[Senate Hearing 111-1168]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 111-1168
 
                  CONNECTING MAIN STREET TO THE WORLD: 
             SMALL BUSINESS PERSPECTIVES ON INTERNET ACCESS 

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

                               ROUNDTABLE

                               BEFORE THE

            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 13, 2010

                               __________

    Printed for the Committee on Small Business and Entrepreneurship

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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED ELEVENTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                OLYMPIA J. SNOWE, Maine, Ranking Member
JOHN F. KERRY, Massachusetts         CHRISTOPHER S. BOND, Missouri
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     JOHN THUNE, South Dakota
JOSEPH I. LIEBERMAN, Connecticut     MICHAEL B. ENZI, Wyoming
MARIA CANTWELL, Washington           JOHNNY ISAKSON, Georgia
EVAN BAYH, Indiana                   ROGER WICKER, Mississippi
MARK L. PRYOR, Arkansas              JAMES E. RISCH, Idaho
BENJAMIN L. CARDIN, Maryland
JEANNE SHAHEEN, New Hampshire
KAY HAGAN, North Carolina
           Donald R. Cravins, Jr., Democratic Staff Director
              Wallace K. Hsueh, Republican Staff Director



                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Landrieu, Hon. Mary L., Chair, and a U.S. Senator from Louisiana.     1
Hagan, Hon. Kay, a U.S. Senator from North Carolina..............     7

                               Witnesses

Reece, Adam, Republican Staff Member for Senator Olympia Snowe...     6
Benton, Angela, Founder and CEO, Black Web Media, LLC............     6
Bundridge, Roger, General Manager, Northwest Missouri Cellular...     6
Chapman, Chris, Owner, Snow Sports Deals.........................     6
Feldman, Lowell, CEO and Founder, WORLDCALL INC..................     6
Wood, Matt, Partner/Operator, George Wood Farms, Inc.............     6
Vaughan, Jesse, Director of Information Technology, GigaTrust....     6
Taylor, Bruce, CEO, Police Central...............................     6
Rowe, C. E. ``Tee,'' President, Association of Small Business 
  Development Centers............................................     7
Morton, Marcus, President and Co-Founder, Network Foundation 
  Technologies (NFT) TV..........................................     7
Landsdowne, Deborah, President and CEO, Ekohs....................     7
Miller, Cheryl, Staff Member, Senate Committee on Small Business 
  and Entrepreneurship...........................................     7
Cravins, Donald, Staff Director for the Senate Small Business 
  Committee......................................................     7

          Alphabetical Listing and Appendix Material Submitted

Benton, Angela
    Testimony....................................................     6
Bundridge, Roger
    Testimony....................................................     6
Chapman, Chris
    Testimony....................................................     6
Cravins, Donald
    Testimony....................................................     7
Feldman, Lowell
    Testimony....................................................     6
Hagan, Hon. Kay
    Testimony....................................................     7
Landrieu, Hon. Mary L.
    Testimony....................................................     1
    Prepared statement...........................................     3
Landsdowne, Deborah
    Testimony....................................................     7
Miller, Cheryl
    Testimony....................................................     7
Morton, Marcus
    Testimony....................................................     7
Reece, Adam
    Testimony....................................................     6
Rowe, C. E. ``Tee''
    Testimony....................................................     7
Taylor. Bruce
    Testimony....................................................     6
Vaughan, Jesse
    Testimony....................................................     6
Wood, Matt
    Testimony....................................................     6


                  CONNECTING MAIN STREET TO THE WORLD:
             SMALL BUSINESS PERSPECTIVES ON INTERNET ACCESS

                              ----------                              


                         THURSDAY, MAY 13, 2010

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:31 a.m., in 
Room SR-428A, Russell Senate Office Building, Hon. Mary L. 
Landrieu (chair of the committee) presiding.
    Present: Senators Landrieu and Hagan.

 OPENING STATEMENT OF HON. MARY L. LANDRIEU, CHAIR, AND A U.S. 
                     SENATOR FROM LOUISIANA

    Chair Landrieu. I would like to go ahead and get started 
with this roundtable, ``Connecting Main Street to the World: 
Small Business Perspectives on Broadband Internet Access,'' and 
I thank all of you for joining with me and with my staff today. 
It is an honor to have you here with the Small Business 
Committee. Some of you are frequent visitors to this office and 
have been on other panels.
    We have just undergone a major renovation. I hope you feel 
comfortable, and it is now one of the prettiest, although small 
but pretty, rooms in the Russell Building, but comfortable 
enough for us this morning, and we are thrilled to have you 
here.
    The purpose of the roundtable is to continue our discussion 
from a hearing that our Committee actually conducted recently 
on expanding broadband Internet access to small business 
customers in the country. During that hearing, we heard from 
Federal and local officials about opportunities that are 
available for broadband Internet expansion. During this 
roundtable, we want to hear directly from you, from small 
businesses, business owners who stand to benefit from increased 
access and adoption. As you all know, over 99 percent of all 
businesses are small businesses, and they employ almost half of 
the American workforce and produce half of the U.S. GDP.
    Because small businesses have long represented the backbone 
of the U.S. economy, we need to ensure that they have access to 
the right tools so they can continue to be successful, and I 
would underscore, particularly at this time trying to build out 
of the recession that we find ourselves in, anything that this 
Congress can do at any committee level to empower small 
business to be the true engines of economic growth that they 
normally are, but we really need them to be at this time to 
help lead our country forward. We believe that the 
opportunities in broadband are significant.
    Broadband Internet service is the ability to open doors for 
small business that have been historically shut or open doors, 
I would say, much wider, and windows, too, for the way that 
small businesses can operate in far-flung places.
    Regardless of the type of industry a small business is 
involved in, broadband can transform their operations through 
increased efficiency and lowered operating costs. Broadband can 
help some small businesses function like big businesses and can 
also increase their geographic presence by moving their 
operations online.
    My staff and I are interested in gathering data on what 
type of broadband services are available to small business 
customers today, at what speeds, and at what price. Access is 
the first step, making sure that infrastructure is in place. 
Speed is also a major factor, and, of course, affordability can 
be another barrier to adoption that I hope we will address 
today.
    According to the FCC, 95 percent of small business firms 
have access to broadband, but 80 percent of them have only 
lower-grade connection speeds. I was actually shocked in the 
hearing to learn myself in terms of speed--and I think I have 
it here. The price per month just--and you all may already know 
this, but it is very interesting, international statistics. The 
price per broadband per month in Sweden is $10.79 average; in 
Switzerland, it is $12.53; in the U.S., it is $15.93. Now, 
there are countries like Ireland that are more expensive on 
average, New Zealand and the Netherlands.
    But what is very interesting to me is the penetration of 
households in South Korea is 95 percent. The U.S. is 60 
percent. What is even more alarming in some ways is the 
megabites per second in Japan are 94 percent; France is 45 
percent; Sweden is 21 percent; New Zealand is 13 percent; and 
the U.S. is--not percent, but 9 megabites per second. So it is 
94 in Japan, 45 in France, 21 in Sweden, 13 megabites in New 
Zealand and 9 in the United States. Knowledge is power, speed 
is power and access is power. If we are in a race, which we 
are, with other countries, we need to pick up our pace, as far 
as I am concerned.
    I look forward to hearing your suggestions today to learn 
about what your companies need, what other companies that you 
represent are telling you, and now let me take a moment to 
explain the format.
    We have got a fairly large group, and we are going to go 
until 12 o'clock. What I am going to ask all of us to do is to 
introduce ourselves as we begin just by name and what brings 
you here today briefly, and I am going to start off the first 
round of questioning, and then I am going to turn it over to my 
very able assistant, Cheryl Miller, and Don Cravins, who is my 
Staff Director, to continue the discussion. Before I turn the 
panel over to Cheryl, I would just like to start maybe, Adam, 
with you introducing yourself, and we will just go around. And 
then when you want to ask a question--or answer a question, 
just place your placard up that way, and then we will recognize 
you. We do not have to raise hands, even though that is what we 
are tempted to do. We can just raise our placards.
    [The prepared statement of Chair Landrieu follows:]

    [GRAPHIC(S) NOT AVAIABLE IN TIFF FORMAT]
    
