systems. During the International
Telecommunication Union World Radiocommunication Conference (ITU/WRC)
in October 1995, NTIA coordinated the release of 3 MHz of Federal
Government spectrum for exclusive use in mobile satellite systems (low
earth orbiting satellites, or LEOs). NTIA has also arranged for shared
use of 360 MHz of Federal Government spectrum for mobile satellite
links for big LEOs.
Most recently, NTIA identified 20 MHz of spectrum for reallocation
by the FCC to private sector uses and assignment by competitive bidding
in accordance with the Balanced Budget Act of 1997. Proceeds of these
auctions were originally to be contributed towards balancing the
Federal budget by fiscal year 2002. Federal agencies' relocation costs
associated with this reallocation are in excess of $ 1 billion. Under
the recently enacted defense authorization statute, these affected
Federal agencies will be reimbursed for their relocation costs by the
winners of the spectrum auctions of the 20 MHz and the previously
identified 1710-1755 MHz band. NTIA will work closely with the Office
of Management and Budget, the FCC, and affected Federal agencies to see
that this process is successful. We appreciate the Commerce Committee's
support in securing this legislative authority.
Planning for Future Spectrum Needs--Reinventing the spectrum
authorization process--NTIA began a program in 1993 to develop an
automated Federal spectrum management system to provide a standardized,
automated method for Federal agencies to submit applications for
spectrum support, select spectrum that is interference free, and
validate that the spectrum requested is within the rules and
regulations governing spectrum authorization. This system will allow
NTIA to make the spectrum management process more efficient and
responsive, more accessible, and less bureaucratic. NTIA introduced the
Joint Spectrum Management System for windows (JSMSw) in March 1997.
Based on feedback the Federal agency users, JSMSw has been revised to
make it efficient and effective. Improvements will continue on JSMSw to
make it even more effective and to make actual use of spectrum more
efficient. JSMSw provides spectrum management tools to spectrum
managers in the field so that they can manage their own use of the
spectrum, use the spectrum more efficiently, and more rapidly obtain
spectrum to meet their needs. Seventeen seminars have been conducted by
NTIA for Federal agency spectrum managers in the use and application of
JSMS.
Public Safety Needs--One of the most pressing Federal spectrum
needs is that of public safety. Under Congressional leadership, NTIA
and the FCC established the Public Safety Wireless Advisory Committee
(PSWAC) in 1995. The Committee was composed of appointees from Federal,
State, and local governments and private sector public safety
organizations. The goals were to evaluate the wireless communications
needs of public safety agencies through the year 2010 and recommend
possible solutions to the lack of available spectrum and
interoperability problems. In September 1996, PSWAC submitted a report
outlining the public safety community's need for additional spectrum,
improved interoperability, more flexible licensing policies, and
increased sharing of spectrum resources. Many of the PSWAC
recommendations have now been adopted.
The FCC is currently conducting a rulemaking to provide the state
and local public safety community with 24 MHz of spectrum that will be
made available when broadcast TV migrates to other portions of spectrum
as part of the deployment of digital television. NTIA is working with
the FCC to develop procedures for licensing of this spectrum and to
provide a means to establish interoperability between state, local and
the Federal government. To this end, NTIA will be participating in the
FCC's recently established Public Safety National Coordination
Committee. The advisory committee will develop an operational plan to
achieve national interoperability, as well as technical standards to
achieve full interoperability and network integration. The work of the
committee is to be completed by September 2000.
As provided for in the FY 1999 budget, NTIA is increasing its
public safety staff to identify the long-range spectrum requirements
for the next 10 years and develop a strategy to provide sufficient
spectrum for growth of current services, advanced technologies, and
interoperability requirements. Through these efforts, we will continue
to ensure that spectrum is available for Federal Government and the
public safety community to meet the needs of law enforcement, national
security, safe airways, disaster and environmental control, and the
promotion of safe living conditions.
Global Positioning System (GPS) Expansion.--NTIA is also addressing
issues that will protect the radio spectrum currently used by the
global positioning system (GPS) and facilitate the expansion of GPS
services. GPS is a worldwide utility that provides precise position,
velocity, and time information anywhere in the world. GPS information
is used by the public and private sectors in such areas as aviation,
maritime and waterways, public transportation, railroads,
telecommunications, surveying, defense, weather, environmental
protection, and law enforcement.
In order for GPS to be used reliably and confidently as a worldwide
utility, the radio spectrum within which it operates must be protected.
NTIA is responsible for leading the efforts in preparation for the
World Radio Conference 2000 to protect the radio spectrum used by GPS.
NTIA is also dedicated to making spectrum available for the
expansion of GPS. The President's FY 2000 budget would provide for two
new signals for civilian uses of GPS. One of the signals will be
available for general applications. The other signal will be located in
a portion of the spectrum allocated to aeronautical radionavigation
services for aeronautical safety applications.
NTIA will be addressing the associated international spectrum
issues at forthcoming technical fora and the World Radiocommunications
Conference 2000. NTIA will also continue its efforts to work with the
Department of Transportation, the Department of Defense, the Department
of State, the FCC, and the private sector to ensure that spectrum is
available in the future for this purpose.
Infrastructure Protection--Finally, NTIA has taken a leading role
in protecting the national information infrastructure. As information
and telecommunications systems become increasingly critical to our
daily communications and our national economy, protection of this
infrastructure is also becoming a priority for the nation. In May 1998,
the President issued a Decision Directive (PDD-63) to create a public/
private partnership to address the nation's need to protect our
critical infrastructures from purposeful attacks. PDD-63 designated the
Department of Commerce as the lead agency to conduct a vulnerability
assessment to protect the nation's information and communication
infrastructure. The Secretary of Commerce assigned NTIA the
responsibility to carry out this program.
NTIA is planning to undertake numerous activities as lead agency.
Among other things, we will be working with industry to raise awareness
of the threat to, and vulnerabilities of, their infrastructure. NTIA
will also work with industry to develop plans to mitigate the risks,
deal with attacks, and reconstruct damaged infrastructure.
Additionally, we will encourage the adoption of security standards and
best practices, not only within the United States, but also among our
major industrialized partners. Our goal is to harmonize our efforts
with other countries and take best advantage of their developments in
technology and policy because this infrastructure is inherently global.
Throughout this process, we will be working closely with industry,
as most of the information and communications infrastructure is owned
and operated by the private sector. We are working with three key trade
associations--the Information Technology Association of America (ITAA);
the United States Telephone Association (USTA) and the
Telecommunications Industries Association (TIA). In addition, NTIA has
established close working relations with other government agencies,
which will contribute to the effort. These include the National
Communications System (NCS), the President's National Security
Telecommunications Advisory Committee (NSTAC), the Federal
Communications Commission's Network Reliability and Interoperability
Council (NRIC) and the FBI's National Infrastructure Protection Center
(NIPC). These close working relationships should ensure the cooperation
of industry and government in our efforts to protect the nation's
infrastructure.
Telecommunications Research
NTIA is greatly assisted on spectrum management and other
telecommunications issues by its laboratory in Boulder, Colorado. The
laboratory, operated by NTIA's Institute for Telecommunication Sciences
(ITS), performs state-of-the-art telecommunications research to support
NTIA and Department of Commerce goals. It also conducts specific
research under reimbursable agreements with other Federal agencies and
under cooperative research agreements with private sector partners.
ITS is an active contributor to many agency endeavors, including
those dealing with spectrum efficiency and sharing issues, digital
television, broadband wireless technology and convergence issues,
advanced video and voice performance testing and standards development,
Internet technology issues, and critical information and communication
infrastructure research and development. Most recently, ITS provided
essential information with respect to signal contours for purposes of
the Satellite Home Viewers Act and related proceedings.
The Value of Federal Research--ITS's research laboratory plays a
critical role in telecommunications research because it is is unbiased
and cuts across government and industry needs. In many instances, ITS's
input is essential to resolving pressing technical questions that can't
be resolved by industry. For example, ITS's research laboratory
recently assisted the FCC in the development of the national digital
television channel assignment plan to facilitate the introduction of
Digital Television (DTV) across the United States. Without this work,
digital television channel assignments could not have been made in a
timely and effective way, potentially costing television broadcasters
millions of dollars due to increased interference. Private sector
experts probably could not have done this work in an unbiased fashion,
since their livelihood depends on the continued affiliation with their
broadcast customers.
In another recent example, ITS participated in international
frequency band allocation proceedings for direct satellite audio
broadcasts. ITS was tasked to determine the viability of the proposed
bands in the United States. ITS's measurements, which showed that the
satellite signals could not be received, prevented the investment of
billions of dollars in potentially unusable satellites. The private
sector probably could not have provided such measurements, because they
would be considered biased and would not have had the same influence as
Government measurements. Additionally, industry did not have the means
to make these measurements in a short time frame.
Over the years, there have been numerous external and internal
reviews of NTIA's laboratory. All these reviews concluded that there is
a compelling need for a centralized Federal telecommunications
laboratory that serves the public interest by undertaking uniquely
governmental research functions in a cost-effective fashion. The ITS
laboratory is essential because it is guided by the public interest,
not profit motives. A centralized laboratory is also crucial to
preventing the duplication of telecommunications research efforts among
Federal agencies.
Review of Telecommunications and Information Technology (IT)
Systems--ITS also provides expert advice to government agencies with
regard to telecommunication and IT planning and implementation. The
laboratory helps these agencies provide cost-effective and
interoperable systems to accomplish their missions. For example, ITS
provided the U.S. Forest Service a national strategic plan for
upgrading telecommunications and IT systems across all National
Forests; assisted the Department of Transportation in developing a
national Intelligent Transportation System to aid traffic control and
general public transportation safety; analyzed Federal Railway
Administration telecommunication requirements for rail safety and
positive train control systems; evaluated and designed Federal Aviation
Administration augmentations to Global Positioning System capabilities
for air traffic control and ship navigation; and conducted engineering
studies and developed standards for the National Communications System
to assure interoperability and continuity of operations during national
emergencies.
ITS is also playing a central role in the Department of Justice's
Interoperability Standards Task Force (a consolidated effort of several
Justice information integration programs), which is aimed at
establishing telecommunications interoperability and effective
information sharing among agencies in the local, State, and Federal
criminal justice and public safety communities. ITS has the
responsibility for identifying and analyzing the user needs at all
levels and for proposing a comprehensive set of interoperability
standards that will allow a nationwide criminal justice and public
safety enterprise network.
Spectrum Use--Finally, NTIA's laboratory provides significant
information on spectrum use. ITS maintains the Nation's database of
radio propagation characteristics for the entire radio spectrum to help
improve radio communications in the U.S. and internationally. The
database provides the foundation for models used by NTIA to prepare
domestic and international radio standards and spectrum sharing
agreements, by NTIA and the FCC in national spectrum management, and by
the broad community of private sector and government users for
planning, designing, and implementing radio telecommunication systems.
This information also facilitates work on advances in
telecommunications technology--such as personal communications services
and high definition television--to benefit all citizens.
ITS also provides comprehensive measurements of spectrum use and
occupancy. These measurements provide critical information for spectrum
policy and regulation which otherwise would be based solely on
information contained in licensing documents and other records. This
measurement capability is also used to solve difficult radio
interference problems. Suspected radio interference between Government
agencies, or the Government and private sector, can become contentious.
ITS, because of its neutrality and expertise, is able to establish the
trust of the parties and develop the evidence regarding any suspected
interference. ITS has been able to quickly resolve many interference
problems that other Government agencies and private sector
organizations were not able to resolve.
ITS is proposing in FY 2000 a Broadband Initiative to develop the
fourth generation of its Radio Spectrum Measurement System. This work
is required to keep pace with the changes in spectrum use brought about
by the deployment of new technologies such as spread spectrum wireless
communications. Without the initiative, ITS will not be able to
maintain its capability to make comprehensive spectrum use and
occupancy measurements and to quickly resolve suspected interference by
Government systems to private sector operations.An FY 2000 initiative
has been proposed for ITS to lead efforts in Critical Infrastructure
Protection (CIP) research related to telecommunications and information
technology. With its tremendous expertise and experience, ITS is a
natural candidate to lead these efforts. ITS will develop a process for
characterizing the assets of existing infrastructures, work with other
Federal agencies and industry to identify threats and vulnerabilities
to specific parts of the infrastructure, and define and evaluate
mitigation strategies based on existing and emerging products and
technologies.
Grant Programs
Another significant area of NTIA's activities is its two grant
programs, which help expand access to new technologies. Having
documented the ``digital divide,'' NTIA is also seeking to bridge the
divide between those with access to new technologies, and those
without. The Telecommunications and Information Infrastructure
Assistance Program (TIIAP) provides matching grants to non-profits and
public entities that are using new technologies in innovative ways to
reach those in rural, low-income, and traditionally underserved areas.
NTIA's Public Telecommunications Facilities Program (PTFP) supports the
maintenance and improvement of public broadcasting facilities
throughout the United States and its territories. Both programs are
ensuring that Americans have greater access to the benefits provided in
our digital age.
Telecommunications and Information Infrastructure Assistance
Program--Since 1994, TIIAP has helped underserved communities use
information infrastructure to improve the quality of, and the public's
access to, lifelong learning, health care, public safety, and other
community based services. TIIAP provides critical seed money, without
which many innovative and vital applications would not take root and
grow in these communities. We have awarded 378 grants to schools,
libraries, hospitals, State and local governments and other non-profit
entities in all 50 states, the District of Columbia and the U.S. Virgin
Islands.
This competitive program has been able to award only one out of
every 14 applications. Over the first five years of the program, NTIA
received almost 5400 applications. Approximately $118 million in
federal grants have been matched by more than $180 million in non-
federal funds. In 1998 alone, TIIAP leveraged $18.5 million in federal
funds matched by $24 million in private, State and local funding and
awarded 46 grants from over 750 applicants to projects in 35 states and
the District of Columbia. For 1999, TIIAP has received 702 applications
seeking over $278 million in grant funds. These applications represent
more than sixteen times what NTIA can fund, making TIIAP one of the
most competitive federal grant programs.
TIIAP has an excellent track record of supporting highly successful
information infrastructure projects in underserved communities. The
program leverages a modest federal investment into significant
community investments and provides national models for public and
nonprofit organizations to follow.
For example, through a TIIAP grant to the City of Winston-Salem,
fire department vehicles responding to emergencies in Winston-Salem and
surrounding communities have access to graphic information about the
emergency sites as they respond. Detailed images of all city buildings
have been created and made accessible in the fire department vehicles
by using technologies such as document imaging, geographic information
systems (GIS), mobile computers, and global positioning technology. By
giving fire fighters better decision-making options during emergency
responses, the system enables them to fight and contain fires more
effectively, to save lives and property, and, in some cases, prevent
fires from spreading to other locations. This project has received
international acclaim--it was recently selected as a finalist in the
prestigious Global Bangemann Challenge, which honors ``the best
information technology projects that cities can show.''
A TIIAP grant has also provided Internet connectivity for
chronically-ill children at the University of Mississippi Medical
Center. This connectivity enables these patients to continue their
education and maintain contact with peers, teachers, and parents.
Through the TIIAP grant, both hospitalized and homebound patients can
use laptop computers and desktop video conferencing to gain access to
their teachers, their classroom assignments, and their friends and
families. Its impact on their emotional well-being, as well as their
continued classroom involvement, is invaluable.
The benefits of the TIIAP grant program were confirmed recently by
an independent evaluation by Westat of projects funded in the program's
first two years. Among other things, the evaluation found that 90
percent of the projects are still in operation, and that the majority
of projects reported meeting or exceeding nearly all of their
objectives. Most important, the projects are sustaining themselves
beyond the federal grant period and are generating new funds. Each
grant dollar has generated another four non-federal dollars to support
information infrastructure. In addition to matching funds, the grants
led to investments that expanded their services beyond the original
scope and further investments to support spin-off activities.
The projects' role as national models further leverages the TIIAP
investment. Extensive outreach by the projects in response to the
tremendous interest is spreading the benefits of the TIIAP grants to
other communities. The 206 organizations surveyed in the independent
study reported responding to 79,000 unsolicited requests for
information and hosted visitors representing over 5,000 organizations.
The evaluation also found that TIIAP projects help communities in
need and serve a diverse public. Sixty-five percent of the projects
involved rural areas, while 48 percent served the inner cities. Fifty-
nine percent reached those living in extreme poverty and 42 percent
involved users with disabilities.
TIIAP grants provide the catalyst for the vast majority of these
programs. Seventy-five percent of grant recipients reported to Westat
that their projects never would have happened without the TIIAP funds.
Of the remaining 25 percent, 90 percent indicated that, without TIIAP
support, the projects would have either reached significantly fewer
people, or have been substantially delayed, or dramatically reduced
their range of services.
For a modest federal investment, TIIAP is providing a tremendous
body of knowledge on which policy makers, community leaders, and
technologists in the private, public, and nonprofit sectors can rely as
they work to ensure that advanced telecommunications and information
technologies reach the farthest corners of our nation. The excellence
of the TIIAP-funded projects is reflected in the nationwide and
international acclaim they receive. For example, four TIIAP grant
recipients were recently named on a short list of finalists in the
Global Bangemann Challenge, which honors the best information
technology projects that cities can show. TIIAP projects have also
received awards from the NII/GII awards competition, the National Rural
Health Association, the National Association of Development
Organizations, the Medical Library Association, and the National
Association of Counties, among many others.
Most importantly, TIIAP is strengthening our communities by
revolutionizing how we learn, how we take care of our sick, how we
control crime, and how we create opportunities for people most in need.
Public Telecommunications Facilities Program (PTFP)--NTIA's PTFP
has helped public broadcasters maintain and expand their equipment and
facilities for the last 35 years. The grants achieve three
Congressionally mandated objectives: (1) extend delivery of public
telecommunications services to as many American as possible by the most
effective and efficient means; (2) increase public telecommunications
services and facilities available to, operated by and owned by
minorities and women; and (3) strengthen the capability of existing
public broadcasting stations.
Facilities funded by PTFP have given millions of Americans access
to the educational and cultural programming of public broadcasting.
With the program's assistance, a public television signal now reaches
about 95% of our nation's population and public radio reaches
approximately 90% of the population. NTIA and its predecessor agencies
have assisted noncommercial entities to acquire the necessary hardware
to produce and broadcast public television and radio programs, radio
reading services, and descriptive video services for the disabled. NTIA
also supports the delivery of instructional and educational services by
a broad array of community institutions.
Since PTFP's inception, over $500 million in federal funds has been
invested in the public broadcasting infrastructure. Local communities
have provided upward of another $500 million dollars to match the
federal grants. In 1998, NTIA awarded $19.9 million for 115 projects in
41 states to facilitate the expansion of public broadcasting services
to communities across the country and ensure the continuation of
service. After receiving clearance from the FCC, NTIA recently awarded
three addition projects from 1998. A number of the awards will expand
access to public radio to 450,000 persons who presently do not receive
any signal. Communities such as Santa Rosa, CA; Wilmington, DE; Kilauea
Town, on the island of Kauai, HI; Leonardtown, MD; Manteo, Buxton, and
Waves, NC; Manahawkin, NJ; Lund and Ely, NV; the Duck Valley
Reservation of the Shoshone-Paiute Tribes in Owyhee, NV; Defiance, OH;
and Vernal/Uintah, UT, will receive either their first public radio
service or greatly expanded service.
The President's FY 2000 budget requests $450 million over 5 years
to go towards the conversion of digital television. In April 1997, the
FCC issued regulations requiring broadcasters to transition from analog
to digital broadcasting. Public broadcasters must convert to digital
broadcasting by May 1, 2003. This deadline allows the analog spectrum
to be turned over to commercial users by the 2006 date established by
Congress and mandated in the Federal Balanced Budget Act of 1997. The
President's budget requests advance appropriations for a multi-year
effort to allow advance planning and certainty in the public
broadcasting system's transition to digital broadcasting. In FY 2000,
the Administration is seeking $35 million from Congress to the PTFP.
The $35 million request is part of the $450 million initiative, now in
its second year. The initiative seeks funds in both the Corporation for
Public Broadcasting and PTFP. Funding through PTFP will be targeted for
digital transmission equipment, while funding for Corporation for
Public Broadcasting will support necessary expenses related to digital
program production and development.
Public broadcasting stations are undertaking an enormous new
financial burden as they transition to the digital format. Over $700
million is needed for the nation's public television stations to meet
the FCC's minimum digital broadcast pass through requirements. The
conversion will place an enormous strain on the already precarious
budgets of many of the public broadcasting stations. Federal assistance
is critical during this transition period. For almost half the public
television licensees, the cost of conversion to digital is projected to
exceed their annual revenues. If stations are forced to convert without
assistance, many stations will be forced to go off the air or reduce
hours of operation, adversely affecting programming quality and
diversity.
PTFP will take special measures to assure that the full potential
of the new digital technology is used to provide the most economical
means possible of providing public broadcasting services. Special
consideration will be given to stations broadcasting in under served
markets, especially those in rural, remote, or disadvantaged
communities. In addition to digital conversion assistance, PTFP will
continue its traditional support to expand the availability of public
broadcasting services to those areas without such service. PTFP also
will assist public radio and television stations to continue providing
their existing analog service during the federally mandated transition
period.
Since September, NTIA has awarded fifty-two awards to assist public
television stations with the purchase of digital-ready or digital-
compatible equipment. Three of these projects--KCTS-TV, Ch. 9, Seattle;
KQED-TV, Ch. 9, San Francisco; and KCET-TV, Ch. 28, Los Angeles--will
allow stations to complete their full digital conversion. Another grant
will permit KERA-TV, Ch. 13, Dallas, TX, to share the cost of a digital
TV antenna, thus allowing the station to remain on its current tower
and greatly assist in its digital conversion.
As a result of an emergency grant to the Mississippi Authority for
Education Television, the state network restored analog public
television service to the Jackson area and allowed the Jackson station
to broadcast experimental digital programming. NTIA funded a new tower
and transmission equipment in response to the collapse of the
commercial tower on which the public television station's antenna had
been located.
These examples demonstrate NTIA's efforts to preserve public
broadcasting, bring service to remote and rural communities, and
encourage efficient technologies. NTIA will follow the same objectives
as we assist public television with digital conversion and ensure that
all public television transmitters are converted by 2003.
Agency Operations
NTIA is also committed to improving agency operations and
management. Beginning in 1990, Congress passed several major pieces of
legislation governing the way Federal departments and agencies operate,
specifically:
--the Chief Financial Officers Act of 1990, as amended by the
Government Management Reform Act of 1994;
--the Government Performance and Results Act of 1993; and
--the Clinger-Cohen Act of 1996.
NTIA has made significant progress in implementing these laws. The
Chief Financial Officers Act requires Federal departments and agencies
to prepare annual financial statements and have those statements
audited in accordance with generally accepted auditing standards. The
Department of Commerce is committed to improving financial information
and financial management capabilities. NTIA was one of the first
Commerce agencies to receive an unqualified opinion on its financial
statements for 1993, and has continued to receive unqualified opinions
on all subsequent statements. Since 1995, the audits conducted have
been formal full scope audits. The unqualified opinions confirm that
NTIA's financial statements fairly present the financial position of
the agency.
Under the guidance provided by the Government Performance and
Results Act (GPRA), NTIA has established a strategic planning process
and developed an agency strategic plan. During the past year, NTIA's
senior managers have focused on redefining NTIA's goals and objectives
and succeeded in reducing the agency goals from seven to four. A
continuing emphasis has been placed on measuring performance, both
internally and at the Department level. NTIA's internal planning
process is designed to complement and reinforce the Department of
Commerce planning efforts. NTIA managers have embraced the planning
process as a way to improve our management and maximize the return to
the public from the agency resources available.
NTIA is also supporting the Department's efforts to properly
implement the philosophy of the Clinger-Cohen Act. Clinger-Cohen (also
called the Information Technology Management Reform Act) is designed to
improve our management of the information technology investments
necessary to enable us to fulfil our missions. The information
technology investments NTIA makes are directly linked to our business
needs. The strategic and operational information technology plans
directly support for the agency's goals and objectives. NTIA has
processes in place designed to ensure that all major information
technology investments are evaluated in terms of the overall business
value to the organization. In addition, NTIA's laboratory (ITS) is
performing a Telecommunications Assessment across all bureaus and
agencies of the Department to provide the current status of
telecommunications and information technology assets for Commerce
management, and to allow informed decision-making on future evolutions
in the infrastructure.
