    [House Hearing, 106 Congress]
    [From the U.S. Government Publishing Office]

                THE DIGITAL DIVIDE: BRIDGING THE TECHNOLOGY GAP

    =======================================================================

                                    HEARING

                                   before the

                          SUBCOMMITTEE ON EMPOWERMENT

                                     of the

                          COMMITTEE ON SMALL BUSINESS
                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED SIXTH CONGRESS

                                 FIRST SESSION

                                   __________

                         WASHINGTON, DC, JULY 27, 1999

                                   __________

                               Serial No. 106-25

                                   __________

             Printed for the use of the Committee on Small Business

                                   __________

                        U.S. GOVERNMENT PRINTING OFFICE
    60-580                     WASHINGTON : 2001

                          COMMITTEE ON SMALL BUSINESS

                      JAMES M. TALENT, Missouri, Chairman
    LARRY COMBEST, Texas                 NYDIA M. VELAZQUEZ, New York
    JOEL HEFLEY, Colorado                JUANITA MILLENDER-McDONALD,
    DONALD A. MANZULLO, Illinois             California
    ROSCOE G. BARTLETT, Maryland         DANNY K. DAVIS, Illinois
    FRANK A. LoBIONDO, New Jersey        CAROLYN McCARTHY, New York
    SUE W. KELLY, New York               BILL PASCRELL, New Jersey
    STEVEN J. CHABOT, Ohio               RUBEN HINOJOSA, Texas
    PHIL ENGLISH, Pennsylvania           DONNA M. CHRISTIAN-CHRISTENSEN,
    DAVID M. McINTOSH, Indiana               Virgin Islands
    RICK HILL, Montana                   ROBERT A. BRADY, Pennsylvania
    JOSEPH R. PITTS, Pennsylvania        TOM UDALL, New Mexico
    JOHN E. SWEENEY, New York            DENNIS MOORE, Kansas
    PATRICK J. TOOMEY, Pennsylvania      STEPHANIE TUBBS JONES, Ohio
    JIM DeMINT, South Carolina           CHARLES A. GONZALEZ, Texas
    EDWARD PEASE, Indiana                DAVID D. PHELPS, Illinois
    JOHN THUNE, South Dakota             GRACE F. NAPOLITANO, California
    MARY BONO, California                BRIAN BAIRD, Washington
                                         MARK UDALL, Colorado
                                         SHELLEY BERKLEY, Nevada
                         Harry Katrichis, Chief Counsel
                      Michael Day, Minority Staff Director
                                     ------

                          Subcommittee on Empowerment

                    JOSEPH R. PITTS, Pennsylvania, Chairman
    PHIL ENGLISH, Pennsylvania           JUANITA MILLENDER-McDONALD,
    JIM DeMINT, South Carolina               California
    FRANK A. LoBIONDO, New Jersey        DENNIS MOORE, Kansas
    EDWARD PEASE, Indiana                STEPHANIE TUBBS JONES, Ohio
                                         TOM UDALL, New Mexico
                   Stephanie O'Donnell, Legislative Assistant

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on July 27, 1999....................................     1

                                   WITNESSES

    Irving, Larry, Assistant Secretary for Communications and
      Information, National Telecommunications and Information
      Administration, U.S. Department of Commerce....................     4
    Lewis, Maureen, General Counsel, Alliance for Public Technology..     6
    Miller, Harris N., President, Information Technology Association
      of America.....................................................     8
    Fulton, B. Keith, Director of Technology Programs and Policy,
      National Urban League..........................................    33
    Robinson, Timothy, Legislative Attorney, Ameritech Corporation...    36
    Krumholtz, Jack, Director of Government Affairs, Microsoft.......    37
    Coleman, Thomas M., President, Technical Career Institutes, Inc..    39

                                    APPENDIX

    Opening statements:
        Pitts, Hon. Joseph R.........................................    47
        Millender-McDonald, Hon. Juanita.............................    51
    Prepared statements:
        Irving, Larry................................................    56
        Lewis, Maureen...............................................    72
        Miller, Harris N.............................................    76
        Fulton, B. Keith.............................................    87
        Robinson, Timothy............................................    92
        Krumholtz, Jack..............................................    99
        Coleman, Thomas M............................................   106

                THE DIGITAL DIVIDE: BRIDGING THE TECHNOLOGY GAP

                                  ----------

                             TUESDAY, JULY 27, 1999

                      House of Representatives,
                           Subcommittee on Empowerment,
                                   Committee on Small Business,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 2:10 p.m., in
    room 2360, Rayburn House Office Building, Hon. Joseph R. Pitts
    (chairman of the subcommittee) presiding.
        Chairman Pitts. Ladies and gentlemen, the time of the
    hearing having arrived, we will convene the Empowerment
    Subcommittee.
        Good afternoon and welcome. Thank you for joining me and
    the members of the Subcommittee on Empowerment to discuss the
    digital divide. The term ``digital divide'' refers to the
    differences between groups to whom computer and Internet
    electronic technology is available and groups lacking such
    access.
        A recently released study by the Commerce Department's
    National Telecommunication and Information Administration finds
    evidence of a widening digital divide. Data from the study
    shows demographic differences between those groups with access
    to telephones, personal computers, and the Internet, and those
    without such access.
        On a positive note, the results of the study demonstrate
    that Americans, as a whole, are advancing with respect to
    Internet connectivity. In fact, in 1998 over 40 percent of U.S.
    Households had personal computers and, of those, approximately
    26 percent had Internet access. While this finding is
    encouraging, a more problematic issue remains. Some
    socioeconomic groups consistently fall below the national
    average with respect to access to the tools of the information
    age. Indeed, the study reports that minority, low-income, rural
    and single-parent households are less likely to have access to
    electronic resources.
        As we move from a paper-based society to an electronic one,
    personal computers and Internet access are becoming
    increasingly valuable. Interactive computer networks have the
    potential to enhance many aspects of our lives, including our
    education and career prospects. Indeed, the rapid infusion of
    electronic resources into our society has rendered computers
    and the Internet indispensable tools in some homes, offices and
    schools.
        As opportunities for jobs in high-tech industries grow, the
    ensuing need for information technology education becomes more
    apparent. Therefore, developing ways to bring innovative
    technology to communities with a demonstrated need for it
    ensures that more people have access to electronic resources.
    Increased access to technology, coupled with proper
    instruction, enhances the possibility that those who are
    currently not computer and Internet proficient will come to
    embrace these resources.
        The Internet is an invaluable research tool for
    entrepreneurs seeking to start or grow a small business,
    allowing them a means of product and market research, as well
    as a method of locating financial resources. The Internet also
    offers the possibility of electronic commerce, allowing small
    businesses another medium for conducting business transactions.
        Yet with all the demonstrated benefits of computer and
    Internet access, some groups remain less likely to avail
    themselves of technology resources. An increased awareness of
    this digital divide has stimulated the private sector to
    intervene with initiatives focused on expanding access of
    technology to include underserved groups. Community and
    nonprofit groups play an integral role in partnering with
    telecommunications firms in order to introduce information
    technology into the communities they serve.
        I am pleased to introduce today two panels of witnesses who
    will acquaint the Members more intimately with the nature of
    the problem and propose solutions.
        On the first panel, we are privileged to have Larry Irving,
    the Assistant Secretary of Commerce for Communications and
    Information, who presided over the NTIA study. Mr. Irving will
    explain the problem of the digital divide by detailing the
    results of the study.
        Following Mr. Irving, Maureen Lewis, General Counsel for
    the Alliance for Public Technology, will share her thoughts
    regarding the role of technology in our society.
        Finally, we welcome Harris Miller, President of the
    Information Technology Association of America. Mr. Miller has
    testified before the full Committee regarding Y2K and e-
    commerce, and we are pleased to have him back to speak about
    the digital divide.
        Our second panel consists of four witnesses beginning with
    Keith Fulton, Director of Technology Programs and Policy for
    the National Urban League, who will speak about the League's
    efforts to bring electronic resources into economically
    distressed areas.
        Next we will hear from Tim Robinson, Legislative Attorney
    at the Ameritech Corporation, who will detail his company's
    efforts to bridge the gap.
        We will then receive testimony from Jack Krumholtz,
    Director of Federal Government Relations at Microsoft, who will
    also speak about the role of the private sector in introducing
    technology to underserved areas.
        Finally, Thomas Coleman, President and CEO of the Technical
    Careers Institute located in New York City, will testify about
    the importance of education in creating a technology-literate
    workforce.
        I am looking forward to hearing the testimony of all the
    witnesses, and I now turn to the distinguished ranking member,
    Ms. Millender-McDonald, for any opening comments she would like
    to make.
        [Mr. Pitts' opening statement may be found in the
    appendix.]
        Ms. Millender-McDonald. Mr. Chairman, let me first thank
    you for convening this hearing. This is a very important
    hearing and one that I have been looking forward to even before
    the report came out. Now about the report has come out, it is
    just a testament of what we have known all along, that there
    are some have-nots who will not cross this bridge into the 21st
    century because they are not connected and they are not online.
        I would like to present my statement for the record. I am
    just going to speak candidly for a few minutes, Mr. Chairman,
    if it is okay with you.
        You know, a couple of weeks ago it was quite telling when
    the President came to visit a variation of communities, rural
    and urban, and he came because he knew that the economy had
    been great for this country and great for Americans but not all
    Americans, and this is why he chose to visit the various urban
    and rural districts.
        He came to my district of Watts because he recognized that
    a lot of my constituents have not and will not be able to
    communicate through this new medium that we call the Internet,
    this newweb page that we talk about. There will be no
    communication from friend to friend across the waters because they are
    not on line. So there are a lot of people who will not be on line, will
    not be able to communicate throughout this world, and yet we talk about
    a global workplace. The digital divide is strictly one that is real in
    the urban communities and, yes, in the rural communities.
        As the President went to Appalachia and some of those other
    areas, we had folks who did not have running water, did not
    have telephones, and so why do we then think that we are
    heading into this whole new medium of exchange, of
    communication, of information, when this highway has left so
    many on the sidelines?
        I am very pleased that I will hear from people today who
    will talk about the report who will perhaps give us some
    solutions as to how we start dealing with this issue, but I
    have young people, young folks in junior high school and high
    school and, yes, in elementary school who will not be able to
    communicate with young folks in Japan and China and other parts
    of this world if we do not prevent this type of have-nots in
    this country.
        We recognize that knowledge is important. Knowledge is
    important because it gives you the information tool that you
    need and then the skills so appropriate for young folks to
    have, but they need the skills and they need the computers.
    Those two things are principal elements to young folks in the
    Watts area, in Appalachia, in Mississippi and other places
    where the President visited that will not have and will not be
    able to move along this superhighway if we do not look at, very
    seriously, this digital divide, this divide that will continue
    to make the rich richer, to erase the middle class and make the
    poor poorer.
        I am very excited about this hearing and look forward to
    the presentations. Thank you, Mr. Chairman.
        Chairman Pitts. Thank you.
        [Ms. Millender-McDonald's statement may be found in the
    appendix.]
        Chairman Pitts. We are going to ask the members and
    witnesses to abide by the 5-minute rule today. We have two
    panels, and if the members who will be asking questions cannot
    cover them in 5 minutes, we will begin a second round.
        So, at this time, we would like to ask the Honorable Larry
    Irving to present testimony.

     STATEMENT OF THE HONORABLE LARRY IRVING, ASSISTANT SECRETARY
    FOR COMMUNICATIONS AND INFORMATION, U.S. DEPARTMENT OF COMMERCE

        Mr. Irving. Thank you, Mr. Chairman.
        I would like to thank you and the members of the
    Subcommittee for this opportunity to testify today on the
    findings of Falling Through the Net: Defining the Digital
    Divide, the study released by the Commerce Department earlier
    this month.
        President Clinton and Secretary Daley released Falling
    Through the Net on July 8, 1999, in Los Angeles during the
    President's New Markets tour; and, during the tour, the
    President and Secretary Daley discussed the fact that, even
    though information technology underlies much of our Nation's
    economic growth, far too many Americans are left out of the
    digital economy and, as a result, the digital divide, that is,
    the divide between the haves and have-nots in information
    technology, has become a critical economic and civil rights
    issue.
        Access to new technologies, such as the computer and the
    Internet, will be keys to the future economic success of any
    American business, community or individual; and, increasingly,
    Americans use the net to find jobs, contact colleagues, locate
    public information or take courses on line.
        Electronic commerce is helping small companies compete and
    entrepreneurs in rural, remote and traditionally underserved
    areas reach out to the rest of the world.
        Familiarity with new technologies will also prepare more
    Americans for the high-tech workplace of the 21st century.
    Because of the increasingly important role of these new
    technologies, Secretary Daley concluded that ensuring access to
    the fundamental tools of the digital economy is one of the most
    significant investments our Nation can make. And as we enter
    the 21st century, it will become even more essential to ensure
    that all Americans, rich or poor, urban or rural, black or
    white, Hispanic or native American, can reap the benefits of
    these new technologies.
        Falling Through the Net provides a starting point in
    bridging the gap between the Nation's rich and poor. This is
    our third report examining census data, looking at the digital
    divide, and we anticipate that it will serve as an important
    diagnostic tool to assist policymakers in the private sector in
    formulating methods to provide greater access for more
    Americans, and today I would like to provide for the
    Subcommittee several slides showing some of our key findings.
        These slides illustrate that, overall, Americans are far
    more connected than they have been in years past. On the other
    hand, we have also found that there are alarming disparity
    based chiefly on income, education, race and geographic
    location in which group of Americans have computers and who is
    on line. Equally disturbing, many of these disparities are
    growing, and let me turn to the first slide.
        Ms. Millender-McDonald. It shows this room and everyone
    will be in the dark if we don't get online.
        Mr. Irving. What this chart demonstrates, that telephone
    penetration has stabilized, that computer penetration has
    nearly doubled in just a 4-year period and that Internet
    penetration in a 1-year period from 1997 to 1998 rose by more
    than 40 percent.
        When you look at the income, the slide is almost a straight
    line up. You will see a disparity, that under families at 5,000
    to 10,000 have a lower penetration rate than households under
    5,000. We believe the reason for that is primarily because
    under 5,000 reflects a number of students. But one of the
    things you will notice is that family income is a huge
    determinant, and if you have a $75,000 income, you are five
    times more likely than a household with less than $10,000 to
    own a computer.
        We have also found that whites and Asian Pacific Americans
    have the highest rate of computer ownership--whites at 46
    percent, Asian Americans at 55 percent--and whites are almost
    twice as likely to own a computer as African American or
    Hispanic American.
        This is the so-called digital divide right in here. This is
    the gap between white America and black and brown America. The
    gap increased. In 1994, the computer penetration gap was 14.8
    percent between whites and Hispanics. Today, it is 21.8
    percent. In 1994, the gap between whites and blacks was 16.8
    percent. Today, it is 23.4 percent. And this difference in here
    is the so-called digital divide.
        The west is the clearcut leader for PC ownership.
    Approximately 50 percent of western households own computers.
    In the south, it is approximately 38 percent, a 10 percent
    difference. And northeast central cities and the rural south
    have the lowest overall penetration rates. So if you are rural
    or central city, you are disproportionately less likely to have
    computer access.
        Again, when we look at Internet we have almost that same
    kind of a hockey stick curve. Again, you will notice the
    anomaly under 5,000. Again, we think that is because of
    students. But households with a $75,000 income are seven times
    more likely to use the Internet than those households earning
    less than $10,000. And, again, this is a digital divide in
    regard to Internet access; and, again, it has grown. It went
    from 12.5 to 19.5 between whites and Hispanics and increased
    from 13.5 to 20.7 percent between whites and blacks.
        Interestingly, one point that is not on the graph is that
    at $75,000 a year household income the gap virtually erases
    itself. There is almost no statistical difference. You will
    find that in your report. It is not on the slides.
        The west leads in home Internet access at 31.3 percent. The
    south again is the lowest, and northeast central cities and the
    rural south again have the lowest rates of any region.
        And quickly, with regard to regions, 32.7 percent of
    Americans have use of the Internet at any location. That is
    home, work or schools or libraries.
        One of the most interesting statistics we found is that
    whites have more Internet access at home than African Americans
    or Hispanics have anywhere. The overall cumulative rate, home
    use, work use, school, library, community center, at a friend's
    house for African Americans and Hispanics, is 19 percent and 16
    percent respectively, but white Americans just home use is 26.7
    percent.
        And where people use it outside of home is actually
    interesting, also. White, nonHispanics, are much more likely
    outside the home to have access at work. What you will notice
    is the blacks and Hispanics are much more likely to have it at
    community centers, at schools, public libraries and similar
    kinds of public institutions as opposed to work; and blacks and
    Hispanics are more likely to use the Internet for educational
    purposes and for job searches.
        We also found that low income and lesser educated Americans
    are more likely, when they use the Internet, to use the
    Internet for things like looking for jobs, getting educational
    skills, than are their more highly educated or higher income
    counterparts.
        Thank you very much.
        Chairman Pitts. Thank you. Thank you for that slide
    presentation.
        [Mr. Irving's statement may be found in the appendix.]
        Chairman Pitts. Now we will go to Ms. Lewis.

