    [Senate Hearing 113-307]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 113-307

                       BROADBAND ADOPTION: THE NEXT MILE

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

                                    HEARING

                                   before the

          SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, AND THE INTERNET

                                     of the

                             COMMITTEE ON COMMERCE,
                          SCIENCE, AND TRANSPORTATION
                              UNITED STATES SENATE

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                OCTOBER 29, 2013

                                   __________

        Printed for the use of the Committee on Commerce, Science, and
                                 Transportation

                                     ______

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           SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                JOHN D. ROCKEFELLER IV, West Virginia, Chairman
    BARBARA BOXER, California            JOHN THUNE, South Dakota, Ranking
    BILL NELSON, Florida                 ROGER F. WICKER, Mississippi
    MARIA CANTWELL, Washington           ROY BLUNT, Missouri
    MARK PRYOR, Arkansas                 MARCO RUBIO, Florida
    CLAIRE McCASKILL, Missouri           KELLY AYOTTE, New Hampshire
    AMY KLOBUCHAR, Minnesota             DEAN HELLER, Nevada
    MARK WARNER, Virginia                DAN COATS, Indiana
    MARK BEGICH, Alaska                  TIM SCOTT, South Carolina
    RICHARD BLUMENTHAL, Connecticut      TED CRUZ, Texas
    BRIAN SCHATZ, Hawaii                 DEB FISCHER, Nebraska
    MARTIN HEINRICH, New Mexico          RON JOHNSON, Wisconsin
    EDWARD MARKEY, Massachusetts         JEFF CHIESA, New Jersey
                        Ellen L. Doneski, Staff Director
                       James Reid, Deputy Staff Director
                         John Williams, General Counsel
                  David Schwietert, Republican Staff Director
                  Nick Rossi, Republican Deputy Staff Director
       Rebecca Seidel, Republican General Counsel and Chief Investigator
                                     ------

                  SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY,
                                AND THE INTERNET

    MARK PRYOR, Arkansas, Chairman       ROGER F. WICKER, Mississippi,
    BARBARA BOXER, California                Ranking Member
    BILL NELSON, Florida                 ROY BLUNT, Missouri
    MARIA CANTWELL, Washington           MARCO RUBIO, Florida
    CLAIRE McCASKILL, Missouri           KELLY AYOTTE, New Hampshire,
    AMY KLOBUCHAR, Minnesota             DEAN HELLER, Nevada
    MARK WARNER, Virginia                DAN COATS, Indiana
    MARK BEGICH, Alaska                  TIM SCOTT, South Carolina
    RICHARD BLUMENTHAL, Connecticut      TED CRUZ, Texas
    BRIAN SCHATZ, Hawaii                 DEB FISCHER, Nebraska
                                         RON JOHNSON, Wisconsin

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on October 29, 2013.................................     1
    Statement of Senator Pryor.......................................     1
    Statement of Senator Wicker......................................     2
        Prepared statement of Tom Koutsky, Chief Policy Counsel,
          Connected Nation submitted by Hon. Roger F. Wicker.........    60
    Statement of Senator Klobuchar...................................    50
    Statement of Senator Rubio.......................................    52
    Statement of Senator Ayotte......................................    56

                                   Witnesses

    Hon. John E. Sununu, Co-Chair, Broadband for America and former
      U.S. Senator from New Hampshire................................     4
        Prepared statement...........................................     6
    Aaron Smith, Senior Researcher, Pew Research Center's Internet
      Project........................................................     9
        Prepared statement...........................................    11
    Bernadine Joselyn, Director, Public Policy and Engagement,
      Blandin Foundation.............................................    13
        Prepared statement...........................................    14
    Sunne Wright McPeak, President and Chief Executive Officer,
      California Emerging Technology Fund............................    22
        Prepared statement...........................................    24
    David L. Cohen, Executive Vice President, Comcast Corporation....    37
        Prepared statement...........................................    38

                                    Appendix

    Hon. John D. (Jay) Rockefeller IV, U.S. Senator from West
      Virginia and Chairman, U.S. Senate Committee on Commerce,
      Science, and Transportation, prepared statement................    71
    Follow-up Submission to Testimony Submitted by Sunne Wright
      McPeak, President and CEO, California Emerging Technology Fund.    71
    Letter dated November 11, 2013 to Hon. Mark Pryor and Hon. Roger
      Wicker from Lilian P. Coral, Director, 2-1-1 California........    75
    Letter dated November 8, 2013 to Hon. Mark Pryor and Hon. Roger
      Wicker from Alicia Orozco, Project Manager, Get Latinos
      Connected, Chicana/Latina Foundation...........................    76
    Letter to Hon. Mark Pryor and Hon. Roger Wicker from Luis
      Granados, Executive Director, Mission Economic Development
      Agency (MEDA)..................................................    77
    Letter to Hon. Mark Pryor and Hon. Roger Wicker from Mike Dozier,
      Executive Director, California State University, Fresno........    79
    Letter to Hon. Mark Pryor and Hon. Roger Wicker from Martin O.
      Gomez, Ph.D., Instructional Leader, Santee Education Complex...    80
    National Hispanic Media Coalition, prepared statement............    80
    Letter dated October 29, 2013 to Senator Mark Pryor and Senator
      Roger Wicker from Javier Palomarez, President and CEO, United
      States Hispanic Chamber of Commerce (USHCC)....................    82
    Response to written questions submitted by Hon. Amy Klobuchar to:
        Aaron Smith..................................................    84
        Bernadine Joselyn............................................    84
    Response to written questions submitted by Hon. Marco Rubio to
      Hon. John Sununu...............................................    89

                       BROADBAND ADOPTION: THE NEXT MILE

                                  ----------

                           TUESDAY, OCTOBER 29, 2013

                                   U.S. Senate,
    Subcommittee on Communications, Technology, and the
                                              Internet,
            Committee on Commerce, Science, and Transportation,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 10:30 a.m., in
    room SR-253, Russell Senate Office Building, Hon. Mark Pryor,
    Chairman of the Subcommittee, presiding.

                 OPENING STATEMENT OF HON. MARK PRYOR,
                       U.S. SENATOR FROM ARKANSAS

        Senator Pryor. I'll call our Subcommittee to order. I want
    to thank everyone for coming to the Subcommittee on
    Communication, Technology, and the Internet.
        Our hearing today is entitled ``Broadband Adoption: The
    Next Mile.'' Again, I want to thank all of our witnesses for
    coming. And some traveled to be here, and we appreciate that.
        I want to especially thank our former colleague, Senator
    John Sununu. It's great to see you again this morning. You
    know, back when he was in the Senate, he used to always remind
    me that he was the youngest Senator in the Senate. You know?
    So, that's what we had to deal with all the time. So, maybe we
    can ask him some real hard questions today. What do you think
    about that?
        [Laughter.]
        Senator Pryor. No, really, thank you all for being here.
    And this is a story where you see the public and private sector
    who have done a tremendous job in trying to make sure that
    Americans have access to broadband. There has been a great deal
    of progress there. Lots of investments. Our providers,
    nonprofits, private entities have all been working very, very
    hard to achieve that goal of access. And the Federal Government
    has done some things with Universal Service Fund, BTOP, and
    other programs. And certainly, as we have the hearing today, we
    don't want to diminish the progress that we've made; we also
    don't want to forget about the millions of Americans who have
    access but still maybe need faster access. But, today our
    focus--today our focus is on broadband adoption, which is a
    little different than just access.
        Nearly 30 percent of all Americans who have access to
    broadband do not subscribe to those services. That is, millions
    of Americas who--Americans who risk being on the wrong side of
    the digital divide. So, today the Subcommittee will look at the
    various barriers to broadband adoption and the strategies for
    overcoming these barriers.
        And just as the public and private sectors have worked so
    hard and invested billions of dollars toward broadband
    deployment, they're also putting significant time and effort
    and resources to encouraging Americans to take advantage of
    this very important resource.
        So, I want to commend our witnesses today, but also the
    private sector and others for doing all that they've done to
    get us where we are today.
        But, I also hope that today we'll hear some of the lessons
    learned on the ground, to understand how to encourage more
    people to sign up to this, what is now becoming, and has
    become, just critically important and necessary infrastructure
    for the 21st century. We, in Congress, hear every day about
    success stories from individuals and communities where
    broadband has made significant impacts. And, of course, our
    providers have a lot of firsthand stories about improvements
    and benefits to homes, schools, businesses, et cetera. However,
    for many Americans, those successes remain hidden.
        So, I think there are probably three reasons why some
    Americans don't sign up, but we want to hear from the witnesses
    about their thoughts. One would be--a lot of Americans just
    don't understand the relevancy and why they should do this. A
    lot of Americans feel like they're not capable or they don't
    have the skills to do it. And then there are some Americans who
    say they just can't afford it.
        So, today we'll hear from a provider and various nonprofit
    organizations that have been working to identify who is and who
    is not online, why Americans are or are not connecting, and
    developing and implementing strategies to encourage Americans
    to adopt broadband Internet. I want to hear from our panelists
    about the most effective ways that we can do this, policies
    that maybe we need to support, the role of the Federal
    Government in improving broadband adoption rates.
        And so, again, I want to thank you. And we'd like to hear
    from Senator Wicker and then from our witnesses.

                  STATEMENT OF HON. ROGER F. WICKER,
                     U.S. SENATOR FROM MISSISSIPPI

        Senator Wicker. Thank you, Mr. Chairman, for holding this
    important hearing on the state of broadband adoption in
    America.
        Over the past year, this subcommittee, under the Chair's
    leadership, has done a great job of providing a forum for
    education and discussion on the state of communications policy
    in our nation, covering a broad array of topics. However, the
    common denominator in all of our hearings has been the emphasis
    on the importance of broadband for all Americans.
        As I've mentioned before, we, as policymakers, must ensure
    that any digital divide that exists between Americans--whether
    that divide is urban or rural, young or old, high income or low
    income--must be bridged. Our goal should be that all consumers
    be able to take full advantage of our 21st century broadband
    economy.
        The deployment of broadband via cable, DSL, fiber,
    wireless, and satellite has been a success. According to NTIA
    at the end of 2012, nearly all American consumers had access to
    some form of high-speed broadband. However, there are still
    challenges to be examined, particularly in regard to consumer
    adoption of broadband services, which brings us to our hearing
    today.
        According to the FCC, the broadband adoption rate in the
    United States stands between 62 and 68 percent, meaning
    approximately one-third of Americans who have access to
    broadband choose not to subscribe to the service. Of particular
    interest is the agency's finding that the broadband adoption in
    non-urban areas is significantly lower than in urban areas.
        So, while tens of millions of Americans now have access to
    broadband, they choose to remain offline. The primary reasons
    for non-adoption include the lack of digital literacy,
    questions regarding the relevancy of broadband in their lives,
    and the cost of equipment and service.
        Mr. Chairman, you and I both know the importance of
    broadband adoption. Our fellow citizens in Mississippi and
    Arkansas have perhaps not taken to the Internet quite like our
    colleagues in Minnesota, for example, or New Hampshire. I fear
    this lack of adoption may hold our states back as we move
    deeper into the 21st century, but I also see this as a great
    opportunity to bring more of our great people to the online
    world to share their interests and talents and improve their
    lives.
        Assembled here today are witnesses with a broad and varied
    knowledge of broadband adoption in America. We have
    representatives of Internet service providers, like Comcast,
    which is celebrating its 50th anniversary this year and, I'm
    proud to say, was founded in Tupelo, Mississippi, where I
    reside. We also have a private philanthropic organization in
    Minnesota's Blandin Foundation, a nonprofit from California,
    and the Pew Research Center, which has provided valuable
    reports and data for us to consider.
        I also would like to welcome John Sununu back to this
    committee, and note, Mr. Chairman, that, according to his
    nameplate, one can leave the Senate and this committee and
    still remain ``Honorable.'' And that is good to know.
        [Laughter.]
        Senator Wicker. Senator Sununu served here on this
    committee with distinction for a number of years.
        So, I look forward to hearing all of our witnesses.
        Thank you, again, Mr. Chairman, for holding this important
    hearing.
        Maximizing broadband adoption needs to be a top priority of
    this subcommittee. This hearing will provide a good opportunity
    for our members to learn about not only the successes of
    broadband adoption, but, more importantly, what can still be
    achieved.
        Thank you, sir.
        Senator Pryor. Thank you.
        And what we'll do is, we'll make all of the members, here,
    their opening statements, part of the record. And we also, for
    all of our witnesses today, your full statements will be made
    part of their record, so feel free to summarize those. And we'd
    ask you to keep all your statements to 5 minutes, and we look
    forward to the round of questions.
        Let me just introduce the entire panel, then I'll just call
    on you, one by one.
        First, of course, we have Senator John Sununu. He's the
    Honorary Co-Chair of Broadband for America. Second, we have Mr.
    Aaron Smith, Senior Researcher, Pew Research Center, Pew
    Internet & American Life Project. Next, we have Ms. Joselyn,
    Director of Public Policy and Engagement, Blandin Foundation.
    And next, we'll have Ms. McPeak, President and Chief Executive
    Officer, California Emerging Technology Fund. And last, and
    certainly not least, we have Mr. David Cohen. He's the
    Executive Vice President of Comcast Corporation.
        So, without any further ado, let me recognize Senator
    Sununu for your opening statement. Thank you for being here.

              STATEMENT OF HON. JOHN E. SUNUNU, CO-CHAIR,

             BROADBAND FOR AMERICA AND FORMER U.S. SENATOR

                           FROM NEW HAMPSHIRE

        Senator Sununu. Thank you very much, Mr. Chairman. It
    really is a pleasure to be here. Happy to be on this side of
    the witness stand, which is, obviously, new for me. I don't
    think I've been in this room in five years. And, well, it's not
    a complaint, my only observation is, these chairs are much
    lower than I expected them to be.
        [Laughter.]
        Senator Sununu. But, happy to be here, nonetheless. And
    nice to see former colleagues here; and, in particular, Senator
    Ayotte, who's doing such a great job for the people of New
    Hampshire.
        I'm, as you indicated, Mr. Chairman, the honorary co-chair,
    along with former Congressman Harold Ford, of Broadband for
    America. It's an organization--a coalition of 300 or so
    members--whose mission is focused on encouraging broadband
    investment, deployment, access, and adoption. So, happy to be
    here to talk about what we see happening in those areas and to
    talk a little bit about adoption initiatives, as well. But,
    we've got a great panel here of many who are working in
    different regions of the country, in different programs, and
    who can share their experience, as well.
        It's hard not to focus on broadband investment when you're
    talking about this topic. It's different than adoption, but it
    has got to start somewhere, and oftentimes it starts with
    money. And over the last several years, I think there's a very
    positive story to talk about in America on broadband
    investment--$250 billion invested by the broadband industry
    over the past 3 years. I think the Progressive Policy Institute
    highlights just the six largest broadband providers investing
    $50 billion in the last year.
        And, let's face it, the broadband infrastructure, it's not
    the be all and end all, but it is the foundation for a lot of
    innovation and economic growth that's going on out there. In
    particular, companies like Google or Apple, but even more
    prominently and more recently, the applications industry. The
    apps industry now employs 750,000 people. It didn't exist five
    years ago. Investment then leads to competition. Very
    important. The OECD ranks the U.S. third in broadband
    competition in the world. We--as was mentioned, I think, by
    Senator Wicker, 94 percent of people in the country have access
    to one or more wired broadband providers, 82 percent have
    access to four or more wireless broadband providers. So, the
    competition is there, and access, in many parts of the
    country--most parts of the country--is there.
        And it's interesting to look at the growth in access. Over
    the last 10 years, we've gone from 15 percent of the country
    having access to broadband to 98 percent of the country having
    access to broadband. That's great progress. Ninety-six percent
    having access to networks that are capable of 10 megabits per
    second or more, 85 percent of the country having access to
    technology that can give 100 megabits per second or more. And
    speeds, similarly, have increased by about 20 percent over the
    past year.
        So, investment, we've got better and growing competition.
    We have access. What about adoption? Because adoption isn't the
    same as access.
        Pew--and we're fortunate to have Aaron here from Pew --
    they've done a lot of study and research in this area. Right
    now, we've got about 70 percent of the country with wired
    broadband access--or, wired broadband service--that is, they've
    adopted it; 80 percent with wireless broadband service. So,
    we've made progress, but we can do better.
        And, in particular, we've got a gap. You know, among whites
    that adoption rate is 75 percent; among African Americans, it's
    65 percent, roughly; and among Hispanics, it's 55 percent. Now,
    the gap is closed--over the last 4 years, the gap has closed by
    roughly half for African Americans, but that doesn't mean we
    can't or shouldn't do better in those underserved or areas of
    the country that haven't taken up adoption like we would want
    them to.
        There are lots of reasons. Both of you--the Ranking Member
    and the Chairman mentioned relevancy, that the computers, the
    equipment is expensive, and, of course, the cost of
    connections. It's all about digital literacy. It's about
    education. And it's about having people understand the value to
    them.
        I would close by emphasizing that, in this case, there's no
    single solution that's right for the entire country. There's a
    corporate involvement and responsibility, there's a government
    role, there are partnerships. It could be Big Brothers, Big
    Sisters, or the Boys and Girls Clubs, or the United Way
    undertaking local programs. It could be companies like Comcast
    in their Internet Essentials Program. AT&T, 250 million in
    their Aspire Program. Bright House is a $2 million program
    that's reached out to 1,500 schools.
        Finally, in terms of the role of government, because that's
    what you're interested and focused on, the light touch
    regulatory approach has been very important in providing an
    atmosphere that encourages and incentivizes investment in
    innovation. The NTIA has done a great job with their toolkit
    for digital literacy that focuses on all of these issues--
    pricing and the cost of equipment and in educating consumers.
        And then, finally, from a regulatory perspective, I think
    you need to continue to allow providers to experiment and
    innovate in the way they package and price the product,
    especially in an age when there are more and more different
    ways to get access to content over the top and other ways.
        So, I appreciate the work that you've done here. I
    apologize that I've gone over time. I said to Senator Wicker,
    ``That's my only fear, is that, in an effort to summarize my
    remarks, I exceed the 5-minute time limit.'' I have failed.
    But, hopefully, the minute is something we'll get back.
        Thank you for your interest in the topic, and I look
    forward to your questions.
        [The prepared statement of Senator Sununu follows:]

      Prepared Statement of Hon. John E. Sununu, Co-Chair, Broadband for
               America and former U.S. Senator from New Hampshire

        Chairman Pryor, Ranking Member Wicker and distinguished Members of
    the Subcommittee, good morning. Thank you for inviting me to join you
    today and thank you for bringing attention to this important national
    priority.
        My name is John Sununu, a former member of this chamber, proudly
    representing New Hampshire from 2003 to 2009. Along with my friend and
    former Congressman Harold Ford, I am co-chair of Broadband for America.
    I have a long interest and extensive professional experience in the
    high-tech and broadband-related industries. I currently serve as
    director of Time Warner Cable and Boston Scientific Corporation. Before
    my career in government, I served as Chief Financial Officer of
    Teletrol Systems. I also received my master's degree in electrical
    engineering from the Massachusetts Institute of Technology.
        Broadband for America promotes well-informed public policy choices
    to create the right incentives for the private sector to build advanced
    networks and offer innovative services throughout the nation, and to
    encourage all Americans to become digitally literate and adopt
    broadband Internet. Our members include national and state-based
    community organizations, education and medical professionals, religious
    and minority groups, and stakeholders in the broadband Internet
    industry. Since our founding, Broadband for America has been dedicated
    to improving broadband adoption throughout the country; this is
    something our more than 300 members care passionately about.
        Today, I would like to focus on two topics:

       The U.S. broadband success story, marked by vibrant
            competition and remarkable levels of sustained investment, and;

       How we can all work together to help further shrink the
            broadband digital divide and increase broadband adoption.