NTIA has declared two information technology systems to be mission
critical for year 2000 efforts: the Spectrum Frequency Management
Systems and the Grants Processing System. Both these systems are year
2000 compliant. NTIA is in the process of developing year 2000
contingency plans for its own essential operations and working with the
Department of Commerce to ensure telecommunications and other services
are available for essential personnel.
conclusion
NTIA serves a critical role in developing and promoting policy in
all areas relating to the telecommunications and information sectors.
We have taken the lead, both on the domestic and international front,
in setting forth positions in spectrum management, universal service,
broadband networks, global competition, and electronic commerce--to
name a few key areas. Given the increasing importance of these issues
to our domestic and global economy, NTIA is playing an increasingly
significant role in its position as representative of the U.S.
government and Executive Branch advisor.
As NTIA Assistant Secretary for six years, I continue to be proud
of the role we play and the accomplishments we have achieved. We hope
to continue to address the myriad new issues in telecommunications and
information technology with the same level of expertise and
thoroughness that we have always displayed. This objective has become
increasingly difficult, however, as the issues and demands on NTIA have
increased, and the staff levels have decreased. I fear that NTIA's
leadership in the dynamic and expanding telecommunications and
information arena could be compromised without adequate resources. We
therefore appreciate the support of this Committee as it considers our
FY2000 Budget Estimates so that NTIA can continue to play a leadership
role.
APPENDIX A
ntia comments on may 5, 1999 discussion draft ``ntia reauthorization
act of 1999''
The Administration offers the following comments on the Discussion
Draft ``NTIA Reauthorization Act of 1999'' (dated May 5, 1999):
The funding level contained in the Discussion Draft falls short of
the President's request for fiscal year 2000 and does not reflect the
fiscal year 2000 budget priorities for NTIA. The President's fiscal
year 2000 budget provides a funding level of an estimated $17.2 million
for salaries and expenses. The President's budget request acknowledges
the increasing demands on NTIA's resources and personnel as a result of
the rapid growth of the telecommunications and information technology
sectors of the economy. The President's request also includes
additional funding to implement World Trade Organization requirements;
enhance Federal radio spectrum management and efficiency; undertake a
new broadband initiative for the telecommunications research facility
at Boulder, Colorado; and implement Presidential Decision Directive-63
on Critical Infrastructure Protection. The Administration notes that
Congress has directed NTIA to conduct 5 or more studies and staff a new
Commission within the next year. Moreover, pending legislation would
direct NTIA to conduct 3 or more additional studies.
The Discussion Draft does not include funds for the
Telecommunications and Information Infrastructure Assistance Program
(TIIAP). TIIAP provides matching grants on a competitive basis to
community-based, non-profit and other public organizations, to
demonstrate and promote the practical applications of new
telecommunications and information technologies that improve the
quality of, and the public's access to education, health care, public
safety and other community-based services. In the five years of the
program, NTIA has awarded 378 grants totaling $118 million, matched by
an additional $180 million from the grantees and their private sector
and State and local government partners. NTIA grant recipients have
been recognized for their excellence on a national and international
level by the Global Bangemann Challenge, the National Rural Health
Association, the National Association of Development Organizations, the
Medical Library Association, the National Association of Counties, and
the NII/GII Awards. The President's fiscal year 2000 budget requests
$20 million for this program.
Although the Public Telecommunications Facilities Program (PTFP)
has not traditionally been authorized through NTIA's authorization
legislation, please note that the President's fiscal year 2000 budget
also requests $35 million for this program. PTFP provides matching
grants on a competitive basis to community based public
telecommunications entities to plan and construct facilities that
provide educational and cultural service to the public. Additional
funding has been requested for fiscal year 2000 to assist public
broadcasters with an orderly transition to digital broadcasting within
the Congressionally mandated deadline for the transition.
The Discussion Draft would also require Federal agencies to
reimburse NTIA for all of the costs associated with the agency's
spectrum management function. Since fiscal year 1997, the Federal
agencies have been reimbursing NTIA for a portion of the costs
associated with these functions. The current reimbursement rate for
fiscal year 1999 and the proposed rate in the President's fiscal year
2000 budget request is 80 percent. The Administration believes the 80
percent reimbursement/20 percent appropriated funds strikes the correct
balance for the funding of its spectrum management functions for the
following reasons. As the President's principal adviser on
telecommunications, NTIA performs certain spectrum management functions
on behalf of the well-being of the nation rather than directly related
to spectrum management performed on behalf of the Federal agencies.
Moreover, the 20 percent appropriated funds allows NTIA to retain its
independence, objectivity and flexibility to perform spectrum
management functions that might not be within the narrow interests of
the Federal agencies, but are necessary in the national interest, e.g.,
spectrum efficiency. These appropriated funds also provide bridge
funding for spectrum management activities during the first quarter of
the year as agency payments are received.
The Discussion Draft would also privatize NTIA's telecommunications
research facility in Boulder, Colorado. Prior reviews of NTIA's
Institute for Telecommunication Science (ITS) to determine its value to
the nation have all reached the conclusion that there is a compelling
need for a centralized, cost-effective, unbiased Federal
telecommunications presence that serves the public interest and
performs unique governmental engineering research. Further, the
Administration believes that privatization of ITS would be detrimental
to the national interest for the following reasons.
First, privatization of ITS through the sale of the laboratory
would not result in any substantial revenues. The underlying laboratory
assets, e.g., telecommunications measurement and testing equipment, are
very specialized prototype equipment with little or no market value.
The true value of the laboratory resides in the knowledge and expertise
of its highly trained and specialized senior engineering and scientific
staff, many of whom could be expected to leave the laboratory for other
Federal employment locally (e.g., the Boulder laboratories of the
National Institute of Standards and Technology or National Oceanic and
Atmospheric Administration) or elsewhere to complete their Federal
careers, rather than remain automatically with a privatized entity.
Second, privatizing the laboratory would eliminate an invaluable
national telecommunications resource. ITS provides the Federal
Government's only impartial telecommunications research and engineering
capability to support the nation's telecommunications policy
development efforts and Federal spectrum management mandate. For
example, ITS has provided essential technical support in the following
telecommunications policy areas: National Digital Television Channel
Assignment Planning; spectrum occupancy and interference analyses to
support national and international (e.g., World Radio Conference)
spectrum planning requirements; Satellite Home Viewers Act network
coverage analysis; quick response measurement support to resolve
potential safety-of-life interference; and audio and video
telecommunication quality of service standards development.
Third, if ITS were no longer available to conduct this research,
NTIA would need additional Federal funding to accomplish its essential
technical research work. For a direct appropriated investment in ITS of
approximately $3 million, the Federal government and the private sector
receive approximately $10 million in research results through
reimbursable telecommunications research work for other Federal
agencies (e.g., Departments of Defense, Justice, Transportation) and
through cooperative research activities with the private sector (e.g.,
US West, BellAtlantic, PacTel, BellSouth, GTE, Hewlett-Packard, Netrix,
Integrator Corporation, Audio Logic, American Automobile Manufacturing
Association).
Finally, the Administration believes that a legislative mandate to
review the long-term efficiency of NTIA is unnecessary. It is our
understanding that the Department's Inspector General and the
Comptroller General already have such authority. Moreover, during the
past six years, NTIA has worked cooperatively with the Department's
Inspector General on a number of studies examining the agency's
management practices and efficiencies. For example, in 1997, the Office
of the Inspector General conducted an audit of NTIA's Office of
Spectrum Management (OSM) and reviewed in detail OSM's funding, fee
collection and staffing practices. The Office of Inspector General
determined that ``no significant conditions'' exist meriting the
issuance of an audit report, but did note that OSM needed additional
personnel and resources to meet its current and future needs and more
timely reimbursement payments from Federal agencies. Since that report,
OSM has worked to address these issues. Most recently, the Office of
the Inspector General completed audits of NTIA's grant programs and
found that both programs promote merit-based decisions. NTIA has
already implemented the Office of the Inspector General's recommended
improvements to the grant award processes. NTIA has also worked
cooperatively with the General Accounting Office in its examination of
federal funding for universal service, technology programs for schools
and libraries, and law enforcement assistance, and on spectrum
management issues involving the Department of Defense.
APPENDIX B
recent congressional studies for the national telecommunications and
information administration
Congress in recent years has authorized the National
Telecommunications and Information Administration (NTIA) and Department
of Commerce certain mandates.
As a result of the Child Online Protection Act (COPA), NTIA
will serve on a 19-member commission to study methods to reduce
access by minors to material deemed harmful on the Internet.
Further, NTIA, is required to staff the Congressionally-
appointed Commission. The Commission has one year to submit a
report to Congress.
As a result of the Digital Millenium Copyright Act, NTIA is
required to consult with the Register of Copyrights regarding
infringing uses of copyright material; NTIA is required to
consult with the Register of Copyrights and report to Congress
on the Act's effect on encryption, technological measures and
protection of copyright owners; and consult with the Register
of Copyrights and report to Congress on the development of
electronic commerce and associated technology.
As a result of the Next Generation Internet Research Act of
1998, the Secretary of Commerce is directed to sponsor a
National Academy of Sciences study that will look at the
effects on trademark rights of adding new top-level domain
names and make recommendations on how best to protect
trademarks in the growing cyberspace economy. Congress
authorized $800,000 for this study; however, no funds were
appropriated. NTIA is the lead government agency carrying out
the Presidential directive on Electronic Commerce supporting
efforts to make the governance of the domain name system
private and competitive. NTIA is working towards creating a
contractually based self-regulatory regime that deals with
potential conflicts between domain name usage and trademark
laws on a global basis.
As a result of the International Anti-Bribery and Fair
Competition Act of 1998, the Secretary of Commerce is required
to report to Congress on July 1, 1999, and each year for 5
years thereafter, with respect to implementation of the OECD
Anti-Bribery Convention. Among other things, the Secretary is
required to report on advantages, in terms of immunities,
market access, or otherwise, in the countries or regions served
by Intelsat and Inmarsat, the reason for such advantages, and
an assessment of progress towards a procompetitive
privatization of these organizations. NTIA has been tasked as
the lead for the Department on the Secretary's report to
Congress.
potential studies proposed by congress
H.R. 1554, the Satellite Copyright, Competition, and Consumer
Protection Act, passed by the House on April 27, 1999, directs
NTIA and the Register of Copyrights to submit to Congress a
joint study on technical and economic impacts of the must-carry
obligations on delivery of local signals. The study would be
due to Congress on July 1, 2000.
H.R. 1714, the Electronic Signatures in Global and National
Commerce Act, introduced by House Commerce Committee Chairman
Bliley on May 6, would, among other things, require NTIA to
report to Congress, within 180 days, and annually thereafter,
identifying foreign barriers to commerce in electronic
signatures. Second, the bill would direct NTIA to promote the
acceptance and use internationally of electronic signatures,
and take such actions as necessary to eliminate or reduce
impediments to commerce in electronic signatures. Third, the
bill would direct NTIA within three years after enactment, to
conduct an inquiry regarding State statutes, regulations, or
other rules of law enacted or adopted after enactment and the
extent to which statutes, comply with statute.
Senate Commerce Committee Chairman McCain has indicated he
will introduce soon legislation that will require NTIA, in
collaboration with the FCC, to analyze the facts and the issues
involved in the ongoing deployment of advanced broadband data
networks, especially in rural and low-income areas, and report
findings to Congress.
Mr. Tauzin. I wonder how that logic, that analogy, would
work with the IRS. If I don't pay the IRS 20 percent, do they
really have to work for me?
Mr. Irving. I am not going to try and find out.
Mr. Tauzin. Let me now introduce our second witness, Mr.
George Ross.
STATEMENT OF GEORGE E. ROSS
Mr. Ross. Thank you, Mr. Chairman, members of the
committee, I am pleased to appear before you. Our most recent
work in NTIA concentrated on audits of its fiscal year 1998
financial statements and its fiscal year 1997 grant funding
decisions. We have also conducted audits of NTIA grantees and
reviewed several of NTIA's operations. Based on that work, we
have found NTIA to be a well-managed agency whose leadership
has responded positively to our recommendations for management
improvements.
Since fiscal year 1994, NTIA has received an unqualified
opinion on its financial statements, which means that those
statements present fairly on all material aspects of NTIA's
financial position and results of operations. That was a
particularly noteworthy accomplishment for fiscal year 1998,
considering that four new financial statements were mandated by
OMB.
NTIA is also making steady progress to comply with the
Government Performance and Results Act requirement that
agencies report performance information. In March of this year
we completed audits of NTIA's two discretionary financial
assistance programs, the Public Telecommunications Facilities
Program and TIIAP.
In fiscal year 1997, PTFP competitively awarded 97 grants
totaling more than $14 million. TIIAP competitively awarded 55
grants totaling almost $21 million. We found that NTIA's
criteria, procedures and practices for soliciting, reviewing,
and selecting those awards generally complied with statutory
Department of Commerce and NTIA requirements and appeared
designed to result in merit-based awards.
However, PTFP program staff adjusted independent review
scores for almost 90 percent of the applications without
consulting the reviewers. Additionally, the Assistant
Secretary, as the selection official, added and deleted
applications from the recommended list without sufficiently
documenting all of those decisions.
We recommended that NTIA implement its state of commitment
not to adjust independent review scores and maintain written
documentation of the reasons for making awards that deviate
from the program director's recommendation. NTIA concurred. We
also performed audits to ensure that NTIA grantees adequately
account for the use of funds. Since October 1995, we have
issued 10 OIG audit reports related to TIIAP recipients. These
audits did not identify any major systemic problems with the
recipients of NTIA financial assistance.
A 1996 performance audit of TIIAP did disclose problems.
NTIA officials agreed with our findings. Spending and staffing
restrictions were lifted in the summer of 1996 and NTIA
officials took a number of actions to implement our
recommendations to properly monitor grants.
Our recent OIG inspection found relatively little
cooperation between NTIA and the Department's International
Trade Administration. In fact, ITA's Office of
Telecommunications has its own staff working on many of the
same issues as NTIA staff. Not only is there an overlap of
duties, but roles and responsibilities for telecommunications
policy initiatives and the promotion of interests abroad have
not been clearly defined. We recommended that the Assistant
Secretary for Communications and Information and the Under
Secretary for International Trade firmly agree on their
agencies''s respective roles and responsibilities and
immediately expand cooperation between their offices and
staffs. The Assistant Secretary generally concurred with our
findings, but also noted that NTIA enjoys a close working
relationship with certain components of ITA.
Our January 1994 Report on NTIA Interagency Agreements
focused on the Institute for Telecommunications Sciences. We
found that the growth in reimbursable work had shifted much of
ITS's emphasis to projects only remotely related to Department
of Commerce priorities. We recommended that NTIS focus ITS's
work on the priorities of the Department and NTIA.
In October 1997 we completed a review of the Office of
Spectrum Management's funding, fee collection, and staffing
practices. Our work revealed no significant conditions meriting
issuance of an audit report, but we did suggest NTIA co-inspect
management fees in a timely fashion.
In November 1997 we completed an audit of the role of OSM
and the FCC's decisions to relocate DEMS licenses and to award
a license to a specific company. We conducted a detailed review
to determine whether NTIA met its statutory responsibilities
for Federal spectrum management. Our work revealed no
significant conditions meriting the issuance of a report.
With respect to the bill we offer two comments. Section 3,
requiring Federal agencies to reimburse NTIA for its spectrum
management activities, is consistent with our review of OSM.
These should be paid by Federal agencies throughout the fiscal
year, since OSM conducts its spectrum management activities on
a continuous basis.
Section 5 includes a requirement for the OIG to conduct an
audit or evaluations of the performance of the NTIA in
conducting each of its programs, functions, and operations, and
to report the results and recommendations to Congress and NTIA.
It may be helpful to point out that under the basic IG
legislation, we already have the authority to audit the topics
itemized in the proposed bill. Consequently, we view section 5
as an unnecessary provision. Of course, we will be pleased to
discuss our audit and evaluation with members of the
subcommittee and its staff.
[The prepared statement of George E. Ross follows:]
Prepared Statement of George E. Ross, Assistant Inspector General for
Auditing, U.S. Department of Commerce
Mr. Chairman and Members of the Committee, I am pleased to appear
before you today to discuss the Office of Inspector General's work
related to the Department of Commerce's National Telecommunications and
Information Administration (NTIA) and aspects of the Subcommittee's
draft reauthorization bill for NTIA. I have attached a list of the OIG
reports that will be covered in my testimony.
Our most recent work in NTIA concentrated on audits of the agency's
fiscal year 1998 financial statements and its fiscal year 1997 funding
decisions with respect to discretionary financial assistance. We have
also conducted 10 financial audits of NTIA grantees; an audit of NTIA's
Telecommunications and Information Infrastructure Assistance Program
(TIIAP); an assessment of the coordination between NTIA's international
activities on behalf of the telecommunications industry and the
International Trade Administration (ITA), as part of a broad review of
the Department's trade promotion program; and an evaluation of the
performance of NTIA's Office of Spectrum Management (OSM).
Financial Statements Audits
An audit of NTIA's financial statements was first performed for
fiscal year 1993. The audit, performed by an independent CPA firm under
a contract with our office, resulted in an unqualified opinion on
NTIA's Statement of Financial Condition, a significant achievement that
resulted from the concerted efforts of the bureau's management to
implement sound internal controls. An unqualified opinion means that
the financial statements present fairly, in all material aspects, the
entity's financial position and results of operations.
That achievement continued into subsequent year audits. The audits
of NTIA's fiscal year 1994 and 1995 financial statements resulted in
unqualified opinions on all financial statements. For fiscal year 1993,
the auditors had identified four reportable conditions, but no material
weaknesses in internal controls. Reportable conditions are significant
deficiencies in the design or operation of an agency's internal control
system that could adversely affect its ability to record, process,
summarize, and report financial data consistent with the assertions
made by management in the financial statements. Material weaknesses
represent serious reportable conditions where the design or operation
of an internal control component does not minimize the risk that
errors, fraud, or noncompliance in material amounts may occur and not
be readily detected.
Only one of the four reported conditions was cited again for fiscal
year 1994. While the fiscal year 1995 audit found the same reportable
condition, the fiscal year 1996 and fiscal year 1997 audits resulted in
no reportable conditions.
The latest audit of NTIA's fiscal year 1998 financial statements
also resulted in an unqualified opinion on all statements. This is a
noteworthy accomplishment, considering that four new financial
statements were mandated by OMB Bulletin 97-01, Form and Content of
Agency Financial Statements. The independent audit firm did not
identify any material weaknesses. In fact, the audits have never
reported a material weakness for NTIA. However, the firm did cite one
reportable condition in the bureau's internal controls over financial
reporting of grants. Although the issue affected NTIA, corrective
action is not within the purview of NTIA management because NTIA
receives its grant accounting services from another Commerce Department
bureau.
Government Performance and Results Act of 1993
NTIA, along with other operating units of the Commerce Department
and other agencies throughout the federal government, faces many
inherent challenges in determining how to best plan and measure its
performance in accordance with the Government Performance and Results
Act of 1993 (GPRA). Our office has reviewed NTIA's overviews to its
financial statements. The overviews provide the linkage between the
financial statements and the GPRA requirement that government entities
collect and report information on their performance in meeting goals
and objectives.
Our review of the draft fiscal year 1997 overview found that (1) it
should be more clear and concise, (2) the linkage to the Department's
Strategic Plan could be improved, (3) improved financial and program
performance data were needed, and (4) the overview needed to discuss
positive and negative results. We presented our findings to NTIA
management. NTIA was responsive to our comments, making changes and
indicating that they would make additional improvements in future
years. In our transmittal memorandum to the final audit report, we
stated that NTIA should strengthen reported performance measurement
data and improve the presentation of information to facilitate trend
analysis and assessment of whether target levels of performance have
been achieved.
Our review of the fiscal year 1998 overview found that the bureau
had incorporated many of our suggestions to strengthen the overview. We
informally provided NTIA our observations on the draft fiscal year 1998
overview, including suggestions to (1) discuss the status of Y2K-
compliance efforts, (2) strengthen the linkage between the financial
statements and the overview, and (3) include more forecasts of
potential problem areas. Once again, management was responsive to our
suggestions. In our transmittal memorandum to the final audit report,
we encouraged the bureau to strengthen next year's discussion of actual
results and to continue efforts to improve performance measurement and
reporting.
Year 2000 (Y2K) Compliance
NTIA has reported significant progress in ensuring that its
computer systems and proprietary software will be operational after the
turn of the century. NTIA has two mission-critical systems. The first
is used by the Office of Spectrum Management in managing the government
spectrum, and the second is used by the Office of Telecommunications
and Information Applications (OTIA) in managing its grants process.
OSM has tested for and corrected the Y2K problems in its systems,
and is already processing data with dates into the next century. A
contractor has re-written OTIA's grants management software. According
to NTIA, both systems have been subsequently tested and certified as
Y2K-compliant.
Discretionary Financial Assistance Program Performance Audits and
Grantee Audits
In March of this year, we completed audits of NTIA's two
discretionary financial assistance programs: (1) the Public
Telecommunications Facilities Program (PTFP), and (2) the
Telecommunications and Information Infrastructure Assistance Program
(TIIAP). Discretionary financial assistance programs are those programs
for which federal agencies have the authority to independently
determine the recipients and funding levels of awards. These programs
involve a significant portion of NTIA's budget and operations, about
$35 million in fiscal year 1997 awards and $38 million in fiscal year
1998 grants. These audits were conducted as part of a Department-wide
review of Commerce's discretionary financial assistance programs
initiated at the request of the Chairman of the Senate Commerce,
Science, and Transportation Committee.
Through PTFP, NTIA provides financial assistance for planning,
acquiring, installing, and modernizing public telecommunications
facilities. In fiscal year 1997, the program received 221 applications
for more than $50.5 million. Of these, 215 were accepted for review,
and 97 grants totaling more than $14.1 million were awarded. All 97
awards were made competitively in response to a formal solicitation
notice published in the Federal Register, posted on NTIA's Internet web
site, and mailed to over 3,000 potential applicants on NTIA's mailing
list.
Through TIIAP, NTIA provides financial assistance to nonprofit
organizations, colleges and universities, and state, local and Indian
tribal governments, to promote the widespread use of telecommunications
and information technologies in the public and nonprofit sectors. In
fiscal year 1997, the program received more than 920 applications for
over $350 million; 876 were accepted for review; and 55 grants totaling
almost $20.9 million were awarded. All 55 awards were made
competitively in response to a formal solicitation notice published in
the Federal Register, posted on NTIA's Internet web site, and mailed to
over 18,000 potential applicants.
We examined NTIA's criteria, procedures, and practices for
soliciting, reviewing, and selecting awards under both programs and
found that they generally complied with statutory, Departmental, and
agency requirements and appeared designed to promote merit-based
funding decisions. We found that NTIA (1) developed and published
merit-based technical and public policy criteria that were consistent
with the programs' objectives and (2) complied with the Departmental
and agency requirement to place a notice in the Federal Register, at
least annually, announcing the availability of funds, soliciting award
applications, and specifying the criteria and process to be used in
reviewing and selecting applications.
We also found that NTIA followed established requirements for the
competitive review of applications for TIIAP, but not totally for PTFP.
Specifically, NTIA program staff participated in review panels for PTFP
awards and routinely adjusted the independent reviewers' scores or
composite evaluation scores without consulting with the reviewers. The
staff adjusted either the score given by the independent reviewer(s) or
the review panel's composite score, without consulting with the panel,
for 191 of the 215 applications, or almost 90 percent of the
applications reviewed by the panels. The program staff adjusted 153
applications to a higher score and 38 applications to a lower score.
The program staff stated that the adjustments were made to correct
applications misjudged or unfairly scored by the external reviewers.
Unilateral adjustment of evaluation scores has the potential to
undermine the independence and objectivity of the review process. NTIA
officials determined, prior to the audit, that they would not repeat
the practice in fiscal year 1998.
Moreover, although Departmental and NTIA requirements for selecting
applications were followed for both programs, documentation was lacking
to fully explain the reasons for deviations from the program directors'
lists of applications recommended for funding. For the year reviewed,
we found that the Assistant Secretary for Communications and
Information, as the selecting official, added three applications to the
PTFP list, and added nine applications to and deleted seven
applications from the TIIAP recommended funding list. A memorandum
concerning the additional PTFP applications noted that the selecting
official's decision was made to achieve greater geographical
distribution, but did not provide specific reasons why certain
applicants were selected over others. The Assistant Secretary provided
justifications for the nine added TIIAP applications, but there were no
written justifications for any of the seven deleted applications.