       STATEMENT OF MAUREEN LEWIS, GENERAL COUNSEL, ALLIANCE FOR
                           PUBLIC TECHNOLOGY

        Ms. Lewis. Good afternoon, Chairman Pitts, Congresswoman
    Millender-McDonald, and other distinguished members of the
    Subcommittee. My name is Maureen Lewis, and I am the General
    Counsel of the Alliance for Public Technology or APT. Thank you
    so much for inviting me to discuss the alarming growth in what
    has come to be known as the digital divide.
        Unfortunately, the divide is wide and deep, and it
    describes the disparity between those who have access to
    information and new technologies and those who do not. The
    divide has the potential of exacerbating the problems of people
    who already lack quality education, affordable health care,
    satisfactory employment and decent housing.
        Telemedicine, local and distance learning, and
    telecommuting, among other applications, are possible through
    emerging high-speed, high-capacity networks which permit users
    to send and receive voice, data, graphics and video using
    telephone, cable, wireless and satellite technologies. These
    broadband networks can connect people and help communities to
    address some of their pressing problems but only if the
    networks reach everyone, everywhere.
        For more than 10 years, the Alliance for Public Technology
    has been advocating for public policies that promote access to
    affordable, usable information and communications tools for all
    consumers, regardless of their income level, place of residence
    or physical limitations. APT is a national, nonprofit coalition
    of individuals and a variety of organizations, such as the
    National Urban League, the American Foundation of the Blind,
    the National Association of Community Action Agencies, the
    National Education Association, and many other organizations
    that serve senior citizens, people with disabilities, low-
    income families, rural residents and small business owners.
        Recently, APT has been defending the interests of consumers
    in the telecommunications revolution by urging the Federal
    Communications Commission to implement section 706 of the 1996
    Telecommunications Act. That provision commands State and
    Federal regulators to encourage the reasonable and timely
    deployment of advanced telecommunications capabilities to all
    Americans through the use of various regulated methods and
    market incentives.
        Well, in 1999, the FCC issued a report in February that
    concluded that deployment of advanced capability is proceeding
    satisfactorily. Well, the Alliance disputes this conclusion and
    remains very concerned that new high-speed network providers
    are bypassing many inner city and rural areas, competing
    instead for lucrative high-volume large business users.
    Consequently, millions of residential and small business
    consumers are falling into the digital divide.
        To combat this problem, APT has been advocating that the
    FCC undertake a number of measures, including eliminating
    certain rules that we believe discourage the large telephone
    companies that currently have the most ubiquitous network that
    can reach more people more quickly from deploying broadband
    infrastructure.
        In addition, the Alliance has urged the Commission to
    actively stimulate deployment of advanced technologies in
    communities that have been left behind. For example, the
    Alliance has suggested that the FCC develop policies that
    foster partnerships between community-based organizations which
    pool their demand for telecommunications services and service
    providers. The partners will then work together to develop
    technology applications that address the critical needs of
    traditionally underserved communities.
        APT believes that these partnerships will help to educate
    communities about the benefits of telecommunications
    infrastructure while demonstrating to providers the viability
    and sustainability of markets they typically overlook as
    unprofitable.
        The Alliance has long believed that community efforts to
    aggregate demand for telecommunications products and service
    can help to attract providers. Accordingly, APT has suggested
    that Congress clarify that incumbent local telephone companies
    may offer at wholesale rates digital subscriber lines, a
    broadband technology that is offered through conditioned copper
    telephone lines, and other advanced services to entities that
    are ineligible for the wholesale rates that currently apply
    only to telecommunications carriers.
        One of the major barriers to demand aggregation is the
    absence of meaningful economic incentives for communities
    themselves to undertake the cost of aggregating their demand.
    Therefore, the availability of wholesale rates for advanced
    services could provide an important catalyst for community-
    based organizations, municipalities, academic, medical and
    other nonprofit organizations to resell advanced services to
    residents and small businesses.
        Another way of promoting demand aggregation has been an
    effort that APT has undertakenwith the National Association of
    State Regulatory Utility Commissioners to develop a proposal that
    enables State and Federal regulators to work together on implementing
    section 706. The proposal asks the Federal Communications Commission to
    convene an ongoing Federal/State conference on advanced services to
    address the challenges of providing advanced services to low-income and
    rural communities and to people with disabilities.
        The conferees, with input from consumers, industry and
    other stakeholders, would, among other things, monitor the
    scope and pace of advanced telecommunications deployment;
    develop deployment strategies that include private initiatives
    and leveraging Federal programs of the National
    Telecommunications Information Administration, the Rural
    Utility Service and the Small Business Administration, among
    others; disseminate best practices and other information; and
    experiment through opportunities to encourage investment of
    private resources through education and through regulatory
    methods in ``706 zones'' as ways of promoting broadband
    deployment.
        Thank you very much.
        Chairman Pitts. Thank you, Ms. Lewis.
        [Ms. Lewis' statement may be found in the appendix.]
        Chairman Pitts. Mr. Miller's testimony will conclude the
    final panel.
        Mr. Miller.