    Chair Landrieu. Adam.
    Mr. Reece. Thank you, Chair Landrieu. I am Adam Reece, and 
I work on the Republican staff for Ranking Member Snowe on the 
Small Business Committee.
    Ms. Benton. I am Angela Benton, and I am CEO of a company 
called Black Web Media, and we essentially are a new media 
company where we produce content and applications specifically 
for African Americans online.
    Mr. Bundridge. Roger Bundridge. I am the General Manager of 
Northwest Missouri Cellular. We are a cell phone provider in 
northwest Missouri. We provide service to about 12,000 rural 
customers. The demographics of our market, we have about 41,000 
people living in our area.
    Chair Landrieu. Thank you.
    Mr. Chapman. My name is Chris Chapman, owner of Snow Sport 
Deals, an online retailer. I sell direct to the consumer. 
Originally, I was a wholesaler, but with the Internet, I have 
now switched to direct sales.
    Chair Landrieu. And what kind of equipment or product?
    Mr. Chapman. Skis, snowboards, winter sports.
    Chair Landrieu. Skis and snowboards, winter sports. Great. 
And you have to speak into the mic and press the button. It 
should light up red and say ``Talk.''
    Mr. Feldman. My name is Lowell Feldman, and I am the CEO 
and founder of WORLDCALL INC., which has two different lines of 
business. One is we acquired spectrum in Auction 73, and we 
endeavored to build out some LTE networks in seven rural areas. 
The other is I have a long standing competitive LEC that is 
focused on new technology interconnection, including the 
ability to provide disaster recovery services using different 
types of new technology, which we are unable to do because of 
the regulatory environment right now.
    Chair Landrieu. Well, we could use that in Louisiana since 
we have more than our fair share of disasters, unfortunately, 
it seems. So see me later.
    Mr. Feldman. I will absolutely see you later. I am also a 
law professor at the University of Texas, and my students there 
have been working on some interesting ideas on some reform for 
the last 4 years.
    Chair Landrieu. Thank you, Lowell.
    Matt.
    Mr. Wood. I am Matt Wood. I am a third-generation potato 
farmer from North Carolina. We farm about 6,000 acres and have 
about 2,000 acres of round white potatoes. I am also a County 
Commissioner, and I am the Chair of our local community college 
board, so I have interest in this from all those perspectives.
    Mr. Vaughan. My name is Jesse Vaughan. I am the IT director 
for GigaTrust Corporation in Herndon, Virginia. We are an IT 
security company specializing in document and e-mail security. 
It is basically content at rest protection, so you can prevent 
people from copying, pasting, editing, e-mails in their reply 
and so forth.
    Mr. Taylor. My name is Bruce Taylor. I am an IBM retiree 
and now President and Chief Operating Officer of a company in 
Atlanta called Police Central. We do law enforcement software 
for police departments and sheriff's offices. We have a small 
company that is critically dependent in supporting 90 customers 
across the country on good broadband connections. Our customer 
base is also very interested in good mobile broadband for 
access to our solutions and for data sharing between law 
enforcement agencies.
    Mr. Rowe. Good morning, ma'am. I am ``Tee'' Rowe. I am the 
President of the Association of Small Business Development 
Centers. We are a nationwide network of over 1,000 delivery 
centers for one-on-one small business consulting, training, and 
outreach. We are proud partner with the SBA and this Committee.
    Chair Landrieu. Thank you, Tee.
    Mr. Morton. My name is Marcus Morton. I am the President 
and Co-Founder of Network Foundation Technologies, also known 
as NFT TV. We are live streaming broadcaster over the Internet 
that saves 60 to 70 percent of bandwidth cost over traditional 
CDN models, with our headquarters in Ruston, Louisiana, and a 
satellite office in Los Angeles. I very much appreciate the 
opportunity to be here.
    Chair Landrieu. Thank you, Marcus.
    Ms. Landsdowne. Good morning. My name is Deborah 
Landsdowne. I am the President and CEO of Ekohs. We are an 
international infrastructure rebuilding company. We have built 
networks in Iraq, Afghanistan, and Africa, so the importance to 
me is that I have employees all over the world.
    Chair Landrieu. Cheryl.
    Ms. Miller. Cheryl Miller. I am staff for the Senate Small 
Business Committee.
    Mr. Cravins. Donald Cravins, Staff Director for the Senate 
Small Business Committee. I work for Senator Landrieu.
    Chair Landrieu. I am very pleased to have one of our 
members join us this morning who has been showing some 
exceptional leadership in the area of rural business 
development and broadband development. Senator Hagan joins us, 
and I think you want to say something about one of your 
constituents here. Thank you, Senator.