We recommended that NTIA ensure that the bases for making awards
that deviate from a program director's recommendations are adequately
documented. Additionally, we recommended that PTFP staff ensure that
independent reviewers' scores are not adjusted by program staff during
the review process. NTIA agreed with our findings and recommendations
and is modifying its financial assistance award process to implement
our recommendations.
We have also performed financial audits of grants awarded under
these financial assistance programs to ensure that grantees adequately
account for the use of award funds. Since October 1995, we have issued
10 OIG audit reports related to recipients of NTIA financial
assistance. In that period, we also processed 236 Single Audit Act
reports that covered $56.7 million of NTIA funding. These audits did
not identify any major or systemic problems with recipients of NTIA
financial assistance.
Performance Audit: ``Information Superhighway'' Program
NTIA's Office of Telecommunications and Information Applications
(OTIA) is responsible for managing the TIIAP program, also known as the
``Information Superhighway'' program. We reviewed several program
grants in 1996. Our reviews of those grants disclosed programmatic and
financial problems, which were attributable in large part to inadequate
program management staffing. For example, OTIA program officers did not
normally visit grantees and only rarely contacted them by telephone,
conducted only perfunctory reviews of grantee status reports and took
no action when significant problems were indicated, and did not ensure
that grantees were aware of federal grant requirements, particularly
those pertaining to matching funds. Moreover, OTIA did not require
independent evaluations of grant results, did not have a mechanism for
grantees to exchange useful information with each other, and required
program officers to perform routine administrative work to the
detriment of their monitoring responsibilities.
OTIA officials agreed with our findings, but said that because of
spending and staffing restrictions, they lacked the resources to
properly monitor grants. These restrictions were lifted in the summer
of 1996, and NTIA officials took a number of significant actions to
implement our recommendations. For example, OTIA established an on-site
monitoring program and conducted visits of 25 grantees from August
through October of 1996; and instructed its program officers to make
detailed analyses of grantee status reports, contact grantees if the
reports indicate any problem areas or concerns, and forward the
analyses to the Department for appropriate action.
Inspection Report: Coordination on International Telecommunications
Issues
In a recent inspection report, we found that despite NTIA's
participation in international telecommunications policy forums, there
is relatively little cooperation between NTIA and the International
Trade Administration. In fact, ITA's Office of Telecommunications
within the Office of Trade Development has its own staff working on
many of the same issues as NTIA's staff. Not only is there an overlap
of duties, but the roles and responsibilities of each agency for
telecommunications policy initiatives and the advancement and promotion
of U.S. telecommunication interests abroad have not been clearly
defined.
We recommended that the Assistant Secretary for Communications and
Information and the Under Secretary for International Trade (1)
formally agree on their agencies' respective roles and responsibilities
in telecommunications export promotion and trade policy development,
and (2) seek to immediately expand cooperation between NTIA and ITA
offices and staffs. In response to our draft report, the Assistant
Secretary of NTIA generally concurred with our findings on its
relationship with ITA, but noted a positive working relationship with
certain components of the ITA.
Inspection Report: Interagency Agreements With Institute for
Telecommunication Sciences
In January 1994, we issued a final report on our review of NTIA's
interagency agreements that were performed for, and reimbursed by,
other agencies, focusing on those agreements conducted by the Institute
for Telecommunication Sciences (ITS). We examined the relationship
between the work ITS performs through such agreements and NTIA's core
mission, the benefits NTIA receives from those agreements, the amount
of resources involved, and the adequacy of oversight by NTIA senior
management. We found the following:
1. The growth in the volume of reimbursable projects had shifted much
of the focus of the lab's work to projects that were remotely,
if at all, related to Commerce Department priorities. Because
of the volume of the reimbursable work, the size and staffing
of the lab was larger than needed to accomplish the primary
mission of NTIA and the Department.
2. The increase in lab operating costs, due almost exclusively to the
growth of reimbursable projects, resulted in an unending cycle
of employment growth and increased funding requirements. Senior
managers were dissatisfied with the amount of time spent
soliciting new projects.
3. ITS routinely entered into reimbursable agreements with the Defense
Department in the last few days of the fiscal year, resulting
in carryovers of funds to the next fiscal year. This practice
raised serious questions about the propriety and legality of
NTIA's obligating and expending ``one-year'' funds in the next
fiscal year.
We recommended that NTIA (1) focus ITS's work on the priorities of
the Department and NTIA; (2) seek alternative procedures for improving
the lab's efficiency at handling reimbursable projects; (3) ensure that
reimbursable ``one-year'' funds are properly obligated in the year
received; and (4) return all reimbursable funds that were not obligated
by the end of the prior fiscal year to the sponsoring agency. NTIA
agreed to ensure that future reimbursable funding would be obligated in
the same fiscal year, but otherwise disagreed with most of our specific
observations and recommendations.
Other Correspondence: Performance Reviews of Office of Spectrum
Management
In October 1997, we completed a review of the performance of NTIA's
Office of Spectrum Management. The review included a detailed
examination of OSM's funding, fee collection, and staffing practices.
Although our field work revealed no significant conditions meriting the
issuance of an audit report, we found several issues warranting
management's attention, which we discussed in a memorandum to the
Assistant Secretary for Communications and Information.
Specifically, resource assessments essential for effective long-
range federal spectrum planning had not been performed; hardware and
software had not been maintained to meet current and future needs; and
inadequate support had been provided for national and international
policy development and execution. OSM also lacked the personnel to
fulfill its responsibility of ensuring that other federal agencies were
complying with the conditions of their spectrum authorizations and
using the limited spectrum efficiently, or that radio interference
problems were quickly detected and corrected. We noted that these
deficiencies might be exacerbated because a large percentage of the OSM
work force would become eligible for retirement within three years.
Furthermore, Interdepartment Radio Advisory Committee member agencies
had not promptly paid their fiscal year 1997 spectrum management fees
to NTIA.
We suggested that NTIA (1) evaluate the work that OSM had been
unable to perform, determine priorities within the context of the
agency's strategic plan, and begin planning to replace OSM staff who
might retire within the next three years; and (2) take appropriate
action to collect fiscal year 1998 spectrum management fees in a timely
fashion.
Also, in November 1997, we completed an audit of the role of OSM in
the Federal Communications Commission's (FCC) decisions to relocate
Digital Electronic Messaging Service (DEMS) licenses and award a
license to a specific company. We conducted a detailed review of OSM's
actions to determine whether NTIA met its statutory responsibilities
for federal spectrum management with respect to these decisions. Again,
our audit work revealed no significant conditions meriting the issuance
of an audit report. We found that OSM officials acted properly and
protected government interests by offering spectrum for the FCC to use
in the relocation of spectrum allocated for DEMS licensees. OSM
officials also followed established procedures for consulting with the
Interdepartment Radio Advisory Committee on the use of federal
spectrum.
We noted, however, that an FCC licensing bureau had issued DEMS
licenses without the knowledge of FCC headquarters or OSM officials,
even though the technology interfered with existing licenses for
federal government satellite operations and with the planned use by
private-sector satellite communications systems for which the U.S.
government had negotiated an international agreement. In a memorandum
to the Assistant Secretary for Communications and Information, we
suggested that NTIA work with the FCC to establish a real-time
licensing information system between FCC licensing bureaus and OSM that
would reduce the likelihood of issuing licenses that interfere with
federal spectrum use.
OIG Comments on Discussion Draft of Reauthorization Bill
We have reviewed the discussion draft of the proposed
reauthorization bill and have these comments:
1. Section 3 of the draft, ``Payment for Spectrum Management
Functions,'' requiring federal agencies to reimburse NTIA for
its federal spectrum management activities, is consistent with
our findings during the aforementioned review of OSM. During
the year under review, fiscal year 1997, NTIA and OSM
experienced severe difficulties in collecting fees required
under the appropriations act for that year. During fiscal year
1998, these fees were paid in a more timely manner by the other
federal agencies. These fees should be paid by federal agencies
throughout the fiscal year, and not just near the end, since
OSM conducts its spectrum management activities on a continuous
basis.
2. Section 5 of the draft, ``Long-Term Efficiency,'' includes a
requirement for the OIG to ``conduct an audit or evaluations of
the performance of the NTIA in conducting each of its
functions, programs, and operations'' and report the results
and recommendations to the Congress and NTIA. It may be helpful
to point out that under the basic Inspector General
legislation, we already have the authority to audit and review
the topics itemized in the proposed bill. Consequently, we view
section 5 as an unnecessary provision. For example, we are
currently considering performance audits of the PTFP and TIIAP
programs to evaluate both program management and program
performance. Of course, we would be pleased to discuss audit
and evaluation areas with Members of the Committee and staff to
ensure that our efforts address key areas of interest.
That concludes my testimony. I would be pleased to answer any
questions that the Members of the Committee would have.
Mr. Tauzin. Thank you.
Colonel Skinner.
STATEMENT OF RICHARD W. SKINNER
Mr. Skinner. Thank you, Mr. Chairman. I am pleased to have
the opportunity to discuss with you a matter that is of
critical importance to the Department of Defense: spectrum
management and the important relationship we have with the
NTIA. I am delighted to share the witness table with Secretary
Irving, who is a good friend of the Department of Defense and
understands the many challenges that stewardship of America's
radio spectrum has presented to us in the past and will no
doubt present in the future.
I submitted a statement for the record, but if you will
indulge me, I would like to share the Department of Defense's
views on the importance of spectrum and the significant
responsibilities domestic and international management place on
NTIA.
There is increasing pressure for the government to reduce
its spectrum usage and make this resource available for private
sector development. We have been directed to reallocate
spectrum from the government service to the private sector. We
believe it is important to consider the impact to national
security in these deliberations and understand the full costs
in terms of security and dollars spectrum reallocation incurs.
We believe the NTIA has an important role in coordinating and
exposing these issues as spectrum reallocation decisions are
made. The Department of Defense is committed to using the
spectrum allocated to it more efficiently.
On the other hand, military requirements such as
development of information technology systems that are less
vulnerable to enemy jamming and interference, exploitation of
video-based reconnaissance systems and detecting stealthy
threats exacerbates an already difficult problem of requiring
significant spectrum for these unique national security
applications. We hope that the modernization plan required by
the draft legislation will be expanded to take a close look at
spectrum allocations across the broadest policy areas of
national endeavors, and we hope that we will have a process to
balance the equities of all of the stakeholders in the process.
You may want to consider carefully whether 12 months is an
adequate period of time over which to make these deliberations.
Information technology affects almost every aspect of the
Department of Defense, from tactical units to the supply lines
that support them. Information superiority is at the heart of
the Department's vision of future war fighting, a concept of
the future we call Joint Vision 2010. Within Joint Vision 2010
we define information superiority as the capability to collect,
process, and disseminate an interrupted flow of information
while exploiting and/or denying an adversary's ability to do
the same.
Radio spectrum is absolutely essential to pursuing and
achieving our future vision. Much of our information
superiority depends on access to the radio spectrum. The
priority our military planners place on mobility, range and
speed dictates that a large portion of our information
technology be wireless. Consequently, we value access to the
radio spectrum because it provides us the essential media for
communicating information, unhampered by mechanical connections
or weather and other natural phenomena.
While communications is a dominant role, we exploit the
radio spectrum for much, much more. Our radars identify
potential enemies, using the spectrum to range and track
objects in space, on the ground, on the water and in the area.
We use the same technology to manage our air operations and
provide necessary air traffic control services. Systems like
the DOD's Global Positioning System, a constellation of
satellites that provides very accurate navigation and timing
from space, would not be possible without access to the radio
spectrum and the ability to coordinate its use on a national
and international basis so that the important signals from
these satellites can be received without interference by
thousands of military and private sector users, both
domestically and internationally.
Secretary Irving's statement addresses the challenges of
the modernization of the GPS system, and we are very pleased
with his indulgence in that area. The importance of spectrum to
the United States military is not lost on our adversaries. We
fully expect our enemies to attempt to deny our access to the
spectrum in times of war. Moreover, they will monitor and
observe our use of the spectrum during peace and the transition
from peace to war so they can exploit our vulnerabilities to
their own advantage. To this extent, we must have the ability
to train in an environment where military spectrum is
intentionally jammed and develop those systems and operational
tactics and techniques so we can maintain continuity of
operations during attacks on a radio spectrum.
Furthermore, we must be able to deny the use of spectrum by
our adversaries to create confusion in the command and control
structure and deny them the sensors they are dependent upon.
We are frankly not surprised to find that many of the
attributes the Department of Defense values in sensing and
communicating using the radio spectrum have private sector and
commercial value as well. In fact, many of these commercial
systems are in use by our Armed Forces. DOD has a close working
relationship and has received extensive support from the NTIA
Office of Spectrum Management. This office is essential to
achieving the goal of meeting the spectrum needs of both
government and industry. We thank NTIA for this and look
forward to our continuing relationship.
DOD would also like to thank this committee for its
language on reimbursement of spectrum reallocations. We will
keep the committee informed on how well it is working. Finally,
the Department is ready to work with Congress and NTIA to
ensure efficient and effective use of the spectrum into the
next millennium. That concludes my statement. I look forward to
your questions.
[The prepared statement of Richard W. Skinner follows:]
Prepared Statement of Colonel Richard Skinner, Principal Director,
Deputy Assistant Secretary of Defense, (Command, Control,
Communications, Intelligence and Surveillance, Reconnaissance & Space),
Office of the Assistant Secretary of Defense for Command, Control,
Communications and Intelligence
Thank you Mr. Chairman and members of the Subcommittee. I am
pleased to have the opportunity to discuss with you a matter that is of
critical importance to the Department of Defense--spectrum management
and our relationship with the National Telecommunications and
Information Administration (NTIA). Spectrum is a very important
resource to the Department of Defense and, as evidenced by this
hearing, the Congress as well. I am also delighted that I can share the
witness table with Secretary Larry Irving who is a good friend of the
Department of Defense and understands the many challenges that
stewardship of the America's spectrum has presented us in the past and
will no doubt present us in the future. In recognizing the supplier and
customer relationship between the NTIA and the Department of Defense, I
would be remiss if I didn't highlight as well that the Department of
Defense is only one of Secretary Irvings many customers. Perhaps we are
the largest or the most demanding but we are only one of more than 50
federal agency customers. So please do not interpret my remarks as
representing the entire customer base, there are many more federal
spectrum users, each with their own unique perspective on this
business.
Why is Spectrum Management Important to Us?
Information and information technology (IT) affect almost every
aspect of the Department of Defense, from tactical units to the supply
lines that support them. At the heart of the Department's Joint Vision
2010 is Information Superiority: the capability to collect, process,
and disseminate an uninterrupted flow of information while exploiting
and/or denying an adversary's ability to do the same. As a result,
Information Superiority is the key enabler for an entire range of
operational concepts, from Dominant Maneuver to Precision Engagement to
Focused Logistics to Full-Dimensional Protection. Information
profoundly influences the entire range of military endeavors including
humanitarian assistance, peacekeeping and coalition operations.
Spectrum is not only necessary, but absolutely essential to
achieving JV2010. For example, without assured access to necessary
frequencies, we could not have successfully rescued our downed pilots
during recent military operations. These rescues required assured
spectrum access for all aspects of our search and rescue operation.
Much of our information superiority depends on access to the
electromagnetic spectrum. The priority we place on mobility, range, and
speed dictates that much of our information technology be wireless and
consequently we value access to the radio frequency spectrum which
provides us the essential media for communicating information,
unhampered by mechanical connections or weather and other natural
phenomena. The U.S. military has an incredible investment in systems
that exploit the spectrum. They provide us our interaction between
echelons of command and within our units of course, but we exploit the
spectrum for much, much more. Our radars identify potential enemies
using the spectrum to range and track objects in space, on the ground,
on the water, and in the air. We use the same technology to manage our
air operations and provide necessary air traffic control services.
Systems like the Department of Defense's Global Positioning System--a
system of satellites that provides very accurate navigation and timing
signals from space--would not be possible without access to spectrum
and the ability to coordinate its use on a national and international
basis. Of course, the importance of spectrum to the United States
Military is not lost on our adversaries. We fully expect our enemies to
attempt to deny our access to the spectrum in times of war. Moreover,
they will doubtlessly observe our use of the spectrum during peace and
the transition from peace to war so they can exploit any
vulnerabilities to their own advantage. To this extent, we must have
the ability to train and develop those systems and operating tactics
and techniques so that we can maintain continuity of operations during
attacks on our electromagenetic spectrum. Furthermore, we must be able
to deny the use of spectrum by our adversaries to create confusion in
the command and control structure and to deny them the sensors they are
dependent upon.
We are frankly not surprised to find that the many attributes we
value in sensing and communicating using the radio spectrum have
private and commercial value as well. In fact, many of these commercial
systems are in use by your armed forces.
There is increasing pressure for the government to reduce its
spectrum usage and to make this resource available for private sector
development. We understand the resolution of who should use and how the
spectrum is used is an important one. It is equally important we
consider the impact to national security in these deliberations and
understand the full costs in terms of security and dollars spectrum
reallocation incurs. The DoD is committed to using the spectrum
allocated to it more efficiently, but new military requirements for
passing video and detecting low observable threats exacerbates an
already difficult problem.
National security is made up of several pillars. It is essential to
balance our economic security needs with the security your armed forces
provides. To do so may require changes in spectrum policy that include:
Improved processes and procedures for balancing the national
security needs of the nation with commercial interests
Implementing spectrum reallocations using the NTIA spectrum
management structure. Legislating reallocation has had a
serious impact. Using the normal process provides an
opportunity to develop sharing arrangements where possible. We
believe that the NTIA process has been extremely responsive to
commercial needs while addressing the Department of Defense
equities in the process
Recognizing that unique military spectrum requirements demand
exclusive priority access to portions of the RF spectrum while
acknowledging that spectrum sharing among competing customers
is a desirable national goal
Establishing and complying with equipment design standards to
permit sharing for all users
Requiring a technical analysis of spectrum use, commercial and
federal, when considering resolution of new requirements
Considering national security and commercial significance in
technical analyses of spectrum users' requirements
Providing all funding to develop, test, train personnel, and
deploy replacement systems for incumbent systems during the
reallocation process
Including costs to reengineer displaced systems in the
calculation of potential net income from spectrum auctions
Recognizing that national security priorities may outweigh
economic interests in specific cases
Specific Issues
I understand there are several specific issues you would like me to
discuss regarding the fee-for-service of NTIA, the privatization and
outsourcing of NTIA laboratories, and the examination of the NTIA by
the Government Accounting Office. Let me address each of the issues as
I understand them, briefly.
The proposal to raise the fees paid by DoD and other federal
agencies to NTIA for its spectrum management services misses the mark
in our opinion. In this era of ever more complicated calls for spectrum
allocation, DoD is not the only entity that benefits from NTIA's work
on DoD matters. Moreover, as my prior discussion makes clear, the
Office of Spectrum Management performs many functions that are not
solely for the benefit of a particular user. Both the civilian and
military, government and private worlds benefit from a robust and well
managed NTIA. Finally, the ``business school'' logic of fee for service
is to restrain the excessive use of the good or to give users a way to
evaluate the cost of the service against ready alternatives. In this
case, DoD must use NTIA for spectrum management, there are no
alternative service providers, and neither of those rationales is
applicable. The current arrangement works, and I would leave it as it
is.
With regard to privatization of the NTIA laboratories, we believe
this is a decision that NTIA must make on its own, after consultation
with its laboratory customers. In the Department of Defense's
outsourcing initiatives, we have worried that we could erode the pool
of government expertise required to address detailed and complex
government matters. We would hope that NTIA will consider that issue
carefully. DoD uses the laboratories on a cost reimbursable basis. The
NTIA laboratory capabilities are world class, and we hope that any
future change would improve their status. A transition of laboratory
operations must address customer concerns for national security and the
needs to protect the trade secrets and intellectual property of the
government and its private sector partners. So, our organizational
conflict of interest concerns and the continued ability to provide
laboratory support in matters where secrecy is as important as
technical excellence must be addressed in the future laboratory
arrangement. Of course, any change in the laboratory arrangement should
result in maintaining or improving the quality and responsiveness that
the government labs provide.
With regard to the GAO report and modernization plan required in
the draft bill, we are enthusiastic proponents of modernization and
process improvement through business process reengineering. However, we
have equities that must be protected to successfully accomplish our
mission. We hope that in the GAO process we will have an opportunity to
comment on the report, either directly with GAO or via NTIA. We also
hope to have an opportunity to comment on, or perhaps even participate
in the development of, the modernization plan. Although I said I would
not attempt to represent NTIA's many other customers, I would expect
that at least some of these agencies would want to engage as well.
Conclusion
DoD has a close working relationship and has received extensive
support from the NTIA Office of Spectrum Management. This Office is
essential to achieving the goal of meeting the spectrum needs of both
government and industry. We thank them for this and look forward to our
continuing relationship.
DoD also would like to thank this Committee for the language on
reimbursement for spectrum reallocations. We will keep the Committee
informed on how well it is working.
The Department is ready to work with Congress and NTIA to assure
efficient and effective us of the spectrum into the next millenium.
Mr. Tauzin. Thank you very much, Colonel.
Our next witness is Mr. Harris Miller.
STATEMENT OF HARRIS MILLER
Mr. Miller. Thank you. Thank you, Mr. Chairman and members
of the subcommittee. I am here representing the 11,000
companies that are members of the information technology
economy. It is an honor to appear before your subcommittee to
discuss what I believe to be the next Y2K issue for our country
and our global information and technology community; namely,
critical information infrastructure protection.
Information technology now represents over 6 percent of
global GDP, the spending volume of more than $1.8 trillion,
according to Digital Planet, a report recently released by the
World Information Technology and Services Alliance. From China
to Mexico, from Argentina to Germany, countries have come to
recognize that IT is the engine of national development,
accelerating the expansion of business and investment while
acting as a buffer against economic downturns.
However, the Y2K software glitch and other well-publicized
episodes of natural or man-made disasters have also triggered
an awareness of the importance of and vulnerabilities posed by
interruptions to information technology. These threats come in
numerous guises: mischief-minded hackers, disgruntled
employees, corporate spies, cyber criminals, cyber terrorists
and unfriendly nations.
A recent Computer Security Institute survey reports that 62
percent of companies have experienced computer breaches. Fifty-
one percent of respondents reported financial losses due to
computer security problems. Criminal hacking losses of the 163
responding organizations was placed at $123 million in 1998 and
is climbing at an extraordinary pace. The Institute found that
system penetration by outsiders has risen in each of the past 3
years, as has unauthorized access by insiders. Twenty-six
percent of the CSI respondents reported theft of proprietary
information, and 27 percent reported financial fraud. Twenty
percent reported unauthorized use or misuse of Websites.
Virus episodes such as the recent Melissa and Chernobyl are
becoming much too frequent. The Antivirus Research Institute
estimates that new viruses are being launched at the rate of 10
to 15 per day, and that over 2,400 currently exist. Thirty-five
percent are considered to be intentionally disruptive.
And, of course, not all threats are man-made. As has been
demonstrated by the Red River flooding, the Kobe earthquake,
the North Ridge earthquake in California, and Hurricane Andrew
in 1992, natural disasters also lead information technology
disasters in disruptions. The Kobe earthquake caused over 5,000
deaths, damaged or destroyed over 180,000 buildings, and left
300,000 people homeless. But it is also important to remember
that the telecommunications and computer infrastructures in
that area were out for weeks and even months.
And then, of course, there is the Y2K issue itself. The sum
and substance of this, Mr. Chairman, is that our country, our
economy, and the global economy have difficult challenges
ahead. In the cyber realm, as we know, ambiguity reigns
supreme. What makes our new environment so different? Some of
the factors include the following: increasing technological and
environmental complexity; the boundless nature of the Internet;
ambiguous laws; the anonymity of adversaries; conflicting
responsibilities and jurisdiction; limited consequence
management preparedness; low levels of awareness, particularly
by those in senior management in the private sector and
government; and limited human resources to deal with this
challenge.
Understanding the challenge, I do believe that NTIA enjoys
the opportunity to play a very important role in helping the
Nation achieve critical information infrastructure protection.
Assessing the CIIP role for NTIA and other government agencies,
it comes down to a simple issue. Our new information-based
economy must be protected and preserved. Participants and users
must understand that along with the obvious benefits of living
in this IT age are corresponding commitments to protect the
information technology system. The societal stakes involved in
critical information infrastructure protection compel both
government and private industry to seek common ground on the
issue.