     STATEMENT OF HARRIS MILLER, PRESIDENT, INFORMATION TECHNOLOGY
                         ASSOCIATION OF AMERICA

        Mr. Miller. Mr. Chairman, members of the Subcommittee, when
    Winston Churchill was Prime Minister, he was approached by a
    leader of the British Women's Temperance Union in Westminster
    Hall. The woman said, Mr. Prime Minister, do you realize that
    all the alcohol you have drunk in your life would fill half
    this room? And Churchill looked up at the ceiling and said,
    ``So far to go and so little time.'' Clearly, the room that she
    saw as being half full he saw as being half empty; and so, as I
    testify today on behalf of my 11,000 IT company members, rather
    than referring to this as a ``digital divide,'' we prefer to
    call it as a ``digital opportunity.''
        For the reasons I will outline, this issue or its
    perception is very important to my members and my industry
    which is at the forefront of electronic commerce. Based on our
    own surveys, we see a doubling of electronic commerce in just
    the next 6 months. Given this dramatic growth, assuring the
    opportunity to access the Internet and to participate in the
    digital economy is not just an empowerment issue, it is an
    economic performance issue. So let us talk about the digital
    opportunity.
        As Mr. Irving discussed, we find that black and Hispanic
    households are far less likely to have Internet access than
    white households. I note that between 1997 and 1998 Internet
    access jumped 40 percent across the board, but disparities
    exist for factors such as income, race, education and household
    type.
        I do not believe that the numerical disparities reported by
    Mr. Irving are unbridgeable, and I believe natural markets
    forces, as opposed to government intervention, will quickly
    fill the breach. The opportunity here is for technology
    sellers, including those who create the content to transmit on
    the web and those who want to sell electronically, to work with
    their actual and potential customers to make this marketplace
    work and to realize the full digital opportunity.
        What are some of the factors involved? Well, the World Wide
    Web is just 6 years old. Yet, we see almost one-third of all
    U.S. homes tapping into the Internet. Typical technology cycles
    take 20 years. The web has gone mainstream in less than one-
    third of that time, a phenomenal rate of adoption. This is in
    large part a function of price. The cost of personal computers
    and related equipment has nose-dived.
        Just last week the Federal Communications Commission
    released a thoughtful report which traced how government
    nonintervention in the data and information market contributed
    to the development of the Internet. The Commission has tried to
    maintain essentially a hands-off approach to these markets, and
    it deserves great credit because these policies have led to the
    quick adoption of Internet technology.
        As a result of the FCC, we all enjoy the benefits of
    competitive marketplace. The incredible increase in performance
    with lower prices brings the Internet within the reach of a
    majority of consumers, but it does not seal the deal. To be
    successful, technology must solve a problem or it must scratch
    an itch.
        Clearly, economics plays a major role in whether you are
    the first kid on the block to have a GPS mapping system in your
    car or a Palm Pilot in your pocket. Economics aside, I think
    that people, regardless of class or origin, are different and
    naturally take different approaches to technology adoption. So
    if affordable technology is the first plank in my digital
    opportunity platform, making it compelling for people who are
    currently not part of the digital network is the second.
        Convenient access is the third critical aspect of a true
    digital opportunity. Internet access is clearly a good
    situation that is getting better every day. In fact, according
    to the FCC, over 6,000 Internet service providers offer dial-up
    service, and 95 percent of Americans today can shop from among
    at least four of these local companies. In classrooms, Internet
    access has chalked up gains from 35 percent just 4 years ago to
    51 percent last year. Convenience and choice are bringing the
    Internet home to consumers, no matter where those homes happen
    to be.
        Bandwidth is still critical. Demand is growing even faster
    than the growth for more digital power. The answer is simple:
    competition, especially in the so-called ``last mile'' to homes
    and small businesses. Aggressive enforcement of the 1996
    Telecommunications Reform Act is essential if we are going to
    give consumers more bandwidth and more options to obtain
    bandwidth at a lower price.
        Let me add a word about the e-rate, the program that pays
    for Internet access for schools and libraries. We have actively
    participated in debate defending the issues of specific
    interest to the IT industry. ITAA believes that schools and
    libraries should have access to the services of the broadest
    selection of possible vendors in order to select the most cost-
    effective provider of Internet access.
        But even if we have affordable price, compelling need and
    easy access, the digital opportunity is still not complete. I
    refer to a woeful lack of participation by most minority groups
    in the information technology workforce. The problem is not
    small-minded employers raising barriers to entry. Rather, it is
    a shortage of appropriately skilled and educated professionals
    in the pipeline. As an example, last year, according to the
    Computer Research Association's Taulbee Survey, only 10 African
    Americans received Ph.D.s in computer science and only six
    Hispanic Americans did likewise. Similarly, only 2 percent of
    undergraduate computer science degrees were awarded to African
    American and Hispanic Americans.
        These numbers are unacceptably low, both from the
    perspective of finding this common ground and, frankly, finding
    workers period for the IT economy. Our own studies indicate
    thatone of ten jobs for computer programmers now goes begging.
        We have set ourself on a course to attract underrepresented
    groups to the IT industry. This issue has been front and center
    at the National IT Workforce Convocations we held in both 1998
    and 1999. We are currently working with the White House to
    assess this situation, and this month cosponsored an industry
    forum on the topic at the National Institute of Standards and
    Technology. And we are also working with programs designed to
    outreach to people with disabilities and low-income women.
        So the question is, do we have a digital divide or a
    digital opportunity? The future, Mr. Chairman, is what we want
    to make it. To reach its greatest potential, we must strive in
    every way possible to give this incredible resource its
    greatest possible reach. The issue is how we achieve it. We say
    the market has worked wonders to date, and I assure you that
    this economic show is just starting.
        Thank you very much, and I will be happy to answer any
    questions you and the colleagues on the Subcommittee may have.
        Chairman Pitts. Thank you, Mr. Miller.
        [Mr. Miller's statement may be found in the appendix.]
        Chairman Pitts. We will now begin the first round of
    questioning, and I will start with Secretary Irving.
        Mr. Irving, you speculate as to why certain groups are not
    embracing computers and the Internet. Can you speculate as to
    why they are not doing this? Obviously, lack of infrastructure
    would inhibit some, but what about the rest? Do some people
    just think that technology does not have a place in their
    lives? If so, what can be done to enhance awareness?
        Mr. Irving. A number of things. I think in America it is
    interesting you will see more computer executives on the front
    page and covers of magazines than you will see celebrities on
    some weeks. There has been the adoption of geek chic in some
    parts of America, and it hasn't expanded to some of the
    minority communities.
        I think the marketing of some computer companies in which
    they will look at the high-income--if you are a businessperson,
    you go for the low-hanging fruit. If you are a high-income
    family and if you look at golf magazines, travel magazines,
    lifestyle magazines geared toward upper income people, you will
    see targeted advertizing looking to sell computers to those
    folks. I think if you look at Ebony, Jet, Hispanic business
    magazines and other minority-oriented magazines, you won't see
    the same kind of targeted advertisements. As you get all the
    low-hanging fruit you may see changes in that and as computer
    prices come down below 1,000, but I also think there is
    something cultural that is going on different. There isn't as
    much on the net of interest to some communities.
        Asian Americans have the highest penetration rate of both
    computers and Internet access, and I think part of the reason
    for that is, if you are an Asian American, given the different
    number of languages, the way you might find content of interest
    to you may be by going on the net. If you are an African
    American, Hispanic American there may be free over-the-air
    broadcasting options, some local options through newspapers,
    and you may not feel the same incumbent need. And, to date, if
    you look at the top 100 web sites, none of them are by, for or
    about African Americans or Hispanic Americans, and that has got
    to change, the compelling content, that Harris was talking
    about.
        So I think it is a combination of cultural, economic, how
    the industry markets itself, all of those things are playing a
    role. But you hit a very critical issue, Mr. Chairman, and that
    is infrastructure. The infrastructure in our inner cities and
    in our rural areas, particularly the rural south, has got to be
    focused on as well, particularly as we move to the broadband
    networks that both Ms. Lewis and Mr. Harris spoke about.
        Chairman Pitts. Thank you.
        Ms. Lewis, what kind of feedback have you received from
    communities that have not benefited from advanced technology
    communications capabilities? Are members of these communities
    speaking out?
        Ms. Lewis. Yes. In fact, there is a great alarm among many
    members of traditionally underserved communities. As more
    information about technologies become available through more
    traditional media, people are beginning to understand it. They
    are getting left out.
        For example, the Federal Communications Commission just
    undertook a rulemaking to help address the needs of people with
    disabilities who, as you can imagine, could greatly benefit
    from advances in technology. Those technologies can provide
    much greater independent living opportunities, much better
    employment opportunities for those folks who suffer from
    disabilities.
        You can also see--and I have heard personal stories about
    people who understand the potential that technology can offer
    but don't have access, and they find it very frustrating. So it
    is a growing problem and one that I hope we will be able to
    address quickly.
        Chairman Pitts. Thank you.
        Mr. Miller, you referred to the digital opportunity rather
    than the digital divide. Will the rapid unfolding of new
    technology create an even greater rift between the technology
    haves and the have-nots?
        Mr. Miller. I think on the contrary, Mr. Chairman. What we
    are going to see is, as new technologies are rolled out--both
    hardware and software--more and more price pressures downward.
    And so at least that part of the equation which I mention as
    one of the planks of achieving this digital opportunity will be
    dealt with. There is going to be price pressures coming down.
    Computers that you bought a year ago for $1,500 are now $500.
    The personal digital assistants, the Palm Pilots and devices
    like that, their prices are coming down. So those opportunities
    are going to be there.
        I think the real challenge is, again, scratching the itch.
    And the reason I refer to the digital opportunity is I am not
    buying any more personal computers for my home. I have got one
    for me, one for my wife, and one for each of my teenage kids. I
    may upgrade one every 3 or 4 years, but the personal computer
    industry isn't going to sell me any more personal computers. It
    is to the families that they haven't yet been sold to, that
    haven't yet accepted the compelling case that there are real
    opportunities, that industry wants. For computers to get to the
    penetration rates of VCRs or televisions, to get up to 70, 80,
    90 percent, which is where the companies all want to be,
    because they all want to sell as many as they can--that is
    really how they make their money. They are going to need to
    continue to bring the prices down and continue to find a way to
    attract people in those communities which are currently not
    purchasing those products so they can blanket the entire
    marketplace, not just particular segments of the marketplace.
        Chairman Pitts. I have just a little bit more time.
        You express concern about the low number of minorities in
    the IT industry. What is the ITAA or its individual members
    doing to attract new workers or further educate current workers
    to move forward within the industry?
        Mr. Miller. It is really a multiplicity of activities, Mr.
    Chairman. Our attitude is letting a thousand flowers bloom. It
    is not just going to be traditional colleges and universities.
        For example, we are talking to some historically black
    colleges and universities that have not been part of this
    educational program which is necessarily focused on training IT
    workers. Some HBCUs have, but a lot of them have not. So we are
    starting to reach out to them.
        We are working more closely with community colleges which
    frequently do a better job of reaching out to minorities and
    people who don't have as much income or who are not thinking
    about going to college because a lot of the skills can be
    obtained through a community college program. For-profit
    schools are also doing an energetic effort. We are also looking
    at working with particular organizations. We have been
    talking--for example, I know Mr. Fulton is testifying in your
    next panel--to the National Urban League because we have to
    find channels into those communities to help convince people
    that they should be part of the IT workforce.
        Chairman Pitts. Thank you. I see my 5 minutes are up.
        Ms. Millender-McDonald.
        Ms. Millender-McDonald. Thank you, Mr. Chairman.
        I am going to first go to Mr. Miller, because I want to see
    whether I either misunderstood you or understood you and want
    to get a clarification, one or the other.
        You spoke of a few Ph.D.s that African Americans have, and
    I hope you were not translating that into the need for one to
    be proficient on a computer one has to have a Ph.D. Because
    clearly there are many folks who even develop computer programs
    at the age of 14, even before they go out to universities and
    colleges. So I would like for you to clarify that, if I
    misunderstood what you said, because certainly Ph.D.s should
    not be a factor in one becoming proficient on the computer.
        Mr. Miller. I agree with you 100 percent, Congresswoman;
    and if I misspoke or misled the Subcommittee it was not my
    intention. But I was trying to make a more generic point. We
    believe that getting people from minority communities who are
    not currently a major part of the IT workforce excited about
    the IT industry is one way, one element of achieving this
    digital opportunity; and the fact that such a small number of
    African Americans and Hispanic Americans got Ph.D.s, that such
    a small percentage of the computer science graduates from our
    4-year colleges and universities are minorities, is indicative
    of the fact that we haven't been able to penetrate into those
    communities and convince them about the great opportunities of
    working in our industry. Does that necessarily translate into
    more penetration into minority communities? Not necessarily.
    But we think it is one element of making sure we get this
    digital opportunity achieved across the board.
        Ms. Millender-McDonald. Well, I like your optimism about
    digital opportunities. However, I suppose I still have to be a
    little pessimistic about it, given the fact that we do not see
    these opportunities at all in the inner city, especially in the
    Watts and Compton and Lynwood areas.
        I am interested, though, in your presentation as I have
    tried to underscore it. You spoke about the importance of
    electronic commerce and the Internet, and I have heard that
    theme going through just about all three of them. Clearly,
    electronic commerce is an important factor, and the word
    commerce or economy and all of that coming together, that is
    the main source and the main problem.
        In this economy, we are talking about folks who do not have
    jobs to even gain $10,000 a year or have $10,000 incomes. So
    how do we expect this electronic commerce to play in inner
    cities or to even have this type of concept brought into our
    communities if, in fact, we do not have the computers, we do
    not even have, as you said, the aspirations of even going into
    that because we don't know how exciting it is if you do not
    have the opportunity to surf on the Internet, if you will.
        Mr. Miller. I think a couple of things are going to be
    important here. The e-rate is bringing the computers into the
    public libraries and into the schools. Even if an individual
    can't afford one or doesn't choose to make it enough of a
    priority to put it in his or her home, at least you have a
    chance to be exposed to it. Again, if there is a digital
    divide, I would say it is not just economic, it is more age.
    Young kids, if they see it and understand the excitement of it,
    they can be the people that go home to mummy and daddy and say,
    ``Mom, dad, I just downloaded some really neat music off the
    Internet; I don't have to go across town to Tower Records or
    wherever I buy; I can buy this stuff off the Internet.'' Which
    may not make mummy and daddy real happy but at least they have
    that opportunity. They can also say, ``Mom, dad, I was able to
    do my homework on the Internet.''
        Ms. Millender-McDonald. I wish I could agree with you on
    that. Unfortunately, as I have gone to my schools, there are
    fewer computers in the schools. They are old computers that
    have been given by computer companies to them. They are no
    longer working. There are about 20 to 25 kids per two
    computers, so they never build up that excitement about it
    because they never get an opportunity to work on it. If they
    do, it is such a short time. So e-rate would be a very
    effective tool for us to begin to work on that, but at this
    juncture, we do not have it. We need that. We need to work with
    you in concert with others to bring this type of concept into
    our schools and to our community.
        Mr. Miller. I will be glad to work with you on that,
    Congresswoman.
        Ms. Millender-McDonald. You spoke about HBCUs. How many of
    those colleges and universities are working with you to try to
    bring this whole Internet and software and computer concept
    into our communities?
        Mr. Miller. I am currently working on a board organized by
    Mr. Mark Warner, who is a businessman in Virginia, just working
    with the Virginia HBCUs. That has been a pilot program, and
    there are currently, for example, 65 students out of those
    historically black colleges and universities who are in
    mentoring programs working with companies in northern Virginia
    where they are able to work during the summer, or during the
    school year. That seems to be a most effective way to start.
        We have begun discussions now trying to expand that beyond
    Virginia. We have had some preliminary conversations, and I
    will be able to give you a further report probably in 3 or 4
    months. We are just going through the process right now. In
    fact, we had a meeting, as I mentioned, at NIST about 2 weeks
    ago, which was very productive, and now we are trying to figure
    out the most effective way to implement that.
        Ms. Millender-McDonald. I certainly would like you to get
    back with me on this because it is very important.
        Again, when we talk about perception, this perception is
    real. It is absolutely critical in our communities, because we
    don't have any of the tools, we don't even have the knowledge,
    we do not even have teachers who come to us ofttimes with the
    knowledge of computers, a literacy, so, you know, to enable
    them to teach it to the students. So you have just----
        I think, getting back to what Ms. Lewis said, that