    The Ongoing Broadband Success Story
        Broadband for America believes broadband is for everyone. As the
    National Broadband Plan states, ``broadband is a foundation for
    economic growth, job creation, global competiveness, and a better way
    of life.'' Today's broadband networks enable an array of services--
    voice, video, e-commerce, and more--over high-capacity wired and
    wireless connections. This platform is revolutionizing our lives:
    improving educational outcomes, delivering better health care, and
    creating a new world of jobs and commercial opportunities.
        A Broadband Nation. Today, 98 percent of American consumers have
    broadband access with 96 percent of households capable of accessing
    speeds 10 Mbps or higher. Only a decade ago, just 15 percent of
    households had broadband access of any kind. Over that time, billions
    have been poured into our economy and broadband networks to build this
    robust infrastructure across technologies. In just the last 3 years,
    broadband providers overall have invested more than $250 billion. In
    2011 alone, 18 million miles of optical fiber were installed in the
    U.S. This laudable level of investment in difficult economic times has
    pushed broadband deeper into communities at higher and higher speeds,
    driving competition and benefiting consumers.
        Broadband providers compete vigorously today on price,
    availability, and speed, providing consumers with constantly innovating
    services, devices, and digital options. Thanks to a light-touch
    regulatory framework based on a long-standing bipartisan approach to
    incent next-generation investment, the U.S. remains a global leader in
    broadband opportunity and competition. In fact, the Organization of
    Economic Co-operation and Development (OECD) ranks the U.S. third for
    competition among carriers of different technologies. The Federal
    Communications Commission (FCC) reported that in 2012, 82 percent of
    the U.S. population had access to four or more wireless broadband
    services, up from 68 percent in 2010. Internet service providers (ISPs)
    deliver broadband via phone lines, cable, fiber, satellite, and fixed
    and mobile wireless connections--all capable of delivering speeds
    unthinkable a decade ago. These speeds continue to escalate: the
    average U.S. broadband speed has increased by 22 percent over the past
    year, and the fastest wired Internet speeds available are 19 times
    faster than speeds available six years ago.
        Broadband providers have delivered these faster and faster speeds
    while keeping prices static: the U.S. has the second lowest entry-level
    pricing for broadband among OECD countries. And entire new industries,
    like the mobile apps sector, have emerged from the innovation engine
    that is the Internet economy. Not even in existence five years ago, the
    mobile app industry now employs 750,000 Americans while generating $18
    billion in revenue last year. Investment in the broadband space has led
    to new technologies at a rate faster than ever before. Better broadband
    technologies encourage innovation and adoption of broadband by
    consumers. Higher adoption rates lead broadband providers to further
    invest in their networks. This cycle of innovation and investment has
    propelled broadband services forward faster than any other technology.
        These broadband deployment efforts in the U.S. are remarkable--with
    broadband providers leading in U.S. investment. Last year alone, the
    Progressive Policy Institute found the top six broadband providers
    invested over $50 billion. But we need to develop solutions to deploy
    broadband in those rural areas where there is not a market based
    solution. The Administration's policies and the FCC's Connect America
    Fund are designed to help ensure that all Americans have broadband
    access.
        Adopting Broadband. From that remarkable technological foundation
    it should come as no surprise that Americans have quickly embraced the
    benefits of broadband connectivity. American consumers' adoption of
    high-speed broadband technology is simply unprecedented. A report from
    the Pew Internet and American Life Project found that 70 percent of
    homes have a broadband connection. If you include mobile broadband
    devices, 80 percent of U.S. households subscribe to broadband services.
        Perspective is helpful here. Thirteen years ago--when just half of
    all adults were ``online'' in some fashion--only 3 million households
    subscribed to broadband at home. Today, the Administration reports that
    88 million households have chosen to take advantage of the
    opportunities presented by the digital economy. Americans have embraced
    broadband-enabled smartphones at an even faster pace. While the U.S.
    has just five percent of the world's population, we have over 50
    percent of global 4G mobile broadband subscribers. In fact, the U.S.
    adoption rates for wired and mobile broadband eclipse--in some cases by
    decades--the comparable adoption timeframes for personal computers,
    cable television, or the landline telephone.
        These positive trend lines extend to communities previously on the
    wrong side of the digital divide. Rural communities tend to adopt
    technologies later than urban and suburban areas. Through increased
    wired and wireless technology, rural areas will develop economically
    through GPS powered equipment, apps that help farmers more efficiently
    track their work and online retail to allow rural businesses to reach
    customers around the world. More of the rural population is able to
    access broadband every day through technologies like satellite and
    wireless. The Pew study on adoption found that 70 percent of the U.S.
    rural population currently has a home or mobile broadband connection.
        Since 2009, the percentage of African Americans that subscribe to
    broadband access has increased from 46 percent to 64 percent, while the
    broadband gap between whites and African-Americans declined from 19
    points to 10 points in that same period, according to Pew. And 49
    percent of African Americans own a smartphone, compared with 45 percent
    of whites.
        The Latino community has also taken great strides forward in
    broadband adoption, and programs by groups like the League of United
    Latin American Citizens (LULAC) have helped in this effort. LULAC
    sponsors technology centers in 25 states across the country, helping
    Latinos with computer training, job searches, and other digital skills
    that are necessary in today's high-tech world. Broadband for America
    believes in programs like this and early on provided financial support
    for LULAC's digital literacy campaign.
    Partnering to Bridge the Digital Divide
        In the past few years, we have learned that building and deploying
    broadband--however complex and expensive--is the relatively simple part
    of this equation. As the pool of non-adopters shrinks, the challenge
    this Nation faces is to ensure that all Americans benefit from the
    broadband economy.
        The Adoption Challenge. Broadband for America applauds this
    Subcommittee for its efforts and leadership to support a sustained
    focus on broadband adoption. As the Nation's ISPs continue to deploy
    broadband, policymakers should concentrate on solutions aimed at
    encouraging all Americans to get online. To succeed, we will need all
    stakeholders to contribute.
        Despite the successes described above, too many Americans still
    face a digital divide--a divide with serious ramifications. The
    statistics are well documented. Fifteen percent of Americans choose not
    to use the Internet at all. The adoption challenge extends beyond
    apartments and homes. The digital divide is just as often a local
    issue, although not often framed as one.
        While the national adoption story is a promising, albeit incomplete
    one, these national figures can obscure regional and community-specific
    challenges. In some areas, broadband adoption dips to 50 percent. These
    pockets of non-adoption reinforce the need for locally targeted efforts
    that address the unique challenges of individual communities. Broadband
    can serve as a great equalizer, opening opportunities to all people
    regardless of economic background, geography, or age. But first, high-
    speed Internet must not only be available, but also relatable.
        People choose not to go online at home for complex and intertwined
    reasons, making one-size-fits-all public policy solutions challenging.
    Pew has done important work in this area. In September, they recently
    released some valuable findings as to why people use the Internet but
    do not adopt a broadband connection at home:

       26 percent find the Internet is not relevant or usable;

       20 percent think computers are too expensive or do not have
            a computer;

       9 percent think an Internet connection is too expensive, or
            it is cheaper elsewhere.

        This shows that relevance and digital literacy are central to
    solving the broadband adoption problem and Internet connection cost is
    lower on the order of importance.
        I note that the FCC will be considering digital literacy and
    adoption issues at its open meeting on November 14. The Commission will
    hear updates on several innovative programs focused on improving
    digital literacy.
        The Path Forward. A multifaceted problem requires a multifaceted
    solution, and one that need not--and should not--be carrier or
    government-centric. This is first and foremost a challenge of inclusion
    and outreach. For broadband adoption efforts to succeed, we need
    persistent and sustained efforts. We need community engagement, through
    developing partnerships with groups like the United Way and Big
    Brothers/Big Sisters. We need to empower partners in our neighborhoods
    and direct relevant messages to underserved communities. Working
    together, we can solve the question of how to connect the dots in each
    non-adopting home and business in a smart and focused manner.
        Targeted government action can play a role in improving broadband
    adoption by specifically engaging community leaders, providing the
    necessary tools, and sharing best practices to get non-adopters online.
    The government's core role is one of facilitator. For example, earlier
    this year, NTIA released its Broadband Adoption Toolkit. NTIA
    recognized that non-adoption is often driven by multiple, interwoven
    factors--perception, access, cost, skills, and relevance--that together
    can form a complex barrier to broadband connectivity. The Toolkit
    emphasized ``concrete, field-tested'' methods and practices in areas
    like curriculum development and training delivery to improve digital
    literacy and engage those not yet online. This effort and many other
    promising outreach models recognize that different communities will
    need different adoption strategies as well as a sustained dialogue with
    community leaders.
        Other aspects of adoption need attention by both government leaders
    and private companies. To many people the Internet does not play a
    large enough role in their life to deem purchasing a broadband
    connection necessary. By incorporating broadband into areas like health
    care, education, transportation and the smart grid, more people will
    find reasons to adopt broadband connections. In many cases, adopting
    broadband is beneficial for consumers. Telemedicine saves money by
    preventing costly hospital stays. For instance, the Department of
    Veterans Affairs' home telehealth program resulted in a 25 percent
    reduction in in the average number of days hospitalized and a 19
    percent reduction in hospitalizations. Smart grid systems save
    consumers money every month. Initiatives by the government and private
    companies will make these programs and technologies relevant to the
    lives of more Americans.
        Government can also help maintain--and facilitate--innovative and
    affordable broadband packages geared to non-adopters. Common sense
    policies, like permanently extending the Internet Tax Moratorium, will
    help ensure broadband prices stay reasonable. This historic
    legislation, first introduced by former Senator Dan Inouye and myself,
    banned states and localities from placing discriminatory taxes on
    broadband access. Over the next decade, this tax moratorium was
    extended twice with bipartisan support. As a result, Internet adoption
    has increased and more entrepreneurs have accessed new markets
    increasing their consumer reach across America.
        The government should also ensure that regulations do not hinder or
    crowd out investment in the broadband and Internet industries. The
    largest private investors in the U.S. are broadband providers; their
    work building out our networks is preparing the U.S. for the economy of
    tomorrow. Deviating from the light touch regulatory model that has been
    in place since the Clinton administration would likely reduce
    investment that helps extend faster broadband services to more people
    across the country.
        Changes in broadband providers' pricing models could also bring
    more people online through a more equitable system. The current
    unlimited-use pricing model has light and moderate users paying the
    same as heavy users, essentially subsidizing heavy broadband use. A
    system that charges customers on the amount of data used would begin to
    reverse this trend. This pricing model would also help close the
    adoption gap by offering additional choices for consumers that more
    closely match their needs and ability to pay.
        Further, the FCC should continue to recognize the pro-consumer
    benefits of new pricing and packaging models. Experimentation with
    speeds, data allowances, and price points is fundamental to providers'
    ability to deliver broadband that is right sized for all consumers and
    businesses.
        Relatedly, the Nation must make a commitment to digital literacy.
    For the country's sustained global competitiveness, digital literacy
    should be a part of every American's rite of passage. As a father of
    three, I have seen firsthand the power of broadband and technology on
    kids. As broadband connectivity transforms our educational system,
    schoolchildren increasingly need broadband access both in the classroom
    and at home.
        Broadband providers are addressing adoption issues head on.
    Broadband for America members, such as Comcast and CenturyLink, offer
    Internet packages for $9.95 per month, along with a low priced
    Internet-ready computer and free digital literacy classes. Only 22
    months after inception, Comcast's Internet Essentials program is being
    used by over 900,000 low-income Americans. Verizon and Time Warner
    Cable both have programs that encourage students to get involved in
    Science, Technology, Engineering, and Math (STEM)-related activities in
    their communities. Verizon's Innovative App Challenge offers prizes to
    teams of students who develop mobile and tablet based apps for use in
    middle and high school STEM classes. Time Warner Cable has invested
    $100 million into its Connect a Million Minds campaign, the program
    helps students get involved in STEM activities through innovative
    online resources, affordable after-school activities, and grants to
    nonprofits that support STEM education. AT&T has contributed and
    committed $350 million as part of its Aspire program since 2008. Aspire
    specifically helps kids stay on track to graduate high school and be
    ready for the hi-tech future which awaits them--and includes digital
    literacy as it reaches kids in our underserved neighborhoods. Bright
    House Networks is providing $2 million of in-kind support to 1,667
    schools through its Cable in the Classroom program. These wrap-around
    solutions will continue to help address the core challenges of non-
    adoption.
        We appreciate the opportunity to share our views on this important
    issue. Broadband for American looks forward to working with Congress to
    help promote increased broadband adoption and utilization. I look
    forward to answering any questions you may have.

        Senator Pryor. Thank you.
        Mr. Smith.

             STATEMENT OF AARON SMITH, SENIOR RESEARCHER,
                 PEW RESEARCH CENTER'S INTERNET PROJECT

        Mr. Smith. Thank you for having me here today. My name's
    Aaron Smith. I'm a Senior Researcher at the Pew Research
    Center's Internet Project. We're a nonprofit research
    organization, here in D.C., funded by the Pew Charitable
    Trusts, and my project has been conducting national consumer
    surveys of Internet use and broadband adoption since early
    2000. And my organization does not promote specific policy
    positions, but I hope that my comments can provide a better
    understanding of the current state of broadband adoption, which
    groups have low levels of broadband use, and also the major
    factors that are preventing people from adopting broadband.
        So, when we first conducted our survey of broadband
    adoption in 2000, just 3 percent of Americans had some sort of
    broadband connection at home. And, as John noted, that figure
    has risen to 70 percent of Americans, as of our most recent
    survey, in May of this year. But, despite this long-term growth
    trend, the pace of broadband adoption has slowed substantially
    in recent years. After increasing by an average of nearly 7
    percentage points per year from 2000 through 2009, the national
    broadband level--adoption level increased by a total of just 7
    percentage points from 2009 through 2013.
        Although 70 percent of the American public has a high-speed
    Internet connection at home, that figure is lower among certain
    groups than among others. Broadband adoption levels are
    especially low among three demographic groups in particular.
    The first group is older adults. Just 43 percent of Americans
    age 65 and older have a broadband connection at home. The
    second group is people with low levels of educational
    attainment. Among Americans who have not received a high school
    diploma, just 37 percent are broadband adopters. And the third
    group is people with low household incomes. Fifty-four percent
    of Americans with a household income of less than $30,000 are
    broadband adopters.
        Now, these are not the only group--these are not the only
    groups for whom broadband adoption levels are low. As John also
    mentioned, rural residents are less likely to have broadband
    than urban and suburban residents, and African Americans and
    Latinos are less likely to have broadband than whites. Also,
    broadband adoption is low among people with physical
    disabilities or with chronic health conditions. But, overall,
    age and socioeconomic status are the demographic factors that
    are most strongly correlated with whether someone has broadband
    or not.
        So, since 70 percent of the public does have some sort of
    broadband connection at home, that means that 30 percent of the
    adult population does not have high-speed home access. That 30
    percent of Americans includes two distinct groups, each of
    which faces distinct challenges and barriers to adoption.
        The first of those groups are the 15 percent of the adult
    population that do not use the Internet at all. This group is
    significantly older than the population as a whole, with a
    median age of 64 years old. These non-users tend to have little
    connection to the online world and often face significant
    challenges, in terms of their comfort level with technology.
    Just 17 of these non-users feel confident that they could go
    online without assistance if they chose to do so in the future.
        And when we asked these non-users to tell us the main
    reasons why they don't go online, they tend to point to their
    perceptions of the relevance of online content and their
    challenges using technology, in general. One-third of these
    non-users say things like they just aren't interested in going
    online, don't need to go online, or think the Internet is a
    waste of time. And a similar number mention usability-related
    issues, such as finding it difficult or frustrating to go
    online, saying they don't know how to go online or are too old
    to learn, or that they're physically unable to use a computer.
        The second group of nonbroadband adopters, which also makes
    up 15 percent of the population, includes people who do use the
    Internet from one location or another but do not have high-
    speed access within their home. In contrast to the non-Internet
    user population, this group is much younger. Around half of
    them are under the age of 45. They also tend to have relatively
    low incomes, relatively low levels of educational attainment,
    and include a relatively large number of non-whites.
        Also in contrast to the non-Internet users I discussed a
    moment ago, issues related to price and affordability are this
    group's primary barrier to adoption. When we asked them why
    they don't have Internet service at home, 42 percent of
    Internet users who lack home broadband cite financial issues,
    such as not having a computer, not being able to afford
    Internet service, or having a cheaper option for access outside
    of the home.
        In summary, three out of every ten Americans currently do
    not have broadband service at home, and many of these
    individuals face substantial hurdles to adoption. Some,
    especially working-age adults at the lower end of the income
    spectrum, see the value of broadband but simply lack the
    necessary financial resources. But, others face significant
    challenges using technology or do not see the benefits of
    broadband access in the first place. For this group of non-
    adopters, a lower price may be necessary, but not sufficient.
    They will likely require a great deal of coaching and
    encouragement before they are ready to join the broadband
    world.
        Thank you again for your time and for inviting me to speak
    on the subject. I look forward to any questions you have.
        [The prepared statement of Mr. Smith follows:]

             Prepared Statement of Aaron Smith, Senior Researcher,
                     Pew Research Center's Internet Project

        Mr. Chairman and Members of the Committee, thank you for the
    opportunity to testify today.
        My name is Aaron Smith, and I am a senior researcher with the Pew
    Research Center's Internet Project. The Pew Research Center is a non-
    profit research organization funded primarily by the Pew Charitable
    Trusts, and its Internet project has been conducting national surveys
    of Internet use and broadband adoption since early 2000.
        The Pew Research Center and its experts do not promote specific
    policy positions, but I do hope that my comments can provide a better
    understanding of the current state of broadband adoption; which groups
    have low levels of broadband use; and the major factors preventing
    people from adopting.
    National trends in broadband adoption
        When we conducted our first survey of broadband adoption in early
    2000, just 3 percent of American adults had some sort of broadband
    connection at home. That figure has risen to 70 percent of Americans as
    of our most recent survey in May of this year.
        But despite this long-term growth trend, the pace of broadband
    adoption has slowed substantially in recent years. After increasing by
    an average of nearly seven percentage points per year from 2000 through
    2009, the national broadband adoption level increased by a total of
    just seven percentage points from 2009 through 2013.
    Demographic differences in broadband adoption
        Although 70 percent of the American public has a high-speed
    Internet connection at home, that figure is lower among some groups
    than among others. Broadband adoption levels are especially low among
    three demographic groups in particular.
        The first group is older adults. Today just 43 percent of Americans
    age 65 and older have a broadband connection at home, which is roughly
    half the adoption rate for those between the ages of 18 and 49.
        The second group is people with low levels of educational
    attainment. Among Americans who have not received a high school
    diploma, just 37 percent are broadband adopters. By comparison, nine in
    ten college graduates have broadband at home.
        The third group is people with low household incomes. 54 percent of
    Americans with an annual household income of less than $30,000 are
    broadband adopters.
        These are not the only groups for whom broadband adoption levels
    are low. Rural residents are less likely to have broadband than urban
    or suburban residents; African Americans and Latinos are less likely to
    have broadband than whites; and broadband adoption is also low among
    people with physical disabilities or severe chronic health conditions.
    But overall, age and socio-economic status are the demographic factors
    most strongly correlated with whether someone has broadband or not.
    Non-broadband users and their reasons for non-adoption
        Since 70 percent of the public does have some sort of broadband
    connection at home, that means that 30 percent of the adult population
    does not have high speed home access. That 30 percent of Americans
    includes two distinct groups, each of which faces different challenges
    and barriers to adoption.
        The first group is the 15 percent of the adult population that does
    not use the Internet at all. This group is significantly older than the
    population as whole, with a median age of 64 years old.
        These non-users tend to have little connection to the online world,
    and they often face significant challenges in terms of their comfort
    level with technology. Just 17 percent of these non-users feel
    confident that they could go online on their own if they chose to do so
    in the future, while 63 percent say that they would need someone to
    assist them.
        When we ask these non-users to tell us the main reason why they
    don't go online, they tend to point to their perceptions of the
    relevance online content and their challenges using technology in
    general. One third of these non-users say things like: they just aren't
    interested in going online; don't need to go online; or think the
    Internet is a waste of time. And a similar number mention usability-
    related issues such as: finding it to difficult or frustrating to go
    online; saying that they don't know how to go online or are too old to
    learn; or are physically unable to use a computer.
        The second group of non-broadband adopters, which also makes up 15
    percent of the population, includes people who do use the Internet from
    one location or another, but do not have high speed access within their
    home.
        In contrast to the non-internet-user population, this group is much
    younger--around half of them are under the age of 45. They also tend to
    have relatively low incomes, relatively low levels of educational
    attainment, and include a relatively large number of non-whites.
        Also in contrast to non-internet-users, issues related to price and
    affordability are this group's primary barrier to adoption. When asked
    why they do not have Internet service at home, 42 percent of Internet
    users who lack home broadband cite financial issues such as: not having
    a computer; not being able to afford Internet service; or having a
    cheaper option for access outside the home.
    Summary
        In summary, three out of every ten Americans currently do not have
    broadband service at home, and many of these individuals face
    substantial hurdles to adoption. Some--especially working-age adults at
    the lower end of the income spectrum--see the value of broadband but
    simply lack the necessary financial resources. But others face
    significant challenges using technology, or do not see the benefits of
    broadband access in the first place. For this group of non-adopters, a
    lower price may be necessary but not sufficient--they will likely
    require a great deal of coaching and encouragement before they are
    ready to join the broadband world.
        Thank you again for inviting me to speak on this subject.

        Senator Pryor. Thank you.
        Ms. Joselyn.

      STATEMENT OF BERNADINE JOSELYN, DIRECTOR, PUBLIC POLICY AND
                     ENGAGEMENT, BLANDIN FOUNDATION

        Ms. Joselyn. Good morning, Chairman Pryor, Senator Wicker,
    members of the Committee.
        I bring you, today, the voices and experiences of rural
    community leaders. These are the people who create vibrancy
    across the American landscape.
        They are hopeful people, and they can make a little support
    go a long way. For example, Janice Gale, Director of the Leach
    Lake Band of Ojibwe's Temporary Employment Program, saw, every
    day, how temporary tribal members without work struggled with
    technology when applying for jobs. She worked with us and
    partners to create sustainable systems for creating culturally
    relevant online job search and work skills and to expand
    computer and Internet access on her reservation. Tribal members
    who upgrade their digital literacy skills now qualify for
    higher pay. Janice smiles with pride when she tells of the
    workers in her program who have been inspired to pursue a GED.
        Multiply Janice Gale times hundreds and the stories
    continue to roll in from communities all across rural
    Minnesota, where broadband adoption is not just a policy
    imperative, it's a community imperative.
        Blandin Foundation works with rural communities in
    Minnesota. We have made broadband adoption a priority, because
    we believe that broadband is the indispensable infrastructure
    of the 21st century, and rural communities need broadband
    access, and the ability to use it, in order to thrive in this
    globalized economy.
        One of our projects, the Minnesota Intelligent Rural
    Communities Initiative, MIRC, had the support of the American
    people through the American Recovery and Reinvestment Act.
    Blandin Foundation administered MIRC on behalf of a coalition
    of 19 statewide partners and 11 rural communities. Our work was
    funded partially through the federally-funded Broadband
    Technology Opportunity Program, BTOP, one of 44 sustainable
    adoption grants awarded nationwide. Through MIRC, we sought to
    support and encourage broadband adoption as a strategy for job
    growth and wealth creation, to increase the culture of use of
    broadband services, and to improve efficiency and effectiveness
    of digital literacy training. In sum, helping rural communities
    keep up globally was our real task.
        MIRC set measurable goals. All were accomplished or
    exceeded, and the details have been submitted for the record.
    Here's just one highlight:
        Broadband adoption in participating MIRC communities grew
    15 percent faster than in the rest of rural Minnesota. But,
    subscription rates tell only part of the story, and not even
    the most important part. Here are just a few examples:
        The town of Thief River Falls launched a collaboration
    between local broadband providers and a nonprofit to supply
    refurbished computers, subsidized broadband subscriptions, and
    digital literacy courses to low-income families. And 84 percent
    of these first-time computer owners have continued their
    broadband subscriptions after the subsidies ended.
        In the small town of Akeley, Minnesota, the business
    community built a series of peer-led technology workshops that
    have helped entrepreneurs bring their businesses to the next
    level using more sophisticated Internet-based tools.
        An immigrant center in Winona, Minnesota, launched digital
    literacy training in Hmong and Spanish for recent immigrants.
        A consortium of nine districts in Stevens County in
    southern Minnesota developed a broadband-based distance
    learning service for students with disabilities.
        This is complex work, with many moving parts. But, I can
    state succinctly the policy implications. Access to broadband
    is key, but so is adoption, and community-based community-
    engagement efforts work.
        I'd like to close with just one more voice, that of Kristen
    Fake, a small-business owner in Akeley, Minnesota when she was
    describing the impact of MIRC on her town. She said, ``We've
    turned a corner and become a community that's actually growing
    and thriving.''
        And persuaded by the effectiveness and impact of these
    efforts, and mindful of the critical role that broadband access
    and adoption plays in the economic and social life of rural
    places, Blandin Foundation's Board of Trustees has committed an
    additional $1.5 million to continue to support broadband
    adoption efforts in rural Minnesota in 2013 and 2014, and we
    look forward to continued opportunities to partner with the
    Federal Government in that important work.
        Thank you. [The prepared statement of Ms. Joselyn follows:]

     Prepared Statement of Bernadine Joselyn, Director, Public Policy and
                         Engagement, Blandin Foundation
        Chairman Pryor, Senator Wicker, Members of the Committee

        I bring to you today the voices of rural community leaders. These
    are the people who are engines of vibrancy across the American
    landscape. They are strong, hopeful people and they can make a little
    support go a very long way.
        When we met Kristin Fake, a sole proprietor in tourism-dependent
    Akeley, Minnesota, it was a leap of faith for her to come to the
    workshop hosted by the University of Minnesota Extension Service, one
    of our partners in our broadband work. Like so many, she couldn't
    imagine how technology might benefit her home staging business. At the
    workshop she quickly discovered that her clients were being misdirected
    by Google maps, how keywords drive inquiries, and how she might use a
    smart phone to dramatically improve her customer service. Her annual
    sales now are much higher than before she took the class and products
    she advertises on Facebook often are purchased before she even gets
    them displayed in her shop. Kristin is poised to take her business to a
    new level as Akeley continues to recover from a very tough economic
    patch.