The road to this common ground, Mr. Chairman, will not be
easy to reach. While the ultimate ends are shared between
government and the private sector, the policies that each will
develop in order to provide the protection could be quite
different. For instance, government policy may seek to
establish very stringent internal- and external-directed rules
to protect cyber infrastructure. The private sector, however,
is going to look for threats to be responded to in terms of
appropriate business responses.
To deal with these different directions, there must be
increased communications, and that is very important. In my
written statement I have included a series of first principles
necessary to achieve the proper balance between the government
and industry desires. Part of this is working together with the
government.
Our Association, for example, announced a major effort in
partnership with the Justice Department and Attorney General
Reno focusing on cyber citizen partnership to educate both
government and the private sector regarding the importance of
cyber protection. While the IT is frequently uncomfortable in
working with government agencies on policy issues, the agency
we are usually most comfortable with is DOC. It is for this
reason that ITAA and the information technology industry
supports the selection and continued mission of NTIA within DOC
as the lead agency for and primary liaison to our industry.
The private commercial sector owns, operates and manages
over 90 percent of the information and communications
infrastructure. As such, it is appropriate that a civilian
agency such as NTIA focus on the advancement of U.S. industry,
and the U.S. economy be assigned the lead for working and
collaborating with the innovative companies that have
responsibility for and manage these important elements of our
economy.
We look forward to cooperating with all agencies throughout
the government involved in the CIA challenge, yet we feel
strongly that NTIA is the proper representative to work with
our industry to build the necessary levels of cooperation to
help develop the national infrastructure protection plan. It
has the knowledge, experience and relationships necessary.
We very much encourage this committee to include funding in
the NTIA reauthorization so that they can carry out their
mission in the CIIP area, and we look forward to working with
you and other members of the subcommittee in this area, Mr.
Chairman.
[The prepared statement of Harris Miller follows:]
Prepared Statement of Harris N. Miller, President, Information
Technology Association of America
Introduction
I am Harris Miller, President of the Information Technology
Association of America (ITAA), representing over 11,000 direct and
affiliate member companies in the information technology (IT)
industry--the enablers of the information economy. Our members are
located in every state in the United States, and range from the
smallest IT start-ups to industry leaders in the custom software,
services, systems integration, telecommunications, Internet, and
computer consulting fields. These firms are listed on the ITAA website
at www.itaa.org.
It is an honor to appear before your Subcommittee again, Chairman
Tauzin. I want to commend you and your colleagues for inviting me to
discuss what I describe as the next Y2K--Critical Information
Infrastructure Protection.
Information technology represents over 6 percent of global gross
domestic product (GDP), a spending volume of more than $1.8 trillion,
and over 8% of US GDP, according to Digital Planet, a report recently
released by the World Information Technology and Services Alliance
(WITSA), a group of 38 IT trade associations around the world (I am
proud to serve as president of the WITSA organization). Enormous in its
own right, these Digital Planet figures mask the contribution made by
this technology to the growth, competitiveness and vitality of other
industries. From China to Mexico, from Argentina to Germany, countries
have come to recognize that information technology is the engine of
national development, accelerating the expansion of business
opportunity and investment while acting as a buffer against economic
downturns.
The Year 2000 software glitch and other well-publicized episodes of
natural or man-made disasters have also triggered an awareness of the
importance of and vulnerabilities posed by disruptions to information
technology. The threat comes in numerous guises. Mischief minded
hackers. Disgruntled employees. Corporate spies. Cyber criminals.
Terrorists. Unfriendly nations.
Aggressors attack at the point of maximum leverage. For modern
society, this means critical infrastructure--transportation,
telecommunications, oil and gas distribution, emergency services,
water, electric power, finance and government operations. A critical
information infrastructure supports all of these vital delivery systems
and becomes itself a target of opportunity for terrorists, adversary
nations, criminal organizations, and non-state actors. Disrupting the
underlying information infrastructure of a transportation or finance
system often can be as effective or even more effective than disrupting
the physical infrastructure. Why blow up a power grid, when destroying
the computers which control the power grid will have the same impact?
As recently as last week, the International Institute for Strategic
Studies (IISS) published a study on this topic citing one expert
claiming he could bring down the U.S. information infrastructure with
10 computer specialists and in 90 days time. This potential
vulnerability--even if overstated--raises numerous difficult questions
for industry and government about how to best provide critical
information infrastructure protection.
A recent Computer Security Institute (CSI) survey reports 62
percent of companies have experienced computer breaches; 51 percent of
respondents reported financial losses due to computer security
problems; criminal hacking losses of the 163 responding organizations
was placed at $123 million in 1998 and is climbing at an extraordinary
pace. The Institute found that system penetration by outsiders has
risen in each of the past three years as has unauthorized access by
insiders. Twenty-six percent of respondents in the CSI study reported
theft of proprietary information and 27 percent reported financial
fraud. Twenty percent reported unauthorized use or misuse of websites.
Virus episodes like Melissa and Chernobyl are becoming much too
frequent. The Symantec Anti-Virus Research Center estimates that new
viruses are being launched at a rate of 10 to 15 per day and that over
2400 currently exist. Thirty-five percent are considered to be
intentionally destructive.
Not all threats are man-made. As has been demonstrated by the 1997
Red River flooding of Grand Forks, North Dakota; the 1995 Kobe
earthquake in Japan; and the 1994 Northridge earthquake in California;
and South Florida's Hurricane Andrew in 1992, natural disasters pose
substantial threats to both major systems themselves and the critical
information infrastructure undergirding. This is indicative of the fact
that the physical element of the information infrastructure requires a
similar level of attention and concern. The Kobe earthquake, for
instance, caused over 5,000 deaths, damaged or destroyed 180,000
buildings and left 300,000 people homeless. Total damages reached $147
billion. Telecommunications and computer infrastructures were out of
commission for weeks and months.
And then there is that set of ``unintended consequences''
associated with a new and dynamic period in the evolution of
technology. I refer to the Year 2000 computer bug as exhibit number
one. As a global information economy, we stand at the very edge of the
Year 2000 divide. Just eight months remain for companies all over the
world to complete their Y2K repairs. How successfully countries will
make this transition is the subject of much speculation. The only sure
bet for Y2K prognosticators is that no one knows for sure how this
situation will play out. Year 2000 underscores the interconnectedness
of society and its computers and the dependence of one on the other.
Where we do not have all the technology bases covered, we have social,
economic, and political vulnerability instead.
We have difficult challenges ahead. In the cyber realm, ambiguity
reigns supreme. What makes our new environment so different? Some of
the factors include:
Increasing technological and environmental complexity--new
technologies are replacing ``old'' ones at a breathtaking pace
as hundreds of thousands of new players enter cyberspace on an
almost daily basis;
Boundless environment--geographic boundaries are irrelevant in
cyberspace raising jurisdictional conflicts;
Ambiguous laws;
Anonymous adversaries--The anonymous nature of the Internet
combined with a lack of geographic boundaries makes it
extremely difficult to distinguish between nuisance hackers,
vandals, criminals, terrorists and nation-states. This results
in indistinguishable motives or intentions;
Conflicting responsibilities and jurisdictions--while
cyberspace is boundless, turf battles abound;
Limited consequence management preparedness--if progress for
preparations for Y2K and the recent Melissa and Chernobyl
viruses are any indication, world-wide, individuals and
enterprises are unprepared to manage contingencies and
consequences of such incidents;
Low levels of awareness--it was, and is still, difficult to
get leaders to focus on Y2K as a major issue. We must now take
pains to point out that Y2K is solely one ``incident'' on the
continuum of potential vulnerabilities to our critical systems:
the proverbial tip of the iceberg. A significant hurdle to
meeting the most basic challenges, however, is low levels of
awareness and understanding. These issues must be raised to the
executive level;
Limited human resources--The public and private sectors
continue to struggle to find the skilled workers to manage the
resources they currently have. Assuring our information
infrastructures calls for more highly specialized individuals
who are in extremely limited supply.
Today you have asked me to talk about the reauthorization of the
National Telecommunications and Information Administration (NTIA) of
the U.S. Department of Commerce (DOC) and role that we think this
agency can play in helping the nation achieve its critical information
infrastructure protection goals. I believe that NTIA enjoys the
opportunity to play a critical role in helping the nation achieve
Critical Information Infrastructure Protection. Before I speak
specifically about NTIA, I will offer a broader conceptual framework on
how we see government and industry working together on this issue. I
will provide you details on the specifics of ITAA's CIIP program. I
will then turn my attention to NTIA.
Government and Industry: Seeking Common Ground
Assessing the ultimate CIIP roles for NTIA, other government
agencies and the private sector is really very simple: our new
information-based assets must be protected and preserved. The
proliferation of low cost computers and networks have spread
information technology to every quarter of society. As technologies
have advanced and been implemented, we have seen enormous payoffs in
the form of increased efficiency, increased productivity and newfound
prosperity. Chairman Greenspan recently credited large investments
being made in computers and other high-tech products for the dramatic
boost in the nation's productivity. Even previously skeptical
economists now concede that IT driven productivity increases have
enabled our country to have what they said we could not have: high
growth, low unemployment, low inflation, growth in real wages.
Rights come with responsibilities. Participants and users must
understand that along with the obvious benefits of information
technology are corresponding commitments to protect IT. The societal
stakes involved in critical information protection compel government
and industry to seek common ground on the issue.
The road to this common ground will never be, of course, a straight
line. On the contrary, while the ends may be commonly shared, the
policies that government and industry will develop in order to provide
this protection are likely to be quite different.
For instance, government policy may seek to establish both internal
and externally directed standards to protect infrastructure elements
from physical or cyber attack, to require systems to detect when
attacks are imminent or underway, to develop processes to react to the
attack, and to reestablish the critical service. By definition, if the
service has been deemed critical to the nation, then the federal, state
and local governments will have increased interest in the operation,
management and protection of the private businesses and services which
comprise the infrastructure elements. The manner in which this
government concern is manifested can have a significant effect on
private sector interests.
Similarly, industry can be expected to react to infrastructure
threats in appropriate ways, guided by sound business considerations.
Individual companies will make infrastructure protection investments
commensurate with the risk management principles in their industries.
Government policies that impose protection standards more stringent
than those inherent in the private sector risk mitigation process may
not be acceptable. Additionally, requirements for reporting incidents
to government operations centers and responding to government directed
reconstitution plans may impose burdens that need to be developed in
consultation with the private sector.
Private sector firms face other real world pressures in formulating
a CIIP response. First, companies run the significant risk of negative
publicity and exposure. Companies are concerned that revealing and
admitting past mistakes, shortcomings, negative experiences or
incidents can open them up for criticism from the press, their
competitors and their shareholders. Along the same lines, and for good
reason, companies are loath to share proprietary or privileged
corporate information. Additionally, firms run the risk of harming
consumer, customer, partner and investor confidence. The private sector
is also unprepared to share information and/or experiences out of fear
that such information will be misused, abused or released to the public
by the government or competitors. Lastly, with the focus in today's
corporate world on the immediate bottom line, most firms see no clear
short-term return on their information sharing investment.
To minimize the likelihood of, minimize the possible impact from,
or prepare a response to a coordinated, comprehensive attack on
critical US infrastructure will require coordinated, comprehensive
teamwork by government and industry. No matter what the business or
political pressures, we all have a stake in protecting our information
infrastructure. The nature of that teamwork is being decided through
national debate, substantive analysis and constructive dialogue. As we
look ahead, our nation is in need of new modes of cooperation,
collaboration and experience sharing among the private sector and
between the public and private sectors. A well prepared and informed
private sector can work with government to find the proper balance
which optimizes the government's need to protect the critical
infrastructure with business' need to manage risks appropriately.
Significant reservations on the part of both private industry and
government to fully collaborate on these important issues exist,
however, which ITAA is attempting to address from both a theoretical
and practical viewpoint.
CIIP: Establishing First Principles
In developing industry positions on national CIP issues, ITAA has
established an initial list of general principles that will guide the
development of future policy.
The protection of the national information infrastructure must
be based on the minimum amount of government (federal, state,
and local) regulation as is feasible.
The cost of protecting the national information infrastructure
must be kept to the lowest level possible commensurate with the
threat and the consequences of attack. Parties must be able to
differentiate between potential vulnerabilities and specific
threats.
Industry owns and operates the Global Information
Infrastructure and, as such, has primary responsibility for
CIIP requirements, design and implementation.
Industry and government share an interest in the proliferation
of a free and open Internet, electronic commerce, other value
added networks, and an efficient, effective information
infrastructure generally.
In protecting these resources, the specific and immediate
priorities of government and industry are apt to diverge.
Industry will be guided by business considerations to protect
itself against physical and cyber-attack as the threat to the
information infrastructure evolves.
Where corrective CIIP action is required to protect the public
good, government must identify such instances and create
appropriate funding mechanisms.
The Internet and electronic commerce are inherently global in
nature; therefore, critical information protection will require
collaboration among international bodies.
Critical information protection measures much be commensurate
with the threat involved; risks must be appropriately
identified and managed but not magnified or embellished.
Positive interaction between government and industry is
essential. Among issues which will require on-going
communication and assessment is the need to balance the
Constitutional right to privacy with national security
concerns.
Industry must monitor the private sector portion of the
national information infrastructure and cooperate both
internally and with government in reporting and exchanging
information concerning threats, attacks, and protective
measures. Coordination among principals must facilitate
creation of early warning systems.
In creating the information infrastructure, as well as
attendant tools and technologies, industry must be provided
safe harbor protections and its works viewed as incidental to
losses caused by criminal or malicious misbehavior or natural
disasters.
Distinctions must be made among cyber-mischief, cyber-crime
and cyber-war to clarify jurisdictional issues and determine
appropriate responses. The adequacy of current laws to prevent
these threats must be reviewed.
Existing laws must be adapted as necessary to allow
appropriate levels of information sharing among companies, and
between the private sector and government.
Current policy in areas such as the R&E tax credit, software
encryption, workforce training, and longterm government
research and development funding must be reviewed in light of
common CIIP goals and objectives.
Law enforcement agencies must gain sufficient cyber-crime
expertise to combat specific threats and to investigate
specific criminal acts.
Emergency response organizations must gain sufficient disaster
recovery expertise to minimize the effect of catastrophic
events on the information infrastructure.
Implementing this diverse set of principles will require
substantial work.
Difficult Issues Remain
At this nascent stage, many questions remain unanswered:
What are the criteria for determining the individual elements
of the critical information infrastructure, and who is involved
in the determination?
What should be the process/mechanism by which the government
will provide threat, indications and warning information to
critical information infrastructure companies?
What legislative remedies are necessary to overcome the
current legal barriers to information sharing?
Will shared information be protected from FOIA requests?
What threshold should be established for reporting anomalous
activity? What type of reporting will be required, given that
industry will be motivated to monitor and protect itself
against cyber-attack for business reasons, and how will
reported information be protected?
What government restrictions/legislation must be modified or
lifted so that private sector companies may implement active
cyber-defense and/or counter-measures (i.e., anti-trust
provisions leading to NSTAC-like organizations)?
What type of organization(s) should plan and execute the
strategy for critical information infrastructure defense?
What policy determinations are required to distinguish between
law enforcement and national security (warfare) jurisdictions
as a result of attacks on critical information infrastructure
elements?
How should industry organize itself to represent private
sector views, to exchange relevant ``lessons learned,'' and to
participate in policy development? Given that IT is both a
vertical industry sector itself, but also undergirds all the
other vertical sectors, what should be the relationship between
the IT sector and the others?
What considerations must be allowed for those elements of the
critical infrastructure which are foreign controlled or are
part of multi-national businesses, considering that most
infrastructures are international in nature?
How should the information technology private sector assess
the implications of liability and insurance for critical
services?
Is there a sufficient research and development effort underway
to improve the ability of the private sector to monitor and
protect its designated critical elements? Who should fund this
effort? How should R&D information be distributed?
If information system security becomes a competitive market
differentiator, how will the private sector accommodate the
needs of the government for infrastructure protection while
maintaining market competitiveness?
How does our country develop a corps of IT workers with
particular skills to focus on security and infrastructure
protection, particularly in light of the overall IT workforce
shortage?
In addition to substantive legal and policy issues, less tangible
concerns must also be addressed, particularly the development of
trust--within the private sector and between the private sector and
government. ITAA and its member companies are working with government
to help build the necessary bridges. I would like to describe briefly a
few of these initiatives now.
ITAA and CIIP
ITAA is taking a number of actions, has initiated programs, and
motivated its membership to address the CIIP challenges that the nation
and our industry face. ITAA realized the importance of this issue and
took it on over two years ago with the establishment of a dedicated
Critical Information Protection Task Group to examine and analyze
policy developments in this area and to offer input into the policy
process. In the past year ITAA's Critical Information Protection Task
Group has continued its mission of providing ITAA outreach and
education to Administration officials, federal civilian, military,
national security, and law enforcement agencies, Congress, the media,
international organizations, and the public on the issues of critical
information protection and assurance. The CIP Task Group has been very
active particularly in the wake of Presidential Decision Directive 63
(PDD63), which was issued last spring. The activity of our industry
Task Group is increasing as federal agencies and industry grapple with
the implementation of PDD63 which has provided the initial outline and
direction for the development of a more comprehensive national
infrastructure protection strategy and plan.
In the past 12 months, much has happened. Through the Task Group,
our members have been active in what has been the rapid development of
information infrastructure security issues and policy. Our organization
has produced one of the first concerted industry efforts to address CIP
issues. We have issued white papers focused on critical information
infrastructure protection. We prepared an industry response to
President's Commission on Critical Infrastructure Protection (PCCIP)
report and recommendations when they were released in the fall of 1997.
Since then, we have held frequent meetings with representatives
across the government to educate, discuss and provide input into the
evolving national policy developments.
In February of this year, ITAA was selected as a Sector Coordinator
by the Department of Commerce for the Information and Communications
infrastructure sector, in conjunction with two other associations
focused primarily on the telecommunications industry--the US Telephone
Association and the Telecommunications Industry Association. As a
Sector Coordinator, we are continuing to work with the federal
government and, in particular, with NTIA on the implementation of PDD
63.
Education and outreach will be critical to the success of our
efforts. This March, ITAA created the framework for a new Cybercitizen
Partnership in conjunction with Attorney General Janet Reno. The
Partnership will focus on promoting individual responsibility in
cyberspace and creating a public-private sector forum for exchange and
cooperation. Through the Partnership, private sector representatives
hope to work with federal partners, including the Attorney General, the
Department of Justice and National Security Agency representatives, on
development of a critical infrastructure protection education and
awareness campaign and other initiatives. In addition to an awareness
campaign we will be coordinating with the FBI's National Infrastructure
Protection Center to identify and coordinate industry representation
and participation in Center activities to build the communication and
trust that will be so essential in moving forward.
Also of note: In October, 1998, I was appointed by the World
Information Technology and Services Alliance (WITSA) to chair a new
task force on critical information infrastructure. WITSA has been quick
to recognize the need for industry to take a proactive role in
protecting information infrastructures. At a meeting in Taipei earlier
this spring, WITSA members approved a policy statement which encourages
government-industry dialogue at the local, national and international
levels.
While both private industry and governments at all levels agree
that there is a growing need to address the challenges of CIP, there is
little agreement on what measures, if any, should be taken to protect
those infrastructures. At the heart of the Statement is the message
that industry has a vested interest in anticipating and confronting
infrastructure threats in appropriate ways, guided by business
considerations. While countries have very different ways of approaching
CIP, WITSA believes that it is of critical importance that governments
and international organizations always cooperate fully with industry in
shaping CIP policy.
In all honesty, we at ITAA face a daunting job of convincing the IT
industry to work with these agencies on these initiatives. It is a
challenge we must step up to if we are to achieve any degree of success
in opening lines of communication. Our industry continues to have
reservations about working too closely with the federal law enforcement
and national security community, particularly with the scars of the
encryption conflict still fresh.
ITAA Endorses Role of NTIA
While the IT industry is frequently uncomfortable in working with
government agencies on policy issues, the agency we are usually most
comfortable with is DOC. It is for this reason that ITAA and the
information technology industry support the selection and continued
mission of NTIA, within DOC, as the lead agency for and primary liaison
to our industry for CIIP. While the national security implications of
information infrastructure security and assurance are clear, it must be
remembered that it is the private commercial sector that owns, operates
and manages over 90% of the nation's information and communications
infrastructure. As such it is appropriate that a civilian agency,
focused on the advancement of US industry and the US economy, be
assigned the lead for working and collaborating with the innovative
companies that have responsibility for and manage these important
elements of our economy.
ITAA and our members will continue to look forward to cooperating
with all agencies and elements of government to meet the CIIP
challenges. Yet we feel that NTIA is the proper representative to work
with our industry to begin to build the necessary levels of cooperation
to help develop the National Infrastructure Protection Plan. Within
DOC, NTIA has the knowledge of and experience and relationships with
the IT and Communications industries that are necessary.
Over the past two years, ITAA, its members and the IT industry have
begun to develop collegial and constructive relationships with the
leadership and staff of the Commerce Department, NTIA and the Critical
Information Infrastructure Assurance Program Office at NTIA in their
capacity as the lead agency for our industry. While significant,
positive levels of trust, cooperation and communication have been
developing, the important work that must be done has barely started.
This is not because of any lack of desire or ability on behalf of NTIA
or the CIIAP Office, but because they have been asked to do their job
without the necessary resources. They lack even the minimum funding and
support that is necessary for them to carry out their mission. It is
essential that the necessary programmatic funding and resources be
appropriated to the NTIA to carry out its mission. $3.5 million is a
small price to pay for getting these important programs moving down the
track.
Conclusion
The U.S. and much of the world are building their economic house on
an information technology foundation. This is extremely positive
approach to take, delivering tangible benefits to a fast growing
percentage of the world's population. As we build this house which
reaches to a better, more prosperous and democratic future, we must be
ever vigilant of cracks in this structure. If Year 2000 is the first
challenge to place our economic house at risk, failure to adopt a
rigorous approach to CIIP will be the second. I have offered a
conceptual framework on which government and industry can work towards
common ground. A framework which recognizes inherent differences and
builds on mutual strengths. A framework in which ITAA continues to play
a leadership role. A framework in which NTIA must now be allowed to
step to the forefront. As you consider the NTIA Reauthorization Act of
1999 and the future role for the agency, I encourage you to make this
possible.
Mr. Tauzin. Thank you, Mr. Miller.
Next is Mr. Rogers.
STATEMENT OF JAMES A. ROGERS
Mr. Rogers. Thank you, Mr. Chairman. My name is Jim Rogers
and I am retired manager of UPS. I have been asked by UPS to
describe to you the spectrum management dilemma that UPS
experienced as customers for package delivery started calling
for advanced information and telecommunications services such
as tracking, tracing, and electronic signatures.
The company also has submitted a letter and has asked that
it be made part of the this subcommittee's record.
[The letter referred to follows:]
United Parcel Service
May 10, 1999
The Honorable Billy Tauzin
Chairman
Subcommittee on Telecommunications, Trade and Consumer Protection
Commerce Committee
2125 Rayburn House Office Building
U.S. House of Representatives
Washington D.C. 20515
Dear Mr. Chairman: On behalf of United Parcel Service, I want to
extend my appreciation to you and the subcommittee for holding the
hearing on Tuesday, May 11, 1999, on NTIA and its spectrum activities,
particularly those involving government use of spectrum to compete with
the private sector. UPS also appreciates the invitation to provide a
witness. Jim Rogers, who will be speaking for UPS at that hearing, is
best suited to explain our history on this matter in that he was the
person responsible for handling the agency and legislative issues
associated with the development of 220 MHz spectrum.
UPS believes that the current situation needs to be corrected. The
case that will be laid out by Jim Rogers at the hearing clearly
provides convincing evidence that our nation's spectrum policy has
evolved into an unacceptable situation as it pertains to the United
States Postal Service (USPS) and its efforts to enter into private
commercial markets. UPS, as a commercial enterprise, must fulfill its
spectrum needs by applying for licenses issued by the Federal
Communications Commission. The Postal Service--UPS's primary competitor
in the marketplace--is given government agency status, and is able to
obtain from NTIA the frequencies it needs to compete in the marketplace
against the private sector.
The disparity in treatment creates an enormous competitive
advantage. UPS has had to live with the delays there are inherent in
FCC proceedings. The Postal Service does not. UPS has to pay for
licenses by bidding for them at auction. The Postal Service gets its
licenses for free.
The competitive advantage enjoyed by the Postal Service is not
merely theoretical. As I have illustrated, UPS paid a significant
price, in both dollars and opportunity costs, to develop the system and
obtain the frequencies needed to compete against the Postal Service. In
contrast, the Postal Service has avoided paying the costs that UPS has
borne, and has instead been able to acquire its frequencies without
charge.