    infrastructure is not in place. Therefore, you cannot teach
    what you don't know, and they cannot learn what has not been
    taught to them. And so it is just critical for this natural
    market that you talk about, that you help me to understand
    where they are and who they are and how we can tap into them.
    Because government has tointrude when no one else is going to
    sufficiently provide the opportunities for these youngsters to get
    digitized, if you will, to get on this digital opportunity that you are
    riding the crest on. And we know that the workforce is going to be the
    minorities, for the most part, and women, and we have to train and to
    get them geared up for this new millennium, and the only way we can do
    that is to have you help us to make that happen.
        I will talk to the others, but I see the chairman is
    flickering with his speakerphone.
        Chairman Pitts. Thank you. We have been called for a vote.
    Let us take one more 5-minute round of questioning before we go
    to the floor. Mr. DeMint.
        Ms. Millender-McDonald. I hadn't finished.
        Chairman Pitts. Your first 5 minutes is up. You may
    continue in the next round, if that is okay.
        Mr. DeMint. Thank you, Mr. Chairman.
        As you probably know, one of the goals of this Committee is
    to use private sector, free enterprise concepts to make sure
    there is equal opportunity for everyone in America, and the
    Internet certainly represents one of those key opportunities.
    As I sit here and listen to you, I am appreciative that you are
    sharing your ideas and hope that you can help us determine how
    we can create equal opportunity to the Internet without
    creating another Federal entitlement program that cannot
    possibly keep pace with this industry. This is one of those
    things that is changing so quickly, it is going to take
    continued private sector involvement, competition, a lot of the
    free enterprise ideas to keep it alive and active. So this is
    not something we can do as a Federal Government, but we can act
    as a catalyst in some ways.
        So my question to the panel is, is there a role for the
    Federal Government here? Is the Federal Government now creating
    any obstacles to this happening? Are there incentives that we
    could offer to make it happen?
        And I will start to my far left to just get some quick
    comments before we have to vote. Mr. Irving.
        Mr. Irving. Yes, there is a role for the Federal
    government. I think one of the key roles is to continue
    promoting pro-competitive policies.
        I have to disagree with my friend, Mr. Miller, just
    briefly. I think the administration and Congress have been at
    least as responsible to hands off high-tech, hands off the
    Internet policy as the FCC, which shouldn't have a role in the
    Internet in our mind, which should be leaving this alone. And I
    think for the last 6 years, Republicans, Democrats,
    administration and Congress have all agreed that we need to
    grow this using the private sector, but there are also other
    roles.
        There are some market dysfunctionalities. I mean, one of
    the things we have recognize that 75 percent of white families
    don't have access to the Internet. When we get into rural
    America we are talking about a significant number. Native
    American families don't have access to the Internet, low-income
    families, rural families, and some of those communities we find
    that having access in public centers is important. So the e-
    rate becomes important. Community technology centers become
    important places. If I don't have a computer at home--and 90
    percent of African Americans and Hispanic Americans don't have
    computers at home, roughly 90 percent of low-income white
    Americans don't have computers at home. They need access today.
    And having access in schools and libraries and computer centers
    can be helpful.
        We also need to continue trying to use the bully pulpit,
    trying to get things like what Sysco Company is doing with its
    network academies, what the Gates Foundation is doing with
    libraries, what AOL Foundation is doing with regard to its
    philanthropic activities, trying to make sure the companies are
    promoting, when they have a 286, 386, Pentium I, Pentium II,
    that they are giving that computer to a school or library or
    community center that can use it. And Members of Congress and
    the administration can be key there.
        And there are a number of other things I could throw out,
    but I think one of the things that I think is very, very
    important is we need to try to find ways of making sure that
    the industry is training American children for the jobs that
    are coming in the future.
        I am not trying to get into H-1b, but it is a tragedy we
    have an industry that is virtually devoid of rural workers,
    virtually devoid of black and brown workers, and we have to
    import people for jobs that pay 40, 50, 60, $70,000 a year, and
    we need to find ways of working with HBCUs, community colleges,
    tribal colleges, rural colleges, to give our young kids the
    skills that they need.
        Mr. DeMint. Ms. Lewis.
        Ms. Lewis. Yes. In fact, I do believe the government has an
    important role to play, and while I do understand the 1996
    Telecommunications Act's emphasis on competition as a way of
    helping to encourage the widespread, ubiquitous deployment of
    advanced telecommunications infrastructure, there will be some
    pockets in some communities where competition won't come
    readily, and it may be important for the government to step-in
    in those instances, and some of the partnerships that I talked
    about earlier are some of the ways we think that can occur.
        The other thing that government can do I think is to
    continue to promote programs like NTIA's TIIAP program, which
    helps to demonstrate throughout communities how technology can
    be useful and important in addressing various community needs.
        I also believe continued support for the e-rate program is
    necessary, and I understand that there is legislation that will
    help provide some Federal funding for community technology
    centers. Again, providing more opportunities for access is
    important, but the Alliance's view is to try to bring access
    into everybody's home. So we hope that policies to promote that
    end can occur.
        Chairman Pitts. You still have a minute left.
        Mr. DeMint. Mr. Miller, comment before we take off?
        Mr. Miller. Number one issue for government is education
    and worker training. Again, if people are not understanding the
    Internet, if they don't have the skill sets, then whether they
    are actually going to become a computer worker or just happen
    to use a computer for their lives, then we have a problem.
        Yesterday, one of my CEOs was calling for a GI plan for the
    21st century. We may to have go that far. That wouldn't just
    apply to African Americans or Hispanic Americans. That would be
    across the board. But, obviously, people in lower incomes would
    be able to take most advantage of that. So, certainly training
    and education.
        Secondly, I agree with Mr. Irving. Competition,
    particularly in the last mile. We need to have competition to
    bring the prices down. It gives people options.
        And, thirdly, since this is a Small Business Committee, I
    will repeat something I suggested to the full Committee, which
    is more training for small businesses in what electronic
    commerce is all about, working with the SBA to set up training
    and education programs. And many of those programs could be
    targeted at African American and Hispanic American owned
    businesses or tribal businesses. It doesn't have to just be
    suburban white owned businesses. It could be businesses across
    the country. And if you get those small businesses hooked on
    the Internet and seeing the advantages of computers, many of
    those people will take it into their homes also.
        Mr. DeMint. Thank you, Mr. Chairman.
        Chairman Pitts. Thank you. I would like to remind everyone
    we will have another round of questions for this panel, but at
    this point we have got to go vote. And so we will recess, and I
    would ask the members to come back right after the vote. Thank
    you.
        [Recess.]
        Chairman Pitts. The time of the recess having expired, we
    will continue the first round of questioning, and I think we
    are ready for Mr. Udall at this time.
        Mr. Tom Udall. Thank you very much, Chairman Pitts, and
    thank you to the members of the panel for being here today and
    sharing your insights with us.
        I also represent a district that is very much like the
    areas that have already been described as underserved, where
    there is a digital divide. It is northern New Mexico--Santa Fe,
    Taos and a number of other rural areas--where we have many
    native Americans and many Hispanics that aren't hooked up, and
    there is clearly a digital divide. I was very interested to
    hear from Maureen Lewis about FCC rules and regulations that
    are holding us back, and I was wondering if you could tell me
    specifically what these rules and regulations are, because I am
    aware that the phone company that is in the district is not
    putting in the infrastructure. Could you please describe
    specifically for me those rules and how you see how they should
    be changed.
        Ms. Lewis. Certainly.
        One of the things that seems to be a deterrent to
    widespread deployment of high-capacity infrastructure has to do
    with the inability of some of the larger telephone companies to
    have their traffic cross what are called toll areas, and that
    has to do with the local telephone companies being confined to
    local telephone service and not being able to provide long
    distance service.
        One of the things that I know that some Members of Congress
    are talking about is providing some relief to large carriers
    that will allow them to cross LATA boundaries with data so that
    companies will have more incentive to roll out capacity that
    will serve underserved areas.
        One of the other things that the FCC is considering in some
    proposed rules is requiring companies in order to have relief
    from some of its current rules is to set up separate
    subsidiaries to offer advanced data services. Those separate
    subsidiaries have the incentive to act like competitive
    carriers and compete for some of the low-hanging fruit that Mr.
    Irving referred to earlier; and, as a consequence, there won't
    be incentive to go to some of the underserved areas that APT is
    most concerned about.
        So in APT's view companies that are able to provide data
    service without the additional expense of setting up a separate
    subsidiary may have more of an incentive to penetrate further
    into underserved markets than they might otherwise.
        Mr. Tom Udall. Thank you. And that is I think what we need
    to do in northern New Mexico, and I imagine it is what we need
    to do in a lot of the rural areas around the country. I think a
    lot of us are in the same boat on that.
        Mr. Irving, your report indicates that--and I am repeating
    myself here a little bit--but that native Americans and
    Hispanics in rural areas are falling behind; and I am
    wondering, you know, what special steps should be taken to,
    that you believe, to address this aspect of the problem.
        Mr. Irving. I think the problem is particularly acute in
    New Mexico, Congressman. I spent some time in your part of the
    world, and I can tell you that, right now, 87.1 percent of New
    Mexico has telephones, and that compares with about 95 percent
    for the Nation. And a large part of that statistic is skewed
    because of the low telephone penetration rate on native
    American reservations. We have reservations where two out of
    three people don't have a phone. Many reservations only half
    the people have a phone. And across the Nation rural native
    Americans are 75 percent penetration, meaning one out of four
    native Americans don't have a phone, by far the least served
    people in this country.
        And I think one of the things we need to focus on are newer
    technological solutions. It is more expensive to run a
    telephone line out to distant rural areas, and we need to start
    letting technology and the market work to some degree by
    looking at wireless technology, satellite technologies as well,
    and it is a place that government can work by trying to create
    incentive and trying to make sure that we have the right
    regulatory policies that will afford that.
        But one other thing that I found interesting is Hispanics,
    native Americans, low-income people, are more likely to use
    community centers and technological centers, and we have to
    have those available. Because when you have a community where
    nine out of ten people don't have a computer or Internet access
    on the day, they are not going to have it near term for many of
    those families, but they cannot afford to go 5, 10, 15 years
    without access anywhere.
        I do think that, in addition to getting new technological
    solutions to the telephone and Internet penetration to the
    home, we have got to get these technologies at least in the
    community for people; and one of the benefits of having
    community centers is you have trained people who can teach
    people how to use these technologies in those centers, opposed
    to just putting a computer there and folks have no idea how to
    use it.
        Mr. Tom Udall. Thank you.
        And, Mr. Miller, do you have any thoughts on either one of
    those subjects?
        Mr. Miller. Just to put an emphasis on competition, Mr.
    Udall.
        About 2 years ago, my family and I took a vacation to
    Chile, and we started in Santiago and then went to Patagonia.
    We were closer to Antarctica than we were to the equator. I
    walked into a phone booth. There were six telephone companies
    to choose from, including one of the local Bell Operating
    Companies here in the United States, which was down there
    competing. It was cheaper for me to use their phone service to
    call back to the U.S. than it was to use my long distance
    calling card that I had brought with me from the United States.
    So when competition comes, there is money to be made doing
    telephone calls.
        Again, maybe it is not a land line, as Mr. Irving
    suggested. Maybe it is wireless or satellite. But, believe me,
    these companies want to do business. But as long as there are
    too many rules and regulations and lack of competition, you are
    going to find these kind of situations where the market is not
    going to work properly. People who frequently suffer the most
    are people who are less advantaged because they can't figure
    the work-arounds. They can't deal with the work-arounds. So we
    have to make sure that competition comes to the marketplace so
    that native Americans have just as much access to
    telecommunications as people in wealthy suburbs do.
        Mr. Tom Udall. Thank you very much.
        Chairman Pitts. Thank you.
        Mr. English.
        Mr. English. Thank you, Mr. Chairman.
        Mr. Chairman, I, first of all, want to thank you for having
    this hearing today, because it has highlighted an issue which
    is of particular importance to a district like mine which does
    have rural areas, does have parts of the midwest, northeast,
    rustbelt area which has the potential to be underserved in this
    situation.
        I am curious, though, one of the things that we have not
    covered in our discussion is how other advanced industrialized
    countries are approaching the digital divide. They obviously
    have some of the same challenges, they have some of the same
    problems, and given that this is obviously anissue which is
    going the affect our long-term competitiveness, Mr. Miller, can you
    comment on what you have seen in other countries, and are there market-
    oriented solutions that are being tried there or is it primarily a
    government-driven response?
        Mr. Miller. Thank you, Mr. English. An excellent question.
        We have done a study, which I will be glad to supply to the
    record for the Committee, called Digital Planet which actually
    compares software, hardware, Internet access in 50 different
    countries, and those data are very telling. But, in general, I
    would say in the industrialized countries of the world that
    have the highest rates of telephone access, countries like the
    Scandinavian countries and Canada, they really have relied
    primarily on the market forces and, as Mr. Irving suggested,
    not just traditional land lines but huge use of cellular
    telephones. In fact, there is a front-page article today in The
    New York Times about how cellular penetration is so much higher
    in parts of Europe and Asia because they, in a sense, skipped
    over the cost of installing a land line and went right to the
    cellular lines.
        In terms of Internet access, unfortunately, most other
    countries of the world, including the developing world, are
    well behind us, and one of the reasons is too much regulation.
    For example, in many cases, an individual from his or her home
    accessing the Internet pays per minute charges for the local
    dial-up. So even though you hear stories this week about free
    Internet access in Britain, so that even AOL is waiving its
    monthly fee in Britain, the reports can be deceiving. Yes, the
    fee for the Internet access is free, but the per minute charges
    are clicking along. So if you stay on line for 15 or 20 or 25
    minutes, you suddenly find yourself with a $10 or $15 or $20
    phone bill. Whereas here, in most cases, that is a local call
    and therefore just part of your local monthly charge.
        So in many countries, one of the reasons that they are
    anywhere from one year to 3 years behind us in terms of
    Internet access, even when you hold constant variables such as
    income, is because their charges for Internet access are too
    high, and that is because of the lack of competition in the
    marketplace there.
        Mr. English. Ms. Lewis, do you want to get your arms around
    this as well? I would be curious to get your observation on the
    international dimension of this problem.
        Ms. Lewis. I really can't speak to that issue, Mr. English.
        Mr. English. I appreciate that.
        Mr. Miller, going back, obviously this is an issue that is
    going to have a big impact on the competitiveness of places
    within regions of the United States as well as internationally.
    Can you, from your international study, identify for us some of
    the pitfalls that we need to avoid. For example, some of the
    cul-de-sacs that other countries have tried from a policy
    standpoint and maybe we should be avoiding?
        Mr. Miller. Well, again, the number one pitfall is
    overregulation. When they tried to control access to the
    Internet through centralized services or the local monopolistic
    telephone company controls the Internet access, you get very
    high rates, very low take-up rates, very low competition. The
    other cul-de-sac, of course, are attempts to control content in
    countries like Singapore and Saudi Arabia. The Internet is such
    a wonderful medium that people have worked around it.
        Let me tell you where I think the successes are; and I
    point, for example, to India as a success. Their success, even
    with a lot of problems that India has--and it is a 980 million
    person country, they have a lot of problems--in information
    technology is staggering because they made a conscious decision
    to combine industry, government and the education community in
    the early 1980s, to train an information technology workforce.
    Their workforce now is estimated to be between 350,000 and
    400,000 trained computer programmers, which makes it the second
    or third largest in the world.
        Now, what does that mean? That means when companies in the
    United States or Japan or Europe find that they don't have
    enough workers with the right skills to do particular jobs and
    they are looking for an alternative place to have the work
    done, frequently they turn to India as a location. The same
    thing is going on in China. It is going on in Ireland. It is
    going on in South Africa. It is going on in Israel. So they
    have figured out, if you will, the Rosetta stone here, Mr.
    English, which is having the trained workforce. If you don't
    have a trained workforce, people who understand these skill,
    then it is tough to be attractive.
        So if the cul-de-sac is overregulation, I think the open
    road is training the workforce. Education. Obviously, India has
    a lot more people to train than 350,000, but if you are looking
    for a model of success, India is an example. It is even
    happening here in the U.S. In South Boston, Virginia, there is
    a project that was started about 3 years ago by some refugees
    from northern Virginia, who got kind of tired of the traffic