        Kristin went from not being able to imagine how technology might be
    helpful to her business to creating demand for products and services
    that the marketplace hadn't yet imagined. Empowering people through
    technology also was the focus of our partnership with the Leech Lake
    Band of Ojibwe.
        Janice Gale, director of the Leech Lake Band's Temporary Employment
    Program, long had seen the digital challenges that her neighbors and
    workers faced in seeking even temporary employment. She quickly put to
    work the resources and relationships available through our network of
    partners to teach online job search and work skills, and to expand the
    availability of computers on the reservation. A computer lab at the
    Boys and Girls Club, for example, attracts 250 students each month.
    Refurbished computers, training and subscriptions for kids and families
    were distributed through Head Start. Temporary workers who participate
    in the digital literacy program upgrade their skills and qualify for
    higher pay. Temporary Employment Program student workers help learners
    in the computer labs, which is a great benefit to both trainers and
    learners. Janice, in her quietly passionate way, grins when she tells
    how many participants have been inspired to pursue their GED.

        Multiply Kristin Fake and Janice Gale times hundreds. And the
    stories continue to roll in from communities all across rural
    Minnesota, where adoption is not just a policy imperative, but a
    community imperative.
        Blandin Foundation is a private foundation that has the unique
    privilege of working exclusively with rural communities in Minnesota.
    Based in Grand Rapids, Minnesota, we are one of only a handful of
    foundations nationwide so focused on rural communities, and we are the
    state's largest foundation located in a rural community.
        What we have learned over 75 years is that thriving communities are
    built on hard work. On the hard work of leadership, inclusion, reaching
    across differences and building lasting connections. On commitments,
    and on belonging--that indelible sense of place that is home.
        That's the fertile soil that healthy communities grow in. And
    that's what Blandin Foundation is about--helping people imagine, lead
    and grow vibrant, resilient, rural communities.
        From our experience, realizing the promise of the Internet is as
    much about investing in human capacity as it about investing in
    technological capacity. Maybe more.
        After a career in the Foreign Service, I became Blandin
    Foundation's first-ever public policy director in 2003. When I looked
    out over the rural landscape, one issue that stood out as having great
    potential to help rural communities thrive into the new century: access
    to high-speed Internet, and the capability to take advantage of its
    many social and economic benefits.
        Today the digital divide remains far too real for rural America.
    And especially real for those who face other types of barriers--
    poverty, language, isolation. The work of bringing the promise of the
    Internet to all Americans clearly is not done.
        We believed in 2003, and still do today, that

      1.  Broadband is the indispensable infrastructure of the 21st
            century, and

      2.  Rural communities need broadband access, and the ability to use
            it, in order to thrive--and even survive--in an ever more
            globalized world.

        To this end, Blandin Foundation has invested in a body of work
    focused on strengthening community broadband leadership and adoption.
    One of these projects, the Minnesota Intelligent Rural Communities
    Initiative (MIRC), had the support of the American people through the
    American Reinvestment and Recovery Act, which connected our work to
    national goals.
        Blandin Foundation administered MIRC on behalf of a coalition of 19
    statewide partners--regional development commissions, state workforce
    and education institutions, etc.--and 11 rural demonstration
    communities. Our work partially was funded through the Federal
    Broadband Technology Opportunity Program (BTOP), one of 44 sustainable
    adoption grants awarded nationwide.

        MIRC began in 2010 and was largely completed by the end of 2012,
    putting to work $4.8 million of Federal grant dollars, $1.8 million in
    matching funds and countless hours of work by community leaders to
    create a network of resources and support to rural Minnesota
    communities, business owners, students, health care facilities, local
    governments, the poor and un-and under-employed.
        Our aims were ambitious: to support and encourage vibrant rural
    economies through broadband adoption as a strategy for job growth and
    wealth creation; and to accelerate broadband adoption.
        Specifically, we sought to:

       Support and encourage vibrant rural economies through
            broadband adoption as a strategy for job growth and wealth
            creation.

       Increase ``culture of use'' of broadband services.

       Improve efficiency and effectiveness of digital literacy
            training service delivery.

       Accelerate broadband adoption by two percent over its
            statistically anticipated growth (increasing broadband
            subscribers by 38,556 more than could otherwise be expected).

        In sum, helping rural communities keep up globally was our real
    task. Thanks to the Federal funding we received we were able to take on
    an ambitious, comprehensive, multi-sector effort that wove together
    work at the local community level, all the way up to state-wide
    engagement.
        MIRC set measurable goals. All were accomplished or exceeded:

    ----------------------------------------------------------------------------------------------------------------
                     Outcome                                 Goal                            Accomplished
    ----------------------------------------------------------------------------------------------------------------
    New households subscribed to broadband               38,000 (2 percent above                              40,496
                                               statistically anticipated growth)
    ----------------------------------------------------------------------------------------------------------------
    Number of public-access computer sites                                     0                                  60
    ----------------------------------------------------------------------------------------------------------------
    Number of people who participate in at                                 3,640                               9,000
     least 16 hrs of training/
    education
    ----------------------------------------------------------------------------------------------------------------
    Refitted and licensed computers                                        1,000                               2,067
     distributed to first-time computer
     owners
    ----------------------------------------------------------------------------------------------------------------
    Number of people reached through                                     160,000                             250,000
     outreach and awareness
    ----------------------------------------------------------------------------------------------------------------

        Overall, broadband adoption in participating communities grew close
    to 15 percent faster than in the rest of rural Minnesota. And
    communities that reported the highest rates of participation in MIRC
    activities also experienced the highest rates of broadband subscription
    growth.
        These data show that, without a doubt, rural communities across
    Minnesota moved the needle on project outcomes, especially with
    underserved residents and businesses.
        Dr. Jack Geller of the EDA Center at University of Minnesota-
    Crookston and lead researcher for MIRC, concluded in his final
    evaluation that, ``It's hard not to connect the MIRC project . . . as a
    contributor to Minnesota's leading position in rural broadband
    adoption.''
        Persuaded by the effectiveness and impact of these efforts, and
    mindful of the critical role that broadband access and adoption play in
    the economic and social life of rural places, Blandin Foundation's
    Board of Trustees has committed an additional $1.5 million to continue
    to support broadband adoption efforts in rural Minnesota in 2013 and
    2014.
    Our Approach to the Challenge of Broadband Adoption
        Blandin Foundation's community-based efforts take many forms,
    driven by the unique needs and interests of participating communities.
    Our strategies include:

       Offering individuals training in computer literacy and
            knowledge worker career development strategies.

       Providing technical assistance and customized training to
            small businesses and entrepreneurs.

       Distributing refurbished computers to low-income, rural
            Minnesota residents.

       Partnering with Internet service providers to offer
            subsidized subscriptions to connect those computers to the
            Internet.

       Helping communities identify their unique goals and
            providing the technical assistance and grant funding needed to
            turn those goals into accomplishments.

        At the heart of our approach is high-touch, multi-sector, sustained
    community engagement. This includes community-wide visioning and goal
    setting and a community-driven grant proposal solicitation process to
    generate project ideas and community commitment upfront.
        To help drive home the recognition that broadband is a necessary
    but not sufficient element of economic development and community
    vitality, MIRC used indicators developed by the New York-based
    Intelligent Community Forum (ICF) to help communities baseline and
    measure their competitiveness in the broadband economy. These
    indicators include: ensuring broadband infrastructure, developing a
    ``knowledge workforce'', supporting innovation, redressing the digital
    divide, and effectively using marketing and advocacy to tell the
    community's technology story.

        Community leaders used the ICF indicators to identify and select
    community projects that best fit local needs and focus their efforts on
    short term achievable goals that would have meaningful impact over the
    long term. More than 100 community-identified projects have been funded
    so far. Here are a few examples:
    Ensuring the Availability and Use of Broadband Infrastructure
        Thief River Falls launched ``Computers for Our Community,'' a
    collaboration between local broadband providers and MIRC partner PCs
    for People. Over 18 months, the project delivered 126 refurbished
    computers, 91 reduced-rate broadband subscriptions, and nine multi-week
    digital literacy courses for low-income families. Most (84 percent)
    recipients continued their broadband subscriptions even after subsidies
    ended.
        Lac qui Parle County created a mobile computer lab that brings
    broadband access to one of Minnesota's most sparsely populated regions.
    A local partner testified: ``The Computer Commuter. . .connects patrons
    to people and places they had no idea they could connect to!''

    Fostering Innovation
        An immigrant resource center in Winona launched digital literacy
    training in Hmong and Spanish for more than 60 recent immigrants. The
    project ``. . . built bridges among cultures and organizations'' and
    led to the realization that a ``connected city helps everyone.''

        A consortium of nine school districts in Stevens County developed a
    broadband-based system to provide specialized distance learning
    services for students with disabilities. Their takeaways:
    ``[Realization] that the world is able to communicate and work
    cooperatively using technology; and, that the world is not limited to
    Stevens County.''
        Benton County added new computers in libraries, schools, and senior
    housing and created 13 new Wi-Fi access points in a variety of
    businesses and community sites, including an elder care facility.
    According to the county's economic director, ``Our elected officials
    now see the importance of broadband for economic development and
    community vitality.''

    Deleting the Digital Divide
        MIRC partner and nonprofit PCs for People, in addition to
    surpassing their goal to refurbish and redistribute 1,000 computers to
    low-income rural households, opened affiliate storefronts in four rural
    Minnesota communities in each corner of the state. Said one computer
    recipient: ``I've gone back to school; I have two kids and now I don't
    have to go to the library and find a sitter to do research. . .I can
    stay home with my kids.'' When expressing her appreciation for
    receiving a computer and Internet connection, another recipient
    explained that the computer was going to be a Christmas present for her
    child; receiving it meant that she wouldn't have to choose between
    buying gifts or feeding her kids over the Christmas break.

    Building a Knowledge Workforce
        Cook County opened a computer lab as part of a higher education
    distance learning partnership. During the project's 18 months, the site
    provided 21 training sessions attended by 185 people in this remote
    community with a population of 1,351. The lab continues to be available
    to all community residents and is used as a public Internet-access site
    and distance learning resource. The partnership offers credit courses
    from more than 25 institutions of higher learning.
    Marketing and Advocacy (The capacity to advocate for change within the
            community and market themselves to the world)
        A local-access television station in Itasca County upgraded its
    software, hardware and website interface to live stream and archive
    public meetings online. The move has improved access to these meetings
    for permanent and seasonal residents. Several other communities
    enhanced their government and business online presence, including
    Windom in far southwest Minnesota, which planned, launched and
    continues to maintain the ``Finding Windom'' community portal web
    presence.

        Here is a sampling of some the voices of rural Minnesotans who
    participated in MIRC reflecting on the impact of these broadband
    adoption efforts on their overall community vitality:

            ``We've turned a corner and become a community that's actually
            growing and thriving instead of stagnant and dying, with what
            we've learned from the MIRC program.''--Kristin Fake, owner,
            Just a Stage/Second Stage home staging, Akeley, MN

            ``This project has permanently changed the way we think and the
            way we work together.''--Della Schmidt, Winona Area Chamber of
            Commerce, Winona, MN

            ``These technology classes have encouraged our Hispanic and
            Somali immigrants to interact, really for the first time.''--
            Fatima Said, Project FINE, Winona, MN

            ``This effort has helped us develop wonderful community
            connections. We have reached out to our whole community.''--
            Keri Bergeston, Principal, Dawson/Boyd (MN) High School

            ``MIRC efforts have really contributed to creating a 'Culture
            of Use' amongst tribal members. Overall, MIRC has helped the
            Leech Lake Reservation increase the economic vitality of our
            community. Tribal community member are more familiar with the
            tools of broadband and the economic opportunities that are
            available.''--Mike Jones, Chief of Staff to Tribal Chair, Leech
            Lake Band of Ojibwe, Walker, MN

            ``This framework brings people together that have not always
            worked together--technology advocates, workforce, social
            service agencies, and economic development professionals.''--
            Danna MacKenzie, Cook County (MN) IT Director

            ``The families in our community will see benefits for many
            years to come as a result of everyone's hard work and
            dedication on this project.''--Kristen Lee, Independent School
            District #381, Two Harbors, MN
    Lessons Learned: Key Elements of Successful Adoption Efforts
    I. Communities know best.
        Involve citizens directly in articulating their community's
    broadband adoption and utilization goals to catalyze long-term
    engagement needed to increase adoption.
    II. Local Leadership matters.
        Help local broadband champions get and use skills to frame issue,
    build and sustain relationships and mobilize people to build a
    community's capacity to achieve its broadband goals.
    III. Broadband is not an end in itself.
        It is a means to the higher ends of increased economic vitality and
    improved quality of life. Framing it this way helps.
    IV. High touch outreach works.
        Effective recruitment strategies are intra-community, hyper local,
    and personalized. Change follows relationship lines.
    V. Peers make great teachers.
        Peer-based learning formats are popular, low cost and easily
    sustainable tools to build a community's technological savvy.
    VI. Cross-community communication is key.
        Signage, local media support, and aligned social media are
    effective low-cost ways to spur and sustain energy and excitement for
    community projects.
    VII. Engage tomorrow's leaders today.
        Recognize and authentically engage the talents of young people.
    This generation of leaders brings energy and sustainability to any
    community initiative.
    VIII. Connect the economic dots.
        Framing increased sustainable broadband use as a necessary but not
    sufficient ingredient in a ``whole systems'' approach to strengthen
    community vitality can help communities see and leverage the connection
    between the technology and benefits to community life.
    IX. Have patience.
        This work takes time. Look for and celebrate early and easy
    ``wins,'' but think long term and build capacity and energy for the
    long haul. Money and other resources follow vision and commitment.

    Conclusions and Policy Implications
        In service to the work of this committee and anyone working to
    strengthen rural communities, Blandin Foundation commends to you these
    key conclusions that we have drawn from our experience:

       Broadband access alone is not enough: without concerted,
            community-based efforts to ensure that all citizens are able to
            take advantage of the Internet, the digital divide will
            continue to grow and to undermine America's promise as a
            democracy where equal opportunity is available to all.

       Community-based broadband literacy and market development
            efforts can and do help ensure that all Americans can
            participate fully in our Nation's economy and civic and
            cultural life.

       Eliminating the digital divide is an urgent challenge that
            must be part of our national agenda. States and communities
            need the Federal Government and its resources as a partner in
            this work.

       Federal investment in broadband access and adoption made
            available to Minnesota through the American Recovery and
            Reinvestment Act have made a significant positive difference to
            rural Minnesota communities' ability to be globally competitive
            and ensure a high quality of life for their residents.

       NTIA has been a very helpful partner in our efforts to bring
            to rural Minnesota communities the full benefits of the
            broadband-enabled economy. NTIA's ``Broadband Adoption
            Toolkit,'' released in May of this year, is an especially
            powerful tool for shining a light on best practices, and making
            them available to community champions across the country.

        In sum, access to broadband is key: Evidence abounds that high-
    speed Internet access has economic benefits (positive impact on median
    household income, employment, and business growth).
        But so is adoption. According to the report, ``Broadband's
    Contribution to Economic Health in Rural Areas: A Causal Analysis,'' by
    B. Whitacre, S. Strover, and R. Gallardo (March 26, 2013), ``Non-metro
    counties with high levels of broadband adoption in 2010 had
    significantly higher growth in median household income between 2001 and
    2010 compared to counties that had similar characteristics in the 1990s
    but were not as successful at adopting broadband.''
        This point was eloquently echoed in a recent edition of ``The Daily
    Yonder,'' published on the web by the Center for Rural Strategies, a
    non-profit media organization based in Whitesburg, Kentucky, and
    Knoxville, Tennessee.

            ``While most government broadband policies have traditionally
            focused exclusively on providing infrastructure, there is a
            case to be made for focusing on demand. . . . Investments in
            people, education and training are essential to achieve
            meaningful use of the Internet.''

        On behalf of Blandin Foundation, our partners, and the people of
    rural Minnesota and rural America who work at broadband adoption every
    day, it is our honor to share our work with you and others. I trust
    that we have demonstrated how, in rural communities especially, support
    for broadband adoption can be stretched a very long way.
    _______________________________________________________________________

        [The witness also submitted Minnesota Intelligent Rural Communities
    Program--Demonstration Communities final report

        by Robert Bell
        Intelligent Community Forum

        A report commissioned by the Blandin Foundation to support the work
    of the Minnesota Intelligent Rural Communities Coalition and Funded by
    the American Recovery and Reinvestment Act http://
    blandinfoundation.org/--uls/resources/MIRC_ICF_Final_Report-04-08-
    13.pdf ]

        Senator Pryor. Thank you.
        Ms. McPeak.

              STATEMENT OF SUNNE WRIGHT McPEAK, PRESIDENT

            AND CHIEF EXECUTIVE OFFICER, CALIFORNIA EMERGING

                            TECHNOLOGY FUND

        Ms. McPeak. Thank you for inviting me to share the
    experience from California. In California, which has some of
    the most challenging terrain for broadband deployment of any
    state and the largest population of people who were not online
    when we began the effort, we have made very significant
    progress, with bipartisan leadership.
        The California Emerging Technology Fund that I represent
    was established by the California Public Utilities Commission
    as a result of mergers of telecom companies in 2005. But, in
    addition, our Governor and legislature first had a broadband
    task force and now have established a broadband council in
    statute.
        The CPUC has established a fund converted from high-cost
    subsidies for telephony to support broadband deployment. And
    recently, the legislature and the Governor allowed that fund to
    be used to support broadband connectivity in publicly
    subsidized housing. In addition, through executive order, our
    Governor has said digital literacy is a priority for our state.
    So, we're committed to closing the digital divide.
        When we began, however, it was like having five states
    inside California, with respect to the geography that wasn't
    covered with deployment and who hadn't adopted. We had the
    national average for adoption at 55 percent, and Internet use
    overall at 75 percent. We've now increased that to having
    broadband use at 76 percent at home, and Internet use that
    exceeds 80 percent. Very significantly, we've increased low-
    income households by 20 percentage points, Latino households by
    18 percentage points, people with disabilities by 20 percentage
    points, and our rural adoption has caught up with urban,
    because we couple adoption with deployment in California.
    However, those now left offline, left to adopt, are largely
    urban poor and those in rural areas that have no access at all.
        With all of this effort in California, we need to have an
    increasing partnership--set of partnerships between the Federal
    Government and the State, public and private partnerships, and
    provider and community partnerships. To be sure, California has
    benefited from being a partner with the Federal Government. We
    received, from the FCC, over $22 million for a Telehealth
    network. We were a grantee, under the NTIA BTOP program, of
    $14.3 million for 19 community-based organizations. And I
    should hasten to say, we met or exceeded our contract
    obligations, achieving more than 200,000 adoptions, people who
    actually adopted broadband for the first time subscribed, and
    generating more than 2700 jobs. So, we have been, I think--
    benefited greatly by this partnership from the Federal
    Government.
        I come here today to share with you what more you can do.
    Clearly, there is a huge resource in the FCC with their powers
    and their resources, and NTIA Director Larry Strickling and his
    team have a wealth of knowledge about what works and
    relationships with states and nonprofits throughout the country
    that you've already invested in, that is an asset that should
    be capitalized upon.
        In terms of our learnings and recommendations for action,
    here's what we want to suggest:
        First, there is no substitute for leadership and for
    Congress setting explicit goals, with performance metrics and a
    timetable to achieve them, on adoption. A focus on getting
    results is essential.
        Second, there is a need to connect the dots at the Federal
    level across bureaucratic silos and to encourage each of the
    Federal departments to optimize the use of broadband and
    information technology in every one of their programs. We have
    provided you very specific examples that we can elaborate upon.
        Next, broadband needs to be integrated into every program.
    And I dare say that we're probably not going to be able to
    achieve adoption in low-income communities without a broadband
    lifeline program that is established at the FCC.
        We also have huge benefit in the investment already through
    NTIA BTOP grants, and would suggest that an additional prudent
    investment in broadband adoption that is done in partnerships
    with the states, with the private sector and community
    organizations, who are the trusted messengers and honest
    brokers, would go a long ways to closing the digital divide.
        And last, we would hope that it would be the hallmark of a
    congressional directive on closing the digital divide and
    improving, increasing adoption, that, indeed, we do it, as I've
    said before, through partnerships with states, with the private
    sector, and with community organizations.
        [The prepared statement of Ms. McPeak follows:]

        Prepared Statement of Sunne Wright McPeak, President and Chief
             Executive Officer, California Emerging Technology Fund

    Closing the Digital Divide is an Imperative
        Imagine if you were not able to communicate instantaneously with
    others using your smart phone, digital tablet, or computer. That is the
    reality for more than 9 million Californians who live in remote rural
    communities, on tribal lands, in low-income neighborhoods, or who have
    a disability. Those of us who have the benefit of a personal computing
    device coupled with high-speed connections to the Internet--referred to
    generically as ``broadband'' that includes both wireline and wireless
    technologies--have come to depend on this connectivity for our work,
    staying in touch with family and friends, and making our daily lives
    easier.
        Broadband is essential 21st century infrastructure for global
    competiveness. It is a key factor in attracting capital investment to
    generate jobs. Communities without broadband are being left behind in
    the Digital Age--remote rural areas, poor urban neighborhoods, and
    people with disabilities are even more disadvantaged without broadband
    availability and computing devices to access the Internet. Closing the
    Digital Divide with public policies and strategies to achieve
    ubiquitous broadband deployment and to accelerate broadband adoption is
    an imperative for economic prosperity, quality of life, and family
    self-sufficiency. Fortunately, it is a goal that can be achieved with
    inspired vision, focused leadership, alignment of existing resources,
    and enlightened investment of a modest amount of additional public
    funding to encourage partnerships--federal-state, public-private, and
    provider-community. There is ample research and empirical evidence
    about what it takes to get the job done.
    The California Experience and Progress in Closing the Digital Divide
        California has some of the most challenging terrain in the Nation
    for broadband deployment and the largest populations of disadvantaged
    residents as priority communities for broadband adoption. When
    California began to focus on closing the Digital Divide, the number of
    ``unconnected'' residents was the equivalent of having 5 other states
    within our boundaries. Approximately 94 percent of all residents had
    broadband access--however the 6 percent of residents totally unserved
    represented 768,000 households (about 2 million residents), more than
    the population of the State of Nebraska spread out over more than
    44,000 square miles of inhabited area, the size of the State of
    Kentucky. Almost 13 million residents (largely urban poor) were not
    connected, more population than the State of Illinois.
        In addition, 1.9 million people with disabilities were off-line,
    the population of the State of New Mexico. And, 680,000 Native
    Americans were not connected, larger than the population of the State
    of Alaska. It should be noted that California has the largest
    population of Native Americans than any other state with 111 federally-
    recognized tribes. Most of the tribal lands lack broadband connectivity
    and want broadband access according to recent consultations of Tribal
    Leaders being convened by Judge Cynthia Gomez, the Governor's Liaison
    to Tribal Governments and the Executive Secretary of the California
    Native American Heritage Commission in collaboration with the
    California Emerging Technology Fund and the Corporation for Education
    Network Initiatives in California (CENIC).
        The California Emerging Technology Fund (CETF) was established at
    the direction of the California Public Utilities Commission (CPUC) in
    the orders approving the 2005 mergers of SBC-AT&T and Verizon-MCI. The
    successor companies agreed to provide a public benefit by contributing
    a total of $60 million into this new non-profit with the mission to
    close the Digital Divide in California. CETF became operational in
    2007, working in partnership with the Governor and State
    Administration, Legislature, CPUC, local governments, and a network of
    more than 80 community-based organizations (CBOs) to systematically
    implement a Strategic Action Plan to close the Digital Divide in
    California, tackling both broadband deployment and adoption challenges.
    CETF reports to the Legislature through the CPUC.
        In addition to establishing CETF, California policymakers have
    taken other key steps to close the Digital Divide, including:

       In 2007 the Governor with the support of the Legislature
            convened the California Broadband Task Force which produced the
            base report to focus attention on the issues.