The solution is both fair and simple.
First, and at a minimum, when the Postal Service needs radio
licenses in support of its competitive activities, it should not be
treated as a Government agency by NTIA. It should be forced to go to
the FCC and compete against everyone else for scarce frequencies. It is
one thing to give the Government users of the spectrum the access that
they need to serve the public interest. It is another thing altogether
to grant the Postal Service preferential rights of access, under
preferential terms and conditions, when it's competing against private
business.
Second, a determination as to whether a Postal Service application
is for radio frequencies to support competitive ventures should be made
in a public proceeding, and should be subject to challenge in the
courts. It is not appropriate that this determination be made by the
IRAC--on which the Postal Service sits. Nor is it appropriate that it
be made without public scrutiny, or without accountability. The Postal
Service should be subject to the same rules as the rest of us when it
is acquiring frequencies in support of its competitive ventures.
Finally, in my view, the Postal Service should be removed from the
IRAC altogether. To the extent that it is permitted to remain a member,
it will be in a position to influence and use leverage over the other
members of IRAC in order to benefit its own competitive objectives.
Sincerely,
Ken Churchill,
Vice President, Corporate Public Affairs
Mr. Rogers. As most of you know, UPS is the largest package
delivery service in the United States. We have grown from a
local service that delivers packages for local merchants to
their customers to a worldwide enterprise that delivers more
than 12 million packages per day around the globe. UPS
customers are demanding ever more information about their
shipments. To meet that need, UPS has transformed itself from a
large package delivery service to a technology-intensive global
communications company that makes extensive use of radio
spectrum to transmit package information data.
In this effort, we discovered a company in Oregon that was
engaged in the business of building LORAN equipment for
aircraft and was doing some exciting work with amplitude
compandered single sideband. It is ACSB. This company,
IIMorrow, was interested in expanding its market beyond
aircraft instrumentation, and we realized that we would both
benefit from accelerating IIMorrow's development of ACSB.
In order to maximize that benefit, UPS eventually acquired
IIMorrow. Developing the equipment was one thing; having
frequencies on which to operate was another. So we began
discussions with the FCC to determine whether there were
frequencies available to support the applications we were
interested in using.
On a separate track, the FCC began the proceedings to
reallocate the 220-222 megahertz band. Many of you remember
that proceeding. The band had been utilized on a secondary
basis by amateurs, and the reallocation proceeding got bogged
down as the amateurs resisted these efforts. The Commission's
notice of proposed rulemaking was released in December 1998,
but a final report and order was not issued until mid-1991.
While this was proceeding, UPS successfully conducted a
test in the Chicago area using frequencies in the 220-222
megahertz band that were licensed for our use on an
experimental basis.
In 1992, the FCC adopted its pioneer preference rules.
While we did receive tentative designation as a pioneer, the
Commission ultimately declined to give us the award. We were
getting close to the time when we needed a track-and-trace
system, but a couple of things occurred. First, the FCC
commenced to hold a series of lotteries to issue licenses in
the 220-222 band. The geographic area covered by these licenses
was local. We spent more than $50,000 to participate in these
lotteries, and while we did win some, we had nowhere near the
nationwide coverage we needed.
In 1993 Congress enacted amendments to the Communications
Act of 1934, giving the authority to auction licenses based on
the values that are placed on these frequencies. We do not
quarrel with the determination that auctioning licenses has
many advantages over lotteries or comparative hearings. One of
the side effects of enacting the auction statute was a long
delay in the Commission's proceeding with respect to issuing
nationwide licenses in the 220-222 megahertz band.
All of the activity that I have described took place
between 1988 and 1994. The upshot is that UPS eventually
invested over $40 million in its efforts to develop a data
network using the 220-222 megahertz band, and it didn't work.
We couldn't wait. We had to get into the market. So we
entered into agreements with cellular licenses around the
country to utilize cellular frequencies for the track-and-trace
services our customers were demanding.
Today UPS is the No. 1 user of cellular services in the
U.S. UPS's primary competitor, the U.S. Postal Service, did not
sit idly by. In 1996 the Postal Service applied for and
obtained licenses to utilize frequencies in the 220-222 band.
This is the same band we spent more than $40 million
unsuccessfully to obtain permission to use. To get its
licenses, the Postal Service didn't participate in an auction.
It filed an application with the Interagency Radio Advisory
Committee, the IRAC. IRAC advised NTIA with respect to the need
for government users to obtain frequency.
Who sits on IRAC? Among its members is the Postal Service.
The IRAC is composed of government users who work together to
ensure the spectrum needs of all government users are met. The
Postal Service sits as a member of IRAC and participates in the
process of advising NTIA on whether or not its licenses should
be granted. It is an applicant, advocate, and a juror.
I suppose that would be fine if it weren't for the fact
that approximately $12 billion per year of the Postal Service
revenues come from providing services in competition with the
private sector, including UPS. But when the Postal Service is
engaged in competitive activities, its membership on the IRAC
gives it a huge competitive advantage. The disparity between
UPS and Postal Service creates an enormous competitive
advantage. UPS had to live with the delays inherent in the FCC
proceedings. The Postal Service did not. UPS had to pay for
licenses by bidding for them at an auction or paying cellular
fees now. The Postal Service gets its licenses for free.
The competitive advantage enjoyed by the Postal Service is
not merely theoretical. UPS paid a significant price in both
dollars and opportunity costs developing the system and hoping
to obtain the frequencies needed to compete. In contrast, the
Postal Service has avoided paying the cost UPS has borne, and
has instead been able to acquire its frequencies without
charge.
The solution is fair and simple. First and at a minimum,
when the Postal Service needs radio licenses in support of its
competitive activities, it should not be treated as a
government agency by NTIA. It should be forced to go to the FCC
and compete against everyone else for scarce frequencies. It is
one thing to give the government users of the spectrum the
access they need to serve the public interest. It is another
thing to grant the Postal Service preferential rights of access
under preferential terms and conditions when it is competing
against private businesses.
Second, determination as to whether a Postal Service
application is for radio frequencies to support competitive
ventures should be made in a public proceeding and should be
subject to challenge in the courts. It is not appropriate that
this determination be made by the IRAC on which the Postal
Service sits. The Postal Service should be subject to the same
rules as the rest of us when it is requiring frequencies in
supports of its competitive ventures.
The Postal Service should be removed from the IRAC
altogether. To the extent that it is permitted to remain a
member, it will be in a position to influence and use leverage
over the other members of IRAC in order to benefit its own
competitive services.
This ends my prepared remarks. I will be happy to answer
any questions that you have.
[The prepared statement of James A. Rogers follows:]
Prepared Statement of James A. Rogers, Retired Representative, United
Parcel Service
Introduction
Good afternoon, Mr. Chairman and Members of the Subcommittee. I am
pleased to have the opportunity to appear before you today. My name is
Jim Rogers, and I am a retired employee of United Parcel Service. I
have been asked by UPS to describe for you the spectrum dilemma that
UPS experienced as customers for package delivery started calling for
advanced information and telecommunications serviices, such as tracking
and tracing, and electronic signatures. Over the last decade, it had
been my responsibility to coordinate UPS's spectrum activities before
the FCC, and later, the NTIA. UPS has asked me to give you a brief
narration of what happened. The Company has also submitted a letter and
has asked that it be made part of the Subcommittee's record.
Background
As most of you know, UPS is the largest package delivery service in
the United States. We have grown from a local service that delivered
packages for local merchants to their customers, to a worldwide
enterprise that delivers more than 12 million packages per day around
the globe. Today we have a fleet of more than 500 aircraft, 157,000
ground vehicles, and more than 325,000 employees to meet the needs of
our customers.
Those needs have gotten far more sophisticated--particularly in the
last 15 years. Today's shippers want to know whether their shipments
have arrived, and if not, where they are, and when they'll get there.
They need information about their shipments.
That's what UPS's customers are demanding. To meet that need, UPS
has transformed itself from a large package delivery service to a
technology-intensive global communications company that makes extensive
use of the radio spectrum.
UPS Experience
By the mid 1980's, our customers were telling us that we needed to
be able to give them up-to-the minute information regarding the status
of their shipments. In response, we began the preliminary efforts to
identify radio-based technologies that could fill this need, and give
us the ability to track our vehicles.
We discovered a company in Oregon that was engaged in the business
of building LORAN equipment for aircraft and terrestrial uses, and was
doing some exciting work with a new technology called ACSB--amplitude
compandered single sideband. This company--IIMorrow--was interested in
expanding its market beyond aircraft instrumentation, and we quickly
realized that we would both benefit from accelerating IIMorrow's
development of ACSB. In order to maximize that benefit, UPS acquired
IIMorrow
But having the equipment was one thing, and having frequencies on
which to operate was another. So we began discussions with the FCC to
determine whether there were frequencies available that could support
the applications we were interested in using. The FCC was familiar with
IIMorrow's work on ACSB technology, and in 1988 encouraged us to look
at the 220-222 MHz band as a possible ``home'' for a new tracking and
tracing service. As our customers continued to push us for increased
information about their shipments, we continued to push forward with
the development of ACSB technology to operate in the 220-222 MHz band.
UPS successfully conducted a test in the Chicago area using frequencies
that were licensed for our use on an experimental basis.
On a separate track, the FCC began the proceeding to reallocate the
220-222 MHz band. Many of you may remember that proceeding. This band
had been utilized (on a secondary basis) by amateurs, and the
reallocation proceeding got bogged down as the amateurs resisted the
FCC's efforts. The Commission's Notice of Proposed Rulemaking was
released in December, 1989, but a final Report and Order was not issued
until mid-1991.
In 1992, the FCC adopted its ``Pioneer Preference'' rules. At this
point, given the sizable investment that UPS had made to develop the
new technology to operate in the 220-222 MHz band, we determined that
we would apply for a pioneers preference award. Our hope was to receive
a ``Pioneer'' designation that would enable us to receive a license for
this new technology without bidding for it at auction. While we did
receive ``tentative'' designation as a pioneer, the Commission
ultimately declined to issue us the award that we sought. But as we
were getting to the point where we were ready to develop an operating
``track and trace'' system, two things occurred.
First, the FCC commenced to hold a series of lotteries to issue
licenses in the 220-222 MHz band; however the geographic area covered
by these licenses was very limited. UPS spent more than $50,000 to
participate in these lotteries, and while we did win a few, we had
nowhere near the nationwide coverage that we sought.
Second, in 1993, Congress enacted the amendments to section 309(j)
of the Communications Act giving the FCC the authority to auction
licenses based on the value that bidders placed on these frequencies.
We do not quarrel with the determination that auctioning licenses has
many advantages over lotteries or comparative hearings. But one of the
side effects of enacting the auction statute was a long delay in the
Commission's proceedings with respect to issuing nationwide licenses in
the 220-222 MHz band.
All of the activity I've described to you took place between 1988
and 1994. The upshot is that UPS had invested over $40 million in its
effort to develop a national digital data network using the 220-222 MHz
band, which didn't come to fruition. We couldn't wait. Faced with
unacceptable delay, UPS entered into agreements with many cellular
licensees around the country to utilize cellular frequencies for the
``track and trace'' services that our customers were demanding. Today,
UPS is the number one user of cellular services, with a nationwide
network pieced together from cellular licensees that permits us to
offer our customers the ``track and trace'' capability that they
demand.
U.S. Postal Service Actions
UPS's primary competitor, the U.S. Postal Service, was not sitting
idly on the sidelines. In 1996, the U.S.P.S applied for, and obtained,
licenses to utilize frequencies in the 220-222 MHz band. This is the
same band that we had spent more than $40 million--unsuccessfully--to
obtain permission to use.
To get its licenses, the Postal Service didn't have to participate
in an auction. It filed its applications with the Interagency Radio
Advisory Committee--the ``IRAC.'' The IRAC advises NTIA with respect to
the need for Government users to obtain frequencies.
And who sits on IRAC? Well, among its members is none other than
the U.S. Postal Service. The IRAC is comprised of Government users, who
work together to ensure that the spectrum needs of all Government users
are met. The Postal Service sits as a member of the IRAC, and
participates in the process of advising NTIA on whether or not its
licenses should be granted. It is at once an applicant, an advocate and
a juror.
I suppose that would be fine if it weren't for the fact that
approximately $12 billion dollars per year of the Postal Service's
revenues comes from providing services in competition with the private
sector, including UPS. But when the Postal Service is engaged in
competitive activities, its membership on the IRAC gives it a huge
competitive advantage.
Recommendations
The letter that Ken Churchill has submitted for the record states
both the problem, and the solution, correctly. UPS, as a commercial
enterprise, must fulfill its spectrum needs by applying for licenses
issued by the Federal Communications Commission. UPS's primary
competitor in the marketplace--the U.S. Postal Service--is treated as a
government agency, and is able to obtain from NTIA the frequencies it
needs to compete in the marketplace against the private sector.
The disparity between UPS and the Postal Service creates an
enormous competitive advantage. UPS has had to live with the delays
there are inherent in FCC proceedings. The Postal Service does not. UPS
has to pay for licenses by bidding for them at auction. The Postal
Service gets its licenses for free.
The competitive advantage enjoyed by the Postal Service is not
merely theoretical. As I have illustrated, UPS paid a significant
price, in both dollars and opportunitiy costs, to develop the system
and obtain the frequencies needed to compete against the Postal
Service. In contrast, the Postal Service has avoided paying the costs
that UPS has borne, and has instead been able to acquire its
frequencies without charge.
The solution is both fair and simple.
First, and at a minimum, when the Postal Service needs radio
licenses in support of its competitive activities, it should not be
treated as a Government agency by NTIA. It should be forced to go to
the FCC and compete against everyone else for scarce frequencies. It is
one thing to give the Government users of the spectrum the access that
they need to serve the public interest. It is another thing altogether
to grant the Postal Service preferential rights of access, under
preferential terms and conditions, when it's competing against private
business.
Second, a determination as to whether a Postal Service application
is for radio frequencies to support competitive ventures should be made
in a public proceeding, and should be subject to challenge in the
courts. It is not appropriate that this determination be made by the
IRAC--on which the Postal Service sits. Nor is it appropriate that it
be made without public scrutiny, or without accountability. The Postal
Service should be subject to the same rules as the rest of us when it
is acquiring frequencies in support of its competitive ventures.
Finally, in my view, the Postal Service should be removed from the
IRAC altogether. To the extent that it is permitted to remain a member,
it will be in a position to influence and use leverage over the other
members of IRAC in order to benefit its own competitive services.
Mr. Chairman, this ends my prepared remarks. I will be happy to
respond to any questions you may have.
Mr. Tauzin. Thank you, Mr. Rogers.
We will now hear from Mr. Kenneth Crawford.
STATEMENT OF KENNETH C. CRAWFORD
Mr. Crawford. Mr. Chairman, I am pleased to say that as a
result of a TIIAP grant that we received 2 years ago, there are
people alive in Oklahoma today that might have died Monday, May
3, so I am pleased to be here to testify on behalf of the
reauthorization legislation.
My testimony will be based upon a program that we know is
OK-FIRST. It was established in 1996 through a 2-year TIIAP
grant. It was developed by my office at the University of
Oklahoma. Our goal was to provide public safety officials in
our State, that is police, fire and civil emergency management,
with the data from the modernized National Weather Service, in
particular their modern Doppler weather radar network,
sometimes called NEXRAD, sometimes called the WSR-88D.
We also provided extensive precursor training, extensive
follow-up after the fact, and we designed our system to be
multipurpose, not just weather-related. My background in this
comes from a 35-year professional career that had me in the
National Weather Service in States like Louisiana and Texas and
Oklahoma. And for the last decade I have been at the University
of Oklahoma where I have had a little bit more freedom to be
creative in these areas.
The weakness that I saw in the weather warning system of
our Nation, be it Louisiana, Texas or Oklahoma, was simply the
ability to--or inability to disseminate time-critical
information to a population at risk. Often that meant a rural
area. Historically, as the National Research Council has
documented on a number of occasions, access to information from
the National Weather Service has been cumbersome, expensive,
non-intuitive, and lacked critical details. And while the
modernization of the National Weather Service through the
1990's has helped considerably with the quality of that data,
there still remains no real viable delivery mechanism to get
time-critical information to public safety officials in rural
areas. In particular, the public safety sector of our society
have not really reaped the benefits associated with the
modernization of the weather service.
It is my opinion that the rural population of our Nation is
likely in an information drought when it comes to natural
disasters. And as best I understand things from talking to
friends across the Nation, the use of NEXRAD data in a host of
public safety offices remains practically nonexistent, even
though the NEXRAD radar network has been in existence for
almost 5 years now.
In Oklahoma, as a result of TIIAP, we have 85 trained
agencies. Of those agencies, 49 percent are from communities
where the population is 5,000 or smaller. As you well know, we
had major tornado damage in central Oklahoma 8 days ago. It
killed 41 people. It wounded and injured 742. There were nearly
7,000 structures that were destroyed, mostly in central
Oklahoma. And while the weather service and the broadcast media
provided an excellent service, the rural areas were also being
hammered at the same time that the media in Oklahoma City was
saturated. All of the media attention went to Oklahoma City.
I would like to read just one of many comments that I can
give you. This comes from the civil defense director in
Guthrie, Oklahoma, to the north of Oklahoma City. He said when
police and rescue crews arrived at the first Logan County
damage site near the city of Crescent, one of the first tasks
was to open the highway sufficiently to get an ambulance
through from Crescent to the hospital in Guthrie. All efforts
were to get that ambulance moving with a critically injured
tornado victim.
About the time they succeeded, a second tornado approached
in the dark and wrapped in rain. The ambulance and the tornado
were moving on intersecting paths. Emergency management, aware
of both events, was able to stop the ambulance until the
tornado had passed in front of it, and he closed that episode
by saying, ``And we received no tornado information from any
source other than OK-FIRST.'' And the reason he didn't was the
media in Oklahoma City was saturated with what was going on.
I could give you a hundred success stories like that. I
would close with three or four points. One, they would never
had occurred had it not been for the availability of TIIAP
funds to permit a pilot project that we know as OK-FIRST to be
developed.
Second, in my opinion it speeded the development of this
kind of information dissemination to the rural areas by at
least 5 years, possibly even more. As a result of our successes
in Oklahoma, the National Weather Service has now teamed with
us to marry our efforts of OK-FIRST with their efforts, AWIPS,
to try to take our work into a national forum.
Finally, I would close by saying had not the TIIAP grant
opportunity been known to us, we likely would have never had
thought about proposing such an effort as OK-FIRST.
My final comment would be taken from the Daily Oklahoma
this morning. I picked it up on my way here. If Larry has PR
people, it is just a coincidence, but there is a front page
story, ``Warning System Called a Life Safer,'' and it mentions
TIIAP and the U.S. Department of Commerce on the front page of
a very conservative newspaper. When journalists can say----
Mr. Tauzin. Larry has his hands everywhere.
Mr. Crawford. When journalists can say that they see the
value in these systems, I believe we as meteorologists have
gained a new level of credibility in our Nation, and I thank
you for the time.
[The prepared statement of Kenneth C. Crawford follows:]
Prepared Statement of Kenneth C. Crawford, Regents' Professor of
Meteorology, Director, Oklahoma Climatological Survey, The University
of Oklahoma
Mr. Chairman and Members of the Subcommittee on Telecommunications,
Trade and Consumer Protection of the House Committee on Commerce, I am
Kenneth C. Crawford, currently a Regents' Professor Of Meteorology and
Director of the Oklahoma Climatological Survey (OCS) at the University
of Oklahoma. I am honored to appear before you today to testify on
behalf of reauthorization legislation for the National
Telecommunications and Information Administration (NTIA). Specifically,
I bring testimony in support of the Telecommunications Information
Infrastructure Assistant Program (TIIAP), a unit within the NTIA. My
testimony also is based upon a program we know in Oklahoma as OK-
FIRST--Oklahoma's First-response Information Resource System using
Telecommunications--which was initially funded by TIIAP.
OK-FIRST was established in 1996 through a two-year TIIAP grant.
Continued funding was provided by the State of Oklahoma during FY99.
For FY00, funding is still subject to Legislative and Gubernatorial
approval during the current Legislative session.
OK-FIRST, developed by the Oklahoma Climatological Survey, provides
public safety officials in rural and urban areas with data from a
network of modern Doppler weather radars (known as the WSR-88D or
NEXRAD) along with other information from the modernized National
Weather Service (NWS). In addition, OK-FIRST provides extensive
precursor training on how to use and how NOT to use the data. From the
beginning, the OK-FIRST system was designed to be multipurpose (e.g.,
it is routinely used during episodes of severe weather, flooding,
wildfires, and hazardous material incidents).
I would begin by telling you that I have been on the faculty at the
University of Oklahoma since 1989. During the intervening 10-years, my
office has developed three major public-service programs--all lying
within the scope of enabling legislation from the Oklahoma Legislature
in 1978. The first service program is the Oklahoma Mesonetwork (known
as the Mesonet), an automated network of 115 remote observing stations
deployed across Oklahoma which provide environmental data at 5 minute
intervals on an around-the-clock basis. Building upon this early 1990s
effort which was funded by the State of Oklahoma, the OCS developed a
K-12 educational outreach program designed to put real-time Mesonet
data into the K-12 classrooms of Oklahoma and to bring the information
age to tomorrow's leaders. This latter program, called EARTHSTORM, was
supported for three years (1992-1995) by a competitively-earned grant
from the National Science Foundation. Today, the Mesonet and EARTHSTORM
continue to provide services to the citizens of Oklahoma using funds
appropriated by our State Legislature and via funds derived from
various other partnerships.
Our third outreach effort--known as OK-FIRST and made possible by
TIIAP--was built upon the credibility brought to us by these past
experiences along with a number of other relevant experiences and
technological advances. This important experience base includes:
My own experiences as an NWS employee of 30 years that
encompassed duty as an operational forecaster, as a research
meteorologist at the National Severe Storms Laboratory during
the early development days of the NEXRAD program (Doppler
weather radar that became known as the WSR-88D), and as a
senior NWS field manager for nearly 10 years. The last 8 years
of my NWS career were spent in central Oklahoma where the NWS
was focusing much of its modernization effort at the time. From
these experiences, I learned first-hand that a major weakness
in the nation's weather warning system was the difficult issue
of the dissemination of time-critical information to the
populated area with the greatest risk.
Historically, access to NWS information by local officials
nationwide had, for years, been cumbersome, expensive, non-
intuitive, and lacked critical details. The $4.5 billion NWS
modernization of the 1990s made this problem much worse by
producing vast amounts of high-quality, county-scale
information with no viable delivery mechanism to those
ultimately responsible for making life-and-death decisions. In
addition, rural areas--traditionally under served by
telecommunications and technology and often ignored by programs
in both the public and private sector--were especially at high
risk when severe weather, wildfires, and hazardous material
incidents occurred. Consequently, local officials made weather-
impacted decisions without adequate information (e.g., storm
spotters were deployed precariously because coordinators lacked
information about storm location, movement, and intensity).
Despite the NWS modernization which dramatically improved their
forecasting and warning capabilities, public safety officials
still have not reaped many of the associated benefits.
Thus, it is my opinion, based upon front-line experiences in
Oklahoma during the 1980s, that the rural population of our
nation is likely in an information drought when natural
disasters strike. Disaster survey after disaster survey
continue to point out that the population-at-risk did not
understand the real risks they faced.
The modernization of the National Weather Service included
deployment of the WSR-88D radar network that consisted of 154
Doppler weather radars. Because of NEXRAD's thoughtful design,
all data were digital, updated frequently, and sharable. Yet,
access to and use of NEXRAD data in public safety offices
remains pratically non-existent in rural areas due to a host of
small issues (e.g., available funds, affordable fees, knowledge
of what is available, training, etc.).
The maturation of the Internet, and in Oklahoma, its statewide
equivalent known as OneNet (funded by the State of Oklahoma for
$14 million in 1992), represented a cost-effective capability
to move data into the most rural of areas across Oklahoma. In
addition, the maturation of PC technology represented the
affordable tools to display important digital information.
All that was lacking to improve the delivery of critical weather
information into rural areas was (1) an affordable access to NEXRAD
data and an authority to redistribute this unique data to state and
locally-supported agencies within Oklahoma, and (2) funds to develop a
pilot project designed to deliver the best possible information from
the modernized NWS to rural Oklahoma, including the provision of
training and on-going support.