OPENING STATEMENT OF HON. HAGAN, KAY, A U.S. SENATOR FROM NORTH 
                            CAROLINA

    Senator Hagan. Thank you, Chairman Landrieu.
    As we have discussed in this Committee, I think access to 
affordable broadband infrastructure is absolutely critical for 
our small businesses to remain competitive in the 21st century. 
It is essential that we continue to identify ways to improve 
that access throughout the Nation. I think this roundtable and 
all the expertise that each and every one of you has will shed 
a lot of light on this area.
    At our last hearing on the National Broadband Plan, I 
actually talked about Matt Wood and the difficulties you have 
encountered accessing the Internet. Mr. Wood operates a potato 
farm in Camden County where he grows potatoes for the Frito-Lay 
Potato Chip Company, and I hope I am not taking away exactly 
what you are going to be saying, but you can reiterate it 
again. During the growing season, Frito-Lay requires him to 
frequently access its online network to upload his harvest 
data, and because the broadband access is not available at his 
farm in Camden, he actually has to drive to his home in 
Elizabeth City, where he uses his own broadband connection to 
access the Frito-Lay system.
    So if you think about having to leave one place to go to 
another place just to be able connect, think of the time, 
energy, and resources that he wastes by just driving back and 
forth to input that data. So I am pleased to welcome Mr. Wood 
here to our Committee this morning. He has joined us to give 
all of us a firsthand account of the difficulty he experiences 
in accessing the Internet from his farm.
    As he also mentioned, in addition to his potato farm, he is 
a Pasquotank County Commissioner, and the Pasquotank County 
Government has shown a serious commitment to deploying 
broadband Internet so that small businesses can enhance their 
global competitiveness.
    Right now in North Carolina, we have a nonprofit, MCNC, 
that is a nonprofit broadband distributor, and that entity has 
applied for the second round of the BTOP funding. We already 
have matching funds that have come forward from the Golden LEAF 
Rural Broadband Initiative to the tune of about $24 million, 
which will allow MCNC to actually apply for the grant. So we 
are certainly hoping that North Carolina is the recipient of 
one of those so that we can get more broadband access. We have 
100 counties in North Carolina, and about 85 of them are in 
rural areas, and we desperately need more access to broadband.
    It is certainly my hope that Matt's perspective here will 
help us better engage in underserved communities and small 
businesses, and I just wanted to personally thank you, Matt, 
for joining us today. And I know everybody will be interested 
in what you have to offer.
    When you think about the fact that not only is he a County 
Commissioner but also Chairman of the community college there 
as well as your full-time endeavors, I thank you for all that 
you do for the State of North Carolina.
    And thank you, Madam Chairman.
    Chair Landrieu. Thank you, Senator Hagan. I am really 
looking forward to this hearing, and just to put this into 
perspective, when I became Chair of the Small Business 
Committee, I sat down with my staff and talked to some of the 
members of the Committee to try to focus on some of the 
priorities of my chairmanship, and there are three.
    One is to make the Small Business Administration the best 
it has ever been in terms of quality of individuals that serve, 
to their services they provide to small business. And that 
agency had been de-fanged in many ways or underfunded--not that 
we want fangs, but we wanted to be effective--in the past 
Administration. I wanted to make sure that the Small Business 
Administration here as part of our Federal system was as strong 
as it could be.
    In that, as you all are somewhat familiar with the SBA, we 
have and recognize that we can deliver those services to small 
businesses in America very effectively through our partnerships 
with banks, credit unions, other financial institutions, 
universities, small business administrations, nonprofit 
organizations, so my second priority is strengthening what we 
like to call the backbone or the bone structure of the SBA 
through our Small Business Development, and we are focused on 
that.
    The third priority is broadband--not that I am an expert on 
it, but I can most certainly as a leader appreciate disruptive 
new technology when I see it. And when I understand just 
broadly about what broadband, affordable and fast, can mean to 
small businesses in America that are not located on Fifth 
Avenue in New York, but they are, Matt, at your potato farm, 
what it could mean to a small business revolution in America 
and opening up opportunities for our entrepreneurs to move well 
beyond the bounds of their towns or their counties or in our 
case our parishes and start selling their products, and how 
important it is and how possible this is, because American 
business is, in my view, still the most nimble, agile, 
flexible, and our laws enable us generally, compared to our 
competitors, unlike companies in Europe that may be stymied by 
kind of some old-fashioned safety net, but it is beyond safety 
net that prevents businesses from being as adaptable as they 
can be. Those barriers do not often exist in America, and my 
view of this is that if our Committee can do everything we can 
to empower small business to get a jump-start on this 
technology or to push us--and it frightens me when I see 
numbers like this about how far behind we are. I do not want 
our small businesses in America to be at a disadvantage to 
small businesses in South Korea, Singapore, Taiwan or Hong 
Kong.
    I am not the oversight committee, as you all know, on 
broadband. That is the Commerce Committee, but I follow what 
they do. They stay so focused at 100,000 feet in terms of 
spectrum and fights between the big guys that I want this 
Committee to give voice to small businesses and to say what 
small business needs right now in America to be the strongest 
and best that it can be. That is what we are going to stay 
focused on, and I have tasked my staff along this regard.
    So I would like to begin by just asking each one of you--
you all represent your own business or understand your own 
personal experience. When did you first have access to 
broadband and you subscribed at different points of time? How 
did you get your first access. How has your company used 
broadband over time? How has that changed over time? And how 
has it either transformed or not been as transforming as you 
would like to the business that you represent?
    I am just going to throw that open for anybody who might 
want to respond, and this is going to be extremely informal. 
The staffs here are going to be taking a lot of notes and 
prompting to get as much information out of you in terms of 
that focus. What can this Committee say to the Members of 
Congress, to House committees, to Senate committees, to the 
committees that do have jurisdiction about what small 
businesses need and how quickly you all need it now to do what 
we are asking you to do, which is create jobs and to grow 
stronger and more profitable for your benefit and the benefit 
of our country.
    Anybody who would like to start? Okay, Chris, go ahead.
    Mr. Chapman. We are a small business in Maryland, a family 
business, into snow sports. I started off selling wholesale, 
not using the Internet at all. As my business grew, I 
discovered eBay and some of the online marketplaces, and 
started with dial-up and selling small amounts. Now some 7 or 8 
years later, my business has reversed. I am 80 percent direct 
to consumer Internet sales.
    As the tools grew, dial-up was not fast enough. I had to 
buy a satellite system for a roof that still was not fast 
enough. I eventually had to--we use Comcast cable. It was down 
the street and they would not bring it--I am in a rural area, 
so eventually I paid them extra money to bring the cable to me. 
And now 5 or 6 years later, almost every application is run 
online. All our service providers, from accounting to 
managing--we are a little over $1 million a year business.
    Chair Landrieu. And what were you before? Were you about 
the same size?
    Mr. Chapman. No, I have grown. Eleven years ago I started 
at about $100,000 a year, and we have grown about $100,000 a 
year for the last 10 years. The whole model has changed because 
of the Internet. Again, I was wholesaling. I actually 
specialized in used equipment. I go out West and buy up all the 
used demos and rental skis all around the country and bring 
them back, supply them to eastern resorts and Play It Again 
Sports, things like that. I had a hard-to-sell product. It was 
very high end and I had no market for it. I saw eBay one day, 
and I put one out there, and I got $700 for it. Wow.
    So as it grew, people started e-mailing me saying, ``I am 
just a regular skier. What about me?'' So I started taking my 
wholesale equipment, putting it on eBay slowly but surely, and 
4 or 5 years later, my whole model had reversed and now we ship 
about 7,000 skis a year direct to consumers through our own 
websites in other marketplaces.
    Everything we do on our computers is high speed. I have to 
have third-party companies to help me manage all those 
channels. So from communications, accounting, everything is not 
on our computers. Our computers do not really matter. We could 
switch to a laptop and go somewhere else. It is the 
applications online that matter. We have to have that. When our 
cable goes down, we sit and stare at the wall. Our whole 
business comes to a grinding stop.
    Chair Landrieu. How often does your cable go down?
    Mr. Chapman. Not that often. I have satellite back-up, and 
I still pay for dial-up just to have redundancy for the worst-
case scenario. But the reliability has been okay.
    Chair Landrieu. In terms of affordability, can you give us, 
if not right now but submit to the Committee, some kind of 
documentation about what you have had to invest of your own to 
get the speed and service that you need, either on a monthly or 
annual basis?
    Mr. Chapman. My cable bill, just the Internet service I get 
from them has gone from $50 to $100 a month. I had to pay $700, 
I think, to bring it--to divert them to bring it down. And my 
satellite system was another $1,000 or $1,200 at the time, and 
that was a couple hundred dollars a month back then. I have 
disconnected it. I can turn it on when I want, but I do not pay 
monthly for it. It is a redundant back-up now.
    Two aspects of the broadband that are important for us is I 
am on the East Cost, and I ship around the country. The 
corridor from Louisville, Kentucky, where UPS is, to Memphis, 
Tennessee, where FedEx is, is a prime area to develop the 
shipping business for Internet sales. It is 2 days to either 
coast. It saves costs, it saves speed. In our business, speed 
is everything. Customers want something fast. So I am looking 
in that area for fulfillment. I am from Kentucky originally, 
and there are lots of holes. There are lots of places where the 
infrastructure would be incredibly cheap, warehouse space, 
labor. I could not even dream about going there without 
broadband.
    Chair Landrieu. That is a very interesting point, and they 
just do not have it.
    Mr. Chapman. We have a family farm in a small town in 
Kentucky, and I could--with almost free buildings. I could not 
think about going there until they have better broadband.
    The other aspect is my customers. A big part of our 
business are rural customers. There are only so many ski shops 
in America. They are mostly inner cities. So a lot of my 
customers live in rural areas, and now with the richer media, 
we are showing larger images; we are showing videos, how-to 
videos. My Mom cannot even look at my website. She is on dial-
up. She spends an hour trying to look at a video or a photo or 
something. It is not worth her time. She is 77. She clicks it 
off and says, ``It is not worth my time.'' That is my own Mom.
    [Laughter.]
    Mr. Chapman. So my customers are greatly affected, and they 
are 60, 70 percent rural environment because they do not have a 
ski shop to go to, and that is why I am in business.
    Chair Landrieu. Thank you, Chris.
    Lowell.
    Mr. Feldman. As part of what I did or have been doing at 
the University of Texas, we participated in some BTOP broadband 
applications to basically solve middle-mile issues in many 
rural areas in Texas. And one of the things that I would--you 
know, I am parroting off of your comment. I think a lot of the 
laws are written very well with respect to trying to promote 
innovation and promote competition. But I think as it goes 
through the system of how things are currently regulated and 
how they are doled out, those intentions end up backfiring. And 
with respect to small business and with respect to innovative 
ideas, it is very hard to take innovative ideas and push them 
forward. You get a lot of pushback almost.
    One of the big examples is in the ARRA. There is a very big 
transparency requirement for people when they get funds to at 
least be able to show where they are going to be spending the 
money, where the fiber they are going to be putting in is, what 
the services are going to cost, to the very businesses that 
need it in these rural areas. And some of my students did a 
study on the people who were winning the money and asked them, 
Where are you going to provide service? How much is it going to 
be, et cetera? And 61 out of 67 of the winners refused to 
answer any of the questions.
    And so I think what you have is you have good laws being 
written, but you do not necessarily have the follow-through on 
how those laws are going to be implemented so people can get 
faster broadband or at least be able to plan on where the 
infrastructure is going to be put in place so the next entity 