       In 2008 the CPUC and the Legislature established the
            California Advanced Services Fund (CSAF) to subsidize broadband
            deployment to unserved and underserved areas by converting a
            high-cost fund for telephone service to support broadband
            infrastructure while also significantly reducing the annual
            amount collected from consumers. Through subsequent legislation
            the total amount authorized to be collected for CASF has been
            increased to $315 million.

       In 2009 the Governor issued an Executive Order to advance
            digital literacy that sets forth official State policy and
            requires agencies to develop and implement an action plan.

       In 2010 the Legislature and Governor established the
            California Broadband Council in statute to sustain State
            attention and leadership to close the Digital Divide.

       In 2013 the Legislature and Governor authorized CASF funds
            to be used for broadband connectivity in publicly-subsidized
            multi-unit affordable housing.

        The sum total of this collective effort is significant progress in
    the last 6 years. In 2008, California's statewide adoption rate for
    Internet use was 70 percent with 55 percent having broadband use at
    home--the same as the national average. Today, 86 percent of
    Californians use the Internet and 75 percent access the Internet at
    home with a high speed connection (including 6 percent that access the
    Internet only by a mobile ``smart phone''). Also, there have been
    significant increases in broadband adoption by priority consumer
    populations:

        --Low-income households up 20 percentage points (from 33 percent in
                2008 to 53 percent in 2013).

        --Latino households up 18 percentage points (from 34 percent in
                2008 to 52 percent in 2013).

        --People with disabilities up 20 percentage points (from 36 percent
                in 2008 to 56 percent in 2013).

    The Role of the California Emerging Technology Fund
        The California Emerging Technology Fund (CETF) has been a pivotal
    partner in driving this progress on closing the Digital Divide, serving
    as a catalyst for focus, action and results by: (a) setting the goals
    for broadband deployment and adoption; (b) delineating the strategic
    framework to achieve the goals with regular reports on progress to
    foster accountability; and (c) making targeted and leveraged
    investments in public policy initiatives and grants to CBOs. CETF is
    performance-driven and outcomes-focused. The CETF Strategic Action Plan
    is based on research and fact finding about ``what works'' and sets
    forth the overall approach and strategies to close the Digital Divide,
    including the metrics for accountability that provide the disciplined
    focus on results. CETF set the following goals for achieving success by
    2017--10 years after CETF began operations--which have been embraced
    widely by policymakers and stakeholders.

        Broadband Supply--98 percent Deployment

       Access for At Least 98 percent of All Households

       Robust Rural-Urban California Telehealth Network (CTN)

       All Tribal Lands Connected and Part of CTN

        Broadband Demand--80 percent Adoption

       Overall Statewide Adoption At Least 80 percent by 2015 and
            90 percent by 2020

       All Regions and Socioeconomic Groups within 10 Percentage
            Points of Overall Adoption (At Least 70 percent)

       Increased Overall Accessibility and Universal Design

        Broadband Global Leadership--Within Top 3 Rankings

       Appropriate and Sufficient Speeds for Consumer Applications
            that Drive Adoption

       Increased Economic Productivity

       Reduced Environmental Impacts

        There is not a ``silver bullet'' to closing the Digital Divide--no
    one strategy or action will get the job done. However, there is
    ``silver buckshot''--a ``critical mass'' of inter-related and mutually-
    reinforcing strategies and actions that do succeed. To achieve the
    optimal impact and a higher return on investment of the original seed
    capital, CETF employs 5 overarching strategies to drive progress on the
    broadband deployment and adoption goals:

      1.  Civic Leader Engagement

      2.  Venture Philanthropy Grantmaking

      3.  Public Policy Initiatives

      4.  Public Awareness and Education

      5.  Strategic Partnerships

        Successful implementation of these strategies requires engaging and
    partnering with ``trusted messengers'' and ``honest brokers'' who know
    their local communities and target neighborhoods, including local
    government officials, regional civic organizations, and successful
    CBOs. CETF has focused on 3 priorities for grantmaking: rural and
    remote areas; urban disadvantaged neighborhoods; and people with
    disabilities. CETF has awarded more than $31 million in grants to
    community-based organizations (CBOs) and public agencies as
    ``partners'' in achieving the broadband deployment and adoption goals.
    Leadership and Strategic Investments by the Federal Government
        California's progress in closing the Digital Divide has been
    significantly advanced by the leadership of the California
    Congressional Delegation and strategic investments by the Federal
    government. The Federal Communications Commission (FCC) awarded $22.1
    million from the Rural Health Care Pilot Program (matched by $3.6
    million from CETF) to connect a network of more than 800 facilities in
    rural and urban medically-underserved communities that comprise the
    California Telehealth Network (CTN). Telehealth is a major public
    policy initiative in California to drive both broadband deployment and
    adoption. Thus, the FCC Healthcare Connect Fund is a vital resource for
    the future, although the program needs some refinement. In addition,
    California has benefited greatly from partnerships with the U.S.
    Department of Commerce National Telecommunications and Information
    Agency (NTIA) under the American Recovery and Reinvestment Act (ARRA)
    Broadband Technology Opportunities Program (BTOP).
        NTIA awarded 13 ARRA BTOP grants for broadband infrastructure
    deployment exceeding $428 million and 17 grants for broadband adoption
    totaling almost $122 million, including support for CTN operations and
    development of services. NTIA provided 2 grants to CETF for a total of
    $14,359,476 (matched by CETF $2,551,796) to support 19 CBOs (sub-
    awardees) resulting in more than 200,000 broadband adoptions and more
    than 2,700 jobs, which met and exceeded the contractual performance
    objectives. These grants were concluded as of June 2013 and are
    summarized below.

    Broadband Awareness and Adoption
        The Broadband Awareness and Adoption (BAA) project mobilized the
    expertise and resources of 8 partners (sub-awardees) to reach
    communities most impacted by the Digital Divide: low-income families,
    limited English-speaking Latinos,  rural residents and people with
    disabilities. BAA partners worked with schools, churches, health
    clinics, job training programs, and social service providers to develop
    model ``service ecosystems'' which included technical support, low-
    price computers, and affordable broadband connections. Key
    accomplishments include:

       Increased awareness about the benefits of broadband among
            13,296,068 low-income residents (266 percent).

       Provided 719,255 low-income individuals with basic Digital
            Literacy skills to use broadband technology (106 percent goal).

       Achieved 198,714 new broadband subscriptions by low-income
            households (149 percent goal) and distributed 6,866 computers
            to low-income households (172 percent goal).

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Total BAA Budget                                              $9,360,672
    NTIA Grant                                                    $7,251,295
    CETF Match Funds                                                $979,476
    Partner Cash Match                                              $882,667
    Partner In-Kind Match                                           $247,234
    ------------------------------------------------------------------------

    Access to Careers in Technology
        The Access to Careers in Technology (ACT) project engaged 11
    partners (sub-awardees) to establish scalable workforce development
    programs while expanding access to broadband and 21st Century jobs in
    low-income communities throughout the state. Individuals with multiple
    barriers to employment--ranging from the homeless to former drug
    addicts--completed Information and Communications Technology (ICT)
    training to obtain jobs in a spectrum of major industries from
    engineering to entertainment with pathways to living-wage careers in
    high demand. Key accomplishments include:

       Trained 24,675 low-income youth and adults and 12,044 small
            business owners and employees with Digital Literacy skills (101
            percent goal).

       Secured 2,745 ICT career-path jobs for low-income residents
            (107 percent goal).

       Achieved 9,331 new broadband subscriptions by low-income
            households and distributed 5,547 computers to low-income
            households (101 percent goal).

    ------------------------------------------------------------------------

    ------------------------------------------------------------------------
    Total ACT Budget                                             $11,081,130
    NTIA Grant                                                    $7,108,181
    CETF Match Funds                                              $1,572,320
    Partner Cash Match                                            $2,379,839
    Partner In-Kind Match                                            $20,790
    ------------------------------------------------------------------------

    Lessons Learned
        The successful implementation of the NTIA grants by CETF and our 19
    partners was led by Senior Vice President Susan Walters, who prepared a
    report Lessons Learned from the Field which has been submitted as part
    of this testimony for the Congressional record.

    ----------------------------------------------------------------------------------------------------------------

    ----------------------------------------------------------------------------------------------------------------
                                     CETF Lessons Learned from ARRA NTIA BTOP Grants

                          Grantee executive leadership and staff management capacity are essential.

                          Coaching and the ``learning community'' were key to reaching goals.

                          Thoughtful work plans in advance led to faster recognition of problems.

                          Anchor institutions and community organizations need to work to ensure that
                                   clients actually obtain broadband (information and encouragement alone are not
                                   sufficient).

                          Integrating digital literacy training and broadband adoption into existing
                                   programs is the best way to ensure sustainability and continually narrow the
                                   Digital Divide.
    ----------------------------------------------------------------------------------------------------------------

        The experience of all NTIA grantees has been incorporated into the
    NTIA Took Kit which is a very useful compilation of data and
    recommendations for accelerating broadband adoption. NTIA Administrator
    Larry Strickling and his team (Laura Breeden and colleagues) have a
    wealth of knowledge about ``what works'' and established working
    relationships with state agencies and non-profit organizations
    throughout the Nation that are valuable assets that should be supported
    and leveraged for sustained progress in closing the Digital Divide.
    Broadband Empowers People and Transforms Lives
        The California Emerging Technology Fund (CETF) has amble evidence
    about the ways in which broadband access and information technology
    empowers people and transforms lives. This is particularly effective
    when broadband is integrated into services and programs that have
    relevance to everyday living, such as in school, job training, housing,
    and healthcare.
        For example:

       CETF has developed School2Home to turn around low-performing
            middle schools through the integration of broadband and
            computing technology into the teaching and learning processes
            with significant parent engagement. Not only is School2Home
            improving academic performance above district and statewide
            gains, but also driving broadband adoption: Spanish-speaking
            parents increased broadband adoption at home from 48 percent to
            76 percent (a 58 percent increase) and English-speaking parents
            increased from 84 percent to 94 percent (a 12 percent
            increase).

       CETF partner The Stride Center has a significant track
            record in training and securing employment for individuals with
            multiple barriers to employment, demonstrating that ICT
            workforce preparation can result in 90 percent of the clients
            obtaining jobs with a median wage double the overall regional
            labor market average.

        The power of the statistics on closing the Digital Divide and
    performance data on the grants comes to life with the stories of the
    people who are becoming self-sufficient and productive taxpayers
    because of these public and private investments. Consider the
    experience of these real people who have benefited from broadband
    access and information technology:

        --Daniel made the honor roll once he had broadband at home and was
                able to keep up with his homework assignments and navigate
                the Internet to gather information.

        --Yanira was as a grocery delivery driver when she injured her back
                and couldn't work in that job any longer. With an online
                course she learned how to write a resume and cover letter,
                search for job listings, and e-mail applications to
                companies--when she began she didn't even know how to send
                e-mails. After just a month, she started a new job in the
                delivery business making nearly $3 more per hour.

        --Henri recently landed his first job as a digital animator after
                receiving job training and now is on a career pathway with
                living wages.

        --Rosa is getting her high school equivalency diploma after
                completing two computer skills certification classes to
                earn a free refurbished computer and signing up for
                broadband at home.

        --Alicia used to struggle to find work, but now works fulltime
                after learning how to use electronic job boards in a
                digital literacy class.

        --Deborah was able to keep up with her high school homework with
                the benefit of broadband access and graduated with a 4.0
                GPA. She searched the Internet for the right college and
                was able to apply online for admission and a full
                scholarship.

        --Maria's flower shop has blossomed since attending a computer
                training class and learning how to manage and market her
                business.

        --Sheryl turned her live around from drug abuse and losing her
                children after learning computer skills at a non-profit
                that received ARRA funds from NTIA BTOP. Today she has a
                full-time job, which allowed her to regain custody of her
                children.

    Conclusions for Closing the Digital Divide and Accelerating Broadband
            Adoption
        Although there has been a steady rise in the number of people
    adopting and using broadband at home, it is becoming increasing harder
    to reach those who remain off-line because they are remote rural
    residents without access and urban poor residents without digital
    literacy skills nor the means to afford market prices. However, all the
    data and experience indicates that the vast majority of people who do
    not have or use broadband at home want to adopt the technology when
    they understand the value proposition and have access. Thus, it is very
    important to understand what actually works to reach these consumers
    who should be regarded as ``prospective customers in emerging
    markets.''
        Dr. John Horrigan (who helped develop the National Broadband Plan
    and has worked for the Pew Charitable Trusts and Joint Center for
    Political and Economic Studies) concludes that the cost of digital
    exclusion is real and rising and that the broadband adoption challenge
    has three primary dimensions: cost, relevance, and digital literacy. He
    further finds increasing broadband adoption requires sustaining
    capacity and scale of strategic initiatives with states and local
    communities involved in the ``ground game'' to focus on ``digital
    readiness'' in unserved and disadvantaged communities. He provides
    valuable insights to guide the work in accelerating broadband adoption.
        The following are the major conclusions from the experience of the
    California Emerging Technology Fund and our community-based partners
    who have been on the ground in unserved rural communities and
    disadvantaged urban neighborhoods.

       It is essential to set goals with quantified metrics and
            accountability for performance in order to drive broadband
            deployment and adoption to close the Digital Divide and to
            regularly report to the public and stakeholders to ensure
            continued focus on the goals.

       Optimizing impact of any investment requires engaging public
            officials at all levels of government and civic leaders in
            regional consortia and local communities. There is no
            substitute for leadership, but leaders need to be involved in
            developing the strategies and supported in systematically
            implementing a coherent, integrated plan.

       Broadband adoption will succeed by working in partnership
            with community-based organizations that are the ``trusted
            messengers'' and ``honest brokers'' for the unserved and
            disadvantaged populations.

       Affordable broadband offers are required to increase
            adoption among low-income households. This is likely to require
            an Affordable Broadband Lifeline Rate Program given that
            voluntary efforts to date have had modest market penetration
            for a variety of reasons, with the most extensive program
            reaching less than 10 percent of eligible participants.

       Sustainable broadband adoption requires a comprehensive
            approach that targets and aligns resources in low-income
            communities with an integrated, comprehensive ``neighborhood
            transformation'' strategy that incorporates broadband adoption
            into other services, such as education, workforce preparation,
            and healthcare.

    Recommendations for Continued Federal Government Leadership in
            Broadband Adoption
        There is a foundation of leadership and expertise in the Federal
    government on which to launch the next generation of work to accelerate
    broadband adoption to close the Digital Divide in America. In
    particular, the powers and resources of the FCC coupled with the
    experience and relationships of NTIA in collaboration with the other
    Federal departments is a solid platform for action. Congress can
    greatly augment this foundation by the following actions:

       Set national goals and performance metrics for broadband
            deployment and adoption along with a timetable and assigned
            responsibilities for achieving them to encourage implementation
            of the National Broadband Plan and utilization of the NTIA Took
            Kit. Institute regular Congressional oversight proceedings to
            ensure performance and accountability.

       Integrate broadband and information technologies into all
            Federal policies and programs through funding incentives to
            align efforts across departments. There is a need to ``connect
            the dots'' with a set of coherent strategies that transcend
            ``bureaucratic silos'' to optimize access to and use of the
            Internet with high-speed connections. For example:

        --U.S. Department of Health and Human Services (HHS) should build
                upon the ARRA Health Information Technology for Economic
                and Clinical Health Act (HITECH) framework to encourage
                stronger linkages and purposeful collaboration of health
                exchanges and ``meaningful use'' to the telehealth networks
                funded by the FCC Rural Health Care Pilots and/or the new
                Healthcare Connect Fund. HHS and the FCC should make a
                concerted joint effort to connect all state and local
                government public health services, federally-qualified
                health centers (FQHCs), critical care hospitals, tribal
                healthcare facilities (if desired by Tribal Leaders) to
                these telehealth-telemedicine networks. This kind of an
                effort will need to be coordinated with other departments
                and programs, such as the U.S. Department of Agriculture's
                Distance Learning, Telemedicine and Broadband Program to
                ensure rural communities are connected.

        --U.S. Department of Education should aggressively encourage the
                integration of broadband and computing technologies into
                the teaching and learning processes in all Federal grants
                to improve education, particularly to turn around low-
                performing schools because of the ability of the technology
                to engage and involve low-income parents with an approach
                similar to School2Home. Implementation nationwide of Common
                Core Standards will require a major effort on a scale not
                yet contemplated by educators and policymakers. Promise
                Neighborhoods grantees should be encouraged to promote
                ``smart communities'' by incorporating broadband adoption
                strategies into their programs.

        --U.S. Department of Labor should encourage integration of digital
                literacy and ICT skills training into all existing
                workforce preparation programs through Workforce Investment
                Act allocations to states and all other grants.

        --U.S. Department of Housing and Urban Development should promote
                ``smart housing'' in all publicly-subsidized multi-unit
                complexes by allowing the installation of an advanced
                communications system with broadband connectivity in each
                residence to be included in construction costs and the
                maintenance of such a system to be included in operating
                budgets. Choice Neighborhoods grantees should be encouraged
                to incorporate broadband adoption strategies into their
                programs.

        --U.S. Department of Agriculture (Rural Utility Service and all
                other rural economic development programs) should encourage
                larger-scale integrated proposals for existing grant funds
                that combine broadband deployment and adoption. There
                should be consideration of easements for broadband
                deployment in National Forests to support public safety,
                emergency response, and homeland security.

        --U.S. Department of Interior should identify all resources to
                assist Tribal Leaders (who request such assistance) in
                providing broadband service to Tribal Lands. There should
                be consideration of easements for broadband deployment in
                National Parks to support public safety, emergency
                response, and homeland security.

        --U.S. Department of Homeland Security should become a proactive
                partner in FirstNet to accelerate broadband deployment and
                adoption to support public safety, emergency response, and
                homeland security.

       Request and support the FCC to accelerate reform the
            Universal Services Fund (USF) and to incorporate best practices
            for sustainable broadband adoption. With limited resources,
            priority consideration for funding and/or subsidies to
            broadband providers should be given to companies that: (a) have
            a coherent, explicit program with quantified goals and metrics
            to increase broadband adoption; (b) partner with CBOs that have
            a proven track record as the ``trusted messenger and honest
            broker'' in broadband adoption; and (c) target low-income
            communities in collaboration with other stakeholders pursuing
            ``digital inclusion'' and ``neighborhood transformation''
            strategies (such as digital literacy in schools, workforce
            training, or publicly-subsidized housing).

        --An Affordable Broadband Lifeline Rate Program should be
                established within the next year and made available to
                residents in low-income census tracts in which there is a
                coherent ``digital inclusion'' component of a
                ``neighborhood transformation'' initiative with responsible
                local governments, key stakeholders, and respected CBOs.

        --Renewal and reform of eRate should prioritize low-performing
                schools and libraries in low-income neighborhoods that have
                established a coherent program with quantified goals and
                accountability to increase broadband adoption, especially
                as part of an overall ``neighborhood transformation''
                initiative.

        --Connect America Fund and other programs to subsidize broadband
                infrastructure should give priority funding to deployment
                projects with plans and partners to promote broadband
                adoption.