These two obstacles were overcome by a unique partnership, formed
in 1996 between the Unisys Corporation of Kennett Square, PA and the
University of Oklahoma. This partnership permitted the State of
Oklahoma to acquire digital radar data from 15 nearby systems in the
WSR-88D network (Figure 1--appended at end of narrative). As a result,
access to the NEXRAD pipeline has become very affordable (compared to
acquiring NEXRAD data agency-by-agency on the open market). The
partnership between Unisys and the University of Oklahoma remains
unique (as far as I know) among the four agencies authorized to
distribute NEXRAD data beyond the Federal Government. With this
partnership in hand, the State of Oklahoma was given the authority to
redistribute WSR-88D data to public safety agencies across Oklahoma--to
include civil emergency management, law enforcement, and fire
protection agencies. As a result, Unisys now receives data fees from a
market not previously tapped, because market forces had made the data
prohibitively expensive for rural agencies that routinely operate on
shoestring budgets.
In addition, funds were provided by a competitively-earned grant
from TIIAP--$549,910 for 2.5 years beginning in October of 1996. As a
result of the momentum generated by the TIIAP grant, eighty-five OK-
FIRST agencies (Figure 2--appended at end of narrative) have been well
trained (we believe) to access and use highly technical data produced
every 6 minutes by each radar in the WSR-88D network (e.g., estimated
hail size, the probability of severe-sized hail, the presence of
mesocyclones, radar estimated rainfall, etc.) and to resolve potential
conflicting information produced by two adjacent WSR-88Ds. Of these 85
user agencies, 49% represent communities where the population is 5,000
or less.
On May 3, 1999, the National Weather Service and the radio and
television media contributed greatly to the quality and efficient
delivery of warnings for a devastating series of killer storms.
Clearly, the severe weather outbreak of May 3rd extracted a horrific
toll, yet produced evidence that modern-day technology does save lives:
75 tornadoes moved across Oklahoma during a 10 hour period
killing 41 and injuring an additional 742 Oklahomans. In their
path, these tornadoes destroyed 4,156 structures (a grand total
of 7,000 structures severely affected), and left an economic
price tag that will exceed one billion dollars!
WSR-88Ds used on May 3rd pinpointed the location of most, if
not all killer storms with incredible accuracy and clarity.
NWS meteorologists at the Storm Prediction Center in Norman,
and at the NWS Forecast Offices in Norman and in Tulsa produced
a series of outstanding forecasts and warnings that represent
major dividends from the NWS modernization.
The electronic broadcast media in Oklahoma City performed
superbly--in fact, in my 35+ years as a professional
meteorologist, I have never seen the broadcast media perform
their warning dissemination tasks in so admirable a manner.
Public safety agencies across Oklahoma also were trained and
ready for this onslaught, due partially to the existence of OK-
FIRST. They performed their local emergency response tasks in
no less admirable a fashion--for the real miracle of May 3,
1999 was a death toll that stood at 41 and did not exceed
1,000! The effects of the tornadoes which struck Oklahoma on
that day could have been worse. Much worse.
However, the best story of May 3rd may not necessarily be those
which made the national and international headlines. Instead, it might
be how OK-FIRST worked as an information-delivery system to save lives
on this most stressful of nights:
The OK-FIRST dissemination system shared 36,278 NEXRAD files of
information with OK-FIRST agencies on May 3rd. A typical NEXRAD image
used by an OK-FIRST agency on this day is shown in Figure 3--appended
at end of narrative.
Steve Chapman, Emergency Management Director for the town of
Chickasha (southwest of OKC), saw the tornadoes developing on his OK-
FIRST displays. Using pinpoint information from OK-FIRST (hence, the
NWS and NEXRAD), Mr. Chapman ordered the evacuation of the Chickasha
Airport--fifteen minutes before one of the first tornadoes of the day
struck. No fatalities or injuries resulted.
Later that evening, when another tornado demolished the Tanger
Outlet Mall in Stroud (between OKC and Tulsa), all stores had been
vacated. Ben Springfield, Lincoln County Emergency Management Director,
used OK-FIRST and notified Stroud 30 minutes in advance.
People in their homes in rural areas also were more secure thanks
to the actions of emergency managers that day. After the storms had
spun their path of destruction across the Oklahoma City metropolitan
area, they continued northeast. Residents in rural areas had minimal
attention from the media, as local news media focused much of their
coverage upon the devastation and recovery operations in and near
Oklahoma City. One of Ben Springfield's assistants, who was monitoring
the OK-FIRST radar display, relayed updates every five minutes on their
scanner. People in the path of the tornado received the information and
took shelter. Mr. Springfield said that many of these people would
otherwise not have taken shelter had it not been for the trustworthy
information coming across their scanner.
In Kingfisher County (northwest of OKC), the town of Dover was hit
hard, with one-third of the homes destroyed and another one third
damaged. Despite the extent of the devastation, only one fatality
occurred. The town's warning system was sounded 10 to 20 minutes in
advance of the storm, according to Danny Mastalka, Director of
Kingfisher County Emergency Management. The lone fatality was an
individual who received the warning but chose not to take action.
Rescue workers themselves were targets of the storms. A tornado
completely devastated the small community of Mulhall in Logan County
(north of OKC). Rescue workers set up a command center to manage the
recovery operations. John Lewis, Logan County Emergency Management
Director, saw another tornado approaching on his OK-FIRST system; it
was following a nearly identical path to the first tornado. He alerted
the command center to move their operations twice. As a result, the
rescue workers did not themselves become victims of the storms.
Mr. Lewis, in his letter of May 10, 1999 (appended at the end of
narrative) stated:
``When police and rescue crews arrived at the first Logan
County damage site near the City of Crescent, one of the first
tasks was to open the highway sufficiently to get an ambulance
through from Crescent to the hospital in Guthrie. All efforts
were to get that ambulance moving with a critically injured
tornado victim. About the time they succeeded, a second tornado
approached in the dark and wrapped in rain. The ambulance and
the tornado moved on intersecting paths. Emergency management,
aware of both events, was able to stop the ambulance until the
tornado had passed just in front of it. We received NO tornado
information from any source other than OK-FIRST for this
tornado.''
``The town of Mulhall, devastated by the initial tornado after
it passed Crescent, was warned primarily by two law enforcement
units sounding their vehicle sirens in the town. The units had
been dispatched there by the Sheriff's Office based upon OK-
FIRST data. Both units continued warning residents until they
were each hit by debris: one by power lines down across his
car, the second by a large tree on top of his unit. Both
officers were uninjured--and so were all but one Mulhall town
resident!'' [Note: practically every structure in Mulhall, a
community of 945 citizens, was destroyed, including the town's
only water tower which had stood since the 1920s.]
In Seminole County (east of OKC), Emergency Management Director
Herb Gunter radioed a warning to a convoy of emergency vehicles
responding to a mutual aid call from the Oklahoma City area. Mr. Gunter
noticed that another tornado was developing and would cross I-40 ahead
of them. The law enforcement convoy closed I-40 so that neither they
nor other vehicles would drive into the path of the storm.
Unfortunately, two vehicles (and two fatalities) were later found swept
from the road in the exact spot where Mr. Gunter identified the storm.
Meanwhile, in far northeast Oklahoma, as attention remained focused
on killer tornadoes, heavy thunderstorms with flood producing rains
brought 5-6 inches to Ottawa and surrounding counties on the night of
May 3rd. Terry Durborow, Emergency Management Director for the City of
Miami, used OK-FIRST to ``help protect the public in a timely manner.''
Incidentally, OK-FIRST has been named a semifinalist in Harvard
University's ``Innovations in American Government'' awards program for
1999, ranking in the top 6% of the 1609 applications submitted.
Selection of finalists in this prestigious awards program will occur at
the end of May 1999.
These success stories (and others too numerous to document) would
have never occurred had it not been for the availability of TIIAP
funds. Three points illustrate the impact of TIIAP upon the development
of OK-FIRST.
First, in my opinion, the development of an information-delivery
system like OK-FIRST--one that would meet the needs of public safety
officials because agency users are trained to use a modern information-
delivery system--would not have happened prior to 2005 had TIIAP funds
not been awarded to jump-start a project that now has national
applications.
Second, the National Weather Service awarded substantial funds in
FY99 to link OK-FIRST and the University of Oklahoma with the evolution
of its LDAD System (Local Data Acquisition and Dissemination)--the
external data-sharing arm of AWIPS (Advanced Weather Interactive
Processing System). With NWS support, two agencies concerned with
public service and public safety are working in partnership to bring
university ideas and concepts into the Federal Government. The joint
program is known as ONALERT--Observations Necessary for Aiding Local
Emergency Response via Telecommunications. TIIAP funds made a
cooperative project possible because the University of Oklahoma now is
a leader in weather-information dissemination to rural areas and has
much to offer the NWS in solving the difficult problem of getting
modernized data into the rural communities of our nation.
Finally, and most importantly, without the TIIAP grant opportunity
being available, the creative staff at the Oklahoma Climatological
Survey likely would never have proposed a project like OK-FIRST.
Moreover, other funds to develop a program like OK-FIRST would have
been unavailable because federal leaders in Washington are not always
sensitive to needs and constraints in rural areas and always seem to
target national programs to populated areas. Furthermore, large
corporations involved in weather dissemination are not always sensitive
to rural areas (e.g., market forces have made WSR-88D data
prohibitively expensive for small communities). In addition, smaller
companies involved with weather information have provided neither
adequate tools designed for public-safety use nor the training that is
critical for the proper interpretation and application of the data.
Thus, TIIAP funds bridged a long-standing chasm that exists in the
complex chain of ``technology transfer''.
With these final three points, I am available to answer any
questions you may have. However, I would call to the Committee's
attention three figures appended to this narrative along with a letter
from John Lewis, Emergency Management Director for Logan County (north
of OKC). His letter provides a perspective of life on the firing-line
that few people appreciate and understand.
[GRAPHIC] [TIFF OMITTED] T6610.015
[GRAPHIC] [TIFF OMITTED] T6610.016
Logan County Civil Defense
Guthrie, Oklahoma 73044
May 10, 1999
Director
Oklahoma Climatological Survey
Boyd St
Norman OK
Dr. Crawford: I want to pass on to you how critical a role the OK-
FIRST program played in response to the tornado disaster which occurred
on May 3, 1999 in Logan County Oklahoma. Having current weather radar
data, available ``on demand'' to emergency services, probably saved
dozens of lives. Some examples follow:
Following the devastating storms in Oklahoma City, Moore, and Del
City, numerous Logan County police and fire crews were eager to go
there to assist. Only by real-time OK-FIRST data were we able to
persuade department chiefs that our own threat was not over; that crews
and equipment should be retained in our area until several additional
supercells capable of producing tornados passed. Thus, emergency
response was still strong in Logan County when we were struck about 90
minutes later.
When police and rescue crews arrived at the first Logan County
damage site near the City of Crescent, one of the first tasks was to
open the highway sufficiently to get an ambulance through from Crescent
to the hospital in Guthrie. All efforts were to get that ambulance
moving with a critically injured tornado victim. About the time they
succeeded, a second tornado approached in the dark and wrapped in rain.
The ambulance and the tornado moved on intersecting paths. Emergency
management, aware of both events, was able to stop the ambulance until
the tornado had passed just in front of it. We received NO tornado
information from any source other than OK-FIRST for this save.
The town of Mulhall, devastated by the initial tornado after it
passed Crescent, was warned primarily by two law enforcement units
sounding their vehiclesirens in the town. The units had been dispatched
there by the Sheriff's office based upon OK-FIRST data. Both units
continued warning residents until they were each hit by debris: one by
power lines down across his car, the second by a large tree on top of
his unit. Both officers were uninjured--and so were all but one Mulhall
town resident!
Police, sheriff, and rescue crews responding to Mulhall began
arriving as two additional tornados approached. Requests for timely
detailed storm information were very urgent. Emergency management
provided continuous, accurate locations on two tornados at each 6
minute radar update. Locations of intense circulation were evident on
the storm relative velocity product of the OK FIRST radar. Officers on-
scene visually confirmed the presence of these follow-on tornados and
accuracy of the emergency management's warnings, and scrambled out of
the tornado's path. During these events, TV media was focused on other
areas, then being hit by larger storms, so again there was no tornado
information source except OK-FIRST.
During recovery operations on May 9, severe thunderstorms again
threatened Mulhall where electricity was still limited, and widespread
public viewing of news media warnings was impossible. Emergency
management set up OK-FIRST displays in the command post. Emergency
management used the radar and mesonet to evaluate the weather threat
and provide a four hour warning. This was important for work crews in
order to protect the exposed supplies and donations (clothing, toilet
paper, bedding, etc) and adjust work schedules and locations. More
importantly perhaps, town officials used bullhorns to notify the
workers and residents, relieving fears and dispelling rumors of more
tornados.
I hope these examples help to portray the crucial role played by
OK-FIRST in warning, emergency response and disaster recovery. I am
totally convinced that without the weather displays made available to
us through OK-FIRST, and the training you provided to interpret those
displays, there would have been a very different story to tell.
Please pass along our gratitude to your staff as well as the miriad
of people responsible for making the OK-FIRST project a reality. We
absolutely have to keep your project alive and growing.
John W Lewis
Director
Mr. Tauzin. The Chair recognizes himself for a round of
questions, and the Chair will be generous with time.
First of all, Mr. Irving, the gentleman from UPS, Mr.
Rogers, in his letter to our office makes a fairly compelling
case that he suffers some real disadvantage with the U.S.
Postal Service when it comes to the allocation of spectrum and
the way the Postal Service sits on the very board that makes
the decisions. How do you answer that?
Mr. Irving. I don't believe I have a lot of discretion. The
U.S. Postal Service is a creature of statute. They are a quasi-
Federal agency. They have the rights of all other quasi-Federal
agencies. I think the Congress, including the Government
Operations Committee, would look askance if an Assistant
Secretary said this is a Federal agency.
Mr. Tauzin. You don't have a choice under current law.
Mr. Irving. I don't. I have to do what the law requires me
to do. Right now they are a Federal agency and they have the
same rights and privileges of every other Federal agency.
Mr. Tauzin. You also heard Mr. Ross make the recommendation
of a much closer, cooperative agreement between your office and
the ITA in terms of international trade issues. Has your office
followed through on that recommendation? Does that require
legislation? What is the news there?
Mr. Irving. It does require us to work closer, but I think
that the Department of Commerce and Congress needs to look at
redundancies. I think there are some questions as to who has
what role in what circumstances.
Mr. Tauzin. Do you have some recommendations for us in that
regard?
Mr. Irving. Personally, I believe that there are some
redundancies. I believe NTIA is fully capable of doing what
needs to be done in national telecommunications. I wonder if we
were starting from a baseline, if we would create two offices
in the Department of Commerce that had international
telecommunications responsibilities.
Having said that, having traveled across this country with
U.S. industry, without ITA's support, particularly in-country
support, the Foreign Commercial Service, I could not do my job.
They know those markets and know those people. But having one
office that has 16 or 17 people doing international
telecommunications and another office that has 300 or 260
people, there are some overlaps and some questions.
Mr. Tauzin. We need to visit more on that.
Colonel Skinner, you and Mr. Miller focused a little bit on
the critical nature of security of telecommunications
information, obviously for military purposes. Mr. Miller
pointed out how NTIA assists in the bridging of that work so
that private sector critical information is also subject to the
same kind of attacks and security issues.
You probably cannot answer this, but it occurred to me we
build stealth technology but that stealth technology is
communicating as it flies, as it operates. Obviously emissions,
points of emission of communications are points of--if I were
looking for something, that is the place I would look. That is
where we target radar on the ground when it is turned on.
How much of NTIA's work in allocating spectrum, working
with you, assists the Department of Defense in protecting our
vital assets when it comes to those kinds of threats? I assume
that they are threats. Identifying the source of a
communication or some form of information technology obviously
allows our military to identify the location of a potential
enemy asset as it makes our own assets vulnerable to some
degree. Would you comment?
Mr. Skinner. I would prefer not to comment in detail in an
open hearing. I think that you have hit an important aspect of
our relationship with NTIA and the future of that relationship
as well. Clearly as our technologically advanced adversaries
become more able to counter our current ability to sense them,
we need to take actions to improve that capability. And one of
the challenges that it is creating for Secretary Irving and DOD
is that many of the technologies that we need to imply against
future threats require more and more bandwidth. While it is in
our best interests to manage that bandwidth that is allocated
to us as efficiently as possible, the demands for more
bandwidth are growing. And all of those issues that Mr. Miller
brought up strike close to home in the national security
environment, and we have to use some of our bandwidth to
provide the security our systems demand.
Mr. Tauzin. Do you call upon Mr. Irving's lab? He was
mentioning that if his lab were privatized, you would have to
build your own. Do you use his lab?
Mr. Skinner. Absolutely. Secretary Irving runs a real
center of excellence. We have used those labs for national
security projects, and we are concerned that outsourcing may
change our relationship on a couple of fronts, as you will see
noted in my written testimony.
At issue is both security and proprietary information that
many of our weapons systems produce.
Mr. Tauzin. You use private labs, but your point is for
security purposes----
Mr. Skinner. It must meet our security requirements and
have the organizational conflict of interest, which is the way
we can protect the intellectual property of our contractors who
we want to have confidence in the DOD, which will protect their
trade secrets as well.
Mr. Tauzin. The Chair recognizes the ranking member for a
round of questions.
Mr. Markey. Thank you, Mr. Chairman.
Mr. Crawford, your OK-FIRST program provides public safety
officials in rural and urban areas with data from a network of
Doppler weather radar, along with information from the National
Weather Service. This is an innovative program, and I
congratulate you for that because it helps to warn people of
severe weather, flooding, tornadoes and hazardous materials
accidents.
You already made reference to this, but in Oklahoma you
helped save lives, and we very much appreciate that. How did
you pinpoint those threats? What was the key? And if the
program was not in existence, that is, if there was no grant
program from NTIA, would lives have been lost?
Mr. Crawford. In my opinion, yes. The reason for that is
the public safety officials, be it fire, police, or civil
defense, would have been operating from an information void,
either due to lack of TV coverage, due to lack of quantitative
details by teletype circuits, whatever means, it would be dated
information and, in particular, nonspecific. Now they have the
same radar images that the National Weather Service
meteorologists use. Once that NWS employee has made a decision
this storm is tornadic, then the local official is empowered to
follow it through its lifetime and take appropriate action.
Mr. Markey. Thank you.
Mr. Irving, as you know, I believe you are the Chamique
Holdsclaw of telecommunications policy.
Mr. Irving. My game is not that good.
Mr. Markey. In your testimony and opening statement, you
noted that prior reviews of NTIA's research facility in
Boulder, Colorado have resulted in a determination that there
is a real need for a centralized cost-effective Federal
telecommunications entity that serves the public interest and
performs unique government engineering research.
When were these prior reviews conducted? What has been your
experience with the NTIA labs in Boulder?
Mr. Irving. The studies--we have had at least 4 studies. In
1983 under then-Assistant Secretary Sikes; in 1988, under David
Markey, not Ed Markey; 1988, under Mr. Sikes; 1988, under our
then budget officer, Sarah Maloney who now runs our management
program at NTIA.
We just recently, working with the Department to look to
see whether the labs should be folded into NIST labs, did
another survey in 1997. I have asked for those to be included
in the record.
[The information referred to is retained in subcommittee
files.]
Mr. Irving. But our experience has been basically that
these labs do serve an important function. If we didn't have
these labs, we would have to reinvent them and that is the
concern.
A few weeks ago I was talking to Chairman Kennard, and I
know this committee has had some conversations with Mr.
Kennard. There are some important engineering analyses that
they need done. They have requested, I think, either here or in
the Senate to be able to bring on some engineering personnel. I
believe the solution is to have them contract with my labs, and
I have discussed that with Mr. Kennard. To the extent that you
have engineering needs, I have got engineers, I have a
facility, you can contract with them. It works in terms of the
reauthorization that you are talking about with the commission,
and with regards to preserving a important Federal resource.
But I don't know how the work we do with the DOD, which has
to be both security and proprietary, my guys don't have a dog
in most of these proprietary fights, and they have clearances
that they need. So what we are able to do--and we also don't
add a markup. It is cost-based. The Economy Act requires it to
be cost-based.
So if the Colonel needs some information and he goes to the
private sector, one, he has to find those labs that are not
conflicted and those with the requisite clearances. And that
may put him in a position of having to pay a monopoly price. I
can't charge monopoly rent because the IG would come down on me
if we mark up above what we are allowed to charge them.
Mr. Markey. Could you help to clarify for us notions of
privatizing the Boulder labs related to cooperative research
and development agreements, agreements struck with the private
sector? It is my understanding that these agreements reflect a
very small portion of the overall operations of the Boulder
labs. Can you tell us how they work?
Mr. Irving. They are an extremely small portion. We have
put $41 million in NTIA's lab total. I have a chart that I
would like to enter into the record that demonstrates only
about 1 percent of our labs--well, approximately 1 percent
funding comes from work for other than Federal agencies. About
40 percent of the money is direct appropriations, and 60
percent of the money is work we do for other agencies. And
depending on the year, it is 50 or 60, sometimes it comes up to
70 or 80 percent with the DOD.
The reality is we do what the Defense Department needs when
they need it, but we are increasingly, I believe, trying to
move to independence of the vagaries of the system. We have
gone from $5.3 million in direct funding of the labs to $3.7
million now. That makes us more dependent upon Federal
agencies. We like working with our brothers and sisters in the
Federal Government, but we believe that we could be doing more
if we had more direct funding. I don't know if these budget
days we are going to get it, but it is--I think it is a
misapprehension on many people's part that the work is being
done for the private sector on a contract basis. Ninety-nine
percent is done for the Federal taxpayer or for Federal
agencies.
Mr. Markey. I ask unanimous consent that the report
referred to in this answer be made a part of the record.
[The information referred to follows:]
NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION
Institute for Telecommunication Sciences
Sources of Funding-July 1999
($ in Millions)
----------------------------------------------------------------------------------------------------------------
FY1994 FY1995 FY1996 FY1997 FY1998 FY1999
-----------------------------------------------------------------------------------
$ % $ % $ % $ % $ % $ %
----------------------------------------------------------------------------------------------------------------
Direct Appropriations:...... $5.3 39.8 $5.7 45.6 $4.3 38.4 $4.3 39.1 $4.4 45.8 $3.8 38.8
Other Agency:............... $7.6 57.0 $6.3 50.4 $6.7 59.8 $6.5 59.1 $5.1 53.1 $5.7 58.2
Other..................... $3.8 28.5 $3.2 25.6 $4.0 35.7 $3.6 32.7 $3.2 33.3 $2.7 27.6
Defense................... $3.8 28.5 $3.1 24.8 $2.7 24.1 $2.9 26.4 $1.9 19.8 $3.0 30.6
CRADA....................... $.4 3.2 $.5 4.0 $.2 1.8 $.2 1.8 $.1 1.1 $.3 3.0
TOTAL....................... $13.3 .... $12.5 .... $11.2 .... $11.0 .... $9.6 .... $9.8
----------------------------------------------------------------------------------------------------------------
Mr. Tauzin. Without objection, the reports will be made a
part of the record as well as the letter, Mr. Rogers, that you
requested be made a part of the record.
The gentleman, Mr. Shimkus, is recognized for a round of
questions.
Mr. Shimkus. Thank you, Mr. Chairman.
Mr. Irving, I have a couple of questions on the grant
programs. That is primarily my focus of today. I want to talk
about the PTFP grants first.
In St. Louis we have a wonderful public television station,
channel 9, KETC. They have been very entrepreneurial in their
aspects and are moving in the direction that I think Congress
is expecting TV to move on. In fact, they just moved into a $13
million facility of which only $500,000 was from the Federal
Government. They were able to raise $12 million from the local
community in St. Louis.
Now in your testimony you mentioned four stations that will
be receiving grants: Seattle, San Francisco, Los Angeles, and
Dallas. All these cities are larger than St. Louis.
I would like to know how much these stations have raised
from the local community to assist in digital transition, and
you may not be able to give me that information so if you can
give me that in writing.
[The information referred to follows:]
If the PTFP grant award process takes into consideration whether a
station has raised community funds to ease digital conversion costs. If
so, are the stations penalized for making an effort to raise money.
By law, the PTFP is a matching program which can fund no more than
75% of the costs to construct public telecommunications facilities.\1\
This restriction applies to all public broadcasting equipment
replacement projects, including those to convert public television
stations to digital technologies. Public television stations therefore
are required to raise local funds in order to receive support from
PTFP. Many stations use the opportunity afforded by having the Federal
government match locally raised funds as a key component in their fund
raising strategies.