can--like a cell phone company can know where the fiber is 
going to be, where they can tap in at the middle-mile solution 
and build a new tower to deliver the service.
    Chair Landrieu. Jesse.
    Mr. Vaughan. So, at GigaTrust, I started in 2006 with them, 
and we originally has 1.5 megabit service, which is relatively 
slow for a business. We are not up to 20 meg service, which is 
fast enough, but I always have staff members coming to me 
saying, ``Gosh, everything is so slow.'' You know, even here.
    Now, granted, they do not want to pay more for it. If you 
go and try and get more money to get them to expand the service 
further, that money, they do not wish to budget for that. But 
more importantly, my wife runs a sole proprietorship. She is an 
attorney specializing in adoption law, and as many small 
businesses start, they start often from the home. And we are in 
the process of moving--not far. Right now we live about half an 
hour outside of Washington, D.C. We are moving about another 25 
miles further out, but where we are moving to is going to cause 
her a great deal of pain and heartache because you cannot get 
high-speed Internet there other than satellite. And a lot of 
her business advertising, a lot of her initial connections from 
the people that she works with are through the Internet. So for 
her, that is going to be a big headache, and we are talking 
maybe an hour outside of one of the largest--you know, big 
cities in the world here. That is just from my personal 
perspective a surprise.
    In terms of, you know, what we do and how we reach our 
customers, what we have I think is acceptable for our company 
to do the work they need. But, again, I can see a lot of 
companies that do require much faster service where they have 
many, many servers on site. And it becomes more expensive very 
quickly when you start to hit those issues. And then if you 
move outside of a major city, if you are not in one of the 
magic zones, you are in the dark very quickly.
    Chair Landrieu. Angela.
    Ms. Benton. So in my business, as Jesse just mentioned, I 
started out of my home, so my access was as good as the home 
Internet access that I had. But as we grew and got more 
employees, we have a distributed, I guess, company. So we have 
people in Tallahassee, Ohio, New York. It really is vital for 
us to communicate, even sharing simple files and documents. 
Without the Internet, we could not operate as a business. 
Without it, we could not even produce the service, which is 
content, to, I guess, our constituents at all. So it is 
definitely very necessary.
    But one interesting point that I did want to raise, we 
actually had our first conference last week here in D.C., and 
it was called the New Media Entrepreneurship Conference. What 
we did, we did invite people from Government, but we had people 
from venture and then also entrepreneurs there, and we had 
African Americans, Latinos and a lot of other minorities were 
represented there.
    What was interesting is a lot of the people that were 
there, their issues were related to not necessarily access, but 
once they actually built an application, just delivery. So they 
had issues in terms of CDNs being too expensive for a small 
business. So if that is the case, that is going to limit 
basically the amount of entrepreneurs that can come online and 
actually do business in a meaningful way and actually 
distribute content easily for consumption.
    Also, there was actually a study--and I cannot remember, 
but I can submit it later--in regards to minorities and our 
just general consumption of Internet usage. And when you look 
at minority businesses, it is actually significantly--I think 
it was maybe 30 percent or so less, and general consumption I 
believe is like 61 percent. So I guess the value that I can add 
is from a minority's perspective and people who want to build 
businesses online and that is their business.
    Chair Landrieu. Thank you. Very good.
    Bruce.
    Mr. Taylor. Thank you, Chair Landrieu. We began business, 
Police Central, in 1995 as a server-based law enforcement 
software business. And we are a technology company, we are a 
software development company, so we did it the way we know how 
to do it. And we have technical folks that were doing stuff, 
building networks, acquiring VPN appliances, and building our 
own connectivity.
    When I joined the company in 2001, we kind of refocused on 
our core business, which was building software for law 
enforcement. It is not building networks. It is not doing HR. 
So we outsourced HR, and the predictability of the costs that 
we get for both the HR side and also for the technology side, 
we were one of the first customers of a good company based in 
Atlanta that provides all of our voice, data, Web hosting, 
secure VPN connectivity for one predictable monthly price.
    So that has been a very good thing for us. We have 
transitioned from our server-based solution to a Web-based 
solution, and in order to do that--and that has really been a 
competitive advantage for us. A lot of the big companies with 
whom we compete for law enforcement business have old 
technology. So we have got Web technology, but it is critically 
dependent on quick access and broadband.
    For the agency, but equally important for us, we have grown 
from about four people in 2001 to ten today. So we are still a 
small company, but we are competing very effectively against 
bigger folks. We have two people supporting about 90 customers, 
law enforcement agencies all across the country. We could not 
do that without good broadband from the home because I will get 
calls in the middle of the night that one of our agencies in 
Minnesota is having a problem with a criminal warrant. And so 
the urgency is pretty obvious that we have to get that 
resolved. So connectivity to their system through the broadband 
and VPN secure connections provided by our provider are 
critically important to us.
    On the agency side, they tend to be operating our jail 
management system software inside the agencies, but the issue 
really is that in many cases they want access from their 
vehicles. So they want mobile broadband access. Our solution is 
designed for on-premises and, therefore, has a fairly big 
network traffic footprint. But rather than re-engineer our 
solution to give them a subset of what they need today, we are 
really very interested, as they are, in expanding the bandwidth 
and the availability and the predictability of the costs for 
them to be able to access our current solutions.
    It is kind of, I think, an interesting coincidence that we 
are here today during National Police Week where clearly that 
is not the reason they are here, but the broadband needs they 
have are paramount, particularly in the wireless area.
    Thank you.
    Chair Landrieu. Thank you, Bruce.
    I am going to turn this over now to Cheryl Johns Miller, if 
she will come forward, and you are in great hands. She truly is 
an expert on this subject, and thank you all so very much for 
contributing. This information that you share today is going to 
go a long way to help a lot of businesses in our country. 
Cheryl?
    Mr. Reece. Just to build on what Bruce was saying, I want 
to talk a little bit about the learning curve. This panel is 
obviously success stories among small businesses, how you have 
transitioned to using the Internet. Can some of you speak to 
how you have made that transition and how difficult it was for 
employees? I mean, many small businesses that are out there 
just don't know where to start in using the Internet. Mr. 
Chapman was talking about getting online and transferring. Now 
you said 80 percent of your sales are Internet. A lot of small 
businesses would like to participate in the online market but 
just do not know where to start.
    So, Mr. Morton, would you like to----
    Mr. Morton. Sure, I can talk about that. We started our 
company in rural Louisiana with my co-founded, Dr. Mike O'Neal, 
actually starting the company out of his house, just like a lot 
of you here have done. We were lucky, Adam, in the fact that we 
maxed out his capabilities of Internet there, which were 
broadband through CenturyLink--CenturyTel at the time. But we 
were lucky inasmuch as we had access to the university, and the 
university in Louisiana was connected to the Louisiana Optical 
Network Infrastructure, or LONI. So we were able to be the 
first customer in the incubator system at Louisiana Tech 
University, move our offices into campus as we grew, and then 
the incubator on campus gave us access to the optical network 
infrastructure for the State, which gives us access to 50 
megabits up and down, as well as we have a commercial link for 
our day-to-day business and our back-up business through 
CenturyLink as well pulled to the business.
    So one thing I would say to people in the early stages is 
if you are anywhere near a college, a community college, those 
are great access points for you to be able to get really high-
speed bandwidth.
    Another point of interest to us, back to what Angela was 
saying, we specifically save 50 to 60 to 70 percent of the 
bandwidth cost right now when broadcasting online as compared 
to an old-style, traditional CDN network, like an Akamai or a 
Limelight. So when you start looking at where the future is 
going to be, hopefully with our technology the future is going 
to be not only more people broadcasting, but groups of people 
that have not been able to broadcast because the cost of an 
Akamai is significant. And if you are an early-stage company or 
even a start-up company or a small business, you do not have 
those type of funds available to be broadcasting live, whether 
it's Angela's conference a week ago, here, or whatever it might 
be.
    We provide an alternative to that, which is also a green 
alternative. If you look at the national footprint of 
electricity, a significant increase in electricity output to 
server farms over the next 5 years--which is going to be very, 
very significant when you start talking about all the other 
issues that the country deals with, and one of the reasons for 
that is more and more people are starting to try to broadcast 
video online, and we deal with that issue.
    And one other points I would like to make is it is 
paramount to companies like ours and probably the bulk of the 
small businesses in the room and in the country that we keep 
the Internet truly open with true net neutrality--and by that I 
mean getting to a point where the big boys are able to control 
the pipes and control the content and then at will choose to 
drop packets on the floor--is going to be basically a noose 
around the neck of small business.
    Ms. Miller. I would like to ask--turn a different question 
out there for thought, and this is just to get a sense of sort 
of how some of you have gotten started, what resources you all 
have relied on. Has anyone in this room made use of any SBA 
loans or that type of funding to upgrade their equipment or to 
expand their service, purchase computers, et cetera? And what 
has that experience in terms of applying for loans with SBA and 
being able to get that funding, what has that been for you? 
Lowell, if you want to start.
    Mr. Feldman. Yes. My initial loan in starting my company 
was through SBIC [off microphone] called Main Street Mezzanine, 
and they are great, and I want to actually juxtapose that to 
what we have been attempting to do with various broadband funds 
that are [inaudible] but with respect to small business, it is 
nearly impossible to deal with the RUS [inaudible]. Again, I 
[inaudible] spent a lot of money buying spectrum [inaudible].
    In setting up the program for RUS, when you go to apply for 
a loan or a grant, if you are not entitled to [inaudible], you 
have all these hits against you [inaudible] seek out and find 
partners [inaudible]. In upstate New York, I was able to find a 
partner and am very hopeful that those grants will be awarded. 
But in other areas, like [inaudible] we were not able to find 
an ILEC who wanted to partner with us. We found other people 
[inaudible]. In particular, we found a company that already had 
a broadband loan to deliver service in the similar areas that 
we now had a license. It is called Internet America, and they 
came to us and said, ``Hey, your technology is better, we would 
like to use you, we would like to be a partner in your 
application for BLP.'' We tried to work with RUS, and not only 
did RUS tell Internet America you cannot modernize your loan to 
move to a better, innovative technology and partner with 
another company, but they also then prohibited anybody from 
trying to file an application to serve the same areas because 
there was already a loan out there.
    You juxtapose that to a real banker like Main Street 
Mezzanine, and they will look at it, and they will say, Well, 
wait a second, we have had innovation happen in the last few 
years. What Internet America may have been trying to do a few 
years ago no longer applies, there is a better way to do it. 
Let us move that loan forward and issue new money.
    And so anything that we can do to--I do not know if you 
want to take money away from RUS. There is a Broadband Loan 
Program through the farm bill that they have not even 
administered, but maybe if you could suggest to RUS that 
instead of trying to manage the fund like it is only for 
incumbent LECs, if they can open it up to allow small 
businesses to come in and/or even partner with existing SBICs, 
and let SBICs leverage the money that has already been 
allocated by Congress so that innovative small business 
companies can go in and--again, we are not asking for a grant 
in this circumstance. We want to borrow money and put in 
infrastructure, and we are basically being told we cannot.
    Ms. Miller. Thank you.
    Deborah.
    Ms. Landsdowne. One of the points that I wanted to make was 
the importance of broadband to my particular business because 