       Provide additional funding to NTIA as a prudent investment
            in global competitiveness to establish the ``next generation''
            broadband adoption program that builds upon the ARRA BTOP
            experience, aligns with other existing efforts, and leverages
            Federal resources through partnerships to achieve explicit
            adoption goals and outcomes by 2020.

        --Encourage states to adopt broadband adoption strategies and plans
                by giving priority consideration for funding to projects
                that align with and complement state programs that have
                explicit adoption goals with accountability for
                performance.

        --Facilitate collaboration among successful BTOP grantees to join
                forces with state governments to develop broadband adoption
                strategies and plans.

        --Request assistance from the National Association of Regulatory
                Utility Commissioners (NARUC) to engage states and convene
                information forums on development of broadband adoption
                strategies and plans.

       Foster public-private partnerships to accelerate broadband
            deployment and adoption. There is no substitute for the
            innovation and efficiency of the private sector when engaged as
            sincere partners motivated to achieve explicit goals. Public-
            private partnerships can significantly leverage public
            resources for a higher return on investment to taxpayers and
            ratepayers.

        --Request the FCC and NTIA to engage broadband providers in helping
                design the ``next generation'' broadband adoption program
                to achieve explicit goals and outcomes.

        --Encourage providers to partner with EveryoneOn (formerly Connect-
                to-Compete) by setting adoption targets coupled with
                affordable broadband offers that can be made available
                without undermining profitability. There needs to be market
                competition for low-income consumers to become sustainable
                broadband customers.

        --Request the FCC to structure USF reforms for a Broadband Lifeline
                Rate Program and eRate to encourage and reward providers
                who partner with non-profit intermediaries (such as
                EveryoneOn) and trusted CBOs with a proven track record and
                align with state plans. Reimbursement and subsidies from
                the USF should reward public-private partnerships that
                drive to and achieve explicit broadband adoption goals.
    _______________________________________________________________________

        [The witness also submitted U.S. Department of Commerce National
    Telecommunications and Information Administration and California
    Emerging Technology Fund, Lessons Learned from the Field: Connecting
    Californians to Broadband and Digital Care (http://www.cetfund.org/
    files/1301_Field-Lessons-Learned%20-Connecting_Californians.pdf)]

                                     ______

                                     ______

                                     ______

                                     ______

                                     ______

                                     ______

        Senator Pryor. Thank you.
        Mr. Cohen.

    STATEMENT OF DAVID L. COHEN, EXECUTIVE VICE PRESIDENT, COMCAST
                              CORPORATION

        Mr. Cohen. Thank you, Mr. Chairman, Ranking Member Wicker,
    who does represent our birth state in 1963. And Senator Wicker,
    you'll be pleased to know that we'll be celebrating that 50th
    birthday on November 20, so just about 3 weeks from now. And
    also, all members of the Subcommittee, thank you for the
    opportunity to testify today.
        The Internet has the potential to fundamentally transform
    our society and our economy, to equalize access to education,
    healthcare, vocational opportunities, and even to news,
    information, and entertainment. But for this to happen, we need
    to have ubiquitous broadband deployment and full broadband
    adoption.
        Broadband deployment in the United States has been a great
    success story. Critics who bemoan America's allegedly second-
    rate broadband infrastructure are simply mistaken. To
    paraphrase the late Senator Moynihan, they are entitled to
    their own opinions, but not their own facts. The reality is
    that America's broadband companies have invested more than $1.2
    trillion to deploy world-class broadband networks which now
    reach 98 percent of Americans. Three of the ten companies that
    invested the most inside the U.S. last year are broadband
    infrastructure companies: Comcast, Verizon, and AT&T. For our
    part, Comcast has built out its broadband plant to over 99.5
    percent of the homes in our footprint. We have increased
    network speeds 12 times over the past 11 years, and, earlier
    this year, we demonstrated that our existing network, right
    here in Washington, can deliver speeds up to 3 gig down.
        Concededly, the broadband deployment picture is not
    perfect. There are still unserved rural areas in our nation,
    and we need to encourage innovative solutions to fill those
    gaps. But, the larger problem affecting many more Americans is
    the lack of broadband adoption in areas where broadband is
    available. Research by the FCC, Pew, and others, has
    demonstrated that a bucket of digital literacy issues--lack of
    understanding of relevance or value, fear of the Internet, and
    lack of understanding how to access and use the Internet--are
    the main barriers to adoption. The National Broadband Plan
    found that 41 percent of non-adopters cited these as the main
    barriers. It also found that only 15 percent of non-adopters
    cited the monthly ISP price as the main obstacle. These trends
    were confirmed by Pew's most recent survey, which Aaron
    summarized, which found that only 9 percent of people who don't
    go online at home cited the price of connection as the main
    barrier to adoption.
        Addressing the broadband adoption gap is a personal
    priority for me and for Comcast. That is why Comcast created
    the program we now call ``Internet Essentials.'' This was a
    voluntary commitment we offered during the regulatory review of
    Comcast's acquisition of NBCUniversal. But, Comcast has
    expanded and strengthened Internet Essentials since its launch
    so many times and in so many different ways that the program
    today barely resembles what is required under the FCC's order.
    In addition to providing low-cost broadband service, Internet
    Essentials delivers access to low-cost computers and to digital
    literacy training; thus, hitting the touch point of every
    barrier to adoption that you've heard about on this panel
    today.
        And I'm pleased to make an announcement today. And that is
    that Comcast recently connected our one millionth Internet
    Essentials user. In just over 2 years of the program's
    existence, we have connected more than 250,000 families to the
    Internet, most for the very first time. Now a million is a very
    big number, more than the entire population of the City of San
    Francisco and about the size of the entire state populations of
    states like Delaware or Montana.
        We measure our success, though, not just by how many people
    are connected to broadband at home, but also by how they are
    using it. And what they have told us as we survey them is
    incredibly encouraging. Ninety-eight percent of those Internet
    Essentials customers surveyed say their kids use the Internet
    for doing homework, and 94 percent of them feel that Internet
    access has had a positive impact on their child's grades; 59
    percent say that the Internet has helped someone in their
    household find a job. So, yes, broadband adoption through a
    program like Internet Essentials really does work.
        I'd also like to say that Comcast supports an improved role
    for broadband in education. Every student deserves access to an
    integrated, always-on digital learning platform, a continuum of
    connectivity that begins in the classroom, follows the child to
    after-school programs, and ends with broadband connectivity at
    home. Updates to the E-Rate program and the administration's
    ConnectED initiative will advance these goals and can be done
    in a cost-effective and efficient manner. I commend Chairman
    Rockefeller, members of this subcommittee, and the
    administration for their leadership in these areas.
        When we look at broadband in America, there is much to be
    proud of, but there is much work that still needs to be done,
    particularly with adoption. Comcast is committing to doing its
    part and to working with you on these issues.
        So, thank you for this opportunity, and I look forward to
    your questions.
        [The prepared statement of Mr. Cohen follows:]

        Prepared Statement of David L. Cohen, Executive Vice President,
                              Comcast Corporation

        Mr. Chairman, Ranking Member Wicker, and Members of the
    Subcommittee:

        Thank you for inviting me to testify today. I welcome the
    opportunity to discuss the critical importance of expanding the
    adoption of broadband Internet service throughout our great nation. The
    Internet is an incredible technology that is unparalleled in its
    ability to level the playing field and equalize access to education,
    health care, and vocational opportunities, as well as news,
    information, and entertainment. People who are not on the Internet,
    however, are shut out from these benefits. Comcast, together with
    thousands of community partners, has made extraordinary efforts to
    address this challenge, but much work remains to be done.
        At the outset, let me commend the Subcommittee for focusing on the
    issue of broadband adoption. Since 1996, America's broadband providers
    have invested over a trillion dollars to deploy world-class broadband
    networks throughout the United States. Thanks to these investments, the
    Internet has become a platform for innovation unlike any the world has
    ever seen. Entire industries that would otherwise have been impossible
    have flourished, and American companies like Google, Netflix, Facebook,
    Amazon and so many others continue to thrive at home and around the
    globe because broadband providers like Comcast have invested to bring
    the Internet to nearly every American household. While there are still
    areas of the United States--particularly remote, rural areas--that
    remain unserved, the United States' broadband deployment story is a
    story of success.
        But there is a cruel irony at play. Because of the digital divide,
    the Internet actually exacerbates, rather than narrows, the differences
    in opportunities available to those who access the Internet versus
    those who do not. This hearing can help shine a light on this issue of
    fundamental fairness.
        The issue of broadband adoption has been a priority for me and for
    Comcast. We care deeply about this issue. Rigorous survey results,
    including by the FCC (as part of the National Broadband Plan), the Pew
    Research Center, and others, consistently show that the main reasons
    why Americans do not adopt broadband are the perceived lack of
    relevance--the absence of understanding the value of the Internet--and
    the lack of digital literacy. In other words, the people who do not
    subscribe to broadband Internet services often do not see the benefits
    of broadband and do not have the skills or tools to use broadband. The
    cost of computer equipment and the monthly cost of a broadband
    connection are also factors, but when Americans who have not adopted
    broadband are asked to cite the main reason they have not done so, they
    consistently cite these factors less frequently than they cite
    relevance and digital literacy.
        My colleagues and I at Comcast viewed these facts as a challenge
    and an opportunity to develop a program that could begin to address
    these obstacles of digital literacy, relevance, and cost in areas that
    Comcast serves. Working in concert with community partners and local
    elected officials, we developed the Internet Essentials program to
    address the main reasons that Americans do not adopt broadband.
        As I detail later on, we are very proud of our results so far. In
    its first 22 months, Internet Essentials has connected over 220,000
    households--that's over 900,000 low-income Americans--to the Internet,
    most for the first time. That's about 40 percent more people than the
    entire population of Washington, D.C., and about equivalent to the
    entire population of the City of San Francisco. While we are pleased
    with these results, we know that our work is not done. We continue to
    improve and expand the program, and have redoubled our efforts to
    target the barriers to adoption and to bring even more non-adopters
    online.
        The barriers to universal broadband adoption in the United States
    are complex and deep-rooted, and often connected to the deep
    socioeconomic and poverty-driven problems that impact other areas like
    education and health. Overcoming these obstacles will require
    commitment and persistence from all stakeholders. Comcast is ready and
    willing to do our part, and we look forward to working with others who
    share these goals.

    I. Broadband Deployment Has Been A Remarkable Success in the United
            States
        One part of bringing the promise of broadband to all Americans is
    deploying broadband infrastructure throughout the Nation. Some critics
    still insist on belittling broadband in America by citing selective
    statistics to support the unfounded charge that our broadband Internet
    service is second-rate. To paraphrase the late Senator Moynihan, they
    are entitled to their own opinions, but not their own facts.
        The facts are that Americans are getting world-class broadband from
    competing companies, and it is getting better every day. Today, more
    than 94 percent of Americans have access to one or more wired broadband
    Internet services,\1\ and over 85 percent of Americans have access to
    networks capable of delivering speeds of 100 Mbps and higher.\2\ More
    than 300 million Americans have access to 4G LTE mobile broadband,
    offering speeds up to 20 Mbps.\3\ Consumers in the United States have
    the third-lowest entry-level broadband prices in the world and the
    third-lowest price per GB of data.\4\
    ---------------------------------------------------------------------------
        \1\ See Eighth Broadband Progress Report, 27 FCC Rcd 10342  60
    (2013) at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-12-
    90A1.doc (``Eighth Broadband Progress Report'') (indicating that
    ``overall, more than 94 percent of Americans have access to fixed
    broadband''); National Broadband Map, Broadband Statistics Report,
    Access to Broadband Technology by Speed, at 3 http://
    www.broadbandmap.gov/download/Technology%20by%20Speed
    .pdf (``National Broadband Map Report'') (indicating that 93.92 percent
    of Americans have access to wireline broadband speeds in excess of 3
    Mbps downstream and 768 kbps upstream) (last visited Oct. 25, 2013).
    When wireless broadband service is included, 98.75 percent of Americans
    have access to broadband speeds in excess of 3 Mbps downstream and 768
    kbps upstream. See National Broadband Map Report at 3.
        \2\ See NCTA, Industry Data, http://www.ncta.com/industry-data
    (indicating that DOCSIS 3.0-enabled networks, which are capable of
    delivering speeds of 100 Mbps and higher, pass 85 percent of American
    households) (last visited Oct. 25, 2013).
        \3\ Verizon, News Center, LTE Information Center, http://
    www.verizonwireless.com/news/LTE/Overview.html (last visited Oct. 25,
    2013).
        \4\ See Int'l Telecomm. Union, Measuring the Information Society
    2012, at 88, available at http://www.itu.int/ITU-D/ict/publications/
    idi/material/2012/MIS2012_without_Annex_4
    .pdf (last visited Oct. 25, 2013); International Broadband Data Report,
    27 FCC Rcd 9884  33 (2012) (``The United States is ranked third out of
    16 countries with an average price of $0.76/GB.'').
    ---------------------------------------------------------------------------
        These data are particularly remarkable given some of the geographic
    and topographical challenges we face in the United States that make
    broadband deployment more challenging here than elsewhere. We rank 28
    out of 34 OECD countries on ``urbanicity,'' which is a measure of
    concentration in high density urban areas.\5\ Because of these
    differences, it may be more appropriate to compare the broadband
    situation in individual states to that in other countries. For example,
    current speed data from Akamai shows that, if U.S. states were ranked
    against countries worldwide, six of the top ten areas in the world with
    respect to average connection speed would be U.S. states.\6\
    ---------------------------------------------------------------------------
        \5\ Richard Bennett et al., ITIF, The Whole Picture: Where
    America's Broadband Networks Really Stand, at 60 (Feb. 2013), available
    at http://www2.itif.org/2013-whole-picture-america-broadband-
    networks.pdf (``The Whole Picture''). By way of comparison, the United
    States' urbanicity score was 5.2, as compared with South Korea, which
    has an urbanicity score of 67.1. Id.
        \6\ See Akamai, The State of the Internet, at Khttp://
    www.akamai.com/dl/documents/akamai_soti_q213.pdf?WT.mc_id=soti_Q213
    (last visited Oct. 25, 2013).
    ---------------------------------------------------------------------------
        Moreover, America's policy of fostering robust broadband
    competition by encouraging the build-out of competing networks has
    worked. The United States ranks third in the OECD in the percentage of
    households with access to two or more competitive wired broadband
    providers.\7\ And new entrants like Google Fiber, Gigabit Squared, and
    DISH Network, as well as new innovative technologies like VDSL2
    vectoring, promise to make the broadband marketplace even more dynamic.
    That's investment, innovation, and competition at work.
    ---------------------------------------------------------------------------
        \7\ The Whole Picture at 17.
    ---------------------------------------------------------------------------
        In less than two decades, the American broadband industry has
    invested over $1.2 trillion to bring multiple forms of broadband
    infrastructure to nearly every corner of the country.\8\ Even during
    this country's recent economic troubles, when job growth stalled and
    private investment tumbled, American broadband companies poured some
    $250 billion in private investment into broadband.\9\ So it is no
    surprise that when the Progressive Policy Institute (``PPI'') issued a
    list of their ``Investment Heroes''--companies that have invested the
    most money here in the United States--three of the ten largest domestic
    investors that were not financial companies were broadband
    infrastructure companies: Comcast, Verizon, and AT&T.\10\ According to
    PPI, ``telecommunications and cable companies are a major driver of
    U.S. investment today.'' \11\ Of course, this substantial investment
    translates not only into better and more widespread broadband networks,
    but also innovation, economic growth, and jobs.
    ---------------------------------------------------------------------------
        \8\ USTelecom, Broadband Industry Stats, Broadband Investment, at
    http://www.ustelecom
    .org/broadband-industry/broadband-industry-stats/investment (last
    visited Oct. 25, 2013).
        \9\ Broadband for America, Blog, ``Broadband Investment from Trade
    Groups Tops $250 Billion,'' http://www.broadbandforamerica.com/blog/
    broadband-investment-trade-groups-tops-250-billion (May 19, 2011).
        \10\ Diana G. Carew & Michael Mandel, Progressive Policy Institute,
    U.S. Investment Heroes of 2013: The Companies Betting on America's
    Future, at 5 (Sept. 2013), available at http://www
    .progressivepolicy.org/wp-content/uploads/2013/09/2013.09-Carew-
    Mandel_US-Investment-Heroes-of-2013.pdf.
        \11\ Id. at 2.
    ---------------------------------------------------------------------------
        For our part, Comcast made all these massive investments with
    private, at-risk capital--we received no government subsidies or
    guaranteed loans. As a result, today Comcast's facilities deliver
    world-class cable, voice, and broadband Internet services. We have made
    broadband Internet available to over 99.5 percent of the homes within
    our ``footprint,'' and our fiber backbone stretches across 141,000
    fiber route miles--that's enough to wrap around the Earth more than
    five times. We have increased the speeds available over that network 12
    times over the past 11 years, and we will continue to do so because our
    network is capable of evolving to meet all types of demand. This year,
    we demonstrated that our network is capable of delivering 3 Gbps.\12\
    And just last week, we successfully trialed the first 1 Terabit
    connection on a portion of our network from Ashburn, Va. to Charlotte,
    NC.\13\ This is believed to be the first trial in which live data
    traffic was carried at this speed on an existing, commercial
    network.\14\ All this is possible because of the investment that I
    mentioned earlier. We do not sit still; the marketplace simply will not
    allow it.
    ---------------------------------------------------------------------------
        \12\ See News Release, Comcast Corp., ``The Future of Broadband
    Speed and 4K Ultra HD Video'' (June 11, 2013), at http://
    corporate.comcast.com/news-information/news-feed/comcast-demonstrates-
    the-future-of-broadband-speed-and-4k-ultra-hd-video.
        \13\ See News Release, Ciena Corp., ``Comcast Conducts Industry's
    First Live 1Terabit Network Trial with Ciena's 6500 Converged Packet
    Optical Solution'' (Oct. 22, 2013), at http://www
    .ciena.com/about/newsroom/press-releases/Comcast-Conducts-Industrys-
    First-Live-1Terabit-Net
    work-Trial-with-Cienas-6500-Converged-Packet-Optical-Solution.html.
        \14\ Id.
    ---------------------------------------------------------------------------
        I certainly would not claim the deployment picture is perfect.
    While nearly all Americans have access to satellite broadband,\15\
    which provisions speeds as fast as 25 Mbps,\16\ more wireline and
    wireless broadband deployment is needed in remote parts of rural
    America.\17\ We should not downplay the geographical and logistical
    challenges of addressing this problem, and we need to be more focused
    on facilitating creative technology solutions.\18\ But, on the whole,
    the speeds and range of choices available to the vast majority of
    Americans are light-years beyond what anybody reasonably would have
    anticipated just 10 or 15 years ago. This is great news for our
    country.
    ---------------------------------------------------------------------------
        \15\ Connecting America: The National Broadband Plan, FCC, at 137
    (rel. March 16, 2010), http://download.broadband.gov/plan/national-
    broadband-plan.pdf (``National Broadband Plan'').
        \16\ See Exede Internet, Internet Packages, at http://
    www.exede.com/internet-packages-pricing/service-availability (last
    visited Oct. 25, 2013).
        \17\ See Section 706 Fixed Broadband Deployment Map/FCC.gov, at
    http://www.fcc.gov/maps/section-706-fixed-broadband-deployment-map
    (last visited Oct. 25, 2013).
        \18\ There are promising proposals and initiatives underway in this
    regard. See, e.g., Ben Leubsdorf, ``UNH to test `Super Wi-Fi'
    technology that could expand broadband access in rural areas,'' Concord
    Monitor, Sept. 24, 2013, available at http://www.concordmonitor.com/
    news/politics/8640947-95/unh-to-test-super-wi-fi-technology-that-could-
    expand-broadband-access-in-rural-areas; Richard Bennett, ``Public-
    Private Partnerships will Close Rural Broadband Gap,'' Billings
    Gazette, Aug. 7, 2013, available at http://billingsgazette.com/news/
    opinion/guest/guest-opinion-public-private-partnerships-will-close-
    rural-broadband-gap/article_0add8e93-4478
    -5ec7-897e-aff16bc406a2.html.
    ---------------------------------------------------------------------------
    II. Broadband Adoption Has Skyrocketed, But Many Americans Are Still on
            the Wrong Side of the ``Digital Divide''
        The key to empowering Americans through access to the Internet is
    to persuade them that adopting broadband is worth their time, effort,
    and money. We have come a long way in the last 20 years. In 1996, just
    a small percentage of Americans accessed the Internet from their
    homes,\19\ and the vast majority of those who did used dial-up
    connections. Thankfully, we have moved beyond the slow speeds available
    over dial-up and have widely adopted broadband. Today, according to
    surveys conducted by NTIA and the Pew Research Center, about 70 percent
    of Americans subscribe to wired broadband.\20\ Millions more have
    tablets and smartphones that use mobile wireless connectivity to access
    a wide range of Internet services for work and pleasure.\21\
    ---------------------------------------------------------------------------
        \19\ See Pew Internet--Trend Data (Adults), Internet Adoption,
    1995-2013, at http://www.pewinternet.org/Trend-Data-(Adults)/Internet-
    Adoption.aspx (last visited Oct. 25, 2013).
        \20\ See Pew Research Center, Home Broadband 2013 (Aug. 26, 2013),
    available at http://pewinternet.org//media//Files/Reports/2013/
    PIP_Broadband%202013_082613.pdf (``Pew Home Broadband 2013''); Nat'l
    Telecomm. & Info. Admin., ``Exploring the Digital Nation: America's
    Emerging Online Experience,'' (June 7, 2013) at http://
    www.ntia.doc.gov/files/ntia/publications/exploring_the_digital_nation_-
    _americas_emerging_online_experience.pdf (``Approximately 69 percent of
    households used broadband Internet at home (72 percent if including
    dial-up) in July 2011.''). Pew's data show that, except for just one
    year between 2010 and 2011 when we think general economic factors
    played a role, broadband adoption has increased every year by an
    average of over five percentage points.
        \21\ See Pew Research Center, Tablet and E-Reader Ownership Update,
    at http://pewinternet.org/Reports/2013/Tablets-and-ereaders.aspx (Oct.
    18, 2013) (``The number of Americans ages 16 and older who own tablet
    computers has grown to 35 percent.''); Pew Research Center, Smartphone
    Ownership--2013 Update, at 2 (June 5, 2013) available at http://
    pewinternet.org//media//Files/Reports/2013/
    PIP_Smartphone_adoption_2013_PDF.pdf (``56 percent of American adults
    are now smartphone owners'').
    ---------------------------------------------------------------------------
        But there is much more work to be done. Too many Americans do not
    yet enjoy the benefits of broadband Internet access. A broadband
    adoption rate of around 70 percent means that there are still about 30
    percent of Americans who do not subscribe to a fixed broadband Internet
    connection at home (and only about one-third of this group has Internet
    access via a smartphone).\22\ More troubling still, clear divisions
    have emerged between the broadband ``haves'' and ``have-nots.'' Starkly
    different broadband adoption rates are evident across educational,
    racial, ethnic, socioeconomic, and geographic lines. For example, the
    Pew Research Center tells us that 74 percent of White Americans have
    high-speed broadband connections at home, but only 64 percent of
    African Americans and 53 percent of Hispanic Americans have high-speed
    broadband.\23\ In addition, one of the most important determinants of
    low adoption is education--only 37 percent of Americans without a high
    school diploma have adopted broadband, while college graduates have an
    89 percent adoption rate.\24\ So, nearly two decades after then-
    Representative Ed Markey warned about the ``digital divide,'' we still
    have one.
    ---------------------------------------------------------------------------
        \22\ Pew Home Broadband 2013 at 4.
        \23\ Id. at 3.
        \24\ Id.
    ---------------------------------------------------------------------------
        Doing something about the persistent adoption gap requires
    understanding the root causes. Rigorous survey-based analysis over the
    past several years has established that the main reasons why a large
    portion of Americans do not adopt broadband are a lack of digital
    literacy, a lack of understanding of the value of the Internet, and a
    belief that the Internet is not relevant to their lives. The National
    Broadband Plan found that nearly half--41 percent--of broadband non-
    adopters cited either a lack of digital literacy or a lack of perceived
    relevance as the main reason for non-adoption.\25\ Only 15 percent of
    respondents cited the cost of a monthly broadband subscription as the
    most important reason for not adopting broadband, with another 10
    percent pointing to the cost of a computer. In its latest survey, Pew
    reported similar results, finding that only 9 percent of Americans who
    do not go online at home cited the expense of the Internet connection
    as the reason for not doing so.\26\
    ---------------------------------------------------------------------------
        \25\ John B. Horrigan, OBI Working Paper Series No. 1, Broadband
    Adoption and Use in America, at 5 (rel. Feb. 2010), available at http:/
    /hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-296442A1.pdf.
        \26\ See Pew Research Center, Who's Not Online and Why, at 12
    (Sept. 25, 2013), available at http://pewinternet.org//media//Files/
    Reports/2013/PIP_Offline percent20adults_092513.pdf. Although that Pew
    study looked at Internet use, which is slightly different from at home
    adoption, it does show that affordability is not the main driver.
    ---------------------------------------------------------------------------
        So, we know what the problems are. Now we--private sector and
    public sector alike--need to muster our collective resources to address
    them.