    and wanted to get out of here. And they started a company and
    they trained computer programmers there in the South Boston
    area. People who used to be in the more traditional tobacco
    industry down in South Boston, which is near the North Carolina
    border. And they developed what I call ``offshore onshore,'' so
    that northern Virginia technology companies, instead of sending
    their work to India or Ireland or some other country outside
    the United States, are outsourcing work to this company in
    South Boston, Virginia. It is called the Software Factory, and
    that model, in ``offshore onshore,'' I think, could be brought
    to a lot of rural areas around the country if we can get the
    people trained with the software skills they need.
        Mr. English. That is an exciting vista, and I appreciate
    your testimony.
        Mr. Chairman, I will yield back the balance of my time.
        Chairman Pitts. Thank you.
        Mr. Davis.
        Mr. Davis. Thank you, Mr. Chairman. I really appreciate the
    opportunity to be here. Let me just use the opportunity to ask
    a couple of questions.
        I came because I am very interested in this subject matter,
    as obviously lots of people are. It seems to me that whenever
    we talk about disparities, immediately many people's mind goes
    to the whole question of race and ethnicity relative to trying
    to figure out the why of it. Then, of course, there are others
    who look at the whole question of economics and income. What
    can be done I think is what I am really trying to get at--if
    income has much to do with the disparities, what can be done
    about reducing the gaps of regulation, legislation? That is
    really my question.
        Mr. Irving. Can I take a crack at this?
        The three biggest determinants we find--income, education
    and race--lower income people, lesser educated people and
    certain races are less likely to have access, and I think that
    a critical point for all of those is informing the communities
    about the importance of these technologies. I think mostly what
    is going to happen with regard to this technology there are
    going to be community-based solutions. They are not going to
    necessarily be solutions just out of Washington, though
    Washington can help, but communities have to be informed that
    if they are going to be viable competitors in this new economy,
    they are going to have to restructure their educational--at the
    school board level, at the individual school level investment
    has got to be made.
        I keep getting questions from people, well, how can we
    afford to put computers in school when we can't afford to give
    kids books that are less than 30 years old or safe places to
    study? And I keep saying, this is the richest Nation in the
    world. We have to find a way to do both. We cannot have a child
    that isn't computer literate and send him out to Mr. Miller's
    workforce, just as we can't have a kid who can't read or do
    math and send him out to Mr. Miller's workforce. All of those
    skills are going to be necessary.
        We are going to have a generation of entrepreneurs who
    understand that if they are going to compete in a global
    economy they have to have global connectivity and they have to
    make the investment. As you would make the investment in
    insurance, security, you have got to make the investment on
    connectivity. You wouldn't have a business without a telephone,
    you are not going to have a business in 2010 that doesn't have
    Internet connectivity. You better figure out now how to get
    there.
        We need to figure out to make sure that our local officials
    understand that isn't a solution to age, it is not a solution
    to violence, to poverty or to health care, but it is one of the
    solutions. It is a tool that can be used.
        Telemedicine, distance education are things that this
    technology empowers, and I think the problem is people are
    looking at this as an isolated issue and not as part of a
    holistic approach to governance and being a citizen as we go
    forward. And I think one of the things that Members of Congress
    and other Federal officials and industry can do are just inform
    people of the power of the technology to improve lives. But I
    think when people see this and have access to it, they get it
    and they will make the economic decision.
        And what drives me to say that is, anecdotally, we haven't
    been able to dig this statistic out, but if you look at who is
    most likely to have a computer at home, it is a person whose
    child has access to technology at school or a person who has
    access to technology at work. If you use this, you understand
    it, you make the purchase for yourself. And the reason that
    native Americans, African Americans, Hispanic Americans and
    rural whites are less likely to have access at home, they don't
    have access at work and their kids are less likely to have
    access at school.
        So we have to make this is a little bit more ubiquitous.
    The market is beginning to work, but it is not going to be a
    perfect fix.
        I had to disagree strongly with Mr. Miller on one point he
    said. Broadband can create a bigger chasm. You are going to
    have people 20, 30, 40 percent of this Nation in 4 or 5 years
    streaming audio, the child he was talking about having audio at
    home. You are going to have 20, 30 percent of this Nation
    watching movies over the Internet, but who are those 60 percent
    who don't? Where are they going to be? And government can play
    a role in terms of making sure that this technology is deployed
    ubiquitously and fairly and that some folks aren't red-lined
    economically and electronically. And those are the kind of
    issues we have got to continue to be cognizant of.
        This report every year gets a little thicker, with more
    questions. I think a question we will have to answer in the
    future is broadband access is a question we are going to have
    to start asking as well as wireless and other technologies,
    because they are all playing a role in the solution to the
    question you asked, Mr. Congressman.
        Mr. Miller. Can I just look at the question somewhat
    differently?
        I am looking at the table on page 27 of Digital Divide, the
    top table which Mr. Irving's department did. What is very
    interesting is, if you get over $75,000 in income, Internet
    usage is pretty close, breaking out by race. Slightly higher
    for white nonHispanic and other nonHispanic but it is pretty
    close. But when you drop down to the next cohort, which is the
    $35,000 to $75,000 bracket, all of a sudden white usage is
    almost twice the rate of black access to the Internet. What has
    happened? Is it just income or is there something else going on
    that when people make $75,000 a year it doesn't make a lot of
    difference what their race is, but when you talk about the next
    cohort, it is so different?
        My gut feeling is, and I don't have any data to support
    this, is that the difference has a lot to do with content and
    making the compelling case. That people in the $35,000 to
    $75,000 income range probably can afford the newer, lower
    priced computers and probably can afford the access, but they
    don't have a compelling case. If I could figure out what it is
    which would appeal to the African Americans who are making
    enough to buy a computer but don't want to get hooked up to the
    Internet, I could become a rich entrepreneur on the Internet. I
    don't know what that is. I don't know whether Mr. Bob Johnson
    from Black Entertainment Television is going to figure it out
    or whether Steven Spielberg is going to figure it out. But
    someone is going to figure it out, and, when they do, I think
    they are going to bring their broadband just as much into the
    central cities and into the rural areas. Because they want to
    sell movies to everybody, they want to sell records to
    everybody, and they are going to push to make sure that they
    can reach into every community.
        Mr. Davis. I thank you very much, Mr. Chairman. I see that
    the time has expired.
        It seems to me that both of you are saying that education
    is the key, in a sense. Either way you cut it, education really
    becomes the key.
        Ms. Millender-McDonald. Would the gentleman yield for a
    second?
        I just want to piggy-back on what Mr. Miller is saying.
        Mr. Miller, usually the $35,000 range parents have smaller
    kids. They are in school. These kids still aren't getting
    computer learning, and a lot of them do not have medical
    coverage. So they are paying a lot within that $35,000 scope,
    and if their kids aren't being taught on the computers in
    school, then they will not be excited about bringing this
    information to the home and the home getting involved in it.
    So, really, as you look at $35,000 salaries, as I have looked
    at them, especially with women, there are so many things that
    they are having to provide to the family that they just cannot
    afford these computers.
        Mr. Irving. Can I add one thing, Mr. Chairman? Because
    there is one point, there is a graph in here that is kind of
    interesting that demonstrates that families that have two
    parents are much more likely to have access to the Internet
    than a family with one parent, for every income group above
    35,000 and below 35,000, for every racial group except for
    Hispanics below 35,000, where it is roughly equivalent. So
    having two parents in the household, interestingly, is not
    intuitive, but two parents are much more likely to give their
    children connectivity than one parent. Every racial group,
    every income level, there is a huge gap, and that is just
    something that I think underscores what Congresswoman
    Millender-McDonald is saying, that there is something going on
    with our families that we need to focus on.
        Chairman Pitts. All right. Thank you.
        We are ready for our second round of questioning, and I
    will go to Mr. DeMint.
        Mr. DeMint. Ms. Lewis, you mentioned the e-rate, and I
    would just like a little more explanation of how that would
    work, how do you think that would help this problem, just
    briefly.
        Ms. Lewis. Well, the e-rate has I think been an effective
    tool helping to bring technologies to communities, and I think
    it is a wonderful first step to providing exposure to young
    children about the advantages, the possibilities that computer
    technology can offer.
        But, unfortunately, there is a great disparity between
    homes that have computers and those thatdon't, and children's
    education, unfortunately, is impacted by that. So APT's goal is to
    further the penetration of computers not just to schools and libraries
    but to homes. But the e-rate is an effective, in my view, an effective
    way of providing some early exposure to communities that may not have
    any exposure at all.
        Mr. DeMint. You are not suggesting using the e-rate to get
    computers in homes but more in public places?
        Ms. Lewis. In public spaces. It is a way to help expose
    some communities that don't have, as Mr. Irving was talking
    about before, access at work and access in other places, to
    provide at least early learning for children, and then perhaps
    those children's involvement and excitement with computers can
    help stimulate some interest in their parents.
        Mr. DeMint. Mr. Miller, any comment about the e-rate, how
    it relates to what we are trying to do?
        Mr. Miller. I agree with what Ms. Lewis said. I think it is
    a question of exposure. I am a little biased, but if I were
    starting a school, the first thing I would do is put in the
    computers.
        But I think the reality, as Ms. Millender-McDonald said
    earlier, is a lot of schools are striving just to keep erasers
    and chalk in supply. So the idea of getting computers in is far
    from them. So having this e-rate does enable them to bring in
    the computer technology which, in turn, exposes the children.
    In turn, you hope they go home and tell their parents to think
    about it, and next thing you know we will have everybody with
    the Internet. That would make my industry very, very happy.
        Mr. DeMint. Mr. Irving, I think I have gotten more calls
    and letters about an Internet tax than anything else, which
    would make it very difficult to ever suggest that. Is that what
    we are talking about or are there other ways to accomplish the
    same thing or just what would you add?
        Mr. Irving. Well, the e-rate is not an Internet tax. The e-
    rate is basically built upon an existing subsidy system. And we
    have had a system in for years where--I grew up in New York
    City, and my mom paid more in New York City so that my aunts in
    other parts of the world, in rural communities could access
    telephones at a subsidized rate.
        What this basically does is take that rural urban
    subsidization system and use that same type of model to give
    some additional income revenue or dollars to schools in high-
    cost areas and low-income areas.
        I always use the analogy of a cell phone. The first time I
    got a cell phone, I couldn't resist calling everybody I knew
    and then I got this bill and couldn't afford it. We don't want
    to have kids on line and school districts get that first bill
    and they found that they can't afford it. And the e-rate helps
    keep it affordable, particularly for high-cost areas and low-
    income areas, but it is not a tax on Internet users, and this
    administration and I believe this Congress would fight against
    any tax on the Internet. We want to see the Internet deployed
    as ubiquitously, as rapidly as possible, but that has to be in
    public spaces. Far too many Americans don't have access
    anywhere else.
        Mr. DeMint. Thank you. I yield back.
        Chairman Pitts. Thank you.
        Ms. Millender-McDonald.
        Ms. Millender-McDonald. Yes, Mr. Chairman, I really have so
    much here to talk about until I really need to take up the
    other time of the other members and would like to do that.
        Ms. Lewis, I just want to commend you for your presentation
    and especially touching on the telecommunications products and
    services that will help attract providers, and I think through
    the e-rate this will be the conduit by which this happens. And
    certainly the CBC has gone on record encouraging the FCC to
    continue to expand and apply the e-rate so that our kids can
    have access to computers in the schools, and that is what that
    was intended to be.
        I also want to commend you on your statement about small
    businesses falling through the cracks. Indeed, small businesses
    are the ones who are the job creators. If we do not put them
    online, give them the computers, technology that they need,
    then we will not have the jobs that are necessary to provide
    for us.
        Mr. Irving, H-1b, absolutely. I just do not think we need
    to be going internationally to find workers and not train
    workers here. So the H-1b program that you are talking about or
    that provision of the law, I really did and will vote against
    again because we need to bring in people, we need to train
    people here in America for the high-tech jobs that we have here
    and not go overseas and bring people in. So I am adamantly
    opposed to that. I think that is what you spoke of.
        Mr. Irving. I don't want to get in trouble with the
    President, Vice President, Secretary.
        Ms. Millender-McDonald. That is all right. I have gotten in
    trouble with them. That is what I said, not you.
        I will say, as you mentioned the program, I will reiterate
    my position on it. I really do think, especially with Silicon
    Valley and all of those high-tech programs we have in
    California, we do not need to have anyone going overseas
    bringing people in. So that is what I say.
        Mr. Irving, and let me just say, we must recognize that
    government must play a role in providing the type of training
    and skills that will allow us to have a workforce 2000 that is
    equipped to move into this global workforce. I just want to
    bring attention to this panel and to those in the outer
    community that it was many administrations like the Rural
    Electrification Administration that was set up in the 1930s
    that established the rural services because the established
    electric companies would not do that.
        We also want to call attention to the myriad of--going back
    to the 1860s, where the Signal Corporation and Defense
    Advancement Research and all of these took place through
    governmental entities. Well, in 1960, the IBM Air Force Sage
    computer system, and it goes on and on, the 1971, my person,
    this expert over here just gave me this information to let the
    public know that the government has played a role. In fact,
    they have been primary, principal, in starting the whole
    hardware and software when it comes to computer systems, and we
    must not forget that. Therefore, they must play a vital role in
    this.
        And my question to you, Mr. Irving, is what is this
    administration doing to try to bring this divide, gap closer?
    Because when you say more connected, that doesn't say anything
    to me. It doesn't tell me anything. Because these percentages,
    are they children? Are they adults? Who are they that have
    gotten to a degree where they are more connected? Who are these
    people and what is the administration doing to help us with
    this divide?
        Mr. Irving. We are doing a number of things. The principal
    thing we are doing is working with Congress to promote
    competition to bring prices down, which it will help.
        I think the second thing we are doing that is very, very
    important is this President and Vice President, again working
    with Congress, redefined universal service to include public
    institutions such as schools and libraries. This administration
    have been a strong and forceful advocate for the e-rate and
    will continue to be a strong and forceful advocate for the e-
    rate. President Clinton and Vice President Gore and others in
    the administration have focused on the need for community
    technology centers. We have increased by, I think, 600 percent
    funding forcommunity technology centers that are storefronts in
    rural areas and low-income areas where people can go in and get
    training and access to computers.
        Ms. Millender-McDonald. So your program, this T-I-A-P, how
    do you pronounce it?
        Mr. Irving. TIIAP.
        Ms. Millender-McDonald. What type of grant money will there
    be for us to access to provide more computers for these
    community centers that you talk about? Because it is great to
    put up these centers, but you have got to put computers in
    there. What is your grant program like?
        Mr. Irving. TIIAP does a number of different things. We
    have about 400 grants out there right now, everywhere from
    rural Kentucky and Mississippi to a program in East Palo Alto.
    Right in the shadow of Silicon Valley there is a community
    called East Palo Alto that is disproportionately black,
    disproportionately Hispanic and a lot of single-family
    households. Those kids that are in there are making
    technological changes. They have contracts with Sega and AOL to
    do computer animation. They paid more in taxes their second and
    third year in existence than we gave in our first year of
    grants, because when you give kids access to technology and set
    them loose, they can do wonderful things.
        I was just down in Kentucky where we have a program with
    the Center for Rural Development that is training people how to
    use technology. In small, little counties, they put little
    technology centers, counties that I had never heard of, but the
    people in those communities are embracing it and learning how
    to use skills.
        I was in Chicago, and another one of our grant programs is
    in the south side of Chicago. We have grant programs at a
    learning center in Los Angeles, low-income, Hispanic, who are
    teaching young kids 7, 8, 9 years old computer literacy so they
    are not intimidated by these technologies.
        But TIIAP is really a model program. What we do is
    demonstrate models and then hope the communities and States
    will fund on their own those types of models. I only have about
    $20 million a year, so I can't do every State.
        Ms. Millender-McDonald. Are you working with the States to
    try to bring that partnership about?
        Mr. Irving. Yes, and the most important thing about TIIAP,
    we disseminate what we learn. We put it up on line. We make
    sure that anybody we give a grant--the National Urban League
    has a grant that we gave both in Seattle and in Baltimore.
        Ms. Millender-McDonald. What about Los Angeles?
        Mr. Irving. There is one there, but we didn't fund that.
    But what they do is they give information about what is working
    and not working in those States.