we do business all over the world and we have employees all 
over the world. And it has changed our whole business model 
because of some of the things that have happened in the 
economy, because of the traffic that is unique to this area, 
over and above some of the other areas. It is very difficult 
sometimes to attract some of the best employees.
    And so what we did is we made a business decision to 
virtualize our business 100 percent, and that has allowed us 
not only to attract a very high level of very senior people 
that work with us because they appreciate the quality of life 
that they have and being able to work from a virtual 
perspective, but it has also allowed us to be able to employ 
more people because I have been able to cut my cost of doing 
business.
    If there is no access to the Internet, high speed or 
broadband, for some of the resources that I am looking at, that 
becomes a very tough decision for me from a hiring perspective 
because they are not going to be able to access our network and 
some of the things that we have that run our business. So it is 
absolutely critical to us that we have the ability to be able 
to continue to have that access, not only here but for me and 
other pockets and other areas around the world.
    Mr. Reece. And have you had employees that have had trouble 
accessing? Has that been a problem?
    Ms. Landsdowne. Yes, we have, and if that has happened, 
that employee is basically useless to me for the day or for the 
period of time that they do not have access, because every 
single thing that they have is online on the Internet, and that 
is how we communicate, that is how we do business, that is how 
we work, and that is how we function.
    Ms. Miller. How often would you say you have problems?
    Ms. Landsdowne. Rare. I have to say, quite honestly, rare. 
We have not had that many problems.
    Ms. Miller. Matt? And also, again, on the SBA loan 
question, if any of you--if anyone else has had any experience 
with it, it would be good to hear.
    Mr. Wood. I cannot speak to that if you----
    Ms. Miller. Okay. Go ahead.
    Mr. Wood. We do not qualify for that. I think what I want 
you to hear from us, from my business, is that small business 
needs to be able to run at the same speed that big business can 
run at. And I think that really is the bottom line of some of 
the issues you have heard all of us talk about: access, 
penetration, speed. If you can solve those problems and put 
them in the hands of our small businesses, we will be able to 
run just as fast, and maybe even faster, than most of the big 
businesses can. I think that is really the perspective of this 
Committee, or it should be. What we are really trying to do is 
even the playing field.
    Our particular perspective, Frito-Lay is our number one 
customer, and we are supplying Frito-Lay with probably, in the 
height of our harvest season, 40 to 50 tractor-trailer loads of 
round white potatoes in a day, and those are being transferred 
all over the country, mainly on the East Coast and into Canada.
    The problem that we have is that everything is speed with 
them. They want it now. They want to be able to send back to us 
detailed quality information that includes pictures off the 
Internet, and they want us to react to that daily. In other 
words, they want--we ship to them overnight. They get it, they 
send us back the information, and if there is something wrong 
with the product or whatever, we get--they want to communicate 
broadband back to us and say correct this problem, you know, 
where did this come from, and speed is really the issue. The 
faster they can get that corrected, it saves transportation 
costs, it saves--it makes us more efficient, and we are able to 
solve problems so much faster. And that is really where our 
issues are.
    You know, right now I think it is--the middle mile is going 
to be a big part of what we are doing, but how to regulate the 
end use out to those rural areas so that we can get access to 
it. Right now you are talking about what do we do--how did we 
learn to get access. We do not have any way--we cannot even pay 
anybody to get access to what we need because really the 
product does not exist.
    Ms. Miller. Following up on that point, if you all had to 
rank speed, quality of service, and cost for service, what 
would you list as the most important thing for you as a small 
business owner with regard to your broadband service, if you 
guys could speak to that? Jesse.
    Mr. Vaughan. Yes, I would say it is a combination of speed 
versus cost. For a lot of small businesses to get your foot in 
the door, just for the very slowest service, you are talking 
between $60 and $120 for a base package, which does not sound 
all that bad, but I was doing some poking around on the 
Internet to see what it compares to in other countries. And to 
get the basic package in the U.K., for example, is 15 pounds, 
which is about 25 bucks. So it is comparatively much cheaper 
for a small business.
    And the other thing is that speed for us is very important. 
About 25 percent of our company now works--probably closer to 
30 percent, actually, works remotely, and we incur their 
Internet connectivity fees from wherever they are. So we are 
incurring fees from California and Texas and different places. 
And if we have developers who live in rural areas, that is a 
huge cost to our business because they cannot get the speed and 
service they need.
    So, really, speed and being able to transfer--they say, 
hey, I need a DVD's worth of data, if we do not have the 
bandwidth necessary to get that DVD to them, we have got to 
ship it to them. Then we incur costs for expedited shipping 
that would not exist if we could just e-mail it.
    Ms. Miller. Thank you.
    Bruce.
    Mr. Taylor. Yes, for us, our customers are State and local 
governments, so in almost every case, a county or a 
municipality or a State agency is already on some form of 
broadband. So we do not typically have a problem reaching our 
customers on premises, and the services that we are getting 
locally in Atlanta from our own provider that, as I mentioned, 
bundles all the various services we do have, provide us the 
capability to get to our server-based solution in our customer 
agencies.
    However, the issue--and it is the major issue for law 
enforcement today--is in the mobile broadband, and it is really 
three things. It is the coverage--because Atlanta is in Fulton 
County. It is not a really rural area, but there are portions 
of Fulton County where it is very difficult to get even a 
modest cell signal. So coverage is an issue. Cost is an issue. 
Municipal governments do have dedicated lines and connectivity, 
as I mentioned, but they do not have budgets. So adding per 
vehicle costs of $60, $80, $100 per month per financial, which 
is what typically is available today, is really a very 
difficult thing for most law enforcement agencies.
    The third thing is the bandwidth itself, the speed of the 
broadband connection, particularly for vehicle-based solutions, 
because we today--and, you know, every law enforcement vehicle 
you see on the street has a laptop and it has solutions that 
provide data to the officers. However, they tend to have been 
optimized to very limited bandwidth, so they necessarily focus 
on the two or three critical things that they need to do.
    Our customers want to see photos; they want to see 
fingerprint images transmitted in some cases. The most 
important thing is photos. Obviously, transmitting photos 
requires a bigger bandwidth. It is not a video kind of 
bandwidth requirement, but it is still more than many of the 
wireless broadband solutions today at affordable cost are 
offering.
    Ms. Miller. Thank you.
    Tee Rowe.
    Mr. Rowe. Well, in our network--and this builds a lot on 
what Mr. Wood said. Our rural intrasection--and Jim Heckman of 
Iowa is the chair of it. He equates broadband access and speed 
to the farm roads initiatives of the 1920s and 1930s. 
Essentially, he is out there in Iowa, and he has got cities and 
counties that are dying because you cannot get access; if you 
do have it, it is dial-up. And it is impossible to market, it 
is impossible to reach out for small businesses in those rural 
areas if they do not have the ability--and, I do not understand 
half of what Lowell and Marcus are talking about sometimes, but 
I know these folks. They face exactly the same problem Mr. Wood 
faces. They have a market, and they cannot get to it. It is 
just like not having a road.
    Ms. Miller. Thank you.
    Roger.
    Mr. Bundridge. Thank you. I have got a solution for 
everybody. Move to northwest Missouri.
    [Laughter.]
    Mr. Bundridge. [Off microphone] My company has been 
offering service for 19 years [inaudible]. We are, again, a 
primarily rural area. We have a university [inaudible]. Sorry. 
Anyway, our company has been successful. We compete directly 
with AT&T, Spring, T-Mobile. That retail center is our market. 
We have 22 employees. We do everything. We do billing, customer 
support, networking, everything out of our one location. So 
when they come in, they can see a face, work with us directly, 
and it provides the customer a better experience.
    I do provide services through--we have a 3G solution. We 
actually provide service to a potato farmer, Garst Farms in 
Watson, Missouri. They use our services to do the things that 
you would like to do with Frito-Lay. Some other things that we 
also do is law enforcement. We have 27 data cards that we 
provide to law enforcement. Just in the last 6 months, I got a 
State grant to put this type of system that you are speaking 
about, Bruce, into the vehicles.
    We are the only company that can provide a 3G solution for 
the whole county, so we have the public safety, the sheriff's 
department, and the campus safety. They have this software that 
you speak about where they can get the pictures and take away 
some of the tasks that they would have to do originally where 
they have to go back to the dispatcher.
    Some of our partner ILEC telephone companies, they use our 
data cards and laptops when they are out in the market to 
trouble-shoot network issues, do work orders. It basically 
allows them the ability to do the work on-site, makes them more 
efficient. They do not have to call back and have somebody 
networking between them.
    John Deere. There are two John Deere dealerships in our 
market. Between the two John Deere dealerships, they have over 
30 data cards with us, and their technicians that go out and 
work on the combines and the tractors in the fields, they take 
these data cards for access to manuals or different things to 
make their job more efficient, while they are on-site rather 
than having to go back to their shop. They can take care of the 
customers more efficiently.
    Insurance agents, they will use our data cards. Real estate 
agents, the same way, showing people homes, makes their job 
more efficient.
    Location-based services, John Deere has started 
implementing or installing--you probably know--GPS-type 
equipment in their combines, and my in-laws' farm, I have been 
in their combine, and it is very unique. You are harvesting and 
you have got this color-coded map that occurs, and it shows 
your yields as you are driving. That information is 
transferred--well, it is actually saved in a database through 
John Deere, and they actually take that data, provide it to the 
chemical companies, and during the spring, when the chemical 
companies come through to apply applications, their drivers are 
just drivers. They do not have to adjust what they are putting 
on the fields. It automatically does it according to what the 
yield was the previous year.
    I have seen this. It is really cool. The younger farmers 
are jumping into it and getting accustomed to it.
    The chemical companies, our market, they did not have the 
money to go out and put the GPS equipment on these towers. We 
allowed them to go in to--well, any of the towers we wanted. We 
gave them a list of all of our towers. They went into four of 
them. And I am sure as this takes off, they are going to come 
into more. We allow them to place their equipment on our towers 
for free. The majority of all the farmers have our service, so 
it is a complement, something we can offer. We give them free 
power, let them have access to our buildings, give them the 
combinations. We trust them. We work with them. We know them 
personally.
    I know a Mac Tool rep. He uses our software or our EVDO 
card for his mobile truck to go out and sell tools and have 
access to his catalog. He can do the orders on-site. He does 
not have to wait until the end of the day to place these 
orders.
    We have over 200 wind turbines that have been introduced 
into our market, and the wind turbines have a fixed broadband 
solution through some of our ILEC partners. However, they have 
our data cards for back-up or emergency purposes. And they use 
our data cards when they are mobile, some of the technicians, 
but primarily they just have our data cards as a back-up in 
case they lose service on the fixed solution.
    I can go on and on. I know auctions that have occurred 
where they have opened up a farm auction to eBay so that 
somebody could--they do not have to actually be at the location 
to bid on something. They can use the eBay solution to remotely 
connect into the auction.
    My company has invested in putting in 3GN. We did not apply 
for the broadband stimulus primarily because we have 3G, we 
want 4G. We have invested in spectrum, just as Lowell has. We 
have 87 megahertz of spectrum, and we are only using 25 of it 
because we have been buying spectrum for our broadband 
solution, and the obstacle we face today is that there is no 
manufacturers out there producing 3G equipment for us. We are 
currently this summer upgrading every single one of our cell 
sites. We have 30. And they will all be capable of LTE, which 