    III. Comcast Developed the Internet Essentials Program to Address and
            Overcome Many of the Key Obstacles to Broadband Adoption
        Comcast has long been committed to addressing the challenges to
    broadband adoption. One of the earliest cable industry efforts was a
    program known as Cable in the Classroom, which brought the first
    Internet connections to many American schools for free, and promoted
    the responsible and effective use of cable's broadband technology,
    services, and content in teaching and learning. The cable industry has
    connected thousands of schools and libraries to the Internet under this
    program.
        Since 2009, we have supported the Comcast Digital Connectors
    program, which gives young people, primarily from diverse, low-income
    backgrounds, the opportunity to develop their skills in using
    computers, applications, and the Internet. Almost 2,000 youth have
    graduated from this program, contributing 100,000-plus hours of service
    in their communities. We also support the Boys & Girls Clubs of
    America's ``Club Tech'' program, which provides young people with
    access to technology, software, curriculum, and training, helping to
    better prepare them for success both in their educational endeavors and
    work careers. We support Club Tech at more than 2,000 club locations
    across the country, serving about 500,000 students each year.
        In 2011, we took our efforts to the next level. As part of our
    acquisition of NBCUniversal, we offered up a voluntary commitment to
    launch a low income broadband adoption program, and that commitment was
    adopted in the FCC Order approving the NBCUniversal transaction. That
    commitment has grown into Internet Essentials, which is the Nation's
    largest and most comprehensive broadband adoption program and is
    specifically designed to systematically address the primary barriers to
    broadband adoption that have been identified in the National Broadband
    Plan and subsequent survey results.
        Since its launch almost 24 months ago, Internet Essentials has made
    broadband Internet accessible to millions of low-income families across
    the Comcast footprint for $9.95 per month--with no charge for the cable
    modem, no installation charge, no contract required, and no obligation
    to buy any other Comcast service. In addition to affordable broadband,
    Internet Essentials gives eligible families the opportunity to purchase
    an Internet-ready computer for under $150, heavily subsidized by
    Comcast. The program also includes a comprehensive digital literacy
    training component--in print, online, and in person--designed to
    empower students and their parents to unlock the full potential of the
    Internet.
        We have been relentless in getting the word out about the program.
    We have distributed 27 million brochures, in 14 different languages, to
    school districts and community partners. We have fielded 1.5 million
    phone calls in our Internet Essentials call center, and we have had 1.2
    million visits to the Internet Essentials websites in English and
    Spanish. We also have broadcast nearly two million public service
    announcements with the help of well-known and respected public figures
    like Super Bowl-winning coach Tony Dungy, and numerous governors,
    mayors, school superintendents, and community leaders from across the
    country who are committed to ensuring that all of their students have
    the opportunity to connect to the Internet at home.
        Comcast's extensive partnership with a diverse array of leaders
    from the education, government, and non-profit sectors across the
    Comcast service area continues to be a cornerstone of the Internet
    Essentials program's success. Over the past three years, we have worked
    hard to engage school administrators, teachers, and parents in the more
    than 30,000 schools in more than 4,000 school districts across the
    Comcast footprint to promote Internet Essentials to eligible families,
    including distributing brochures with their National School Lunch
    Program (``NSLP'') letters and report cards, providing presentations to
    school stakeholders, and attending numerous back-to-school nights and
    parent-teacher association meetings.
        Comcast also has worked with thousands of community-based
    organizations, faith-based organizations, libraries, and educational
    associations, such as the National Urban League, the League of United
    Latin American Citizens, and the National Council of La Raza, to spread
    the word about Internet Essentials, to create and foster an atmosphere
    of support and excitement about Internet Essentials, and to share
    ``best practices'' with each other to improve both the program and our
    communications. Finally, state, local, and Federal officials, including
    members of this Subcommittee, serve an important role in educating
    their constituents about the importance of broadband and helping them
    to find programs like Internet Essentials.
        We are proud of the results. As I mentioned earlier, in the first
    22 months of the program, we connected more than 220,000 families,
    totaling more than 900,000 low income Americans, to the power of the
    Internet at home--many for the first time. We have sold 18,000
    subsidized computers at an affordable price point. And 20,000 people
    have attended free, in-person digital literacy training.
        We are also tremendously encouraged by data we have compiled based
    on surveys of the families who have signed up for the program. In
    particular:

       90 percent of Internet Essentials customers surveyed are
            ``highly satisfied'' with the service, and 98 percent of those
            surveyed would recommend Internet Essentials to others.

       85 percent of respondents said they use Internet Essentials
            to go online on a daily basis.

       More importantly, 98 percent of survey participants reported
            that their school-age children used the Internet Essentials
            service for school assignments, and of that group, 94 percent
            felt Internet Essentials had a positive impact on their child's
            grades.

       Other popular uses included general research (94 percent),
            e-mail (85 percent), social networking (73 percent), health
            care and government services (66 percent), online bill payment
            (60 percent), and employment searches (58 percent). The
            majority of those who said they used Internet Essentials for
            employment searches felt that the program helped someone in the
            household locate or obtain a job.

        We have learned a lot over the first two years of the program, and
    we have made improvements based on our direct interactions with
    families. In fact, at this point, the program has gone far beyond the
    original commitment we made in connection with the NBCUniversal
    transaction. For example, we initially designed the program only for
    families that have at least one child eligible for a free school lunch
    through the NSLP. Last year, we extended eligibility to families
    eligible to receive NSLP reduced-price school lunches, making 300,000
    additional families eligible for the program. This year, we expanded
    eligibility yet again, to include families with private, parochial, and
    home-schooled students who otherwise meet the NSLP eligibility
    criteria. This enhancement made nearly 200,000 additional families
    eligible for Internet Essentials in Comcast's service areas--bringing
    the total to nearly 2.6 million eligible families.
        We also improved the service we are offering as part of the
    program. When we launched the program we offered a 1.5 Mbps downstream
    connection, but last year we raised that to 3 Mbps, and this year we
    raised it again, to 5 Mbps, all without raising the price.
        And we continue to find ways to make the process easier and faster
    for qualified families to enroll. For example, we recently expanded the
    instant approval process for families whose students attend schools
    where 70 percent or more of the students are eligible to participate in
    the National School Lunch Program.\27\ We also have set up an online
    application request form, which is available in both English and
    Spanish and can be accessed through any Internet-connected computer (at
    recreation centers, libraries, and public computing labs, for example),
    or on tablets or smartphones. In addition, we have implemented
    innovative measures such as Internet Essentials Opportunity Cards, so
    Comcast's non-profit partners and others can purchase up to a year of
    Internet Essentials service for qualified families. We are confident
    that these changes will make Internet Essentials even more attractive
    to families, allowing us to bring the benefits of the Internet to even
    more people--and, importantly, more children.
    ---------------------------------------------------------------------------
        \27\ Previously, only families whose students attended schools
    where 80 percent or more of the students are eligible to participate in
    the National School Lunch Program could take advantage of the instant
    approval process.
    ---------------------------------------------------------------------------
    IV. A Comprehensive Solution to the Adoption Problem Must Involve
            Efforts from All Stakeholders
        We designed Internet Essentials to address the key barriers to
    adoption. It has been a remarkable success, but our on-the-ground
    experience has shown that improving broadband adoption in these
    communities is more complicated than just addressing relevance, digital
    literacy, and price. We have found that solutions must address the
    impact of poverty, education, and a range of other deep socioeconomic
    problems that are at the heart of the non-adoption issue. This is why
    we believe that all stakeholders in this area must work together to
    more effectively bridge the digital divide. The fact remains that no
    one company and no single program will completely close the digital
    divide in America. The challenges are certainly daunting, but progress
    is being made, and will continue to be made if we all make this a
    priority.
        The education space is one area where several key broadband
    adoption initiatives deserve our attention and support. Internet
    Essentials is targeted to homes with school-aged children purposefully.
    As a nation, we must recognize the importance of an educated and
    technologically literate work-force ready to compete in the economy of
    the 21st century. In many homes, it is often children who first develop
    digital skills and understand the relevance of broadband to their lives
    and education. Once children gain these skills, they are able to
    demonstrate the benefits of broadband adoption to others in their
    households and communities. All of this helps increase digital literacy
    and reduce the apprehension about technology and broadband for both
    children and adults.
        Broadband at school complements broadband at home. We must all work
    together to ensure America's classrooms have access to the advanced
    broadband networks that will support a modern digital learning
    environment.\28\ To that end, we share the ConnectED vision that ``our
    schools [must be] an integral part of the broadband and technology
    transformation'' to ensure that students ``can benefit from these
    advances in teaching and learning.'' \29\ And I would be remiss not to
    highlight this Committee's vision and role in identifying the critical
    need to connect schools almost twenty years ago. Chairman Rockefeller
    and former Senators Olympia Snowe, Jim Exon, and Bob Kerrey all deserve
    enormous credit for the E-rate program, as does the Senator from
    Massachusetts, Mr. Markey, who championed this cause while in the House
    of Representatives.
    ---------------------------------------------------------------------------
        \28\ ConnectED: President Obama's Plan for Connecting All Schools
    to the Digital Age, The White House, at 2, (June 6, 2013) at Khttp://
    www.whitehouse.gov/sites/default/files/docs/connected_fact_sheet.pdf
    (``Our schools were designed for a different era. . . . This system
    does not take into account the constant learning opportunities of
    global connectivity[.]'').
        \29\ Id. at 1-2.
    ---------------------------------------------------------------------------
        Over the past two decades, the E-rate program has succeeded in
    ensuring that many elementary and secondary schools have access to
    basic Internet connectivity at discounted rates.\30\ However, as
    Senator Rockefeller noted earlier this year, ``basic Internet
    connectivity is no longer sufficient.'' \31\ Today's educational
    environment requires not only the delivery of broadband Internet
    service to schools, but also the deployment of the infrastructure
    within the school, such as through robust Wi-Fi networks, in order to
    meet the digital needs of each classroom.\32\ A modernized E-rate
    program can help achieve these goals in a cost-effective and efficient
    manner.
    ---------------------------------------------------------------------------
        \30\ See, e.g., News Release, FCC, FCC Launches Modernization of E-
    Rate Program to Deliver Students & Teachers Access to High-Capacity
    Broadband Nationwide, at 1 (July 19, 2013), available at http://
    transition.fcc.gov/Daily_Releases/Daily_Business/2013/db0719/DOC-322284
    A1.pdf (``Over the past 15 years, support provided by the E-rate
    program has helped revolutionize schools' and libraries' access to
    modern communications networks, but the needs of schools and libraries
    are changing.'').
        \31\ See Press Release, U.S. Senate Committee on Commerce, Science,
    and Transportation, Rockefeller Says E-Rate Should Expand to Connect
    More Students to High Speed Broadband (June 6, 2013), available at
    http://www.commerce.senate.gov/public/index.cfm?p=PressRel
    eases&ContentRecord_id=5cb24ad3-281e-4abd-acd0-
    afb699008e3e&ContentType_id=77eb43da-a
    a94-497d-a73f-5c951ff72372&Group_id=4b968841-f3e8-49da-a529-
    7b18e32fd69d&YearDisplay
    =2013. See also, Modernizing the E-Rate Program for Schools and
    Libraries, 28 FCC Rcd. 11304 (2013) (Statement of Commissioner Jessica
    Rosenworcel) (``[W]e are quickly moving from a world where what matters
    is connectivity to a world where what matters is capacity.'').
        \32\ See Comments of Comcast Corporation, WC Docket No. 13-184, at
    9-10 (Sept. 16, 2013). As Comcast has explained, more spectrum needs to
    be provided for unlicensed use ``[i]n order to ensure that students get
    the full capabilities of the underlying wired broadband connection the
    Commission intends to support.'' Id. at 20.
    ---------------------------------------------------------------------------
        In 1996, we could talk about connected learning in terms of the
    school. When it comes to learning in the digital age, however, we need
    an integrated, always-on digital learning platform that delivers
    improved educational outcomes for every student--a continuum of
    connectivity. It begins in the classroom and throughout the school with
    access to an array of digital learning tools, but then follows the
    child to after-school programs at public libraries, recreation centers,
    and other community centers, and ends with at-home broadband. If we
    want our children to succeed in this complex and connected world, it
    really will take a coordinated effort to create these types of
    continuous digital communities.\33\
    ---------------------------------------------------------------------------
        \33\ To foster the development of these types of digital
    communities, earlier this year Comcast and the City of Chicago
    announced the development of Internet Essentials Learning Zones, a
    concept that Comcast is now implementing in other Internet Essentials
    communities. See News Release, Comcast Corp., ``Mayor Emanuel, Comcast
    Announce that Chicago's Internet Essentials Enrollment Doubles to
    14,000, More Than Any Other City in the Nation'' (Sept. 16, 2013),
    available at http://www.businesswire.com/news/home/20130916006076/en/
    Mayor-Emanuel-Com
    cast-Announce-Chicago%E2%80%99s-Internet-Essentials (``The zones will
    help bridge the digital divide and extend learning beyond the school
    day by connecting the dots between Comcast, the United Way, the Smart
    Chicago Collaborative, participating community organizations and
    school-based leaders, all of which will work in partnership to enhance
    access to broadband and provide technology training beyond school
    walls.'').
    ---------------------------------------------------------------------------
        Indeed, high-speed broadband Internet access throughout the day can
    enrich curricula and enhance the learning process by permitting
    students to use digital textbooks, work on multimedia projects, stream
    educational video content, conduct Internet-based research, take online
    courses that are not locally available, and interact with content
    experts around the world or right next door.\34\ And when we extend the
    broadband experience to the home, it even enhances the involvement of
    parents in their children's education. These digital tools can improve
    learning outcomes for our Nation's students and prepare the next
    generation for success in an increasingly competitive digital
    world.\35\ This only underscores the importance of today's topic and
    how we need to keep working harder to ensure that all Americans have
    access to broadband at home.
    ---------------------------------------------------------------------------
        \34\ See generally The Broadband Imperative: Recommendations to
    Address K-12 Educational Infrastructure Needs, State Educational
    Technology Directors Association (rel. May 21, 2012), at http://
    www.setda.org/web/guest/broadbandimperative (``SETDA Broadband
    Imperative Report'').
        \35\ See, e.g., National Broadband Plan at 226 (``Broadband can be
    an important tool to help educators, parents and students meet major
    challenges in education.''); U.S. Dept. of Education, Press Release,
    Statement from U.S. Education Secretary Arne Duncan on FCC Action to
    Connect More Students to High-Speed Internet (July 19, 2013), at http:/
    /www.ed.gov/news/press-releases/statement-us-education-secretary-arne-
    duncan-fcc-action-connect-more-students-hi (``The U.S. once led the
    world in connecting our schools to the Internet, but our strongest
    international competitors are surging ahead of us because they know
    that giving students and teachers the right tools is vital to their
    economic strength.'').
    ---------------------------------------------------------------------------
        The efforts that those of us in this space have undertaken thus far
    are certainly commendable, but they are only a piece of the overall
    solution to the adoption gap. The focus needs to remain on increasing
    Americans' adoption of broadband at home, so that families can benefit
    from the innumerable benefits of the Internet. The existing obstacles
    to adoption cannot be eliminated with any magic bullet. We look forward
    to working with all stakeholders--within the broadband industry and in
    other sectors--to address the complex problems that remain.

    V. Conclusion
        America's broadband past has been truly remarkable, and the future
    of broadband is even brighter. Our infrastructure keeps getting faster
    and better, as industry continues to invest in innovative new
    technologies, expand network deployments, and increase speeds.
    Consumers' choices have never been greater.
        While adoption continues to grow, it is not at an acceptable pace,
    and certain populations are still at a danger of being left behind.
    Every American must have the opportunity to participate in the wonders
    and practical benefits of the Internet. Making this a reality begins
    with a firm understanding of why these people are not using the
    Internet, and acting based on sound information to get the most return
    on our public policy investments.
        In particular, we need to continue public and private efforts to
    promote awareness of the social and economic benefits of the Internet,
    and to accelerate the development of digital literacy and computer
    skills. We need to continue efforts to get low-cost computer equipment
    into the homes of those who don't currently have it. We need to update
    and revitalize the E-Rate program to ensure that our classrooms have
    the bandwidth necessary to take advantage of the digital learning
    platforms that will prepare our children for the digital economy of the
    21st century. Finally, we need to continue to educate families about
    the availability and benefits of programs like Internet Essentials, so
    their children are connected at home just as they are at school.
        Comcast is working hard to do our part, and we're partnering with
    thousands of elected officials and community organizations to do so. I
    look forward to working with members of this Subcommittee on this
    important challenge. Comcast is firmly committed to engaging with
    Congress, the Administration, the FCC, and stakeholders from across all
    relevant industries to ensure that no American is left behind as we
    stride boldly into our exciting future.
        Thank you for the opportunity to testify today.