---------------------------------------------------------------------------
\1\ 47 U.S.C. 392(b) ``with respect to any project for the
construction of public telecommunications facilities, the Secretary (of
Commerce) shall make a grant . . . except that such amount shall not
exceed 75 percent of the . . . reasonable and necessary cost of such
project.''
---------------------------------------------------------------------------
In recent years, PTFP has usually awarded funding for equipment
replacement, which includes digital conversion projects, at a rate of
50% Federal funding. Stations are permitted to request up to the legal
limit of 75% Federal by providing justification of their need for this
additional level of support. We believe that the PTFP therefore
encourages stations to raise funds from their local community, while
providing those stations unable to raise 50% of project costs with the
opportunity to receive Federal support up to 75% of the project costs.
Mr. Shimkus. And does a PTFP grant application take into
account what stations have done on their own to raise funds?
The issue is who are we rewarding? Are we rewarding those
who are working and developing their base to move into this new
age by the people that respect the service they provide, or are
we rewarding those who are not moving as fast as we would like?
That would be the first thing that I open up for comments.
Mr. Irving. I don't have the specific statistics, but we
will work with the Association of Public Television Stations to
give that.
With regard to how we try to give grants, my preference is
to try to give grants where the need is clearest. With regard
to digital transition, I think all stations are going to have
some problem making the commitment, the financial commitment
needed to get a digital age. But there are some communities
where they are going to have a hard time getting 10 or 20
percent. There are rural communities that are--to want to have
digital television, smaller communities are going to have
difficulty. The WGBHs, the WETAs, the WNETs will have some
difficulty, but clearly they will have less difficulty than a
station in the bottom 75, bottom 80 market.
Mr. Shimkus. I put this into baseball analogy. Look at
these markets that you have in your testimony, Seattle, San
Francisco, Los Angeles and Dallas, as compared to St. Louis.
St. Louis fields a competitive baseball team because the
consumers in St. Louis appreciate the St. Louis Cardinals and
are willing to support it, although we are a small market.
Many of these markets--Los Angeles is probably 4 times
larger than the St. Louis community. They should be able to go,
based upon their community, and draw much better. So the
question is how--I can understand the small markets, but you
are not addressing the small markets in your testimony.
Mr. Irving. Even in larger markets, it is a matching grant.
We don't give anybody 100 percent of anything. We change the
match for the smaller markets. On things like some new and
novel approaches that all public television can derive benefits
from, we will generally go to those who have the money up front
and have the ability to drive out the technology.
Digital television is going to happen in the top 10
markets, for two reasons: One, those stations have the
resources to do it faster. Two, the competitive realities, not
that they should be in competition for commercial purposes, but
in making sure that viewers who are moving to digital
television, as they are moving to it in commercial worlds, we
want to make sure that public broadcasters in those communities
are also able to provide those kinds of services.
Digital VTRs, video tape recorders and other things in the
studios were studios used first in the larger markets because
they have some resources to offset. Many of the small stations
are just trying to stay together. It is rubber bands and spit
that keep those towers up and keep those VTRs running.
I can't tell you the specifics as to why those four were
ahead of St. Louis, but if they were doing things that were
novel, going to extend their services and provide a needed
service in public broadcasting, that is probably why we funded
them. I think all of us want to see the public continue to
support public broadcasting, but I think we also know from the
numbers that the public has never in any community supported
public broadcasting with 100 percent of the funding that they
needed.
Mr. Shimkus. The St. Louis statistics that I provided you
shows a strong commitment. The point is that I want to reward
those who are doing the job and not rewarding those who have
the need but are not doing the job in their own markets.
Mr. Irving. This is a rhetorical question, but what comes
to me--if I have a station like a St. Louis that is raising a
lot of money to do the right thing, and they come to me for a
grant, I don't want to punish them for having raised a lot of
money.
On the other hand, if I have a station that has raised a
lot of money and doesn't come to me for a grant, that is
unlikely. Almost none of the stations in the public
broadcasting are not going to come to me for some assistance. I
don't know how I measure if there is a recession in one
community or they don't have a good PR person or fund-raising
capabilities; do I make the decision based on that?
I will be happy to work with any member of the committee on
that. I don't know what I do if there is a need in the
community and they have the match. Do I not give them the grant
because somebody else was able to raise the money on their own?
Mr. Shimkus. I just don't want you to penalize effort and
commitment by the local community.
Mr. Irving. I would love to be able to give better awards
to those who are working with their local community. They
should be local and community-based decisions, not federally or
Washington-based decisions.
Mr. Shimkus. Thank you.
Mr. Tauzin. We will do a second round if anyone desires
one. Mr. Deal, the gentleman from Georgia.
Mr. Deal. Thank you, Mr. Chairman.
Mr. Irving, it is my understanding that NTIA subsidizes the
other Federal agency spectrum management by about 20 percent.
Would you describe the reimbursement mechanisms and how you
determine the fee that is assigned to these agencies, and is it
possible those fees could be increased without doing
substantial damage to the management system?
Mr. Irving. Let me answer the first question first. The
fees could be increased without substantially damaging our
management system, but we believe it would be a policy mistake
to move it up to 100 percent. I can submit the glide path that
we have been on for 4 or 5 years now.
Congress asked us to move from--for almost the entirety of
NTIA's existence except for the last 5 years, we got
appropriated every dollar that we used to manage spectrum for
the Federal agencies. Over the last 4-5 years, we have been on
a gradual glide path where it is now 80/20. A decision was made
in consultation with the appropriations committees that that 20
percent was the appropriate number, because my spectrum
management team works on behalf of the U.S. taxpayer as well as
on behalf of the Federal agencies.
When those teams go off to Geneva, the ITU and other
places, they are negotiating for all of America, not just any
individual segment. The way that we charge our individual
clients, members of IRAC, members of Federal agencies, is based
on how many assignments and allocations they have from the
Federal Government. The Department of Defense pays a
significant portion. U.S. Information Agency or Department of
Education may pay a relatively de minimis fee. And we are
trying to get processes that we get paid in the front end of
the year instead of the back end, but a lot of the budget
officers in the services and in other Federal agencies have not
yet figured out the easiest way to do it. We are doing better
every year, but we are still waiting for some people to cut us
a check.
I would love to continue to have some degree of autonomy. I
don't want to become a captive of just my clients.
Spectrum, when Spectrum Management goes over to a war
conference or goes to a standards conference--we have been
working on GPS. We have a multibillion dollar commercial
industry that is benefiting from GPS. GPS was a defense
technology. We worked with the DOT and Department of Defense to
develop the Global Positioning Satellite System. Now you can't
go to a fishing store or a Wal-Mart and not find a $99 thing
that any camper or boater can use. We have created a billion
dollar industry based upon the work that we did with the
Department of Defense.
There are other issues like that. Technologies are going to
benefit every American as we get better, smarter uses of
technology. It is not unfair to have one-fifth of that budget
come from the general taxpayer as opposed to directly from our
client base.
Mr. Deal. Colonel Skinner, could you tell me how much DOD
reimbursed NTIA for spectrum management last year and how that
figure was calculated?
Mr. Skinner. Sir, I would have to take that for the record.
I don't have those details with me.
Mr. Deal. Could you get that and also the payment time
schedule as to when that payment was made?
Mr. Skinner. Yes, sir, we will take that for the record. We
believe it is approximately $5 million divided among the
service components and agencies of the Department of Defense.
Mr. Deal. Thank you, Mr. Chairman.
Mr. Tauzin. Thank you, Mr. Deal. The Chair now recognizes
Mr. Pickering for a round of questions.
Mr. Pickering. Thank you, Mr. Chairman.
Mr. Irving, it is good to be on the Commerce Committee, and
in the past, we worked together on the Science Committee on the
domain name system and the transfer from NSF to NTIA. I have a
few questions related to that.
The cooperative agreement has now been transferred, as I
understand it, from the National Science Foundation to you at
the NTIA. In your view, do you need congressional authorization
or legislative authorization for that transfer of authority and
administrative responsibility?
Mr. Irving. I believe it is actually to the Department, and
the Department has designated us. Our belief is what we are
doing is consistent with the law.
Mr. Pickering. Is there any funding as a result of that
transfer that comes through NTIA to administer the domain
names?
Mr. Irving. To my understanding, the work we are doing on
domain names is being funded directly out of our existing
appropriated level. We have received no additional funding, nor
have we requested additional funding for our increased
responsibilities in working with the domain name system.
Mr. Pickering. As you recall from the hearings we had in
the Science Committee in the last Congress, as we transfer, go
from government control to private sector control, one
remaining question is to a certain degree accountability. To
that objective, do you have any plans to issue a report
concerning NTIA, the transfer of domain names, and what is
being done so that Congress and the public will be familiar
with what has happened, what is occurring, what is the
governing board, those types of issues any time in the near
future?
Mr. Irving. I believe there is a final report that we will
have to issue, but while we are working on this managed
transition--and we want to get out of this business as rapidly
as possible and have the private sector do it all, and we are
getting to the point where the private sector can do it all.
Everything that we do during the transition is public. I read
an e-mail this morning that we are going to have an on-line
discussion about what has happened with domain name systems.
Every meeting that we are involved in, we try to make as public
as possible. But we will have a final report explaining what is
happening.
When we moved to the 34 new registrars, we immediately sent
out information. And if any member of the committee feels that
they are not getting information, we will send folks up here to
brief you. We want to get the information out. We do not have
anything to hide.
This is the most interesting process that I have ever been
in. People who care about domain names care about it as
passionately as Trekkies care about Star Trek. I have never
seen as much traffic cross my desk from people who are
anguished about an issue that is so arcane, and so we know the
importance not to try to hide anything.
Mr. Pickering. Most people say this is just the
transference of the domain names or the www.com and the
registries. But fundamentally what is the crux of the issue is
the governing body. We are setting up, in essence, the
constitutional structure for how Internet operations will be
conducted, disputes resolved, intellectual property determined.
So it is much more important and much more comprehensive than
just the transfer of domain name systems.
So, because of that, I want to encourage you to continue
being as open as possible. If you are planning to do an annual
report of what has happened, what is happening and what is
projected to happen, I would encourage the NTIA to make that
type of annual report to Congress so that we can inform the
public of what we are doing; that it is not viewed as a closed
process or an exclusive process or that any type of conspiracy
could be projected onto the operation of what we are trying to
do, which is a very important transition and very fundamental
to the success of the Internet and the governing of the
Internet in the outyears. Thank you, Mr. Irving.
Mr. Irving. Thank you, Mr. Congressman.
Mr. Tauzin. Thank you, Mr. Pickering. The Chair will do a
second round.
Mr. Crawford, let me first thank you and the work that you
have done in Oklahoma on behalf of all of us who are aghast at
the awful loss of life and tragedy out there. I am facing a
similar situation in Louisiana along the coast of my State. We
have had some pretty good hurricane years, and very little
hurricane activity in the last several years. They are
predicting an 80 percent chance of a very mean season.
I also visited the FEMA offices where they tell me that New
Orleans is going to be 27 feet under water with a category 4
storm coming in from Lake Borgne or Barataria Bay, which are
the two big water areas on the other side of the city. Those
kinds of storms will breach the levies, and New Orleans sits
below sea level. Twenty-seven feet of water. You are not going
to get a population of 1.5 million out of town. With the kind
of warnings that we get, you will get some evacuation.
The ability to notify people in the face of that kind of a
threat and to assist in moving them, perhaps vertically up into
taller buildings or whatever it is going to take, is heavy on
my conscience. I have been urging FEMA. We just passed some
legislation to get FEMA involved in a vertical evacuation
study.
But cities along the coastline that are going to experience
potentially a disaster like that have no idea how to handle it.
And I would be very interested in knowing whether what you put
together in Oklahoma has meaning to solving problems like that.
You mentioned your own experience in Louisiana with their
weather conditions. If you can briefly comment, sir.
Mr. Crawford. I am quite familiar with your problems in
southeast Louisiana, having worked at the New Orleans and
Slidell offices for the Weather Service for 10 or so years. I
worked with their SLOSH model to deal with surges from
hurricanes in Lake Pontchartrain, so I know what you are
talking about. And I think what hurts an emergency manager to
know what to do is how bad is it going to be and where is it
going to be the worst. And while we can give generic advice,
today's modern society demands far more of us, because there
are more of us and they demand more.
With the ability of the Information Highways that we have
in existence in the Nation, it is very easy to send graphics of
images that either are radars or projected radar images or
forecast----
Mr. Tauzin. It is not going to be the forecasting. We get
pretty good forecasts right now. The problem is these storms
make radical changes in their direction. And a forecaster may
say, Our best information is going west, and all of a sudden it
turns. We ducked the bullet with George, like we ducked our Y2
triple K problem in Louisiana when Duke didn't make the run-
off.
But the problem we have with hurricanes is that they make
that quick turn. We couldn't evacuate the city. What I am
asking is whether or not there are models and whether or not we
can learn from the Oklahoma experience as to what kind of
systems ought to be in place to aid everybody who is going to
be desperate to get people out of harm's way when this bowl of
a city suddenly fills with 27, 28 feet of water. I just call
that to your attention. I would love to know what you have
learned in terms of how your system works and whether it has
any relevance to us.
Mr. Irving. When we give grants, one of the key criteria is
whether or not they are replicable, whether or not what we
learned in Oklahoma has any value in Louisiana, in Texas.
My understanding is that what they have done has become a
national model and they are working with the National Weather
Service to try to figure out how to do it and replicate it.
What you basically have are the advanced weather service
statistics and graphics laid over a map that gives you a sense
of where things are likely to happen. While it would not maybe
solve every problem Louisiana is going to have, if you have a
tornado spun off from a hurricane, that will give you notice
that you wouldn't otherwise have.
I have been down to Louisiana visiting Mr. Morial a few
times, and you will not get everybody out when there is a
problem. This will let the folks know where a hurricane or
tornado is and where the storm surges are, where the heavy
rains are likely to be, based on what I know.
And what we try to do is give folks like the counties in
Louisiana the e-mail addresses, the telephone numbers, and
other ways of getting in touch with the folks in Oklahoma so
they can begin to marry their respective skills and knowledge
and do a better job of transferring information.
Mr. Tauzin. I would appreciate, at least if you could share
with us how you think--knowing the weather experience you had
in Louisiana, how you think some of those systems might have a
relevance for us?
Let me conclude. I am going to give everybody a chance. Mr.
Rogers, I just want to ask you quickly. We can't change the law
of this committee on the postal service obviously. We don't
have jurisdiction. We do have jurisdiction over the IRAC.
IRAC sounds like a country. In terms of that, we could very
easily require that IRAC hearings, when it comes to issuance of
spectrum, will be public hearings. We could require that,
perhaps take into consideration the anti-competitive nature of
a grant of spectrum, or we could do some minimum things like
that.
Mr. Rogers. It would make a difference.
Mr. Tauzin. I would encourage you to perhaps think about,
within the jurisdiction of this committee, what it is we might
do; and Larry, obviously we wouldn't necessarily change your
authority. We would simply be talking about making sure that
where there are any competitive issues at stake, that would be
one of the considerations in the allocation of spectrum.
I suppose that might help, at least call attention,
perhaps, in a public setting, to the----
Mr. Rogers. I am sure the various bipartisan advisors I
have could think up something very helpful.
Mr. Tauzin. We would be very interested in hearing from
you.
Mr. Irving. There is one problem. The IRAC hearings are
generally classified hearings and they are closed----
Mr. Tauzin. That is what I thought. They have a lot to do
with whether the military gets spectrum to----
Mr. Irving. And it's going to be very hard to have a
hearing that 95 percent of the hearing----
Mr. Tauzin. Well, maybe you can have one when it deals only
with the postal service. I am not sure our national security is
threatened over a question of whether or not the postal service
gets some spectrum to compete with UPS.
Mr. Rogers. One of the things we proposed is that we have
some sort of a hearing when the postal service seeks authority
to determine whether or not it is in a competitive area and
that that decision would be appealable in a court.
Mr. Tauzin. We can look at that. Obviously, we have an
interest, you know, in the postal service, and we want it to be
strong and----
Mr. Rogers. I am sure that we could come up with something
to improve the situation.
Mr. Tauzin. And I invite your comments on it. The Chair
recognizes Mr. Markey for a second round.
Mr. Markey. Thank you, Mr. Chairman, very much.
Mr. Irving, you know, on this committee we have to deal
with OMB and CBO, and they are constantly trying to put their
fingers into the spectrum piggybank and grabbing more spectrum
to go sell off for whatever purpose to meet whatever the short-
term needs are, and the budget committee, all of them, there is
a deep seated pathology as, you know, that exists when these
budgeteers get together.
Now, we have Colonel Skinner over here, and he is somebody
who has often had his territory raided in order to find more
frequency. Are you under any pressure right now to be talking
to Mr. Skinner to get him to cough up some more spectrum so
that OMB and CBO can put it in to be auctioned off?
Mr. Irving. I would not want to have that conversation with
Mr. Skinner or his colleagues again. We have had some very
contentious discussions during my tenure, and I don't--but
generally they have tried to work with us as much as they can.
They have been cut deeper than anybody else in terms of what
they have given up. We have given up 255 megahertz spectrum
since I have been here which is an enormous amount of spectrum.
What is troubling about that is 95 megahertz of that
spectrum is in the hands of the FCC right now, and only $14
million, only $14 million has been realized by the Federal
treasury from all of the spectrum we have given over to the
FCC.
It has cost the military $1 billion to relocate. They have
given up between now and 2002, 255 megahertz of spectrum across
all of their program platforms. They need more spectrum as they
get smarter bombs and trying to keep our men and women out of
harm's ways. One of those cruise missiles goes into a building
anywhere in the world, that is using spectrum to direct it and
to make sure it gets to where it is going and to identify the
location.
I have got a very difficult time going to these guys and
saying we are going to put boys and girls, men and women, into
harm's way because you have got to give up some spectrum, and
then we get $14 million into the Federal treasury and it cost
the military $1 billion of appropriated moneys to have that
happen.
I don't know what happened to this spectrum. It goes into
some kind of a black hole, but it is not going out and being
sold. And we are constantly being asked to give up more. I am
not sure that the FCC--what they are doing with the stuff we
have already given them or plan to give them.
Mr. Markey. That is very helpful to us now and, I am sure,
to Mr. Skinner. You have helped his argument out a lot on
whatever new issues might be heading in his direction.
Let me ask you at NTIA how you are handling the workload
that we put on you--the WIPO legislation, the Satellite Home
Viewer Act, the Child Online Protection Act, the International
Bribery Bill, perform research and other studies for Congress
coming from various directions. Do you have enough staff to get
all this done for us?
Mr. Tauzin. A good answer would be: ``no problem.''
Mr. Irving. Because of the excellence of the staff with
whom I work there is no problem. However, we----
Mr. Markey. Your staff, by the way, was nodding their head,
no problem.
Mr. Irving. They don't sleep, they never see their wives
and husbands and children, but they do the work. They do an
excellent job. Candidly, we are stretched. We are stretched
beyond--Congressman Pickering asked us about an annual report.
My problem is, my folks who work on the main names, the two
people who work almost 80 hours a day on the main names, they
are so busy treading water to keep all of the work we have to
do on a daily basis, it is very difficult for them to do any
prospective work or to do a report just on the bodies to throw
into that fray when we are trying to manage a transition. We
are skeleton staff. You lose 25 percent of your staff over 4
years when you have about a 70, 80 percent increase in the area
of responsibility you have.
And we will do with what this Congress asks us to do or the
Secretary and the President and Vice-president ask us to do
because that is who we report to, but we are really, really
down to muscle and sinew. We don't have a whole lot of fat on
our bones right now.
Mr. Tauzin. Thank you very much.
Mr. Shimkus.
Mr. Shimkus. Thank you, Mr. Chairman.
Mr. Crawford, has the University of Oklahoma ever violated
a contract that is part of the NTIA grant?
Mr. Crawford. If they have, I don't know it. My guess is
the one we have is the first.
Mr. Shimkus. Okay.
Should there be provisions to prevent the violation of
contracts?
Mr. Crawford. What do you mean ``violation of contract''?
Mr. Shimkus. Well, you get a grant, you sign an agreement,
and if someone doesn't uphold their end of the agreement,
should there be provisions to prevent that?
Mr. Crawford. By and large, the university puts its name
behind anything that it agrees to do and holds either the dean,
the president, or faculty members like me accountable.
Mr. Shimkus. Should the NTIA have the ability to recover
moneys spent on grantees that stop providing the service or
don't follow up with the initial agreement?
Mr. Crawford. I don't feel that I am really qualified to
answer that.
Mr. Shimkus. Let me ask you this.
If you were awarded a grant and you promised to do X, Y and
Z, and you only did X and the Federal Government gave you money
to do Y and Z, do you think the Federal Government would be
within its rights to recover the money for Y and Z?
Mr. Crawford. Yes, sir, I do. I would say, though, that the
likelihood of that happening the way this grant was monitored,
the reporting back to TIIAP is so tremendous that it is very
carefully watched.
Mr. Shimkus. Well, be careful because I have examples from
the Inspector General, not in yours, but on grants that call
into question how much we scrutinize grant applications, and I
would like to direct my next question to Mr. Ross.
The report that I have in front of me is the Inspector
General's report on LatinoNet, and I am sure that is a name
that is infamous in the NTIA. If not, it should be. You report
that you asked that the NTIA recover $94,336 in excess--to
recover that in excess grant disbursements.
What happens after that? Have you--in a follow-up review,
do you evaluate their ability to recover these moneys in
previous reports?
Mr. Ross. The normal process is when we issue a report
questioning costs related to a grant, such as LatinoNet, first
of all, the auditee, LatinoNet, the operator, is afforded 30
days to provide additional information to support its costs or
any other issue raised by the audit report.
Within that first 30 days, it provides information. Then
there is another 30-day interval during which the grants
officer, who is within the Department of Commerce, also
solicits the advice of NTIA because the Department's Office of
Executive Assistance Management serves as the grants office for
NTIA, reviews any information that the auditee might submit,
for example, to document additional costs or, perhaps,
additional work that was performed, reviews that documentation,
and prepares an audit resolution proposal, which is then
submitted to the OIG for a review.
So in any one of these grants that we have looked at, if we
question costs, then the grants officer comes back to us with
an audit resolution proposal that says we have reviewed the
additional documentation that has been submitted, and any other
supporting material, and based on that, we propose to make the
following decision. We then would look at that information and
come to a concurrence with the grants office of whether it is
an appropriate basis to change our questioned costs.
So it is a concurrence.
Mr. Shimkus. Okay. And so this report was in August 1997,
and your recommendation was an attempt to recover $94,336 in
excess grant disbursements. Has there been a follow-up to
determine whether that money has been recovered?
Mr. Ross. What I can tell you is, as a result of the
resolution, the federal portion of the questioned costs was
reduced from $118,991 in the report to $31,014 in disallowed
costs, which would have converted into a recovery amount that I
don't have in front of me. That then gets communicated to the
operator. The audit determination letter says that the
Department of Commerce has established a debt in X number of
dollars.
The Department makes demand immediately, but the
organization could try to enter into a repayment agreement, if
it cannot pay up immediately, under the standard debt
collection provisions of the Department.
The Department does have a mechanism whereby every 6 months
the Secretary of Commerce has to produce a report that follows
up on what has actually happened with those disallowed costs
and the amount to be recovered. I can't tell you as I sit here
today what the current status is. I will be glad to submit
that.
Mr. Shimkus. If you would, please.
[The information referred to follows:]
The audit resolution was transmitted to LatinoNet by letter
dated December 9, 1997. LatinoNet was advised that $77,496 of
the questioned costs of $297,329 was disallowed. (The federal
portions of those amounts were $31,014 and $118,991,
respecttively.)
The period of performance for the award was October 15,
1994 through October 31, 1996. The audit covered the period up
to March 31, 1996. Because seven months remained on the award,
the recipient was not billed for the excess funds disbursed as
of March 31, 1996 ($6,359). LatinoNet was required to delete
the $77,496 in disallowed costs from its claimed costs and to
submit to the Office of Executive Assistance Management a
revised SF-269, Financial Status Report, to reflect the revised
costs as of March 31, 1996. In addition, LatinoNet was asked to
provide a final SF-269.
Mr. Shimkus. And following up, if I may, Mr. Chairman.
On Mr. Irving, it is my understanding that on these grant
applicants, they are quarterly reports, and it is also my
understanding that the problem with LatinoNet really surfaced a
year after, although they--in fact, in their response, they
say, well, we have been submitting quarterly reports, you-all
haven't questioned them, so they must have been okay, so we
don't need to pay this debt because you have approved them.