is the 4G solution that we are choosing. We have fiber to the 
majority of our sites. We are actually going to be installing 
fiber to the rest of our sites over the course of the next 3 
years.
    The obstacle we face, though, is we cannot get access to 
handsets. There is no road map for a company like ourselves to 
have access to handsets. And there is no--even though our 
equipment is going to be capable of providing this solution, 
that is only in our cellular broadband--or cellular service we 
offer today. We bought this additional spectrum--which we have 
pretty much maxed it out with our 3G and our voice traffic. We 
bought this additional spectrum so we can use it towards 4G 
solutions, and today there is no equipment being produced for 
us. Verizon is having some equipment, AT&T, but it is band-
specific to them. And so the spectrum we have purchased today 
has no value.
    So there are a lot of things that we are trying to do. The 
Commerce Committee is concerned with spectrum and the fights 
that companies like myself have with the big guys. The Small 
Business Committee has weighed in on behalf of the small guys, 
and especially on issues necessary for us to compete going 
forward, like with data roaming or handsets, handset 
availability.
    I belong to an organization, Rural Cellular Association, 
and many of our members have gone out and formed a consortium. 
Today there are 34 members of this consortium so that we can 
get handsets or have handsets developed for us.
    Unfortunately, in the first quarter this year, 90 percent 
of all activations that occurred were with Verizon and AT&T, so 
10 percent would be every other company outside of those two. 
When you come down to my company, we have 12,000 customers, or 
even if you look at the ACG group, we have approximately 4 
million customers combined. We still cannot get handsets 
produced for us brand-specific. We have to wait until an 
exclusive deal with the handset expires, and then we can have 
access to it. You know, we do not have exclusive deals.
    So those are my concerns going forward. I want to provide 
service to all these existing customers that I have today with 
4G, and I would like to offer it tomorrow to them because their 
business is changing--3G is great for them. They are able to 
have access. I think sometimes maybe these businesses that I 
have might take it for granted. I would love for them to be 
sitting in this room hearing about the struggles that everybody 
has here.
    What we are facing today, though, is that the 3G offering 
that is out there is not fully mature, and you already have 
companies that are migrating to 4G. So there are a lot of areas 
like my market and many other markets throughout the United 
States where there is nobody that has a vested interest there. 
There is nobody who takes ownership. I grew up there. I know 
the people. I hear them every day, so we have a vested 
ownership. We have a vested interest. We want to take care of 
those customers.
    On top of all this, we have to compete on price. We do not 
have the iPhone. We do not have some of these exclusive phones. 
So not only do I provide all these things, I provide them lower 
than the national competition. I have to do that to compete. 
Our data plans are lower. We offer carryover minutes. We called 
them rollover minutes and got a phone call one day, and we had 
to change that. So any service that the national carriers 
provide we provide.
    We have a customer that comes in, they say, How come you 
don't have this? We will put it in place. So, you know, not 
only are we providing the service, we are providing it at a 
much lower cost to our customers.
    Mr. Reece. Just to follow up on that, you talk about the 
needs for small businesses versus the big guys, and Congress 
continues to look at a number of initiatives, for example, the 
National Broadband Plan, stimulus projects, and whatnot. A good 
question that we would like to have the panel on the record 
addressing is what are your recommendations for Congress from a 
small business perspective? Lowell, what can be done to even 
out the playing field?
    Mr. Feldman. I want to jump on Roger's comments first. A 
very practical thing can be done. What Roger is really talking 
about, I think, at the end of the day, is his interconnection 
rights with the giant companies. In essence--and we all have, 
as service providers, as carriers, as common carriers like a 
wireless provider, or as a common carrier like a CLEC, we have 
an entitlement under the current act for interconnection 
rights. However, trying to implement those rights with respect 
to data roaming--and, for example, we would be able to launch 
Bruce's service tomorrow, before I even build up anything, if I 
can have an explicit right to data roaming in-network with AT&T 
and Verizon. If I have that right, then I can start building 
out my network that gives them the full-speed video with 4G 
because I have a roaming right with the existing networks that 
are there. And roaming does not mean you get it for free. It 
means you pay for it when you use it, but you have the ability 
to overbuild and build it yourself.
    While we in theory have all these rights, in practice we 
have none, and all you end up with is 10 or 15 years of 
litigation. So a very practical thing that you can do is you 
could charge the FCC to actually put out model agreements to 
say, ``You know what? It is not just that we give you a legal 
right. We are going to actually spell out this agreement is in 
the public interest. The rate is X, the terms are Y, the 
interconnection facility is Z, and this is how it is going to 
be.'' These are things that the FCC and others do not want to 
go tackle because if they tackle something and they put forth 
an agreement that is in the public interest that allows smaller 
carriers to basically play on a more level playing field, it 
does take away a major benefit that AT&T and Verizon enjoy, 
which is monopoly status. Because what you are doing is you are 
saying, well, wait a second, we want to promote something else.
    I mentioned disaster recovery before. I have been working 
for 10 years to put forth a non-geographic service for disaster 
recovery, so when people are displaced, they can dial up a 500 
number that I was able to get through my CLEC. AT&T has 
effectively blocked my ability to use it by saying they do not 
think it is really a service, except when they provide it, and 
the only way it is going to be provided is if I pay them $20 
million up front and 10 cents a minute.
    Well, obviously, it is not a service there. It is more like 
an application that we want to provide when people are 
displaced that they all can call a common number and be routed 
to them and leave messages for them. That is an innovative 
application that we are barred from providing, not because 
under law I am prevented from doing it, but because in 
practice, to implement the law it has taken 10 years, we still 
do not have an answer. When we do get an answer, it is probably 
not going to be the one that I want, and I will probably have 
to appeal it to some court somewhere. And that is what is 
unfortunate. So you can get out in front by doing practical 
things, very practical things.
    We were talking earlier before we got in also about 
changing the fund. The Connect America Fund is what you are 
talking about when you are saying let us move and change 
universal service. The current Universal Service Fund is 
designed to subsidize basic phone service, and it is not just 
designed to subsidize basic phone service to the exclusion of 
broadband and other things, but it has done so in a way that 
incorporates 50-year-old regulations and policies. It is very 
much like in the digital photography world today, where we all 
have digital cameras, as if we are taxing the new innovative 
digital cameras and saying you have to go subsidize the old 
film. In essence, every small business that is out there that 
provides any type of service has to pay into this fund--14 
percent of your total revenue--that then goes directly to 
subsidize not just other companies that you compete against but 
a service that you are not even really technically allowed to 
provide. That is just wrong.
    It is not that we do not have a need for subsidy for low-
income people or for rural areas. We obviously do. But we need 
to change it so that it, like the Internet does, tries to get 
closer to the users and empower users to make choices, not 
empower a business model that is 50 years old that regulators 
are accustomed to dealing with.
    Ms. Miller. Thank you.
    Angela.
    Ms. Benton. I want to circle back to what Roger was talking 
about in regards to fiber-optic networks and 3G and 4G 
networks. For me, I did have like a standard kind of DSL 
connection, and the bandwidth was limited. So I consider myself 
like a power user. I am online all day because that is the 
nature of my business, and I would be limited. So at some point 
I will either have to restart a modem or something, but it was 
just--it was not good at all, and that was through AT&T.
    The service that I have now is Clear--and they provide 4G, 
and that is actually really fast--in my home but also mobile. 
So I use their Clear spots so I am able to actually work 
wherever I go.
    In terms of penetration, though, I feel like--and I am not 
sure. Lowell or Roger probably know a lot more about this than 
I do. But it seems like bigger businesses are only penetrating 
certain markets, and they do not include rural, unserved or 
underserved communities. And so that is a huge issue for people 
in rural America or even in urban communities who want to be 
small businesses and want to be entrepreneurs. If they do not 
have high-speed Internet access, then it just sets them back. 
It is like going back 5 to 10 years.
    Ms. Miller. Thank you.
    Chris.
    Mr. Chapman. I was going to try to answer a few of the 
questions. The SBA question you had, I am just starting the 
process, so I can get back to you in a few months and let you 
know how that worked.
    Ms. Miller. Great.
    Mr. Chapman. Speed, reliability, costs. I am a small 
business, a winter business, so I do most of my business 4 or 5 
months of the year. So speed and reliability are tops. If my 
system crashes for 3 or 4 days in the middle of winter, it is 
devastating for me.
    Cost is an issue because I am small business, but I can 
always negotiate cost and work on it. I can change my model. 
Speed and reliability are critical.
    Adam, as far as your question about how we grew, one of the 
most exciting parts of our business is how we can compete with 
everybody in the world, being a small, 5- or 6-person family 
business. We can run circles around customer service with the 
big box competitors. Communications, usually Skype and 
broadband communicating, I actually export to China four or 
five times this year. I have imported products. I have 
communications, which at first were very daunting, now are very 
cheap, easy to communicate and make quick, quick decisions, 
which in my business is critical.
    We bought closeouts from manufacturers, and in the past 
only large companies could tap into their databases and see 
real-time inventory. Now even as a small player, I can do that 
and find opportunity and move quicker.
    We have the width we need right now, but we are pushing the 
limit, and I think soon we will be looking for alternatives. I 
cannot get fiber optics where I am right now because I am in a 
rural environment, but with all the changing so fast every 
day--it is an exciting part of being in business. In 6 months, 
it will look a little different than it does now. You can see 
the media coming, the videos, the photographs. It is getting 
larger and larger and larger bandwidth. So I will be upgrading 
soon, and I will be looking for those things. I am limited 
right now, and that may affect where, if I choose to move or 
relocate, to where those are available.
    One last aspect is just the way small businesses can start 
up so quick now, and I have a lot of friends. We form groups of 
Internet cells to protect ourselves, because we are all small 
and we need a big voice to speak out to the industry and 
marketplaces and everybody. It is amazing how you can be 
interconnected around the world right now. I am in the ski 
business, so how I can compete in--people want personal 
questions answered about how to ski and what to buy. Big boxes 
cannot supply that service. I am working with the people in 
Australia who can give me 24-hour service at night to answer 
questions. So my customers 24 hours a day around the world can 
call or e-mail and get an intelligent response. Who would have 
thought 5 years ago I could do that? I can have programmers 
around the world. I can have graphic artists coming, giving me 
artwork. Without broadband, I cannot even receive it much less 
communicate with them. So it is just critical for a very small 
business like myself.
    Ms. Miller. Thank you.
    Marcus.
    Mr. Morton. Thank you. I just wanted to go back to the 
question that you and Adam had about the SBA. We have not done 
any SBA loan programs, but we have won, I think, four or five 
competitive SBIR programs, the last two or three with the 
National Science Foundation, administering them. That program 
has been a very big success for us as a company and has helped 
fund our original development of our patented technology that 
we now have five issued patents for and another, I think, eight 
patents pending behind that technology. We would have not been 
able to take those early steps without that program, and I 
think the SBA should certainly look at putting more funds in 
that direction.
    And one other last point is one of the ways that we think 
you will see the bigger companies run out to provide broadband 
services to various areas is by bringing them more customers. 
We just put in for a BTOP grant in the second phase that would 