        Senator Pryor. Thank you. And congratulations on your
    millionth customer. That's big news.
        Let me, if I may, start with Senator Sununu, and what we'll
    do is 5-minute rounds here, and I'll try to actually keep my
    first couple short so that we can get to our other colleagues.
        But, Senator Sununu, I know that one of the things you are
    concerned about is the Internet tax moratorium. And tell us how
    you think lifting that moratorium--in other words, adding a tax
    to the Internet--how you think that might hurt adoption rates.
        Senator Sununu. Well, I think it's basic economic fact,
    when you tax something, you get less of it. So, you tax
    something, you raise the price; you tax something, you make it
    a little less attractive to invest; you tax something, you make
    it a little less attractive to put money behind the kind of
    deployment and access and, ultimately, adoption that we're
    talking about. So, we want to make sure that this
    infrastructure is as economically sound and robust as possible,
    and I think it certainly helps to prevent, not just the Federal
    Government, but states, cities, towns, all from being able to
    tax it.
        I--and I'll draw an analogy to the wireless industry, where
    this was a path that wasn't taken, and anyone can look at their
    wireless bill and look--as a result, there are local taxes,
    State taxes, Federal taxes that do affect the economic
    viability and the economic incentive to continue investment.
        Senator Pryor. Right. You mentioned, in your testimony,
    that you like the, quote, ``light touch regulatory approach,''
    which doesn't surprise me, knowing you. But, what else can
    Congress do, or not do, that will help increase adoption rates?
        Senator Sununu. Well, in terms of the light tough
    regulatory approach, I mean, it's sort of a simple phrase, but
    I think it's a meaningful one. That was an intentional approach
    that really began under President Clinton. It has been largely
    followed by Congresses, by the FCC, and by administrations ever
    since. You know, things that might be done that would certainly
    hinder investment and innovation are regulations regarding the
    packaging, pricing and distribution of broadband services.
        David Cohen just talked a great deal about the evolution of
    the Internet Essentials Program. It's something that's changed
    over time and over the years, and there's no question that the
    private sector has much greater flexibility when it comes to
    innovation and packaging. And it's especially important now,
    frankly, within the broadband industry, as consumer habits are
    changing dramatically. Right? Where they access broadband--is
    it wireless, is it wired, is it for content, is it for
    information, is it for education, is it for entertainment?
    Being able to innovate and try different approaches in order to
    encourage the adoption we're talking about is very, very
    important.
        On the ``What can government do that's helpful?'' I'd just
    allude to, and let others expand on, the work that's been done
    by--within government--FCC and NTIA, and looking at that
    adoption toolkit, and highlighting the issues of perception and
    skills relevant to access and cost, as NTIA did, and then look
    for those partnerships, because everyone is challenged in a
    different way--communities, families, urban versus rural--and
    so that the way that you approach adoption in one particular
    part of the country or one particular demographic is going to
    be different. And so, you need to identify the problem you're
    trying to address, come up with a partnership that can address
    that problem.
        Senator Pryor. OK. Thank you.
        Mr. Cohen, I just have a minute left. Let me ask--you
    talked about your Internet Essentials Program, which sounds
    like it's a great success for the company and for your
    customers. You also talked about your idea of a continuum of
    connectivity. And I know that, as part of this--and you
    mentioned it in your testimony--you're doing digital literacy
    training for thousands of people in your communities. And do
    you see an increase in adoption rate after these folks have
    that digital literacy training?
        Mr. Cohen. So, this is one of the great struggles, and we
    do try and survey our Internet Essentials customers about this.
    And I don't think we have enough data yet for us to be able to
    demonstrate that digital literacy training increases adoption.
    But, all the data we've looked at, whether it's from the FCC or
    from Pew, is crystal clear that, to the extent families
    understand the Internet and understand the value of it and what
    it means, this does increase adoption. And it's one of the
    reasons we've focused on this school-aged population. The
    eligibility for Internet Essentials is having a child living in
    your household who's eligible to participate in the National
    School Lunch Program, because this is an interesting
    technology, in the sense that adoption may well be driven by
    young people because they understand the importance. They see
    other kids in their class going home and doing homework on the
    Internet. So, they may drive adoption for their parents and for
    their grandparents.
        And anecdotally, I can tell you that I have absolutely seen
    dozens of those stories, where parents have said, ``We didn't
    understand this until we heard about this from our children,
    from the teachers in the school, how important the Internet was
    and it wasn't just for playing games and for Facebook.''
        So, I think it's pretty clear that the digital literacy
    barrier here is a big one and it's a complicated one. And I do
    think--as Ms. McPeak said, there's a real role for the
    government in this space. I think it's an educational
    component, and I think the FCC and NTIA have helped to shine a
    spotlight on this and facilitate digital literacy training, and
    that, in the longrun, that is going to drive adoption.
        Senator Pryor. Good. I'll ask you about E-Rate in a few
    moments, but I want to first turn it over to Senator Wicker.
        Senator Wicker. Thank you, Mr. Chairman.
        And, Mr. Cohen, let me join our Chairman in congratulating
    you on your announcement of your one millionth person. I
    understand you've gone above and beyond the conditions imposed
    on you by the merger with NBCUniversal. Let me just ask you to
    comment on some testimony from Ms. McPeak.
        She advocates a setting of goals, and one of the things
    that struck me is, affordable broadband offers are required to
    increase adoption among low-income households. This is likely
    to require an affordable broadband lifeline rate program. Would
    you comment about your opinion concerning such a program?
        Mr. Cohen. So, I agreed with almost everything in Ms.
    McPeak's testimony, and you found the one paragraph that I
    probably----
        Senator Wicker. That's my job.
        Mr. Cohen.--don't fully agree with. So, congratulations.
        [Laughter.]
        Mr. Cohen. Now, for our company, I think we've demonstrated
    that a governmentally-designed and governmentally-regulated
    program is not the best way to go. And my concern would be that
    if you created a government-regulated rate-set Lifeline
    program, that what you'd have is a government-regulated, rate-
    set program, but you wouldn't have anything to deal with the
    cost of computers, you wouldn't have anything to deal with
    digital literacy, you wouldn't have anything to deal with
    helping to drive adoption through community partners. The
    success of Internet Essentials has been based on this holistic
    approach and, quite frankly, the commitment of this company to
    doing what's right to drive adoption. And we've created that
    web of partnerships with community that Ms. McPeak talks about.
    And I can't underscore enough how important that is to be able
    to drive adoption.
        And if you try to regulate and, through government
    intervention, try and hit only one element of this equation, I
    don't think you'll end up with a successful program. I think
    encouraging the rest of the private sector or others in the
    private sector--and Senator Sununu noted, we're not in this
    alone; we have AT&T and Time Warner Cable and Suddenlink and
    Cox that all run programs--and I think encouraging those
    programs and encouraging the holistic approach of private
    sector, government, nonprofit sector, school boards, libraries,
    faith-based community to work together to drive adoption is the
    secret sauce that is going to move this needle.
        Senator Wicker. Ms. McPeak, what do you say to that? Sounds
    pretty good.
        Ms. McPeak. Mr. Cohen is personally very passionate and
    dedicated, and Comcast has done better than any other company.
    What David just said is that you need this very holistic,
    integrated approach. It's exactly what my testimony says, and
    spells it out.
        What I said about setting a goal is really important.
    Comcast Internet Essentials is going to expire next year. With
    all of the effort that has been invested by Comcast, they have
    not reached more than 8 percent of the eligible recipients. So,
    8 percent is not a success, when we have all of these people
    offline.
        We recommend that, in order to sustain that, because
    affordability is an issue, access to a computing device is an
    issue--Comcast has, for all intents and purposes, really set
    the market, they've set the price point that will drive
    adoption. It needs to be a much fuller engagement of community-
    based organizations and digital literacy.
        We do have the data. We got the 200,000 adoptions through
    working with NTIA because of digital literacy, and we go back
    and we survey and we know it is sustainable. We fully integrate
    the use of technology, broadband and computing devices, into
    teaching and learning in a program we call School2Home. It
    fully engages the parents as one of those key elements of
    turning around low-performing schools. The worst of the worst
    schools are getting better academic performance today with the
    use of the technology, largely because the parents can stay
    connected with their kids' homework, with the teachers. The
    technology allows them to overcome their inability to go to a
    teacher conference because they might work two jobs or they
    don't speak English. It really is the mechanism for engagement.
        Senator Wicker. All without----
        Ms. McPeak. And here's the data----
        Senator Wicker.--all without a mandate.
        Ms. McPeak. Pardon?
        Senator Wicker. All without a government mandate.
        Ms. McPeak. Absolutely. Absolutely.
        But, let me, then, try to show the data and answer your
    question on why. Why does it become important to have at least
    either sustained partnerships--remember, I hit that over and
    over again. Any public investment that we make should be
    leveraged to the hilt, but partnerships between the Federal
    Government and states, between the private sector and public
    sector, and particularly providers in the community--it's that
    trusted messenger, that honest broker on the ground that makes
    a difference.
        In our School2Home Program, after both integrating the
    technology into the teaching and learning and improving
    academic performance beyond the statewide average or the
    district average in the lowest performing schools, we find
    that. There is broadband adoption that increases for Spanish-
    speaking parents by 58 percent and by English-speaking parents
    by 12 percent. Those percentages that I just shared with you
    exceed all of the effort, in terms of adoption, that we have
    right now, in a voluntary sense.
        If there is not, either through industry or through
    government, an affordable broadband offer beyond next year, we
    will hit the wall, and have in California, on broadband
    adoption. So, somehow we need to figure this out.
        And our point is that, if the FCC, which is looking at an
    affordable broadband offer, makes that available, it should be
    with the encouragement incentives to have the partnerships that
    Mr. Cohen and I have talked about.
        Senator Wicker. Thank you.
        Senator Pryor. All right, thank you.
        Let's see. Senator Klobuchar.

                   STATEMENT OF HON. AMY KLOBUCHAR,
                      U.S. SENATOR FROM MINNESOTA

        Senator Klobuchar. Thank you, Mr. Chairman. Thanks for
    doing this hearing.
        And thank you, Senator Sununu, for coming back on this
    important topic.
        And I really do appreciate the work that Comcast is doing
    in this idea of partnerships. But, Senator Wicker was noting
    that there was no mandate, but there has been a lot of
    government funding. And I was just looking at this, you know,
    $4 billion alone out of the NTIA and the hope that we can use
    some more Universal Service funding for this. So, do you see,
    Ms. Wright McPeak, that we could just do this with the private
    sector?
        Ms. McPeak. Oh, I think that any public investment, whether
    it's at the Federal level or the state level or the local
    level--and nobody finds somebody that is more frugal than I am;
    they--everybody thinks I am actually much too frugal, and I
    come out of a business sense.
        May I add that, on NTIA's broadband adoption program, it
    was $450 million, so most of the funding in BTOP through ARRA
    was actually deployment, it wasn't adoption. So, it was modest,
    in the sense of an investment in adoption, which I think makes
    sense if we're trying to close the digital divide. We cannot be
    globally competitive with the 20, 30 percent of our citizens
    left behind in the Digital Age.
        There are many ways to leverage partnerships. It begins
    with, ``Can, in fact, the Federal Government connect dots in
    your own program, or programs?'' May I suggest just a couple of
    examples? And it goes to, then, the partnership question.
        The FCC funded pilots for Telehealth. There is now a $400
    million annual fund for the Healthcare Connect Fund for
    Telehealth. Over on HHS side, there is not an active pursuit of
    getting all federally qualified health centers or critical care
    hospitals or public health facilities onto a Telehealth
    network.
        I gave you the example about education. It's not, today,
    the policy of the Department of Education to say every grant we
    put out should optimize the use of technology and computing
    devices.
        The HUD does not require that publicly subsidized housing
    encourage the connectivity of broadband.
        Those are examples.
        When those kinds of policy dots are connected through the
    Federal Government and, on top of that, you say, ``We want to
    give priority or incentives to those programs that have
    partnerships--partnerships with the state that align their
    efforts, partnerships with the private sector''--now we finally
    have optimized what Congress can do in directing broadband
    adoption.
        Senator Klobuchar. So, you say that, given that we still
    are clearly having issues with adoption, that----
        Ms. McPeak. Oh----
        Senator Klobuchar.--a few requirements here and there might
    make a difference.
        Ms. McPeak. It--but, what I----
        Senator Klobuchar. OK, I've got to--I want to move on to my
    hometown witness, here, but, would that be correct, that the
    requirement----
        Ms. McPeak. Yes, I am saying that.
        Senator Klobuchar.--should be helpful----
        Ms. McPeak. I am saying that.
        Senator Klobuchar.--whether you call them mandates or
    requirements?
        OK. Ms. Jocelyn, thank you for coming, and thank you for
    your incredible work that you're doing with Blandin. At the end
    of McPeak's questions with Senator Wicker, she was talking
    about schools. And I think the numbers that I have here is
    that, according to the study by the Federal Reserve Board,
    graduation rates for students with computers at home are 6 to 8
    percent higher than students without them.
        Ms. Joselyn. That's right.
        Senator Klobuchar. Your experience in Minnesota, especially
    on the tribal reservations, what have you seen when kids don't
    have computers?
        Ms. Joselyn. Well, thank you for the opportunity to address
    that question. In terms of the quality of education and having
    a level playing field for all children of America so that the
    quality of your educational experience is not dependent upon
    where you live, broadband is absolutely essential. And I can
    give you a specific example in our home county of Itasca
    County, up in north central Minnesota, where we have very
    small, spread out school districts that are the size of some
    States, and it's just not physically possible to offer the
    quality and breadth and depth of educational opportunities that
    are available in more urban centers. We are now, through
    availability of broadband access and adoption education
    efforts, to offer to our students a stunning array of
    educational opportunities that would otherwise be unavailable
    to them, including Ojibwe language training, physics, high
    level math, specific literature courses that, through a
    consortium effort, when school districts come together and use
    this technology platform, they are able to offer world-class
    educational opportunities that would otherwise be unavailable
    to our students. And we certainly believe, I'm sure, that, in
    our nation, we want equal opportunity for all. And growing up
    in a rural area should not prejudice your educational
    opportunity.
        Senator Klobuchar. Thank you. And the other thing I
    remember from those northern Minnesota counties is how, with so
    few people having the Internet access--and still a lot of them
    don't even have access, much--good access--is that the
    libraries became increasingly important, because there--
    literally would have waiting lines for people to try to apply
    for jobs. And I think that's something else we have to
    remember, especially--our state now is down to 5.1 percent
    unemployment, and yet a lot of people are having trouble
    getting trained for or accessing jobs. And I would like that,
    instead of having the brinkmanship we've been engaging in, in
    the last few months, to be engaged in discussions about the
    workforce training and how we get people trained for the jobs
    so we can actually compete in the economy that's in front of
    us.
        Ms. Joselyn. Thank you.
        Senator Klobuchar. So, thank you.
        Ms. Joselyn. Thank you, Senator. And I would just add, if I
    may, that in Minnesota, we are program rich and systems poor.
    And part of what the Federal investment in this BTOP effort has
    allowed us to do is to align systems at the state level with
    community-based efforts, in partnership with the Federal
    Government. And the return on investment for our Nations and
    our children's future has been very impressive.
        Senator Klobuchar. Thank you.
        Senator Pryor. Thank you.
        Senator Rubio.

                    STATEMENT OF HON. MARCO RUBIO,
                       U.S. SENATOR FROM FLORIDA

        Senator Rubio. Thank you.
        Thank you all for being here today. This is an incredibly
    important issue, I think, for the future of the country, even
    though it's not going to be on the headlines tomorrow morning.
    So, that's why I wanted to ask you.
        So, if I went back home now--and I know the answer to this,
    although I'm not sure I can fit it on a bumper sticker--but, if
    I went home today and I explained to somebody, ``This is a
    really important issue, 30 percent of the population has no
    access to broadband, and it's bad for the country, bad for our
    economy, and bad for them, for the folks that don't have
    access,'' how would you say that I'm trying to figure out how I
    can make this issue more relevant to people, in terms of why it
    is that it's good for the country that we get more people to
    have access to broadband.
        Mr. Cohen?
        Mr. Cohen. So, Senator, I'll tell you, the two items that
    came out of our research on this that would be drivers to cause
    people to want to sign up for the Internet, one is almost a
    bumper sticker. Eighty percent of Fortune 500 companies today
    only accept job applications online. So, if you want to apply
    for a job--and it goes to what Senator Klobuchar was just
    talking about--you need to have access to the Internet to be
    able to apply for a job.
        And the second, a slightly different population but I think
    equally compelling, is to peg this to educational achievement
    and attainment. Twenty-first century education today is vastly
    enriched by digital learning platforms, by digital curriculum
    that is offered in schools but that is integrally tied to being
    able to work on the Internet after school and at home, to
    enable parents to communicate with teachers, teachers with
    parents, to track what their kids are doing, what their
    strengthS are, and what their strengths are not.
        There's another Pew study which says that 79 percent of
    teachers today are assigning homework that requires access to
    the Internet out of school and after school to be able to do
    that homework.
        So, if you want your kids to be competitive for 21st
    century jobs, to have 21st century job skills, you need to have
    Internet access at home to be fair to your kids and enable them
    to keep up with other kids in their classrooms and other kids
    elsewhere in the state, in the country, and in the world.
        I think those are two big motivating factors for parents:
    getting a job and educating your kids.
        Senator Rubio. So, now the number is 70 percent. And I
    would imagine there's some cohort out there that's never going
    to--for example, my mom is in her mid-80s. She's never going to
    be Internet savvy, for all the reasons you've outlined--but,
    that's not who we're talking about. Beyond that, what is a
    realistic goal for the country?
        So, if we said--and obviously it's a different issue, but,
    you know, when President Kennedy said we'd be on the Moon by
    1969 and return someone safely--what is a realistic goal for 5
    years, 10 years from now, in terms of the number--the
    percentage of Americans that we would have, beyond the 70
    percent?
        Ms. McPeak. I can share with you what we have said in
    California, which is 80 percent by 2017. Eighty percent
    adoption, statewide----
        Senator Rubio. By 2017?
        Ms. McPeak. 2017. And no one region and no one demographic
    group less than 70 percent. And we started really low. I mean,
    we were at 55 percent nation--statewide. Low-income families
    were at 33 percent.
        Senator Rubio. And then I guess my last question is--
    obviously, I've heard, or read, basically in all of your
    testimony, about the need for a multifaceted plan, that there's
    not one singular thing that we can do to move people, to get
    those numbers up. It will require a host of different issues.
    Probably the most interesting one--and I forget whose testimony
    it was; I read them all--was how--and this is the one issue
    where it's the children and the younger, you know, Americans
    that are bringing the rest of the family in, in some way,
    shape, or form.
        So, I guess going back to--on the educational front--it's
    one of the things I'm really interested in, how we can
    incentivize Internet literacy. I mean, if you're talking about
    teaching kids things that are relevant for the 21st century, it
    is unimaginable that one of--that you could have an educational
    system that isn't teaching Internet literacy and technology
    literacy as part of a curriculum that is relevant to the 21st
    century.
        A lot of the focus we have here as policymakers is on
    infrastructure. I think that's important, too. And I think I'm
    really interested in wireless, for a second, because I think
    that we've focused a little bit today on access at home, but
    we're an increasingly mobile society, not just in how we live
    our lives, but, you know, the equipment that we use to access
    the Internet.
        In full disclosure, nowadays I very rarely go online on a
    laptop; it's always on a mobile device. And I think a growing
    number of Americans are going to find themselves in that
    position. Hence, these wireless networks are incredibly
    important. And, to that, the availability of competition in
    broadband is a key part of it.
        And again, when I describe that to people and I talk about
    broadband, their eyes glaze over a little bit, because no one's
    made the connection. But, how critical is that, the wireless
    component?
        Mr. Cohen. First of all, I do think wireless is important,
    and I include in wireless Wi-Fi, just so we're clear. But, I do
    think devices are increasingly mobile. And, by the way, even if
    you don't use a laptop, I think we could do a show of hands of
    how many people use a wireline connection even when they are
    using a laptop, because even people using a laptop are most
    frequently on wireless or Wi-Fi or some wireless technology.
        So, I do think wireless is important. And Senator Pryor I
    actually referred briefly, in my oral statement, to the fact
    that we need innovate solutions to deal with the deployment
    gap. And I think technology is increasingly going to be the way
    in which we reach the millions of Americans who don't have
    broadband deployed to them. Because I think wireless deployment
    may well be less expensive, more capable--more capable of
    closing that gap in a more efficient and a faster way. So, I
    think a variety of wireless technologies is going to be very
    important to closing the deployment gap, and having--allowing
    people to have wireless access to their broadband connection is
    very much going to be a part of society, going forward.
        I'm sorry, Senator, I just have to say one thing. This
    comes more anecdotally, in discussions with teachers, with
    parents, et cetera. It is still really hard to write a term
    paper on even a tablet. One of my horrible----
        Senator Rubio. That's true.
        [Laughter.]
        Mr. Cohen.--stories is that I met a mother in Atlanta who
    was signing up for Internet Essentials, and she came up to me,
    crying, thanking me for the program. And I said, ``You're very
    welcome.'' And she said, ``Mr. Cohen, you don't understand what
    a difference this is going to make in our lives.'' And I said,
    ``What do you mean?'' She says, ``I''--she had two kids. She
    says, ``I'm deeply committed to their education. We couldn't
    afford Internet at home. I do have a smartphone from work. And
    what I used to do is, 4 nights a week after dinner, I would
    drive to a McDonald's and park in the parking lot, where they
    have free Wi-Fi, and I would hand my smartphone into the
    backseat, and my kids would share the smartphone and do as much
    of their homework as they could.''
        Senator Rubio. Yes.
        Mr. Cohen. But, you can't--and she said, ``You can't write
    a term paper on a smartphone.''
        Senator Rubio. And that's just an indication--I don't write
    a lot of term papers these days.
        Mr. Cohen. Right. So, I just----
        Senator Rubio. But, all my kids are working off----
        Mr. Cohen. Right. So, all I'm saying is, I think----
        Senator Rubio. No, that's true.
        Mr. Cohen.--it goes, really, again, to the integrated
    needs, here, that you have to cross the entire spectrum and
    have deep partnerships and have multiple technologies and
    multiple ways for people to be able to access the Internet,
    just like all of us have.
        Senator Rubio. Right.
        Senator Pryor. Thank you.
        Mr. Cohen, let me follow up with that a little bit. You
    mentioned technology may be the solution. And obviously, your
    company has seen a rapid change in technology, rapid
    development. And you guys have been an innovator there. But,
    also, I was going to ask about E-Rate for our schools. And it
    kind of goes back to what you were saying a moment ago, with
    the story--this anecdotal story you had in Atlanta.
        But, the FCC currently is looking to update the E-Rate
    program. You know, I personally feel like it's been pretty
    successful. But, they want to look at it and evaluate it and
    see if they can make it better, maybe expand it. And I'm
    curious about your thoughts about should we try to find ways to
    get more E-Rate dollars and make those available to schools,
    and even libraries?
        Mr. Cohen. OK. So, a really important question---- and if I
    could pair the FCC's E-Rate proceeding with the President's
    ConnectED initiative, because I actually think they're related
    to each other. Obviously, the President announced a goal--he
    was listening to Ms. McPeak--and said that 99 percent of the
    schools in America should have ultra-high speed Internet
    connections within the next 5 years. And I think that's an
    important goal, because, with the digital learning platforms
    that are out there, I think it is essential that all of our
    schools have the capacity to be able to offer the educational
    enhancements within the school to all students in this country,
    regardless of the communities where they live.
        E-Rate has obviously been the primary funding mechanism for
    Internet connections to schools and to libraries. And so, I
    think the FCC's recent proceeding to looking at the E-Rate
    program and to ask the question how is it working? How could it
    be retooled? What are improvements that could be made in the
    program?--will be essential to accomplishing the objectives
    that are set forth by the President in the ConnectED
    initiative.
        Now, I'm not a critic of the E-Rate program. I would agree
    with you that it has done a lot of good in this country. But,
    it has been around for a long time. And it was created, quite
    frankly, in a time where a completely different set of
    technologies ruled. And so, we're very supportive, as a
    company, of that proceeding and think that there are
    enhancements that could be made to the program.
        I'll just note one issue, because I know we're in a tight
    timeframe, but I'm happy to come back to it. I think the most
    critical item that I would focus on around the educational
    aspects of technology is that it's important, not only to bring
    ultra-high speed Internet service to the school, but to
    disseminate that service throughout the school. So, it's not
    enough--I mean, Comcast delivers, to thousands of schools, 100-
    meg-plug connections of Internet, yet we know, in most of those
    schools, that service is not being disseminated throughout all
    the classrooms in that school. Maybe it goes to the central
    office or computer lab, maybe there to two or three computer
    labs, maybe to a small pocket of classrooms. But, if you're
    going to accomplish the educational attainment objectives,
    which is what we're all interested in--we're not interested in
    connectivity for connectivity's sake; we're interested in
    improving student achievement, improving graduation rates,
    improving the delivery of 21st-century skills--you've got to
    disseminate that high-speed data service throughout the school.
        In the current E-Rate program, Internet connections to the
    school are known as Tier 1, and then the dissemination
    programs, getting that high-speed data connectivity throughout
    the school, are known as Tier 2. Just the way they define it
    tells you everything you need to know about the service. The
    priority has been on Tier 1. Tier 2 has been underemphasized,
    has not really been a focus of the E-Rate program. And, to make
    this work with the modern technology--and Senator Rubio was
    talking about that--the mobility of devices--you've got to
    disseminate the speed within the schools, which is going to
    require a reallocation of attention between so-called Tier 1
    funding and Tier 2 funding. That's just one example.
        Senator Pryor. Thank you.
        Senator Ayotte, you ready?