How do you respond to an accusation like that, and what
good are the quarterly reports if you can't put an early halt
to abuse of Federal funds?
Mr. Irving. The quarterly reports are useful. There are
some things that are obvious right from the quarterly reports,
and we can go right to them. There are other times, if you have
400, roughly, grants out there, there are going to be some
problems.
I don't know if they are bad actors or just problem
children, but some percentage you are going to have a problem.
In some instances we have gone to the IG and said we are
hearing there is a problem, will you investigate for us because
I don't have the staff to go out and do the kind of
investigation that they can do in terms of a field audit.
We often, on a blind basis, send people out to do field
monitoring. What we try to do is what any organization that is
responsible for handling public goods should do. With the
resources we have, we try to get the reports in and look at
them for facial problems, and then we try to go the extra step
and send folks out. But we can't send and shouldn't send, I
don't believe, field monitoring to every office we give a grant
to. But we do try to give a fairly representative view and have
folks out there looking at the problems. And if we know either
from our view, what we are hearing from across the trenches,
somebody lets us know anonymously, or when we go out and do a
field audit, we will call the IG and say, please check this out
for us, you have got the resources to let us know. And I think
there have been occasions where we have had some problems
within PTFP and in TR.
Can we do a better job? If we had more resources, maybe,
but given the resources I have, we have done a pretty good job,
I think, of making sure that we are not wasting Federal
resources.
Mr. Shimkus. Thank you, Mr. Irving. I do have a follow-up,
but I will do it in the next round, if I may, Mr. Chairman.
Mr. Tauzin. The gentleman from Georgia, Mr. Deal.
Mr. Deal. Mr. Rogers, we have heard reference to the fact
that spectrums are not raising the funds that were anticipated.
As I understand, UPS spent over $40,000.
Mr. Rogers. $40 million.
Mr. Deal. $40 million to develop an alternative system to
the one that the postal service received from the granting of
their spectrum for free. Would that $40 million have been a
good investment had you been able to purchase the spectrum in a
timely fashion?
Mr. Rogers. Yes.
Mr. Deal. And would you have preferred to have had that
alternative approach?
Mr. Rogers. Yes, but spectrum is an asset that, as
technology improves, you can do more and more with it. The
position we are in now is we are a purchaser of message units
from vendors of message units, and it is more difficult to
advance the technology when you are buying it on a per unit
basis.
Mr. Deal. And as I understand, part of the reason was the
fact of the delay in the auctioning process; is that correct?
Mr. Rogers. Yes. It really slowed us down, and we were to a
point where the competition who had gotten ahead of us in the
spectrum race was putting out services and we weren't, and we
just had to do something. The cellular system had developed to
the point that it was providing us with a real alternative to
use digital data on a cellular network nationwide, and we
jumped into it.
Mr. Deal. Had that spectrum that postal service received
been auctioned, do you have an opinion as to what the fair
value of it would have been?
Mr. Rogers. I really couldn't judge. I don't know even if
any of the nationwide 220 spectrum was ever auctioned.
Mr. Deal. Okay.
Mr. Rogers. We just--after we went cellular we didn't put
the effort into this to follow it up until we saw a notice in
the newsletter that the postal service was going and getting
the same spectrum that we couldn't get.
Mr. Deal. Thank you.
Colonel Skinner, could you give us some specifics as to
what changes that you might be looking for in the current
spectrum policy?
Mr. Skinner. I think that, number 1, you have to ask
yourself today if you have a spectrum policy. You know, a lot
of things have changed since the radioactive 1934. We have
talked a lot today about technology.
Mr. Deal. Well, if we don't have one, what would you
suggest we do?
Mr. Skinner. Well, I think we have to consider all the
equities that make up the American interests in this resource.
We have to understand it is not a renewable resource. If we
give it to a specific user to use as he or she would use it, it
will not be available to others unless we can harness our
technical prowess on sharing the spectrum that is available,
and we have many, many demands, many different demands.
There are many different elements of national power,
whether it be the Defense Department's or our economic power on
international community. And we also have to consider ourselves
that we are part of a larger international community, and in
the case of military interests in this area, what we do in the
United States, we need to be able to export as we take our
military interests overseas. And so we have to consider that
larger international aspect.
We have to consider, frankly, the fact that other
developing countries have interests in spectrum which we are
currently using. It is a very, very complicated issue, but it
is certainly one of national importance.
So I know I have described what the problem is, and I
cannot offer you solutions today. But it is going to take some
of the best minds in the world, some represented today in your
hearing, that need to lay down the groundwork for a new
National policy on how we use and allocate spectrum.
Mr. Deal. Thank you, Mr. Chairman.
Mr. Tauzin. Thank you, Mr. Deal. The gentleman from
Mississippi, Mr. Pickering.
Mr. Pickering. Thank you, Mr. Chairman.
Mr. Irving, part of our congressional responsibility is
oversight and to hold whether it is NTIA or any
administration's feet to the fire.
But I think it is also our responsibility to say good job
and to make a commendation when something right and good
happens. And I want to recognize two things you did for the
State of Mississippi: One, the grant for the University of
Mississippi Medical Center which takes chronically ill children
and it connects them back to their classroom, to their teacher
and to their families and is a great model of what can be done
with technology to improve the quality of life.
And the second thing I want to commend is the emergency
grant to the Mississippi Educational TV. When the tower
collapsed and lost that service, you quickly stepped in. And we
were able to get that service back up and running.
So I want to begin this round by first saying, thank you,
and acknowledging and giving you a sense of appreciation from
the people of Mississippi of what you have done.
The second thing is a question on research, and the third
if I have the time, goes to culture. On research, one of the
things that we worked on in the 1996 Telcom Act was to make
sure that electric utilities could provide telecommunication
services. The barriers to their entry were removed, and that
was something I was personally very involved and interested in
because a State like Mississippi the rural electric utilities
could provide the infrastructure, the advance network and all
the capabilities and applications that come with that.
I was recently briefed on a technology, and I wanted to
ask, one, if you're aware of it, and two, are there any plans
to provide any research in these applications. Something called
Media Fusion which takes the electromagnetic field that is
generated around the electric wire during the transmission of
power, that creates the field by which telecommunications,
data, voice, video, could be transmitted. Are you familiar with
this concept within this research both in our country and in
Europe, and do you have any plans to perform any research in
that area?
Mr. Irving. I am not familiar with it, but next time I see
you I will be familiar with it, and I will check with my labs.
I don't believe we are doing anything on it right now, but I am
certain that somebody there is familiar with it, and we can
find out if there's a way we can--I agree with you completely.
As we watch more and more consolidation in the industry, if
we can get more and more players like the utilities and others
providing broadband and they are into the homes, that would be
a great thing for the American people, and if we can find a way
to get that in there, that's good.
Mr. Tauzin. Just, actually at Stennis Space Center in
Mississippi, a company called Media Fusion out of Texas is
working with NASA on this technology, but there are others,
there are others as well that are working on different aspects
of it.
Nortel, I understand, has an aspect where they are working
inside the wire itself, and they ran into some electric
transmitter problems, but they have overcome those now. Some
pretty exciting work. It might be very good, Larry, to--
frankly, I would love some advice from you as to whether or not
any of this stuff is real because the gentleman, he will know
more about it than all of us because I think the gridwork is
going to go on in his--is Stennis in your district?
Mr. Pickering. It is not in my district but it connects--
Stennis really works in all of our districts as well as the
rest of the country.
Mr. Tauzin. They are going to have the grid in Mississippi,
so he'll probably be the first to know about whether they are
having success and what is going on with it, but I would be
very interested in knowing from you, as you check into it, how
much of this is real, because that kind of technology could
dramatically affect the kind of policy we make on broadband and
how we deal with critical information in the future.
I thank the gentleman for yielding.
Mr. Pickering. Thank you, Mr. Chairman, and Mr. Irving. I
will try to work with you and your office to get you further
information, and again, as Mr. Tauzin said, it would be good
for us to have some of your technical advice and your judgment
as to the viability, the potential, and whether it warrants a
research investment, whether it is by NTIA or NASA or other
entities, where we can bring the potential of a technology that
could be a very important component of reaching out in rural
areas and all over the country.
Mr. Chairman, if I could ask for an extension of just one
more question?
Mr. Tauzin. Without objection, it will be awarded.
Mr. Pickering. My last question, and this goes back to a
parallel policy that we did in the 1996 Act as well and where
the administration advocated and supported the V-chip, and in
your testimony you talk about what we need to do to look at
indecent and violent material on the Internet and how we can
try to find ways to protect our children.
Congressman Franks and I have introduced a bill that would
require all schools and libraries that receive the erates to--
we don't mandate a filter, per se, or we don't tell them
exactly what filter they should use, but that they must have
some type of filtering device if they receive an erate. Would
the administration support that legislation and that approach?
Mr. Irving. We are close, but it is not an exact fit. We
have sent a letter to the FCC on behalf of the administration
requiring that every school district or library that receives
Federal funding, the erate, to have an acceptable use policy,
that the local community make a decision as to how they are
going to protect----
Mr. Pickering. Mr. Irving, if you require every TV set to
have a V-chip mandate, why can we not say that every school and
library, especially after Littleton, have a filter?
Mr. Irving. Filtering technology, we are trying not to
mandate a technology for something as dynamic as the Internet,
and again, the V-chip can be turned on or off. A parent can
have a V-chip and disable it.
You put a filtering device inside of a computer, you are
telling the library you have got to use it unless you are
saying, put a filter in there and then you have a choice. I
have a choice as a parent. If I was a parent or my niece and
nephew come and visit me, I can disable the V-chip, I wouldn't,
but I could. I don't know if it is from Washington we should
mandate how Texas or New York City or Tulsa or Jackson should
check their children and that is--we agree a 100 percent----
Mr. Pickering. You mandate for each TV set that is
manufactured that they have a V-chip. There is a little
disconnect from a principle point of view as to why you can
mandate a V-chip in a TV, but let us say, a sixth grader
receiving an erate, you wouldn't say that he should be
protected from pornography or violence like we saw the groups
in Littleton. And surely, we have the capability to find a
flexible technology that appropriate subject matter can be
available to school-age children while we can block offensive,
indecent, and violent material. And surely, the administration
would put a high priority in research into the technology of
the type of filter that would protect our children.
Mr. Irving. We agree 100 percent that we need the
technology. We agree 100 percent that we need to find a way to
make sure that the people who want to use the technology can
have the technology. The only place where the minor difference
is whether or not Washington should mandate it or whether we
should leave it up to the----
Mr. Pickering. Didn't the administration support a mandated
V-chip in a TV?
Mr. Irving. We support a mandated technology in the TV, but
not a mandated use of that chip in the television. There is the
difference.
Mr. Pickering. But surely we can find a way that you can
turn off a filter and turn it on.
Mr. Irving. If you are going to do that, then you are
pretty close to the acceptable-use policy that we have because
a community still has the ability, if it wants to go out and
get a computer with a chip in it if they want to do that. But
we are not mandating that they do use blocking technologies,
and I have looked at all of them, CyberSurf, Target Patrol, Net
Nanny. I have gone through a lot of them to see what works.
They all have some glitches. They all have a problem that
doesn't make them perfect. So you----
Mr. Pickering. Could you provide research into the glitches
so we have a----
Mr. Irving. I can't, but we can certainly work with you to
develop it. This is anecdotal, personal experience, but I will
certainly work with my staff to get back to you on some of the
problems, what has happened, and I think we can put some
surveys together and work with you on that.
Congressman, I want to assure you, I want to do the same
thing you do. I want to protect America's children from filth,
from violence, from pornography. I don't, however, feel that on
behalf of this administration we can mandate a particular
technology. And we also--and I kind of feel like I am on the
wrong side of this argument. I am kind of going to State and
local rights, not a position I have been----
Mr. Pickering. Let me get this straight. The
administration's policy is that we should have mandatory gun
control requirements, but we should not have mandatory filters
to protect them from pornography and violent material; is that
the administration's position?
Mr. Irving. I would say that you are correct that there are
mandatory gun control policies this administration has
supported, and you are correct in saying that with regard to
whether or not every school and library that gets an erate
should have a filter, we would say at this point, leave it to
communities to figure out what is best for the people in the
community.
Mr. Pickering. Thank you. For the consistency in position,
philosophy, and principal.
Mr. Irving. I am trying.
Mr. Tauzin. Consistency being the hobgoblin of little minds
anyhow.
Actually, Larry, I am not at all quarrelling with your
position. I think we have to be careful what we mandate in
terms of technology. My friend, Mr. Markey, and I disagree on
that to some degree. So this debate is going to go on some
time. Although, I think we share the common purpose of
advancing technology so that parents and schools and everybody
else can have more control over what comes in under these
systems. Obviously what a parent chooses to do or not to do in
terms of how they raise their own children is one thing, but
when the children are in the custody of the government, as they
are in the school, public school, perhaps there is a different
standard.
We need to talk about that. Maybe there is.
Mr. Markey. Will the gentleman yield?
Mr. Tauzin. I will be happy to yield, my friend.
Mr. Markey. And we might be talking--we are trying to
accomplish the same goal. So it is theoretically possible for a
school to subscribe to an online service that does not need a
filter because the only thing that kids have access to is good
stuff. So mandating that they have a filter built into a
service that already has been certified as kid-safe would
create a dilemma for the school system.
So I think that we all agree that kids should be protected
in school from stuff that they shouldn't be exposed to, but
there may be a way in which there is just a generic program
which is used that substitutes for a filter and the same goal
is accomplished.
Mr. Tauzin. And these are the old arguments, but I made
them before, while the parents are watching the TV with the V-
chip in it downstairs, the kids are going to be upstairs
watching the old TV, unfiltered.
So there is all kinds of problems with how you manage these
technologies in a home and in a public setting. But I think we
can start with the proposition we all want to advance the ball
in this area so that there is at least some opportunities to
protect children, particularly when it is a government's
responsibility because they are in a public setting, they are
in a public school or hospital or what have you which is
receiving government funds.
Mr. Irving. And we also want to encourage industry and
private sector and schools to create green space on the Net. We
want to find positive places. I enjoy the Net. I love the Net,
and I can find wholesome things to do 24 hours on the Net.
There is a lot of bad stuff, and I think if we created
opportunity and incentives to create green spaces where if you
are in that space, you have pretty much certified that your
child is going to be safe. That is the important thing.
When I was growing up, my momma wouldn't let me play with
certain boys or go to certain playgrounds because she didn't
like the element there. She would say you can play in the park
down the street but don't go to the park across town because I
don't like those kids over there.
Mr. Tauzin. I know parents who wouldn't let their sons and
daughters play with you.
Mr. Irving. Oh me, far too many of them. It hurt my dating,
but if we can find more positive places on the Net for our
children, as well as finding ways, and I want to continue to
work with you, Congressman, on this minor difference we have on
finding ways to bridge it. This is important for our children.
It is too much good stuff for us to say the Net's an evil
place.
Mr. Pickering. And Mr. Chairman, let me just follow up. I
believe Mr. Markey may have hit on something that, you know,
maybe there are other ways in a filter that we can protect, a
safe place for our children, and I am willing to work with you
and with Mr. Markey and Mr. Tauzin to see whether it is a
multitude of tools that we can bring to bear, but we should
find a way, and we should do something in this area. We ought
to look at it just like we do toxic pollution because, for our
children, it is deadly and it is dangerous.
Mr. Irving. I think everybody that I work for, including
me, will give you whatever resources you need to help
accomplish that goal. We want to do what you want to do.
Mr. Tauzin. In fact, it might be very interesting, Larry.
You might be interested in helping us with this. I have talked
about doing this for quite a number of months, and we never
really put it together, but it may be useful for us to have a
hearing where we actually look at the state of technology, and
we hear from people who are innovating and developing new
technology like this, new security systems.
I know Mr. Miller could probably contribute a great deal
with your member organizations.
Mr. Miller. I would second what Mr. Markey was suggesting.
We share Mr. Pickering's goal but what is happening is this is
becoming a competitor's issue and different products,
particularly when they are trying to get into the schools and
get into the libraries, are going to come out and offer the
fact that they either have tool capabilities to offer the kind
of acceptable-use policy that Mr. Irving was talking about and
that you are trying to achieve, Mr. Pickering, or they are not.
And if they are not, they are going to find themselves at a
distinct disadvantage in the marketplace.
So there are very strong incentives right now in this
industry and there are some products that Mr. Markey was
suggesting which are already very prideful of their ability to
filter out, and that is one of their strong selling points when
it comes to----
Mr. Tauzin. It might be good at some point--we will discuss
it with you--to actually have a hearing at some point where we
examine the state of all that technology because obviously if
we are going to enact some policy in the area it ought to be as
expansive as possible to take into account all those
possibilities. So, again, this is maybe the beginning of a very
good and useful discussion, and we will continue at another
date.
Any further questions by any member of the committee? Let
me thank you all--I am sorry, Mr. Shimkus.
Mr. Shimkus. I would like to ask to keep the record open
for suggestion----
Mr. Tauzin. Without objection the record will be open for
30 days, 30 days.
Mr. Shimkus. I have got a lot of questions. Mr. Chairman,
can I ask----
Mr. Tauzin. The gentleman is recognized.
Mr. Shimkus. [continuing] three short questions. One, going
back to Mr. Crawford. Going back to one of the IG reports in
1997, if you were listed as an--your application was listed as
outstanding, and then the assistant secretary took seven of the
outstanding requests and for reasons only dispersion of grants
throughout the country and you knew that you were one of--there
were 38, now there are 31 grants going to outstanding
candidates, you were one of the candidates that was pulled off,
do you feel that the university would at least deserve some
justification for that?
Mr. Crawford. I think university faculty are used to being
told no a fair amount, and so we would have just taken it in
stride and not thought twice about it, but would have vowed to
come back the second time and do better.
Mr. Shimkus. So you don't have any problem with the Federal
Government not justifying why one grant went versus against
another?
Mr. Crawford. No.
Mr. Shimkus. Especially when one grant may have been listed
as fair versus as outstanding?
Mr. Crawford. Those are details that normally an individual
like me would never, ever know.
Mr. Shimkus. That is why we have a Federal Government that
has an Office of Inspector General, so everybody has access to
these public documents, and people could find out that
information should they want to know the internal proceedings
of a Federal agency.
Mr. Crawford. No. I think most of my colleagues would not
question it. They might be disappointed; but they would not
question it, saying that is the way it is, and we will just do
better next time.
Mr. Shimkus. But you already got an outstanding. You were
listed as an outstanding applicant. How much better can you get
in the next try?
Mr. Crawford. Well, sometimes there are emphases that an
administration or a Congress would bring to bear as a hot
button issue.
Mr. Shimkus. And, Mr. Irving, can you address some of
those?
Mr. Irving. I would love to. Let me tell you what can
happen. I had, say, 38 outstandings. I might have had 100, 150
outstandings, but I might not have had an outstanding from,
since I am from New York, New York State, and I want geographic
dispersity or diversity. So what I will do is I may not--in the
State of Illinois I may have eight outstandings. In the New
York the best I have is a fair. I want to give every State--
maybe all I can do is two in Illinois so I want to give all to
Illinois, so I give one to----
Mr. Shimkus. I don't know, Illinois, if they are all
outstanding.
Mr. Irving. Maybe it is one fair in Illinois and eight
outstanding in New York and I want geographic diversity. Maybe
I have got five that are using satellite technology and one
fair but the board says with a little bit of tweaking this can
be a great grant, but the way they wrote it it is only a fair
grant.
I did college admissions, and a lot of times we wanted to
get a kid who was a drum major into the university. He may not
have a 3.9, he may not have a 1600, but he is the best drum
major in the country or he is the best tuba leader or he is a
great entrepreneur and made a billion dollars with some
innovation.
That is what we do with these grants. We try to look below
the surface. If I could fund every outstanding grant I would,
but I can't.
Mr. Shimkus. Let me follow up, and I understand and I
appreciate you all do great work, but the IG has testified you
haven't provided justification for these----
Mr. Irving. What he said was we didn't provide
justification for the ones we dropped off. We did provide
justification for the ones we added on, and the reason we
didn't provide justification, I didn't know you wanted it. We
will in the future. There will never be a grant that is dropped
off----
Mr. Shimkus. I think it is only fair if they provide an
outstanding application and they make it to the final-cut list
and then they get dropped off for----
Mr. Irving. Congressman, can I make one point?
Mr. Shimkus. Sure.
Mr. Irving. That final-cut list is the list that is
presented to me by my staff, and they have a great deal of
knowledge, but they don't have necessarily all the political
knowledge I have of what the Congress wants me to emphasize,
rural, underserved, this year we want to make sure we do more
satellite and so----
Mr. Shimkus. I understand.
I hear you, and let me follow up with this question. Can
you provide for me, for the record, the grants that have not
met the requirements, which of those fell into the scoring
breakdown for applications? My question is, if we are making
political considerations, and then we are providing grants to
fair and good applicants based upon political applications,
then we have a problem like LatinoNet that cannot meet their
requirements and actually end up owing the Federal Government.
Then that is something that we ought to look at, and I
think we are justified in asking those questions.
Mr. Irving. When I say political, I want to be very clear.
I mean, things like this Congress has said to me, we want
rural, we want you to focus on underserved, not on--this is
not----
Mr. Shimkus. No, no, politics--good politics is good
government, but what I am saying is, we have an Inspector
General's report on LatinoNet that show that they didn't meet
their requirements and owe the Federal Government a lot of
money.
I want to know if they were a poor rating, and if they were
a poor rating, if they were bumped up because of good political
considerations, dispersal, big cities, inner cities, minority
populations, whatever, I think that ought to be put into
consideration.
Mr. Irving. I will be happy to find out what their
rationale was--what the rating was for LatinoNet.
[The information referred to follows:]
LatinoNet
In 1994, LatinoNet of San Jose, California, received a
TIIAP grant in the amount of $450,000. The grant was made for a
demonstration project to show how minority communities can
participate in the nation's advanced information
infrastructure.
LatinoNet's application was highly rated by the peer review
panel, receiving a ``Good to Outstanding,'' ``Good Plus to
Outstanding,'' and ``Good'' ratings respectively from the three
panelists. [Note: Outstanding indicates ``Recommended for
Priority Funding,'' Good indicates ``Recommended for Funding if
Funds Available.'']
The application was rated in the top 20% of applications
reviewed by the review panel. Based on its high ratings, the
TIIAP Director recommended the application for award.
The OIG audit of LatinoNet occurred while the grant was
still active. At the time of the audit, LatinoNet had received
an excess disbursement of federal funds. However, LatinoNet
spent local matching funds after the audit and, based on their
final financial report, the Department's grants office has
determined that LatinoNet does not owe the federal government
any funds.
Mr. Shimkus. And we will probably follow up with other
reports.
Mr. Irving. Thank you, Congressman.
Mr. Shimkus. I yield back.
Mr. Tauzin. I thank you--my mike is not on. You were
mentioning grants in a lot of districts of members of the
committees. You didn't mention Mr. Markey.
Mr. Irving. To my chagrin and his dismay, we have never
funded a grant in his district.
Mr. Tauzin. You and I are pretty close. I will be happy to
intercede for Mr. Markey.
Mr. Markey. I am living proof there is such a thing as good
government. You would think statistically with 400 projects
that he has given out----
Mr. Tauzin. There is also another good Russell Long story I
just really want to share with you because it is so good.
His staffer once--one of his staffers once came to him when
he was having a particular important moment with one of the
presidents of the United States who needed him very badly on a
point. And his staffer said, well, sir, what you need to do is
write out a good list of things you need from the president.
When you see him this afternoon, just hand him that list. Isn't
that a good idea?
And Russell said, absolutely not. And the kid said, well,
why not? I think it would be a good idea. Just hand that list
to the president. You know, he needs you bad right now. Just be
good, put it in his hand personally, you know. And Russell
said, no, terrible idea. He says, well, why not? He said, well,
son, every list has an end.
Thank you very much. We are going to move, as I said,
legislation this year on NTIA. We're going to do our best to
get it done. So if you have some thoughts on how the grant
program can be improved and want to add those sections of the
bill, please submit them for the record, Mr. Ross or any of
you.
If you have some--we mentioned some talk about how we might
insure that IRAC perhaps a little fairer. We need to know how
that might work, Larry, in the context of national security.
Comment back to us. The record is open for 30 days.
Gentlemen, thank you very much for the contributions you
made.
[Whereupon, at 4:25 p.m., the subcommittee was adjourned.]