allow us to provide about 2,000 high schools in the U.S. with 
our technology, enabling them to broadcast all of their sports 
online and their graduations, as well as distance learning. And 
the point there is if you can help in an innovative, cost-
effective way drive more traffic to the Internet, I think 
ultimately you are going to see the dollars chase that traffic.
    Ms. Miller. Thank you.
    Jesse.
    Mr. Vaughan. Yes, you were asking about what advice or 
things to recommend to help small businesses with this issue, 
and providing some more incentives to companies such as Mr. 
Bundridge's company through wireless to the large service 
providers such as Cox and Comcast and Verizon to provide 
broadband service to areas that do not have it and do not have 
it available I think is going to be very important moving 
forward, because there may be stuff out there, but clearly it 
is not getting broadband to where it needs to be. The big 
concern is that it is not just small businesses that exist 
today, but when I grew up, the Internet was not really big yet. 
Now it is. And we are seeing huge impacts on the way that we 
educate children in the future. And areas that do not have 
broadband, we are affecting small business tomorrow because now 
they are not getting the broadband that they need to become 
well educated, to get that entrepreneurship going, where they 
can now become a small business. And that is a big--you know, 
that is a huge financial loss, and to me, there should be 
equally large incentives to get broadband to those people 
because, otherwise, America is going to fall behind in the 
future.
    Mr. Reece. And that is a great point, and I wanted Tee to 
touch on this, and this is our next item on the agenda, anyway. 
Tee, can you talk about what education resources are out there 
for small businesses? Jesse talks about children. It is not 
just children that need education on broadband. I know my 
parents live in north Georgia and could not know less about 
technology and broadband. So, Tee, if you could kind of touch 
on----
    Mr. Rowe. Yes, well Marcus raised a very good point that it 
is through education that we are highlighting--I will not say 
creating. The markets are there. We are highlighting their 
existence.
    The great thing about SBDCs is we operate in conjunction 
with colleges and universities, so there tends to be the access 
there. The problem is the penetration issue that Angela spoke 
about, and that affects the whole quality-of-life issue, which 
is why Chris lives where he lives and works the way he does. 
And we completely disable those things because, unfortunately, 
there is too much concentration and overbuilding. So you have 
got piles of access in San Francisco and Boston and New York, 
and, frankly, when folks argue about net neutrality, I think 
somebody in Mason City, Iowa, says, ``What the hell does that 
mean to me? I cannot get bandwidth to save my life.''
    We are trying with the Small Business Development Centers--
I brought with me something that Sprint--and I hope that is not 
a dirty word to some people--has helped us put together for 2 
years now. It is called Practical Tech, and it is just basic 
information for small business users on how they can use 
bandwidth to build up their business through marketing and 
through basic efficiencies that you might not think of. But it 
is all--and we have distributed hundreds of thousands of these. 
But it is all wasted effort if the access is not there.
    We are working with SBA and FCC on the Broadband Plan on 
the educational side of it, and it is an interesting situation 
because for me I look at it and I say, gee, we could do some 
amazing things, but then when I get right back to the basics, 
it is we have to do this face to face through an SBDC and at a 
training seminar that we might hold in Dubuque or Lafayette, 
Louisiana. We have to do it face to face because there is no 
point in putting together an online training tool for people 
who do not have bandwidth.
    Mr. Reece. Right.
    Mr. Rowe. You need to get to them. And the more people we 
can get to and the more we can make this apparent that the 
market is there, I think the more that will stimulate folks to 
hopefully think a little more clearly about the way they are 
operating with Lowell and the other smaller providers. Those 
folks are there, and I am glad SBIR--and SBIR is an amazing 
tool. Our folks in Missouri do a lot of work with SBIR. It 
needs to be expanded. There needs to be more funding put in 
through SBIR into innovative broadband solutions for rural 
areas, because, unfortunately, to a certain extent, we cannot 
always rely on the larger providers who are looking for the 
larger markets. They are not necessarily going to look at 200 
people.
    Mr. Reece. Do you find the overwhelming comments you get in 
your rural areas is lack of access?
    Mr. Rowe. Yes, it is really as simple as that. I would love 
to use the--``I have a great idea, and I have to leave where I 
live because I cannot operate an Internet business from here. I 
have to move.''
    And it may not be something terribly technically advanced. 
It could be something as simple as being an architect or 
running an industrial design firm. But when you have to send 
complicated drawings, you need bandwidth to do it.
    Mr. Reece. Sure.
    Ms. Miller. Thank you,
    Bruce, did you want to follow up?
    Mr. Taylor. Yes, if I could. I just wanted to make one 
other point. I had mentioned in my comments before that we are 
acquiring all of our services from one firm. It happens to be 
SeeBeyond, and they have done great stuff for us. And we 
actually attempted fairly recently to work with SeeBeyond to 
come up with an affordable offering that we could offer to one 
of our local sheriff's offices who wanted mobile access. If you 
think about mobile broadband for law enforcement, it is sort of 
a force multiplier. If you require the officer to get back to 
the squad room to do stuff, it is both a potential public 
safety issue--he is not out doing something else--and he is 
also not doing it as effectively as he could.
    We do have data cards from SeeBeyond. I am using one. I can 
use it up and down the New Jersey Turnpike driving up and down 
to Cape Cod every summer. However, there are regions, including 
in Fulton County, where coverage is not available, and the 
price point that SeeBeyond was able to offer was not really 
going to meet the Fulton County sheriff's office budget needs 
in tight times.
    So I think--and, again, I do not understand all the 
technicalities of it, but since a provider like SeeBeyond is 
critically dependent on affordable access to the pipes and the 
fiber that is there, then there is a constraint there that--I 
do not want to go to a big guy that is going to make me 
unbundle my services and do part here and part there. What we 
need is to have an affordable way to have the SeeBeyonds of the 
world have affordable access to the broader band, in particular 
wireless in our area.
    Ms. Miller. Thank you.
    Roger.
    Mr. Bundridge. I wanted to touch on a couple of things 
here. For one, Lowell mentioned public interest, and Bruce was 
talking about these public safety cards. The public safety, the 
sheriff's department, contacted us when they were doing their 
application for a grant. They did not have funding to support a 
long-term solution for the broadband. They were just 
experimenting with it. My company, we made the decision because 
we knew it was in public interest. We discounted those cards. 
We cut the price in half because we felt that we needed to 
provide this service.
    Again, to me, mobile broadband is a complement to the fixed 
broadband. It is not a replacement. Some people out there might 
think that 4G is a replacement. In Angela's case, she mentioned 
she is a high user. It is strictly a complement. When you are 
home, you are better off to be on a fixed solution. What I want 
to provide is a complement to the fixed solution which is a 
mobile solution. By no means is it a replacement, and it never 
will be. The things that we are facing going down in the future 
with 4G and some of the other applications and products that 
are available, we are going to look back at how much bandwidth 
we use today, and we are going to laugh.
    I remember the first computer I got years ago. It was like 
a 20-gig hard drive, and you are like ``Whoa, that is great.'' 
But it is not enough now.
    When I mentioned that we did 3G, we do not have a 3G 
roaming agreement. We have asked--we have inquired about 
getting one, but we do not have one to date. My customers go to 
2G when they leave my market. Eighty-five percent of all my 
usage occurs on my cell sites. Another 10 percent occurs within 
a 150-mile radius of a market. Omaha and Kansas City were in 
the middle there, and we have a major interstate that travels 
between our area. Another 5 percent of our traffic occurs 
throughout the Nation.
    So today it works. Today people are satisfied with their 
data use in our market. My concern is moving forward not having 
a 3G solution or not having a 3G or 4G roaming agreement. Today 
my customers--we have introduced the Android in the last 6 
months and BlackBerrys, and it was very hard for us. It took us 
over 2 years to get a BlackBerry agreement. We were told once 
we signed the agreement it would be a year before we had 
product, and it was more than a year.
    Those are struggles that companies like mine face, and even 
though we faced not having BlackBerrys, for an example, we 
still were successful in customer growth. Customers still 
choose us. My concern is, though, going forward--my wife last 
night, she was reading Facebook, and there was somebody that 
she had friended that she is not really close with, and they 
were making comments about cell phone providers, and I am sure 
they did not realize she was seeing these things. There were 
about 15 messages going back and forth between people, and they 
are all in my area so it was good to hear. Nothing was negative 
against our company, but one customer pointed out some benefits 
of a phone we offered. It is a Quantico. It is a waterproof 
phone, shock resistant, and they were--when I get back, I am 
going to send them a gift certificate, because they were 
really--they were doing a great job, and they must have been 
reading something off our website.
    But the point of that is three or four people on there 
mentioned--and I know who these people are, and they are people 
that we work with and we do business with, at least, work with 
in companies, like insurance companies that we work with, and 
one mentioned they love their Pre, which, we cannot get the 
Pre. Another one mentioned the iPhone is the best phone to get, 
which, I have an iPod, and it is pretty cool. I would love to 
have an iPhone. I would love to be able to offer the iPhone.
    Today in our market, we lose--on a portability case, we are 
3:1 ratio as far as people porting in numbers versus people 
porting out. And our primary competition would be AT&T, and of 
the people that leave us, I would say 80 percent are leaving us 
because of the iPhone.
    I can also tell you that a good handful--I mean, I just 
heard a name yesterday, and we also are putting a commercial 
together with somebody who is doing a testimonial for us, where 
they thought they wanted the iPhone. They got the iPhone. They 
loved the phone, but they did not have service. So they paid 
the early termination fee and came back to us. That happens 
quite often. I mean, people see something like that, they want 
it, and after they get it, if they cannot use it, then it does 
not do any good for them.
    We have introduced the Android phone, which is a very cool 
phone. Most of the applications on Android are free. It has 
helped us. It has given me a sense of maybe a little bit of 
light at the end of the tunnel, because now people are taking 
data. They can justify paying the data service when they get 
these applications. And in Lowell's case, if he called me up 
and said, ``Hey, Roger, we have got this--we are working with 
the law enforcement in your area, and we want to provide them 
these data cards,'' we would form an agreement with them right 
away because, honestly, the amount of money we are charging our 
law enforcement is probably not paying our costs, or if it is 
paying our costs, it is probably barely paying our costs. So, 
honestly, in my case, I would probably be better off to give 
him an affair roaming agreement, but----
    Ms. Miller. Thank you. In the interest of time, I want to 
shift gears just a little bit. I am sorry. I do not mean to cut 
you off, but we only have the room for so long, and I do not 
want to miss anything that has been on our agenda.
    Earlier on, the notion of barriers to women- and minority-
owned businesses was raised, and the National Plan does address 
this in part. One of the things that it talks about are public-
private partnerships and the way that they can possibly help 
socially and economically disadvantaged small businesses and 
also the targeting of small and medium-size enterprises in low-
income areas.
    I was curious. I know not everyone here is familiar with 
the plan or has read it. It is huge. But what thoughts or 
ideas--and I open this up to everyone--does anyone have on 
this? If you are a small business yourself, what ways do you 
think Congress or the FCC or--what things can they do to 
implement this or what would make sense? If you are a provider 
or if you work with providers, what things do you think that 
the private sector could possibly be helping with in this area? 
Lowell.
    Mr. Feldman. The first thing that we should do as far as 
subsidizing low-income areas that you mentioned is try and 
subsidize to the degree we can the users in some direct fashion 
rather than through a centralized fashion. A great example is 
low-income housing.
    Today, and even really the way it is structured right now, 