        Ms. Millender-McDonald. I will say--and, Mr. Chairman,
    thank you so much for the extended time--this is a number one
    civil rights issue, and we must address it. Thank you so much.
        Chairman Pitts. Thank you.
        Mr. English.
        Mr. English. Thank you, Mr. Chairman.
        Mr. Irving, in my earlier round of questions, I neglected
    you. That was unintentional, and actually, the line of
    questioning by my colleague, I would like to follow up on and
    maybe see if I can clarify some of your points.
        In your report you stress community action centers as the
    key to finding a solution to addressing some of the problems of
    the digital divide within communities that are not as well
    wired. May I ask, in your testimony, why you don't stress the
    community action centers as much? Also, you don't give us as
    clear an idea of what the Federal role should be in promoting
    these access points. In your comments you pointed to the
    availability of some money for some prototypes for some pilot
    projects, but I don't have a sense of where the administration
    would like to go in establishing a firm Federal role for
    promoting the creation of these centers. Can you give us a
    sense, is this the administration's next programmatic
    initiative or ideally how much money should the Federal
    Government be putting in this direction?
        Mr. Irving. If I can, it is a multilayered question. The
    administration feels strongly that community access centers are
    a key. Community access centers can be broadly defined.
    Community access centers include schools and libraries and
    other public spaces.
        Mr. English. Do they include churches?
        Mr. Irving. They could include churches, although there is
    an establishment clause question that I don't have the
    capability of----
        Mr. English. So there is a concern on your part that any
    funding for churches to set up this sort of center might create
    an establishment problem?
        Mr. Irving. It might. I am a lawyer, but I am not competent
    to answer that question.
        Mr. English. I understand.
        Mr. Irving. I have to constantly look at those issues in my
    grant programs as to what types of grants I can give and what
    type grants I can't. Churches, community centers, barbershops,
    shopping malls, wherever there are community points where
    people will go. If a young student--I mean, I grew up in
    southeast Queens, New York. It is a working class neighborhood.
    There are a lot of kids that I went to high school with, half
    my class from freshman year to senior year dropped out. For me
    to think that those kids are going to go back to my high school
    or go to a library to learn the computer is just fiction. Those
    kids have already said that these institutions have failed me.
    They are walking away. There are places in the community that
    they might go where they will feel comfortable, where they will
    be around peers, and we need to have those kind of centers in
    rural and in urban areas. That is why we use the generic term,
    community access centers.
        The specific program that the administration, the President
    introduced last year in his budget and asked for increased
    funding this year are called community technology centers.
    Those are storefront shops where you not only have computers
    but you have trained people to train people how to use these
    technologies. We have asked for a 650 percent increase I think
    from fiscal year 1999 to fiscal year 2000. It was $10 million
    last year, $65 million this year.
        Mr. English. Which has produced how many centers?
        Mr. Irving. The grant round was just completed by the
    Department of Education last year for community technology
    centers.
        Another thing that Secretary Cuomo has introduced are
    computers of learning and technology centers in housing
    projects where you can have people in the housing centers and
    in the housing projects teaching other. We have had some
    prototype projects through my TIIAP in housing projects. We
    have shown it can work. Now other agencies are taking what we
    have learned and others have learned and extending it.
        I think you need programs like TIIAP that can show what
    works and doesn't work, and then you need the agencies in the
    Bureau of Indian Affairs, in HUD, in Department of Education,
    who can build upon what we are learning, but we also need
    private initiatives, and we need community initiatives.
        Mr. English. And how would what you are proposing actually
    promote that?
        Mr. Irving. I think that when you have these community
    technology centers it is incumbent and important for local
    businesses to be part of the solution and the design of these
    community technology centers and also to contribute.
        I was in Billings, Montana, at the invitation of Senator
    Burns a few years ago, and the owner of the local Wendy's had
    made huge contributions to the library to make the library a
    community technology center because he learned he had computer
    illiterates working in his Wendy's and they needed computer
    skills just to be a burger maven or a burger employee, and he
    realized right then that he needed to make an investment.
        This is a call for action across not just the Federal
    Government but also State and local governments and the private
    sector. We are not going to cure this with one silver bullet.
    We need a whole arsenal of tools to go in and fight this
    problem if we are really going to make every American ready for
    the 21st century.
        Mr. English. And I agree with that, and my concern is there
    is a tendency in Washington to identify a problem and then come
    up with a whole range of small niche programs aimed at it. What
    you are proposing here, I understand you would like to see more
    Federal funding for these community action centers broadly
    defined, but I am still trying to get my arms around the
    concept. My sense is you are right to be flexible, but my
    concern is you have just listed a whole range of programs, and
    I wonder if we can move away from producing a lot of prototypes
    to trying to come up with a focused policy that will, with
    goals, set some clear parameters for how we can promote this
    access with a limited Federal role and in partnership with
    communities and State.
        Mr. Irving. I think all of us in the administration, the
    President and Secretary Daley down to me, would love to work
    with you on that, but there is one thing that I find as I have
    traveled across this country. A solution in rural Pennsylvania
    is going to be very different from a solution in the south side
    of Chicago, very different from Lynwood, California, very
    different from a native American reservation in Hopi or Navajo
    parts of Arizona. And so if I try to do a single shot or try to
    get my arms around this with one holistic solution, I am going
    to have some things fall through the gaps, and this technology
    moves so fast we need to be flexible and focused.
        Mr. English. I agree. But, Mr. Chairman, if I could
    continue briefly this line of questioning, Mr. Irving, my
    concern is that if you come up with 50 programs for doing this
    you may come up with 50 great photo opportunities in the
    process, and that will gratify some people in the political
    arena, but I am not sure you are coming up with a policy that
    is actually going to be measurable, that we are going to be
    able to fund because we know what we are getting.
        You have told some great anecdotes, but I guess what I am
    looking for here is a flexible framework that allows for a
    Federal involvement in promoting these access points in rural
    areas and in urban areas, in very different settings, and not
    just create 40 different programs because we can think of 40
    different kinds of communities we want to help. That is not a
    very coordinated policy. And as someone who thinks that there
    is a Federal role in promoting this access, I think that we
    need to have maybe a better defined policy here.
        Mr. Irving. I think we are in violent agreement. But I
    think one of the issues we have got to focus on is, if you have
    a disease, we are right at the diagnostic stages of the
    disease. And when you have a disease and you are trying to cure
    the disease, you may have to try a lot of different things.
    Sometimes you find that Mom's homemade soup is enough, but
    sometimes you need surgery.
        And I don't think we are at the point where I think we need
    surgery, but I do think we need a diagnostic evaluation of what
    works best. And if I have a problem with my arm I need a
    different analysis than if I have a problem with my knee or in
    my spine. And I am not quite sure whether this is a spinal
    problem or a joint problem, but we know we have a problem. And
    what the cure is I think will determine on how persistent the
    problem is. Will it go away on its own? Will the marketplace
    take care of it?
        And I don't think we are at the point yet where we can make
    this one prescription, but I would like to work with you, and I
    think all of us in the administration would like to work with
    you on how to find a prescription that is cost effective.
        The flexible framework you mentioned is absolutely the
    right type of approach, I believe, and I believe the President
    would believe. Let us find a way that is focused, that is
    holistic, that is flexible, that helps to resolve these
    problems.
        Mr. English. I think you made a very fine presentation
    here, Mr. Irving; and we very much appreciate it.
        I yield back.
        Chairman Pitts. Thank you.
        Ms. Tubbs Jones.
        Ms. Millender-McDonald. Mr. English, I agree with you. I
    don't want any prototype programs either.
        Ms. Tubbs Jones. Thank you, Mr. Chairman.
        To all of the witnesses that I have missed, I apologize for
    my delay, and I am confident that my colleagues have done a
    good job of addressing the issues in this area. I am going to
    be very brief.
        The report, Falling Through the Net, was anybody surprised
    by the fact that it was likely to be minorities that would have
    less access to the Internet? Was anybody surprised waiting on
    this result?
        Mr. Irving. This is the third one I have done, so I had a
    sense of where we might be.
        Mr. Miller. I was pleasantly surprised, and it may not be a
    startling finding, by the fact that when we did get above the
    $75,000 income level, and I admit that is still a small
    percentage of the population, that a lot of the racial
    divisions did seem to disappear. I think that is a hopeful
    finding. That is not to say that everything is fine, but it
    does show that at some income level, people are willing to say,
    regardless of race or nationality, this Internet is important
    to me.
        And one of the tricks of the trade that we haven't figured
    out as an Internet industry is how do we appeal to groups. As
    Larry said earlier, it is interesting that of the top 100
    Internet sites, none of them is targeted to a minority
    community. Why hasn't anybody, in a sense, figured that out?
    Why isn't some great creative person figuring out the message?
        Ms. Tubbs Jones. In campaigns, they use focus groups. Have
    you thought about that? I mean, ask the people who don't use
    it, it seems to me, might be the easy way.
        Mr. Miller. Exactly.
        Ms. Tubbs Jones. Anybody ever thought about tax incentives
    for companies providing access to the Internet or computer
    opportunities?
        Mr. Irving. I am sure it has been thought of.
        Ms. Tubbs Jones. But not implemented?
        Mr. Irving. You have a scenario in which the Internet is 6
    years old, really, as a public space. You are seeing 50 percent
    per year increases across every income group now,
    althoughminority started later. People are giving away PCs now if you
    sign on to AOL or you sign on to various things. So those numbers are
    going to probably increase a little bit, but you are not going to get
    to equity anytime soon. We are not at equity with telephone
    penetration. African Americans are about one in every five----
        Ms. Tubbs Jones. Maybe you misunderstood me. I didn't mean
    to the person who accesses the Internet. I am talking about to
    the people who control the Internet, the people who control
    computers. But the idea as we are moving from welfare to work
    of giving companies' tax incentives for employing welfare folk,
    why not give them tax incentives for accessing computers and
    training people to use the Internet and this technology? I am
    just throwing it out as a possible suggestion.
        Mr. Miller. A bill has been introduced in the House by
    Congressman Moran and in the Senate by Senator Conrad which
    would provide tax incentives for companies to do IT training.
    And, obviously, we believe that most of the people who take
    advantage of that would be people who are less economically
    advantaged.
        Ms. Tubbs Jones. But what I am saying is that those of you
    who are in the business of creating the Internet and dealing
    with computers and so forth may have to go on the offensive,
    and we reward you for going on the offensive if you do more
    than sign somebody up and say I signed them up and they failed
    the course and I am done, if you do something a little more
    than that, and that is something that quickly comes to mind to
    me.
        I would like to thank you very much.
        Mr. Chairman, I yield the balance of my time.
        Chairman Pitts. Thank you.
        Mr. Davis, do you have any questions?
        Mr. Davis. Yes. Thank you very much, Mr. Chairman.
        And I really am pleased because I just wanted to follow the
    trend of thought that I thought I had picked up from Mr.
    English. And while I am in agreement with all of the community
    access centers, all of the programs, all of the opportunities,
    as I listened I was thinking that I have seen about as many
    storefront programs as I want to see. I have been in about as
    many basements as I really want to go in. With certain kinds of
    programs, that they are good as the only thing that you can
    get.
        I mean, if you get down to the point where this is all that
    you can get, then put it in the storefront. If this is all that
    you can get, then put it in the church basement. But if there
    is a coherent policy in terms of actually putting into public
    education, into the school systems where there is an
    environment, where there is an atmosphere, where young people
    can really learn to make the greatest use of this technology
    and these instruments, then I really think that goes to another
    level.
        And so, while I am not denigrating storefronts and small
    programs and initiatives, as I have been dealing with those all
    of my adult life--I mean, ever since I have lived in inner city
    America, which is all of my adult life, that is what I have
    seen. But I have never seen the kind of results that could
    really come if we were to anchor down and put into public
    education the kind of resources, the kind of equity so that
    some school systems are not being funded at a level three times
    as high as others, where all of the children really get the
    opportunity, then I think we can reduce the disparity.
        I mean, anything less than that, I think the same
    disparities that we experience we will continue to experience
    because we are putting Band-Aids on cancer, and it just keeps
    breaking out, keeps breaking out.
        But I really appreciate the testimony and the responses
    that all of you have given, and I find it intriguing, but I
    really think we need to go to another level.
        Mr. Irving. May I briefly respond?
        Congressman, I couldn't agree more about the importance of
    focusing this on education, but I also hope when Mr. Fulton and
    others testify in the next panel you will hear about some of
    the success stories. And, interestingly, the Baltimore grant we
    gave is in a church. So there is some way churches can be
    involved.
        Some of the success stories in community centers, there are
    literally hundreds of people in Baltimore working in high-tech
    today because the Urban League and the Federal Government made
    investment and gave people computer training. There are
    literally hundreds of young people in East Palo Alto, hundreds
    of young people in Newark, New Jersey--Keith and I were just
    down in the west side of Chicago looking at a community
    technology center that the Urban League has there, and young
    people there are going to have opportunities because we made
    those investments.
        And, again, as somebody who was formerly young, I know that
    at a certain age, in certain communities, there are kids who
    are not going to go to school and are not going to go to
    libraries for the training, and we have to reach them as well
    if they are not going to be lost to this economy. And that is
    why, while I don't disagree that we have to focus on schools, I
    think if we only focus on schools we are going to have a
    generation of people who aren't equipped that we could
    otherwise reach.
        Mr. Davis. And I didn't want to, again, denigrate in any
    way. And I agree that if anything you take, if that is all that
    you can get, I agree with that. I have just seen all that you
    can get so much, knowing that if we do 10, there are 10,000
    that we needed to do. If we do 100, there were 50,000 that we
    needed to do, and I just want to go after the 50,000. It is
    kind of my like daddy used to tell us when we were farmers and
    one of the crops would come. He would say, pray for a good
    harvest, but keep on hoeing. And so let us keep doing what we
    are doing while we really go for the big one.
        Put it in education where everybody has a shot at it.
        Mr. Miller. Congressman, I couldn't hope to match your
    eloquence about the importance of education. Every business
    person believes in it. I heard a story yesterday which I found
    very disconcerting. One of my large member companies is trying
    to give away to some school districts brand new PCs. Because of
    various bureaucratic rules some of these public school systems
    cannot accept them. So I agree money is part of the solution,
    but sometimes it is overcoming old fashioned thinking. So
    anything we can do to work with local school districts and
    state governments which fund so much of education to get them
    past some of this old thinking would also be helpful. The
    thought that a school district would turn away free PC's in
    this day and age is pretty appalling.
        Ms. Millender-McDonald. Mr. Miller, see me after the
    hearing.
        Ms. Tubbs Jones. Mr. Chairman, could I ask one more thing,
    please. There is in fact a significant amount of legislation
    that prohibits public schools from accepting PC's and it may be
    the direction of going to the legislature in that particular
    jurisdiction to try to get some change. Because I have heard of
    it and not only where you are but a number of other places.
        Lastly I want to add in I know you are talking about this
    group of young people who are not in school. But there are also
    a significant group of people somewhere between 35 and 65
    whowon't even--I mean, have you ever stood behind one of them at an ATM
    machine? And the reality of it is there is an issue for retraining that
    we need to address as well as the young people, but retraining where
    people who probably have another 30 years in the work force, who have
    never touched a computer. We need to get there some way too.
        Thanks, Mr. Chairman.
        Chairman Pitts. Ms. Lewis.
        Ms. Lewis. I am so glad that you raised that issue, Ms.
    Tubbs Jones, because one of the concerns that APT has is that
    schools and libraries and community access centers are a
    wonderful first step but the technology needs to be brought to
    the home. The infrastructure has to be brought from the
    neighborhoods into everybody's home so that people can feel
    comfortable to play around with technology and not feel
    intimidated. And it is important to support all of these
    efforts. But it takes the entire community working together to
    empower the community through the use of technology.
        Ms. Tubbs Jones. Thank you.
        Chairman Pitts. I wish we could go on. We have gone over
    two hours with the first panel. We have heard some excellent
    and timely testimony. But at this time I would like to dismiss
    and thank the first panel and call the second panel to the
    witness table.
        Ms. Millender-McDonald. It is a nation state. Thank you
    very much.
        Chairman Pitts. All right. The Chair would like to welcome
    the second panel of Mr. Fulton, Mr. Robinson, Mr. Krumholtz,
    and Mr. Coleman. Welcome. And I would like to ask Mr. Fulton,
    who is the Director, Technology Programs and Policy for the
    National Urban League, to begin.

    STATEMENT OF B. KEITH FULTON, DIRECTOR, TECHNOLOGY PROGRAMS AND
                     POLICY, NATIONAL URBAN LEAGUE

        Mr. Fulton. Certainly. Thank you, Mr. Chairman and members
    of the Subcommittee. As the others have already done, we want
    to thank you for this opportunity to testify about the Urban
    League's efforts to partner with industry and government to
    bridge the Nation's digital divide. Today I would like to share
    insights from our more than 30 years of experience in bringing
    technology based programs to low income communities and working
    with industry and inner city communities to develop a skilled
    information technology work force.
        First, I will briefly characterize the National Urban
    League and our technology based programs. The League was
    founded in 1910. Our mission is simply to assist African
    Americans and the urban poor in the achievement of social and
    economic equality. In short, that means we help people to help
    themselves. We achieve our mission through direct service
    programs, public education, collaboration with industry,
    government, other community based organizations and bridge
    building between different racial and ethnic groups.
        We have 115 Urban League affiliates throughout the United
    States operating in 35 states and the District of Columbia. We
    have 3,000 professionals and approximately 30,000 volunteers
    serving a client base of approximately 2 million people. We
    have a rich history in technology based programs. Our first
    program opened in 1968 in Los Angeles, at the IBM training
    center. At that time there was no Internet and no PC's, so the
    programs focused on COBOL programming, mainframe upkeep and
    data entry, again on mainframes as they were the industry
    standard. That program grew over the years and by the early
    90's we had approximately 32 programs operating, and the
    training had shifted to PC's, which are now the dominant
    computing tool in industry.
        More recently companies like Bell Atlantic, AT&T, EDS,
    Microsoft, Ameritech as well as volunteers in the small
    business community have worked with us to continue our work to
    train entrants for the information technology work force.
        Our current vision is to build 115 state of the art
    technology education and access centers across our footprint of
    local Urban League affiliates. Also known as digital campuses,
    we expect each center to train approximately 600 entry level
    workers per year. Finally, we produce a number of books and
    other writings. Some of you may recall that we sent you a copy
    of the proceedings from your Urban Technology Summit and a copy
    of the book we developed with the Benton Foundation called
    Losing Ground Bit by Bit. The information went to your offices
    a few weeks ago. We do these writings and hold other forums as
    part of our public service to help policy makers and
    practitioners to make appropriate program and policy
    connections.
        You have heard Mr. Irving and others talk about the
    specifics of the digital divide. I want to hone in on some of
    the implications that arise when there is uneven distribution
    of information technology resources. Several areas are
    impacted. I will focus on jobs, education and opportunity. With
    respect to jobs, advances in information and communications
    technologies are driving our information economy. We have heard
    this. Some experts estimate that information technology jobs
    pay as much as 78 percent more than jobs in other industries.
        However, less than 10 percent of the information technology
    work force is made up of women and minorities. Interestingly,
    while two-thirds of all core IT workers have a Bachelor's
    Degree, 26 percent have less than four years of college and 6
    percent have only a high school diploma or less.
        If the digital divide is not bridged the
    underrepresentation of minorities in the IT work force will
    proliferate and contribute to the further erosion of inner
    cities; e.g., the outflow of work to suburbs, closing bank
    branches, and falling home ownership.
        With respect to education, while programs like the e-rate
    have been critically important for getting Internet access into
    schools and libraries in the aggregate, recent studies show
    that only 16 percent of schools in low income areas are
    actually connected to the Internet. In contrast, 80 percent of
    schools in more affluent areas have Internet connections.
    Further, most libraries do not have the available staff, space
    or instructor know-how to teach marketable information
    technology skills. These factors will combine to jeopardize the
    achievement and competitiveness of children in low income
    communities, leaving them and their parents relegated to a low
    wage and low skill economy.
        Finally, with respect to opportunity, infrastructure
    disinvestments characterize low income communities.
    Accordingly, businesses in these communities must pay a premium
    for services and they are not able to compete with
    entrepreneurs in saturated infrastructure areas in the central
    business district and emerging fringe development areas.
    Resulting savings based on location away from low income areas
    can run as high as 30 percent. These inequities will result in
    fewer minority owned IT ventures and fewer small business
    generated opportunities in these communities.
        The National Urban League plans to work with industry and
    government to build 115 state of the art digital campus centers
    by the year 2006. We believe that this substantial investment
    in low income communities is necessary as part of the emerging
    technical training infrastructure of America. At full operation
    we expect our technology training centers to produce 68,400
    newentry level IT workers per year.
        We are currently at 65 centers across the country. National
    efforts like the Department of Commerce's TIIAP program have
    done a great deal to leverage government and private sector
    resources for local training projects. The National Urban
    League was the beneficiary of a 1997 TIIAP grant. That grant
    combined with a generous investment from the Bell Atlantic
    Foundation helped the League to pilot our technology and
    education access center model in four U.S. Cities. These
    centers served over 7,000 adults and youth in their first 14
    months of operation.
        Most recently we received grants from the Ameritech
    Foundation and AT&T to develop eight additional digital campus
    technology education and access centers. Each of these centers
    will have 30 to 42 PCs, a network, Internet access, on-site
    training, 24-hour toll free call support and access to 50
    Internet based courses for training and industry standard
    applications and career development. We have tied our work in
    this area squarely to work force development and academic
    achievement. The computer centers will be safe places for
    children and caring adults to use computers for work force
    development and academic enrichment. In each city that we bring
    these technology projects, our local affiliates have created
    collaborations with industry, government, academic institutions
    and other community based organizations. These local
    partnerships serve to expand the reach of a given project and
    the probability of their long term success and survival.
    Government resources provide incentives for these community
    investments.
        For example, our Los Angeles technology center in 1997 they
    trained 1,400 workers. Those workers earned $31 million and
    paid $2.1 million in taxes. We anticipate similar returns on
    investment in the other cities where we begin these projects.
        In summary, public-private partnerships to build community
    technology centers can make a significant impact on the digital
    divide. Practitioners will need reliable pools of resources
    from government and industry. Programs will also need resources
    for evaluation and assistance in disseminating findings. Last,
    organizations with IT know-how should be encouraged to use
    their convening power and influence to compel other
    stakeholders to invest in developing an inclusive IT work force
    and for preparing our children to succeed in the 21st century.
        Thank you.
        [Mr. Fulton's statement may be found in the appendix.]
        Mr. DeMint [presiding]. Thank you, Mr. Fulton. Mr.
    Robinson.

      STATEMENT OF TIM ROBINSON, LEGISLATIVE ATTORNEY, AMERITECH
                                 CORP.

        Mr. Robinson. Good afternoon. Mr. Chairman and esteemed
    members of this Subcommittee, I want to thank you for inviting
    me here today to talk about the digital divide which is not
    getting better, but is getting worse. I would like to tell you
    what Ameritech has done to combat that divide and what Congress
    can do to help small business and minorities in particular gain
    equal footing with larger businesses and nonminorities.
        At Ameritech we are actually trying in conjunction with our
    community based organizations to satisfy the exploding demand
    for information resources and services. Just two weeks ago we
    announced that we would provide financial assistance in the
    form of a $350,000 grant to help in establishing five community
    technology centers. These centers, which are to be known as
    Ameritech digital campuses, will be located in central cities--
    --
        Mr. DeMint. Sorry to interrupt but I need to ask you, and
    everyone on this second panel, to summarize to some degree. We
    will include your full statements in the record, but for now,
    if you could just touch upon your major points that would be
    helpful. I don't want to cut you short, and if you need to read
    through the whole thing, certainly feel free to do so, but I
    want Members to be able to hear from the entire panel. So thank
    you.
        Mr. Robinson. Thank you. I will be mindful of that. In
    inner cities, where a disproportionate number of black and
    Hispanic Americans live, recent studies show that retail buying
    power amounts to $100 billion a year. And although blacks
    comprise nearly 13 percent and Hispanics comprise 10 percent of
    the population they respectively own less than 4 percent and 6
    percent of all businesses. These numbers demonstrate there is
    considerable room for growth in the formation of minority
    businesses. Ameritech believes it can tap into that growth
    while also providing some of the tools and information
    resources to spark that growth.
        More can be done to turn the digital divide into a digital
    dawn of opportunities for underserved groups. And we can help
    in creating some of those solutions. That is why Ameritech
    petitioned the Federal Communications Commission for authority
    to provide data services to its customers across arbitrarily
    defined geographic boundaries known as LATAs. According to the
    FCC's rules, Ameritech and other RBOCs cannot transport voice
    or data services from a user in one LATA to a user in another
    LATA. This prohibition which the FCC has interpreted as
    applying equally to voice and data, is excessively broad in
    scope and has hindered our ability to offer appealing and
    useful data service packages to our customers.
        For example, we cannot carry data from a low income or
    minority customer in Chicago who might want to register
    electronically for an online course 150 miles away at the
    University of Illinois in Champaign-Urbana. Nor can we carry
    data across our networks for a retail goods firm that needs to
    download inventory data from its suburban warehouse to its
    urban retail outlets so long as those two facilities are
    located in different LATAs. The perverse result is that a
    capable communications company like Ameritech is needlessly
    shut out of the burgeoning data market denying customers
    another viable choice among service providers.
        Congressmen Billy Tauzin and John Dingell have introduced
    H.R. 2420 and Congressmen Bob Goodlatte and Rick Boucher have
    introduced others--H.R. 1685 and H.R. 1686--that would wisely
    eliminate this restrictive prohibition, which only serves to
    impede growth and availability of high speed Internet access.
    We would ask that you consider supporting these bills because
    they are good for our country's economic health, our
    businesses, and our employees.
        Thank you for the opportunity to testify before this
    Subcommittee, and I look forward to addressing any questions
    you might have.
        [Mr. Robinson's statement may be found in the appendix.]
        Mr. DeMint. Thank you, Mr. Robinson.
        And other members, the chairman will return in a moment and
    I will leave to vote and we will continue the testimony. So if
    you need to leave to vote, please return for the questioning.
    So again thank you, Mr. Robinson.
        Mr. Krumholtz.

       STATEMENT OF JACK KRUMHOLTZ, DIRECTOR, FEDERAL GOVERNMENT
                        AFFAIRS, MICROSOFT CORP.

        Mr. Krumholtz. Thank you, Mr. Chairman, Congresswoman
    Millender-McDonald and members of the Subcommittee. I would
    like to commend the Subcommittee and the chairman for holding
    this hearing on what we too see as a critical issue. I would
    like to take what time I have this afternoon to comment briefly
    on Microsoft's approach in this issue and discuss some of the
    lessons we have learned from our efforts. Our approach is to
    start small with pilot projects, form partnerships with
    interested parties on both the local and national level,
    evaluate what works and what doesn't and expend our efforts and
    programs based on what we have learned.
        As a Nation we are reaching a new and exciting stage in the
    technology revolution where computers are easier to use and
    less expensive to manufacture and own. New devices providing
    many of the capabilities we now expect from a personal
    computer, including connectivity to the wealth of information
    and services on the Internet, are being introduced at a wide
    range of prices, yet despite the advances made in these lower
    cost devices and the increasing affordability of information
    technology generally, we continue to face the challenge of
    ensuring that all Americans have access to the Internet and the
    opportunities it affords.
        Microsoft's vision of a computer in every home would be
    incomplete without the vision of access to technology for all
    Americans in the Nation. As we pursued this vision we have
    learned that there are no simple solutions and that a
    successful effort to close the digital divide will require
    partnerships between the public and private sectors, between
    businesses, government and nonprofit organizations. I would
    like to describe briefly how we have pursued this approach with
    two specific initiatives.
        In 1996 we launched a pilot program called Libraries Online
    in the public libraries across the country. Partnering with the
    American Library Association and the local library officials,
    the objective of Libraries Online was to provide access to
    information technology and the resources of the Internet to
    some of the most disadvantaged and underserved communities in
    the U.S. Because libraries are a vital informational resource
    for communities we believed that this initiative would reach
    most members of the community from school age children to
    senior citizens.
        We learned a great deal from this initial pilot program
    that year. Perhaps most importantly we learned that training
    librarians to use and maintain the technology is as important
    as providing the funding and donating the technology itself.
    With that lesson in mind we began a one-week training program
    for participating librarians and provided ongoing technical
    support. When it became apparent that the model used in
    Libraries Online was a success, the Gates Learning Foundation
    established by our Chairman Bill Gates and his wife Melinda
    expanded the program to library systems across the Nation. The
    ultimate goal is to wire every public library in the country.
    Microsoft now partners with the foundation by providing
    software to the participating libraries.
        Briefly, the second example is Microsoft's working
    connections program. Working connections is a 5-year $9 million
    program administered to the American Association of Community
    Colleges. We believe the community colleges play a critical
    role in providing education and work force training to
    disadvantaged and underserved communities. Visiting several of
    these institutions, we concluded that community colleges have
    both the capacity and the interest to prepare their students to
    enter the information technology work force.
        Mr. DeMint. Mr. Krumholtz, I apologize but I have to go
    vote. I thought the Chairman would be back. I will just adjourn
    the Committee momentarily. I am sure he is on his way. I
    apologize to all of you for jumping up and down. Let's take a
    brief recess. I am sure Chairman Pitts will be right back.
        [Brief recess.]
        Chairman Pitts. All right. We will reconvene the hearing at
    this time and ask Mr. Krumholtz if he will continue where he
    left off.
        Mr. Krumholtz. Thank you, Mr. Chairman. Just before the
    recess, I was just mentioning briefly a program we have with
    community colleges called Working Connections, administered by
    the American Association of Community Colleges. We established
    Working Connections to encourage the development of innovative
    information technology programs. Its goal is to train workers
    to succeed in IT careers and to open the IT world up to
    minorities and women where jobs and opportunities are plentiful
    when the work force supply is not. Grants to community colleges
    from Microsoft fund an IT curriculum, faculty training and
    outreach to local community groups and industries.
        As we move forward with these and other efforts, we
    continue to learn more about what works and where to best
    invest our resources. We have learned that training people to
    use technology is just as important as providing them access.
    We have also learned that closing the digital divide will take
    a coordinated effort; no single party or entity can do it all.
    The best programs must include partnerships between the public
    sector, private sector, and nonprofit entities.
        We look forward to continuing our collaboration with
    educators, legislators and members of the business community to
    bridge this gap and bring technology to everyone, everywhere.
    Thank you again for the opportunity to testify. I would be
    happy to respond to any questions.
        [Mr. Krumholtz' statement may be found in the appendix.]
        Chairman Pitts. Thank you. Mr. Coleman.

       STATEMENT OF THOMAS COLEMAN, PRESIDENT AND CEO, TECHNICAL
                        CAREERS INSTITUTE, INC.