it is set up so that a business model is subsidized, where a 
provider has to get some designation in order to be subsidized. 
It would be much more efficient--and we have worked with 
nonprofits, the University of Texas--when I say ``we'' on this 
one--has worked with nonprofits in Houston and Austin called 
Austin Free-Net and Technology for All in Houston, and housing 
authorities and a nonprofit company started by some of my 
students called U.S. Phone, where if you change the model and 
you give the housing authority in charge of the project money 
directly--and you are talking $8 to $10 a month per user. But 
you give them money directly, they do not just get phone 
service at a discounted rate, but that $8 to $10 to a 600-unit 
housing complex can actually provide broadband to the entire 
complex.
    So built into our current systems of universal service is 
horrible inefficiency. With respect to that, that would greatly 
benefit small business because the small business providers who 
would go in, and wire the building for ethernet are all small 
businesses. The people who are going to be doing the work are 
going to be contracted to put in the ethernet and do the 
various things.
    So we have got to--it is not that the money is not 
allocated. There is billions of dollars spent every year to 
subsidize low-income. It is just spent to go to the pockets of 
AT&T and Verizon. It has got to be re-spent in a better way.
    So HUD, anybody who is a HUD user or a HUD provider should 
be able to get the money directly from the Universal Service 
Fund so it can decide who to buy the service from and how to 
deliver the service.
    I also think that to create sustainability, anybody who is 
eligible for money in any way shape or form should be sunset so 
that the fund is not abused. The funds that have been allocated 
already--and so this is, again, how we structure a fund going 
forward. We have let universal service just get away. It 
started at $2 billion and now it is $9 billion a year, and it 
really is very inefficient.
    I would suspect that, if not a majority, a very large 
percentage of the current subsidies, services that are 
subsidized, are not even used. There is not even a measurement 
to say to AT&T or a cell phone carrier, ``Hey, before we give 
you this check for $38 a month, did they use the service?'' It 
is obscene.
    I know of companies that have gone out just to get 
satellite phones, just to get a right to get satellite phones 
so they can hand them to farmers and say let's stick them in 
your truck. At the same time, ILECs in rural areas are 
mandating that even though somebody just wants broadband, it 
comes with a phone line, even though the phone line is not 
used.
    So we can look at the way the fund is done now and just not 
make the same mistakes.
    Ms. Miller. Thank you.
    Deborah.
    Ms. Landsdowne. I think I would take that a little bit 
further than just saying subsidizing. You have to empower 
people, and you have to train them, and you have to create 
opportunities. So if there is a way for Government and big 
business in particular to play a role, and even small business, 
it is going in and being able to put programs and education in 
place and job opportunities so that they can see how broadband 
really affects their day-to-day life and not just from a TV or 
an Internet perspective, but it is a way that I can make money. 
It is a way that I can reach out. It is a way that I can create 
jobs in my community. I would like to see it go a little bit 
further than just a subsidy of putting it in place.
    Ms. Miller. So you think education would be a more 
important focus.
    Ms. Landsdowne. Absolutely, it is critical.
    Ms. Miller. Angela?
    Ms. Benton. I really agree with what Lowell just said and 
also what Deborah just said. But to piggyback a little bit off 
of what Lowell just mentioned, not only--if we work with HUD, 
not only will you from the National Broadband Plan perspective 
help consumers with access, but then those consumers then in 
turn turn into small businesses, and then they have the 
opportunity to become an entrepreneur or to build something and 
become a builder.
    With that said, I definitely agree with Deborah. Part of 
what we discussed last week at the New Media Entrepreneurship 
Conference was--and there were entrepreneurs in the room. They 
do want to work with Government and private sector, so some 
type of program that may be similar to an 8(a) program, but 
focuses specifically on people who are interested in technology 
or new media type of companies.
    In addition to that, education was a big thing, because 
even though--a lot of times in minority communities, when you 
think of you want to be an entrepreneur or you think of you 
want to be a small business, it ends there. They do not 
necessarily know, okay, well, how can I take this a step 
further. It is somewhat short-sighted. So they do not think 
about their business from a sense of scale.
    So just allowing them to actually have access to the 
Internet, but then also providing education, and then also 
providing education not just on how they can use the Internet, 
but how they can build a business with the Internet. That 
includes structuring business models, financing, the whole kit 
and kaboodle.
    Mr. Reece. I think that is a great point on the role that 
SBA needs to play in this process. At the hearing we had on 
April 27th on broadband, both Chair Landrieu and Ranking Member 
Snowe pressed the SBA to be a legitimate partner in the 
process, because I think that, like you said, building the 
business, not to mention the technological aspect of it, is 
going to be important. So, Tee, maybe you can talk about your 
partnership with SBA and how that will work moving forward?
    Mr. Rowe. Right. Well, Deborah and Angela are absolutely 
correct, and I will go quick because I know Roger and Jesse 
have something to say.
    Our partnership with SBA--and I just met with Ana Ma, the 
Chief of Staff, last week. We are developing, besides the 
professional development training we are doing on teaching our 
counselors to teach folks about the use of social media as a 
marketing tool, building an Internet-based business, all of 
that, it is also developing a model, a training seminar that 
will go out to small businesses, a hands-on.
    We have actually a very gifted presenter who works with us 
who used to work for Microsoft, and we have developed a 
curriculum, and we are working on the happy side of it, which 
is finding the funding. But I am confident that with partners 
like Sprint and some other folks we can get there.
    But it is what Angela said. It is getting to the individual 
and telling them that this opportunity exists. And it is not 
just in the rural areas. I think this is something we vitally 
need to do at our SBDCs in Manhattan, the Bronx, and Detroit, 
for crying out loud, to tell people there is more than your 
neighborhood, and you can get to it and here is how.
    Ms. Miller. Thank you.
    Roger.
    Mr. Feldman. [Off microphone, inaudible] We have used the 
funding to go into remote areas [inaudible]. We also will 
provide amplifiers to homes, businesses, [inaudible] sorry. We 
will provide additional assistance to get customers coverage, 
and we install those at no cost.
    In my viewpoint, though, some of the things that frustrate 
me, there is another company that is a USF recipient in our 
market, and I see them building sites today in areas where I 
have a tower and I have had a tower for 5 or 6 years, and they 
are building it either in the same field or right across the 
street, and we are using the same technology. It makes no 
sense, using the funds in that manner.
    So I think better guidelines and better management of the 
States to understand--we have to give a 2-year projection of 
what we are going to do with the funding, maps included. So 
there is a road map there. It is not like I just put it up and 
said here is what we use it for, so I think better management 
would be ideal.
    And the last thing, I think for my company, we have been 
very successful. We have a 30-percent penetration. Customers 
prefer us over any other carrier in our market even though we 
have the big guys competing against us. But I feel like we need 
to have mandated third- and fourth-generation services for 
companies like mine in order to compete down the road.
    A larger carrier has no vested interest in my market. We 
have 15-percent population density. In the last 9 years, our 
population has declined 3 percent. They are going to build out 
the major interstate, and they are going to build to the 
university, and all the other communities that are suffering 
the decline in population are not going to get any support.
    So when I see the wind turbines coming in, I see hog 
confinements coming in, I see John Deere and the things they 
are doing to help the farmers be more efficient, those are 
things I can do to assist those businesses today and hope to 
stabilize the economy in my market.
    Ms. Miller. Thank you.
    Jesse.
    Mr. Vaughan. This goes back to what I was saying before and 
also something that I think Tee or Marcus said earlier, and 
that is that--well, I guess there are sort of two parts to 
this. The first part is going back to the incentives. You were 
saying that the large companies in the large cities, you have 
sort of an over-infrastructure there, and then in the rural 
areas, you have sometimes almost nothing. So to me, that says 
that the incentives to build in those areas are not sufficient 
to level the playing field. They are not going after the small 
company or the small communities that have some businesses in 
them because it is not worth it to them. So doing something to 
make it worth it to them to go out there, whether it be money 
or funding or tax breaks or whatever, to get them to be of 
value to those large companies and to small companies to fill 
those gaps.
    And then in terms of the women and minorities, I used to 
work with Career Education Corporation, which has a lot of the 
career colleges, and I used to see all the time these students 
who were trying to start their own companies and were using 
Internet services at the university to do that, but did not 
necessarily have those Internet services at home, either 
because they could not afford them or because they could not 
get those services for whatever reason.
    But as you were saying, there is an economy of scale to 
provide services to a large--maybe a Section 8 housing 
community, for example, and giving some kind of an incentive to 
get companies in there to do it at a reduced cost, to do it 
at--to provide that service to them will get more people in the 
minority sector or in other target groups to give it a try and 
to try and get their business going. And you know what? Some of 
them are going to probably fail, but some of them are going to 
succeed and some of them are going to become successful because 
of those opportunities that are presented.
    Ms. Miller. Thank you.
    Lowell.
    Mr. Feldman. I will try to be really, really quick. One 
thing about education and outreach, as we were talking about 
earlier, is it typically is not a profit motive endeavor, and I 
think that should be recognized. And at the University of Texas 
we have worked with, TFA, Technology For All, and Austin Free-
Net, all nonprofits that have outreach. And while we have 
applied for BTOP funds to create a best practices center as a 
collective group to do a lot of these education things--and I 
think doing any type of Web design and things like that for 
users would fit right in. There is no guarantee that we are 
going to get it through BTOP, and it is not a bad idea to say 
that part of a broadband plan that you are going to have 
education and outreach and at least some type of best practices 
center on a regional basis created. I think that is a very good 
idea.
    I think the other thing, as we are talking about money, and 
money going to subsidize different people in different ways in 
different areas. You do not always have a good cell provider. 
You do not always have a good incumbent LEC. And I think as we 
create a new plan and get rid of the old--and I am 100 percent 
in favor of killing the old universal service system because I 
think it is very, very bad. But it needs to be replaced, okay?
    We can do things like what the Government has done with 
highway funds, and say if you want to participate in this 
subsidy program, you are going to have very clear non-
discrimination standards on your network management so that you 
cannot drop packets on the floor; and you are going to have 
very, very clear transparency rules that may or may not be, as 
the Chairman of the FCC is finding out, under the current act. 
But it certainly can be something that, if they want 
subsidies--which is not an entitlement by any carrier--they 
have to obey certain rules so that Marcus' platform cannot be 
discriminated against in favor of a Time Warner video platform 
or somebody else's.
    Mr. Reece. Well, I just want to say on behalf of Ranking 
Member Snowe that your testimony has been very helpful and 
insightful from a small business perspective, and we appreciate 
all of you being here today.
    Ms. Miller. Yes, I just echo that on behalf of Chair 
Landrieu. I want to thank you all for coming here today. I know 
some of you traveled from very far away, and we definitely have 
appreciated all of your thoughts and all of your comments.
    I want to remind you all that the record will remain open 
for a week, and so if you have follow-up comments or thoughts 
or if you have partners that could not be here today but also 
had comments that they wanted to submit, please help us to make 
the record as complete as possible.
    Thank you again.
    [Whereupon, at 12:16 p.m., the Committee was adjourned.]
  

                                  
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