        Mr. Coleman. Thank you, Mr. Chairman, members of the
    Subcommittee. My name is Tom Coleman. I am president of the
    Technical Career Institute, a two-year degree granting
    proprietary school located in Manhattan. It is a pleasure to be
    here today to discuss the digital divide and to share our
    experiences in providing access to technology to the Nation's
    most economically disadvantaged.
        At TCI we serve more than 3,500 students in programs
    designed to prepare a well-trained work force in various fields
    of technology. 75 percent of our students are African American
    and Hispanic; 55 percent of our students come from families
    with an average annual income of less than $12,000. Some are
    new Americans requiring instruction in English as a second
    language. Many are products of the New York City Public School
    System. And suffice it to say that remedial training is a
    critical component in preparing our students for today's highly
    technical work place.
        Despite all these challenges we at TCI were recently
    identified by Community College Week as ranking first
    nationally in the production of two-year engineering related
    associate degrees. We are very proud of the accomplishments of
    our students, particularly in view of the extraordinary
    challenges many of them must overcome to receive their degrees.
        At TCI we have been educating the economically and socially
    disadvantaged inner city student for a long time and we
    continue to use new and varied approaches to raise the
    academic, technical, and employability skills of our students.
        For example, in 1988 we initiated a program to introduce
    computer technology training to community and faith-based
    organizations in the Flatbush section of Brooklyn. Working with
    the clergy and community, we invited women who were returning
    to the work place after raising a family, as well as those
    attempting to move there from welfare to work, to come to our
    campus for free computer training. In the 11 years the program
    has been in effect, 1,300 women have participated. Some have
    left the program for good jobs that were previously unavailable
    to them. Approximately 20 percent have enrolled at TCI and many
    have enrolled in other post secondary institutions.
        Our personalized student success program assists students
    in improving their basic academic skills and essential work
    place competencies. New students have the opportunity to
    participate in a boot camp experience prior to attending
    classes at the college. This intensive program emphasizes the
    math skills required for academic success.
        While this boot camp approach has increased the chances for
    success of many of our students, we quickly came to realize it
    takes more than a couple of weeks to overcome many of our
    students' lifelong underexposure to technology. Our technology-
    based after school initiative introduces computer technology to
    11th and 12th graders enrolled in New York City Public Schools.
        We have also learned that community service is a strong
    self-esteem booster which assists our students in developing
    the tools for success in the work place. In a program our
    students have dubbed Dare to Dream, old computers are
    contributed by corporate donors and are refurbished by our
    students. We have received and donated more than 300 computers
    to organizations such as the New York Public Schools, community
    facilities for the handicapped, AIDS residential facilities,
    community based organizations and individuals with
    disabilities.
        Another recent initiative which has provided me with a
    great amount of personal satisfaction has been our Women in
    Technology Program. The program assists women entering into
    careers in technology by providing them with mentoring to
    prepare them to succeed in nontraditional occupations. Since
    the inception of the program, the percentage of women enrolled
    in our technology programs has increased by almost 20 percent.
        In conclusion, I am here today to tell you that the digital
    divide is real, and that it is getting wider every day. But for
    the programs I have spoken to you about this afternoon, many of
    TCI's students and graduates would have fallen through the
    divide already. If I were to offer one observation based on my
    experiences of the past few years, it would be this: If we are
    to succeed in closing the technology gap for future
    generations, we must be willing to blur the distinctions among
    business, academia, and community.
        Institutions such as TCI cannot afford to isolate our
    students and faculty in ivory towers of academic thought. We
    must reach out to the communities where our students and
    prospective students live, to lay a solid groundwork in math
    and technology at the high school level and before. We must
    reach out to our local businesses, where our graduates will
    work, to be constantly sure that our skills we are providing
    are the skills prospective employers need and want. And we must
    reach into the hearts and minds of the students we serve to
    give them the skills, the confidence, and the opportunity to
    succeed in our Nation's increasing digital economy.
        I want to thank the chairman and members of the
    Subcommittee for your interest in this important issue and for
    the opportunity to appear today before you. I would be happy to
    answer any questions.
        [Mr. Coleman's statement may be found in the appendix.]
        Chairman Pitts. Thank you very much. Mr. Coleman, let's
    start with you. You mentioned that 55 percent of TCI students
    come from families with an average annual income of less than
    $12,000. What is the average salary that TCI graduates can
    expect when they enter the technical career with their
    associates degree?
        Mr. Coleman. It varies on the program, whether it is an
    office technology program or whether it is a more highly
    skilled program. But if we talk to the highly skilled programs
    typically we are seeing salaries that begin in the late 20's to
    the mid-30's in that area and we have seen some as high as 45
    but that is a rarity.
        Chairman Pitts. Do most of the TCI students receiving two-
    year degrees go immediately into the work force or do some
    pursue more advanced degrees?
        Mr. Coleman. Most of them go directly into the work force.
    Some later on may attempt to go for the four-year program.
        Chairman Pitts. Do many of your graduates have
    entrepreneurial aspirations to your knowledge? Do some of them
    own small businesses or do most grads take jobs in the private
    sector and are they going to large telecommunication companies
    or are they apt to work in smaller enterprises within their
    communities?
        Mr. Coleman. About 60 percent of our students end up with
    small employers; that is, the employers of less than 1 or 200
    employees. As far as the entrepreneurial aspect of it goes, I
    only have some anecdotal evidence and just last Thursday I met
    a student who I didn't have time to spend with, spend any time
    with him, but he told me that he has just developed his own web
    page and he has got a little business selling some kind of
    health products. But I hope to talk to him more about what he
    is doing. But it is that kind of thing that is really great.
        Chairman Pitts. You suggest integrated training initiatives
    between schools and businesses. Is TCI currently taking steps
    to create such training initiatives?
        Mr. Coleman. Yes, right now we are working within one
    county a community of churches to donate a number of computers
    to them so they can establish a center there, and we would like
    to work with others.
        Chairman Pitts. You mentioned after school programs for
    high school students. Do you track the scholastic improvement
    of those participants; for instance, what percentage of those
    participants go into developing careers in technology?
        Mr. Coleman. I can't answer that because we just started
    this program in late June where we offer two programs. One is
    introduction to computers and the other is visual basic. When
    the fall comes along we will continue those as an after school
    program. We will add to that remedial math, which is really
    needed by the New York City school students but we do plan to
    track them. I would be happy at a later date to brief you.
        Chairman Pitts. Can you discuss in more detail TCI's
    program for women preparing to re-enter the workforce. What
    were some of the difficulties you encountered, what were some
    of the successes?
        Mr. Coleman. Day care is a problem for the women. It is a
    huge problem for them. And the successes that we have had, we
    have had women who have just worked in the $5 an hour jobs for
    a great part of their life, they have been on public
    assistance, and now they get some education and they find
    themselves making $30,000 and they feel so much different and
    they are able to support themselves and their families.
        Chairman Pitts. I think also you mentioned service learning
    projects where students assist those learning English or
    rebuilding computers. How does the volunteering component
    enhancethe student's experience? Have you found that a very
    positive experience?
        Mr. Coleman. This is our Dare to Dream project, which was
    originally started as a project to help students improve their
    English. Some of--it has grown over the years. It has become a
    number of things. One of the things the students do is they go
    into the schools and they help tutor in the community. This is
    good for the students. It has built their self-esteem. It also
    improves their skills. It has been a very positive experience.
    And those students as a group do better than students who are
    not involved in community service.
        Chairman Pitts. Very good. Thank you.
        Mr. Krumholtz, in light of the results of the NTIA study
    what do you see as the future of the Information Age? Will the
    divide continue to get wider? And what can we do to make sure
    it does not expand?
        Mr. Krumholtz. Well, I am pretty optimistic about the
    future of the Information Age. In fact I think it is telling
    that the name of the Subcommittee is the Empowerment
    Subcommittee because I think one of the great things about the
    benefits of the Internet and information technology is how
    empowering it is to so many individuals, businesses of all
    sizes. So, I am very bullish on it.
        Are there things that need to be done to make sure we
    address the digital divide? Absolutely. As I pointed out in my
    remarks, I think it is important that there be, you know, that
    we look for and encourage partnerships both between the private
    and public sector working with nonprofits, like the Urban
    League for instance, to really address some of these issues. As
    I think was suggested earlier by Mr. Irving, there is no silver
    bullet to address this challenge. And it really is going to
    take some work at the local level and working with people that
    have the expertise as we did in our libraries project, working
    with the American Libraries Association.
        At Microsoft we went into this knowing very little about
    libraries, so we brought in experts who could tell us what were
    the hurdles going to be in working with libraries--where were
    there areas where we really could make a difference.
    Unfortunately, there is not a single answer but I think that
    there is a lot of opportunity to help address the problem.
        Chairman Pitts. Now, regarding your partnerships and trying
    to reach underserved groups, how does Microsoft decide where to
    invest its time, its money, its resources?
        Mr. Krumholtz. We would like to think that we are very
    thoughtful and strategic in doing that. We spend a lot of time
    looking at different opportunities. As you might imagine, a
    company or Microsoft or Ameritech or many other large
    corporations, there is no lack of opportunities to try to
    engage and participate in efforts of this nature. So we really
    spend a lot of time.
        I think probably the thing that we try to do the most is we
    try to start small. In all of our major national efforts and
    initiatives we have started them as pilot projects. And we have
    really gone back and studied what worked, what didn't work.
    Again in the libraries initiative we actually had an
    independent advisory board of librarians and other experts in
    that community to go out and look at the individual projects in
    those 9 pilot sites and report back and give us their
    recommendations on what was working well and what may be needed
    to be redirected.
        Chairman Pitts. Did you come up with the most successful
    method for providing instruction with libraries?
        Mr. Krumholtz. Well, I think training is absolutely key.
    And we learned there--perhaps it is self-evident, but we
    learned maybe the hard way that you can't go in and just expect
    that the individuals on the ground, the librarians, are going
    to necessarily have the skills they need to use the technology,
    maintain the technology. Because maintaining a computer, as we
    all know--we all have our computers crash unfortunately from
    time to time--takes a certain amount of training and expertise,
    and I think that realizing that and working to address that was
    one of the key findings.
        Chairman Pitts. You mentioned that Microsoft participates
    in a program called Working Connections in conjunction with
    community colleges. In your opinion, are two-year degrees from
    community colleges going to be instrumental in preparing
    workers for the IT field?
        Mr. Krumholtz. We think that the community colleges play an
    absolutely critical role in preparing our work force, not only
    retraining workers but also preparing younger kids that are
    coming out of high school to enter the IT work force. And a
    number of witnesses today have discussed the real challenge
    that IT companies have--and not just IT companies, really
    companies across the board who have IT needs and requirements
    in filling those jobs. I think listening to Mr. Coleman's
    testimony about some of the people that they had trained, you
    know not all of those people are necessarily going to end up
    being a programmer or a developer of tools that others may use
    to develop software programs, but there is a wealth of
    opportunity for those individuals to enter all levels of the IT
    work force.
        Chairman Pitts. Thank you. Mr. Robinson, Ameritech has
    forged strong partnerships with community groups like National
    Urban League. What incentives do private sector firms have to
    invest in underserved areas?
        Mr. Robinson. I think firms like Ameritech have a
    tremendous number of incentives to invest in areas that have
    been historically underserved. If we look--if we project out 20
    years from now, 60 percent of the jobs in this work force will
    require some level of IT literacy, information technology
    literacy. Today only 20 percent of the work force possesses
    those skills. So it is very important that we invest in our
    communities and invest in those people that we serve. Because
    we will be looking to them in the future not only as consumers
    of our products and services but also as employable talent.
        Chairman Pitts. In light of the results of your digital
    divide study, what are some solutions in addition to community
    technology centers that will help bridge the gap?
        Mr. Robinson. One of the benefits of going second is that
    you can hear the first panel. The answers given by Maureen
    Lewis and I believe Mr. Miller on the first panel with regard
    to overregulation were right on target. Too much regulation can
    retard growth by stripping away incentives that are already in
    place to bring more information and data services more quickly
    to small business and low income households.
        Businesses do need and require some incentives to move into
    areas where they might not be able to otherwise recoup their
    investment. And to that point I commend Congresswoman Tubbs
    Jones for thinking ``out of the box.'' I think we need to have
    some creative solutions, some incentives in place that would
    encourage firms like ourselves to go in and deploy broadband
    access more quickly than we might otherwise.
        Chairman Pitts. Thank you. Mr. Fulton, the Urban League
    certainly plans for a large network of digital campuses
    nationwide. What criteria do you use when deciding which cities
    to establish community technology centers in? And do you
    typically rent space; do you use existing community facilities,
    do you build new structures? If would you explain that.
        Mr. Fulton. The type of space we use varies. In the 114
    communities across the country where we have Urban League
    affiliates, half of them own their facilities, their building,
    and other resources, and that facility might choose to use
    existing space. In other cases we will rent out anoffice if the
    owned space isn't suitable. Some of the criteria we use for selecting
    cities are a demonstrated capability to deliver on the expected results
    of the centers we want to create. Do they have resources for staff? Do
    they have community support? Do they have interest from the local
    government? Those kind of things we find come together to make for the
    most successful outcomes.
        Chairman Pitts. Now, you estimated the cost of a community
    technology center with 20 computers I think at $70,000 to
    $100,000, including staff, office space, other overhead.
        Mr. Fulton. That doesn't include the staff and office
    space. The staff and office space and other factors could
    ultimately make that number increase.
        Chairman Pitts. With the emphasis on volunteerism here,
    could the cost be reduced by using industry volunteers to
    supplement permanent staff?
        Mr. Fulton. Volunteers help. We have aligned ourselves with
    several affinity groups in the information technology industry
    to help us with that. The issue becomes accountability. We have
    aligned our technology centers with work force development and
    achievement. At the end of the day we want to be able to
    demonstrate that we have trained a certain number of workers
    who are capable and ready to enter the IT work force. When you
    have volunteers doing the training, in a structured program
    that can become difficult as a volunteer may give a couple of
    hours but they may not be able to give a full day or a series
    of days over a 10-week period. So we think that hired
    professionals are an important element to the most successful
    training programs.
        Chairman Pitts. You mentioned evaluation is an important
    aspect to the process of running a successful program. Does the
    Urban League keep track of how many community members are using
    the centers? If so, have you found that communities make an
    immediate use of the digital campuses or does it take some time
    for them to embrace the opportunities offered by the centers?
        Mr. Fulton. We do track. Initially a lot of the tracking
    happened locally. When I came into place in 1996 the objective
    has been to standardize some of that tracking. So moving
    forward, we will track in a national way the activity that goes
    on. What we find is that the community tends to embrace the
    center. They want to come in and find out what kind of programs
    are available for the adults and children. So what we do is we
    have structured programs and unstructured programs. The
    structured programs focus on training for entry level
    information technology work force jobs. The nonstructured
    programs focus on academic enrichment and allow adults and
    young people to enter into an environment where there are
    resources and there is a professional, but where they can
    explore the technology and conduct job searches as well as
    other things and on a drop-in basis.
        Chairman Pitts. Thank you. Miss Millender-McDonald.
        Ms. Millender-McDonald. Thank you, Mr. Chairman. And I
    would like to thank this panel and apologize for having to step
    away but in the people's House you have to do the people's
    business and that's oftimes having to leave committees. I
    commend you because it seems like the common thread with this
    panel, especially of corporate heads, is that of partnership.
    And it is clearly impossible to touch any of these disconnects
    without a partnership, partnership between Federal, state local
    and private firms.
        I just wanted to make clear though that the government does
    play a role. I am also interested in, as my colleague on the
    other side said, that we must not have a lot of fractionalizing
    with programs, programs that are just feel good programs, but
    programs that would really go to the heart of the issue. And if
    it does mean any types of tax incentives, we would be happy to
    look atthat to ensure that we continue to expand these
    partnerships. I am not adverse to tax incentives. I did them in the
    state legislature and I certainly will not have a problem with doing
    them here. But what we want to do is expand so that you can reach those
    who have not had the opportunity of getting online with these various
    digital campus centers. I am very impressed with that Mr. Fulton and
    Mr. Krumholtz. Is that the way----
        Mr. Krumholtz. Krumholtz.
        Ms. Millender-McDonald. Krumholtz. Your community college--
    I have often said that the community colleges have not been
    tapped in the way that they should and we must continue to tap
    them on a larger basis promoting the types of community working
    connections that you have with your program.
        Mr. Robinson, I am impressed and also encouraged by what
    Ameritech has done with $350,000, opening up at least 5
    centers. We would like to work with you, for you, to expand
    those to more and see what we can do to help you expand to more
    centers.
        Mr. Fulton, when you do volunteers, I am wondering if we
    can pull from the pool of the companies that do partnership
    with you to get some of their people to come and volunteer
    because they have a stake in this as well, as well as your
    former grads to return back to utilize their expertise. One is
    a Jack Priester. I am told that he is doing quite well in this
    area in Virginia, having finished the LA Urban League and now
    has become I think a Washington's Businessman of the Year. That
    validates what can be done when we do do partnerships with the
    corporate sector, with the public sector and with community
    based organizations such as the Urban League. So I am
    encouraged today.
        I will go away from here having said that we have formed a
    type of partnership now with all of you because I will be
    calling on you to form partnerships with me. You are not going
    to go too far before I call you. Because I want you to now help
    me to help those young folks and even the ones who are
    returning, those old folks like I am, to bridge that gap, that
    we must do to make sure that this digital divide becomes more
    narrow.
        Thank you, Mr. Chairman, again for this outstanding
    hearing.
        Chairman Pitts. Thank you. I apologize for going over time.
    You have been very patient.
        The hearing has been very informative, excellent testimony
    on a very important issue, and the Committee thanks you very
    much for coming today. So at this time, the hearing is
    adjourned.
        We will keep the record open for 5 legislative days should
    anyone have any additional information to include.
        [Whereupon, at 5:07 p.m., the Subcommittee was adjourned.]

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