                    STATEMENT OF HON. KELLY AYOTTE,
                    U.S. SENATOR FROM NEW HAMPSHIRE

        Senator Ayotte. Yes. Thank you very much, Mr. Chairman.
        First of all, I want to thank all of you for being here.
        It's really an honor to have Senator Sununu, given
    everything that he did for our state. I want to ask you about
    New Hampshire, because I think, having served admirably on this
    committee and with all the great work you're doing now on
    broadband issues, you appreciate very much the challenges that
    we face, particularly in some of the more rural counties of
    Coos, Grafton, and Sullivan with this issue of broadband
    deployment and access.
        So, I just wanted to get your thoughts on how, in a state
    like New Hampshire, we really can do better, particularly when
    we think about the North Country, the economic development
    opportunities there with broadband.
        Senator Sununu. Well, you know, in New Hampshire, we
    generally have higher levels of deployment, access, and
    adoption than the national average, but, without question,
    there are still communities that are underserved, and there are
    still the same challenges that we have with adoption that other
    parts of the country see. So, you know, it's an indication of
    the pervasive challenges that are faced, even in a part of the
    country that's considered relatively high-tech and has
    relatively high levels of access or deployment, adoption's a
    challenge.
        I think it gets back to the kind of partnerships we've been
    talking about. You know, providers working with community
    organizations to understand why is adoption lagging, providers
    working with the school systems to identify opportunities to
    improve digital literacy. Time Warner Cable, obviously a
    company that I've worked with now for almost 5 years, is a big
    promoter of Connect a Million Minds initiative, over $100
    million in the last 4 or 5 years to drive digital literacy in
    the schools. So, you know, that's the adoption side.
        On the access side, though, as you point out, northern New
    Hampshire, we don't have the speeds that you'd like to see. You
    don't necessarily have the infrastructure that you'd like to
    see. Some communities are still served by legacy infrastructure
    that might even meet the technical definition of broadband, say
    over 3 or 4 megabits per second, but isn't driving the
    community into the 10 or 20 megabits per second----
        Senator Ayotte. Right
        Senator Sununu.--per second that's so important to the
    economy.
        So, there, it's a question of, you know, funding, in part,
    and, again, both by the private sector--so, the local
    provider--but, in many cases, some of those rural communities
    have benefited from their effort to work with the Federal
    Government, whether it's FCC, NTIA, or other programs.
        Senator Ayotte. And one of the issues that I've been very
    critical of here in the Committee is, frankly, the Universal
    Service Fund, because New Hampshire is a net donor of nearly
    $25 million annually to the fund, and the reality is, as you
    just identified, Senator Sununu, there are real needs in New
    Hampshire. And so, I've been very concerned that this doesn't
    make economic sense for a state like New Hampshire, the way the
    distribution is done. So, I certainly wanted to get your
    thoughts on that issue, because, when we talk about funding, I
    think that rises to the top of my mind.
        Senator Sununu. Well, thank you very much for drawing me
    into an issue that's, generally speaking, outside the purview
    of broadband for America.
        [Laughter.]
        Senator Sununu. But, I will offer a few thoughts, because
    look, it's a really important----
        Senator Ayotte. Well, you know how hearings are.
        [Laughter.]
        Senator Sununu.--it's a really important issue. I'm
    obviously joking a little bit, but it--look, it's an important
    issue because of the amount of money you're dealing with,
    because of the potential to reform and revise the program and
    make it work better.
        And I'll couple this response to the E-Rate response, in
    that I would argue both of these programs, E-Rate and Universal
    Service, they were originally targeted for very specific goals.
    Right? Universal Service obviously bringing phone service to
    all parts of the country. The E-Rate for that Tier 1
    connectivity on schools--that was the original goal.
        And today, as we look at the landscape, the needs are very,
    very different. And I think, in both cases, those programs have
    lost their focus, the resources are not well targeted, so
    they're really not effectively targeted at communities that
    have greater economic need, not very well focused at
    communities that have greater infrastructure need. And so, in
    the case of Universal Service, I think you can fairly argue
    that much of the money is being used to provide subsidies to
    parts of the country that are already served by----
        Senator Ayotte. Correct.
        Senator Sununu.--two or three or four wireless carriers
    very effectively, and, in effect, almost universally.
        In the case of the E-Rate, I think you can very fairly
    argue that a good deal of the resources go to subsidize the
    Internet connectivity of fairly well off suburban school
    systems. And we're all concerned about education, but that is
    not an effective targeting of those resources, when you have
    all of the challenges that are both economic, demographic,
    associated with adoption.
        So, in both cases, Universal Service and E-Rate, I would
    encourage you to roll up your sleeves, because it's not easy,
    there are a lot of politics here. I--you know as well or better
    than I. But, it's a lot of money at stake that could be used
    far more effectively to deal with the issues of adoption,
    literacy, improving perception, and helping to drive the
    digital economy that we know is so important in the 21st
    century.
        Senator Ayotte. Thank you.
        I know that my time is expired, but I could not agree more.
    I do hope that we do roll up our sleeves on USF and E-Rate so
    that we are making sure that those dollars are accomplishing
    what we all want to accomplish, and particularly given the
    nature of technology, so we're acknowledging the changes that
    are made. So, I really hope that we're able to take that up,
    Chairman.
        Thanks.
        Senator Pryor. Thank you.
        Senator Wicker.
        Senator Wicker. Ms. McPeak, you were nodding vigorously
    during Senator Sununu's answer to the final question. Would you
    elaborate, briefly?
        Ms. McPeak. I would. And we have it in our testimony. We
    said, ``Reform E-Rate and Universal Service's Fund, target it
    to the most needed areas.'' So, that's basically unserved areas
    that tend to be rural and urban poor neighborhoods. Target
    those resources and leverage them to partnerships. That's what
    we said.
        We have a lot in common with New Hampshire, if I might just
    comment, Senator. We, too, are a donor state. You've named
    three counties. We've got 16 that have a population of 2
    million, exceeds the population of New Hampshire, and they're
    spread out on 44,000 square miles. That's a state of Kentucky
    inside California. And these are communities that, if I were
    answering Senator Rubio, ``Why do this?''--because economic
    development will go there, and they will be able to pay more,
    even if we are a donor state. And all of the disadvantaged
    residents in my state will actually get an education, get a
    decent living, and become taxpayers to contribute to the
    overall well-being of America.
        Senator Wicker. Now, having found some agreement and like-
    mindedness between Ms. McPeak and Senator Sununu, let me ask
    you, Senator Sununu: when there was an exchange between Senator
    Klobuchar and Ms. McPeak about requirements and mandates, did
    you begin to worry that we were intruding on the light
    regulatory touch that you advocated?
        Senator Sununu. Yes, a little bit.
        Senator Wicker. And would you care to elaborate?
        Senator Sununu. Sure. I feel self-conscious, because I feel
    like I've eaten up too much of Senator Ayotte's time and your
    time, my longer answers. But, there's no question that that
    raises some concerns.
        And the fundamental reason is because things are changing
    very quickly in this space. So, let's talk about, for example,
    a hard target for adoption rates. Well, first and--if you had
    set that target just a couple of years ago, the exclusive focus
    would have been on wired broadband connections. But, as we just
    heard, 80 percent of the country has actually adopted wireless
    broadband connections and America is leading the world, in
    terms of technology and deployment of 4G--well, high-speed
    wireless broadband. So, if you had set that target and focused
    exclusively on--set that target thinking about wired broadband,
    you might have limited or inhibited both investment of that
    wireline and maybe of the wireless.
        It's hard to say where we'll be 2 or 3 years from now. Not
    that we should promote the adoption, but I don't think there's
    a magic number. I don't think there's one specific technology.
    I don't think there's one specific price point. You know, if we
    were to say, ``Here's what the Internet Essentials price point
    has to be,'' that's not going to be right for every company in
    every part of the country with every demographic, because you
    have questions about what's included with--does that include e-
    mail? Or do you have flexibility what you can package with
    that? You know, what is your customer? What other hurdles do
    they have? You know, whether it's $9.95 or $10.95 or $12.95,
    that might not make any difference to someone that doesn't have
    that computer.
        So, the hard mandate on price or packaging or the magic
    number adoption rate, I think risks limiting innovation and
    flexibility in this area, and, as a result, can potentially
    become counterproductive.
        Senator Wicker. Thank you, Senator Sununu--Mr. Cohen, is
    Internet Essentials going to go away in a year?
        Mr. Cohen. So, I don't have an answer to that yet. And I
    would say, by the way, that it is a weakness, if you will, to
    the extent there is a weakness, of governmentally-defined
    programs, because the only evidence that anyone would cite that
    it's going to go away is that the FCC order, in connection with
    the NBCUniversal transaction, obligates us to offer the program
    for 36 months after we launch the program.
        So, I'm not trying to be cute. We have not made a
    definitive----
        Senator Wicker. You have not made----
        Mr. Cohen----decision.
        Senator Wicker.--a decision.
        Mr. Cohen. We love the program. I think the passion for the
    program that the whole company has demonstrated has been
    crystal clear, and we'll have an announcement, in due time, and
    then maybe we'll never have to make an announcement again
    because there won't be any ambiguity that the program is a
    Comcast program that we're doing because we're passionate about
    it and it's the right thing to do. It----
        One thing I will add, because it's important to say this,
    is, one of our commitments has been that, if we were ever to
    stop this program after 3 years, everyone who's in the program
    gets the benefit of the 9.95 price for as long as they have a
    child eligible to participate in the National School Lunch
    Program. Not the same child they have today, necessarily. So,
    20 years from now, if you have a child who's eligible to
    participate in the National School Lunch Program, you'd still
    be eligible for the $9.95 price. So, in that extent, the tail
    of this program, regardless of what we decide, is a 15-,
    20-, 25-year tail for eligible families.
        Senator Wicker. Thank you.
        Mr. Chairman, at this point, I have a unanimous consent
    request. Connected Nation has been delivering to the NTIA data
    on broadband availability and adoption for some 10 states.
    This--they have prepared some testimony, which they would have
    given, had they been included. This brings to the Committee's
    attention several of the findings of their work. The testimony
    provides state-specific broadband adoption information from
    States such as Minnesota, Nevada, and South Carolina, and also
    includes data they have collected on broadband adoption by
    businesses in the United States, an important aspect of
    broadband adoption that we should remember--the connection
    between broadband and the economy.
        And I would like to ask unanimous consent that this
    testimony on--prepared by Connected Nation be accepted as part
    of the record.
        Senator Pryor. Without objection, it'll be accepted.
        Senator Wicker. Thank you very much.
        [The information referred to follows:]

           Prepared Statement of Tom Koutsky, Chief Policy Counsel,
                                Connected Nation
    Contents

    I. Introduction

    II. Current State of Broadband Adoption

            A. Residential Adoption

            B. Business Adoption

    III. The Challenges That Remain

    IV. Conclusion
                                     ______

    I. Introduction
        Connected Nation applauds the Senate Commerce Committee and its
    Subcommittee on Communications, Technology, and the Internet for
    holding this important hearing on broadband adoption and welcomes this
    opportunity to submit written testimony on this topic of national
    interest. Chairman Pryor, Full Committee Chairman Rockefeller, Ranking
    Member Wicker, and Members of the Subcommittee are to be commended for
    keeping this issue in the spotlight, as Connected Nation and its state
    programs across the United States have consistently asserted that
    broadband adoption and use is as important as the ubiquitous
    availability of broadband.
        Connected Nation is a nonprofit organization that works with
    states, local communities, and technology providers to increase
    broadband adoption and digital literacy for all Americans--both urban
    and rural. For over 10 years, Connected Nation has worked directly with
    states, local leaders, consumers, and broadband providers to build
    public-private partnerships to identify gaps in broadband service;
    understand broadband and computer adoption barriers in communities;
    develop grassroots technology planning teams in communities for
    improved broadband adoption, and provide computers along with
    technology literacy programs for low-income and disenfranchised people.
    We work on behalf of American consumers, and we continue to find, time
    and again, in communities across our nation, that unserved and
    underserved people can and will overcome broadband challenges when the
    public and private sectors work together toward meaningful solutions.
        Connected Nation also has the privilege of working through the
    United States Department of Commerce, National Telecommunications and
    Information Administration (NTIA)'s State Broadband Initiatives (SBI)
    program in nine states and the territory of Puerto Rico. The SBI
    program was authorized by the Broadband Data Improvement Act of 2008
    (Public Law 110-385), legislation that originated in this committee and
    would not have passed without the Committee's leadership on this issue.
        As technology evolves, broadband's impact has extended into every
    aspect of our society including education, government, healthcare, and
    economic development. A citizen's or business's ability to effectively
    use a computer, software applications, and the Internet are essential
    in ensuring that they, regardless of their demographic, location, or
    income, have the skills needed to be competitive in today's employment
    market. According to the FCC, over the next 10 years, it is estimated
    that 80 percent of jobs will require digital literacy skills making
    broadband adoption absolutely vital.
        The expansion of broadband adoption among U.S. residents will lead
    directly to a more educated and trained workforce, a stronger economy,
    and healthier citizens. For this reason, Connected Nation is focused on
    equalizing digital opportunities so that all Americans can get access
    to high speed Internet and all it has to offer. Broadband is a tool,
    and like any other it must be used to produce results--this is the
    measure by which we will gauge the true success or failure of our
    efforts.
        Through the SBI, Connected Nation has been delivering to the NTIA
    data on broadband availability and adoption for 10 states and
    territories (Alaska, Iowa, Michigan, Minnesota, Nevada, Ohio, Puerto
    Rico, South Carolina, Tennessee, and Texas).
        In this testimony, I will bring to the Committee's attention
    several of the findings of this work. In each of these states,
    Connected Nation has placed an emphasis on the topic of broadband
    adoption as State Programs work daily to research, map, and implement
    community-based projects centered on adoption.

    II. Current State of Broadband Adoption
        Connected Nation and its programs have been most successful at
    stimulating broadband adoption by inspiring and empowering communities
    to lead local initiatives that both reach out to disadvantaged
    populations and non-adopters and also spur the creation of local
    applications, which generates a higher level of relevancy that in turn
    spurs adoption.
        However, these adoption programs do not and are not designed to
    function alone and should be part of a comprehensive and larger
    statewide or regional broadband initiative for maximum effectiveness
    and sustainability.
        When we examine the state of U.S. broadband through the prism of
    demand (adoption) and supply (infrastructure), it is abundantly clear
    that the Nation's ``demand gap'' is significantly larger than the
    ``access gap.'' And yet, until the Broadband Data Improvement Act of
    2008, the Sustainable Broadband Adoption grant program implemented in
    2009, and the National Broadband Plan completed in 2010, very little
    national attention had been placed upon broadband adoption as a
    national policy challenge. Since that time, we have seen significant
    movement and attention to broadband adoption at the national level.
    Approximately 30 percent of the adult population does not subscribe to
    broadband, and this gap is wider for minorities, for the low-income
    population, and for the elderly. And we are beginning to understand the
    barriers and challenges to adoption--digital literacy, cost, privacy,
    and others.

    A. Residential Adoption
        Connected Nation's 2012 research surveys conducted as part of our
    Iowa, Michigan, Minnesota, Nevada, Ohio, South Carolina, Tennessee, and
    Texas programs estimate an aggregate household broadband adoption of 70
    percent. Minnesota and Nevada lead this group of states, with the
    highest broadband adoption rates at 78 percent and 75 percent,
    respectively.\1\ Figure 1 shows the adult adoption rate in each of
    these states surveyed. The rates of adoption among certain demographic
    groups are even lower, as shown in Figure 2.
    ---------------------------------------------------------------------------
        \1\ State Broadband Data and Development Grant Program Notice of
    Funding Availability defines broadband as ``Data transmission
    technology that provides two-way data transmission to and from the
    Internet with advertised speeds of at least 768 kilobits per second
    (kbps) downstream and at least 200 kbps upstream to end users . . .''
    http://www.ntia.doc.gov/frnotices/2009/
    FR_BroadbandMappingNOFA_090708.pdf

                                     ______

        The challenges that remain, five years after the enactment of the
    Broadband Data Improvement Act and over four years after the creation
    of the Broadband Technology Opportunities Program at NTIA and the
    Broadband Initiative Program (BIP) at the Department of Agriculture, do
    not mean that progress has not been made. In fact, Connected Nation
    has, as a benefit of conducting its research in multiple years, been
    able to track significant gains in household broadband adoption rates,
    with an average increase in household adoption between 2011 and 2012 of
    five percentage points. (See Figure 3).

    B. Business Adoption
        Whether businesses are adopting and using broadband technology to
    the maximum extent is frequently overlooked by researchers--and it
    should not be, given the important impact broadband can have on small
    business productivity and job growth. As part of our SBI programs,
    Connected Nation frequently surveys business establishments to assess
    their adoption and use of broadband. That research has demonstrated
    that there are significant gaps in broadband adoption and use in
    various business sectors. In 2013, our research indicated that in the
    states surveyed, only 76 percent utilize broadband, meaning that nearly
    one in four business establishments do not utilize broadband. (See
    Figure 4).

        There are plenty of missed opportunities for economic growth and
    job creation if the United States were to close this business broadband
    adoption gap. Connected Nation has found that annual median revenues
    for businesses that use broadband are $300,000 higher than those
    businesses not using high-speed Internet service.\2\ Small businesses
    that have adopted broadband report annual revenues that average
    $100,000 higher than those not connected, and based on Connected
    Nation's data, we estimate that there are 1.8 million businesses across
    the U.S. today not using broadband to create efficiencies that lower
    costs, increase revenues, and help them, grow and create jobs.
    ---------------------------------------------------------------------------
        \2\ Connected Nation 2013 Business Survey: http://
    www.connectednation.org/survey-results/business
    ---------------------------------------------------------------------------
    III. The Challenges That Remain
        It is one thing to identify the broadband adoption gaps--it is
    quite another thing to explain them. Based on the findings of various
    business and residential surveys, Connected Nation engaged in a series
    of research projects aimed at more fully understanding some basic
    barriers to broadband adoption: Cost, Location, Digital Literacy and
    Education, and Demographic.
        When analyzing all the states in which Connected Nation is engaged,
    the main barrier to broadband adoption was found to be relevance (see
    Figure 5). Relevance represents a non-adopter's feeling that there is
    little of interest to them on the Internet. This barrier to adoption
    can be addressed through campaigns to educate the public on the
    benefits of broadband, digital literacy training, and lifelong learning
    initiatives. The nation's public libraries are frequently at the
    forefront of all of these efforts, and Connected Nation works closely
    with the library community to help make sure that these facilities have
    adequate facilities and staff to meet this growing demand.

        Our research shows that the barriers to home broadband adoption
    vary significantly by state, as Figure 6 demonstrates. For example, in
    Minnesota, the largest barrier to adults that have not adopted
    broadband is overwhelmingly relevance. However, in South Carolina and
    Nevada, the largest barrier to adoption is cost.

        Below are descriptions and links to various papers analyzing each
    topic in various states:

            A. Cost

            23 percent of respondents state that the cost of broadband is
            the main reason they do not currently purchase and/or use
            service. However, our data indicate that this sensitivity to
            price varies across different vulnerable demographic groups. As
            we show in Figure 7 below, 53 percent of non-adopters indicate
            that they would not subscribe to broadband even if it was
            offered at a price they considered ``acceptable.'' To be
            effective, then, programs aimed at addressing the cost barrier
            to adoption need to be targeted to groups and demographics that
            will respond to these price signals.

            This research, and white papers on it produced by Connected
            Nation titled ``Late to the Party: How New Broadband
            Subscribers Compare to Early Adopters'' (2011) and ``Let's Make
            a Deal: Price Sensitivity and Willingness to Pay in the
            American Broadband Market'' (2012), were the focus of a
            Connected Nation presentation to the FCC in February of 2013,
            as a part of the Commission's 2013 Broadband Summit: Broadband
            Adoption and Usage--What Have We Learned?''

            Because the receptivity to price incentives will vary by
            demographic group, Connected Nation therefore recommends that
            policy makers or marketing strategists should complement price
            incentive strategies with programs addressing other barriers to
            entry such as awareness campaigns, and digital literacy
            training.

            The Federal Communications Commission is taking this approach
            as to how it has structured its Lifeline broadband adoption
            pilot projects, which combine price subsidies with efforts
            designed to conquer other barriers to broadband adoption.

                    a. Connected Nation, ``Late to the Party: How New
                    Broadband Subscribers Compare to Early Adopters,''
                    http://papers.ssrn.com/sol3/papers.cfm?ab
                    stract_id=1995130

                    b. Connected Nation, ``Let's Make a Deal: Price
                    Sensitivity and Willingness to Pay in the American
                    Broadband Market,'' http://papers.ssrn.com/sol3/
                    papers.cfm?abstract_id=2033415

                    c. Connect South Carolina, ``Cost as a Barrier to
                    Broadband Adoption: Structuring Subsidy Programs That
                    Work,'' http://www.connectsc.org/sites
                    /default/files/connected-nation/South%20Carolina/files/
                    sc_willingness_
                    finaloct032012.pdf

                    d. Connect Minnesota, ``Worth the Cost: Broadband
                    Prices in Minnesota,'' http://www.connectmn.org/sites/
                    default/files/connected-nation/Minnesota
                    /files/mn_price_barriers_final.pdf

            B. Location (Rural vs. Non-rural)

            Location has consistently been a factor in broadband adoption
            rates in states and localities where Connected Nation has
            conducted research. Simply put, broadband adoption rates are
            lower in rural areas of the United States, a problem compounded
            by more extensive broadband availability challenges. Detailed
            and state specific research results are available in the
            documents below:

                    a. Connected Texas, ``The Texas Digital Divide: An
                    Assessment of Rural and Non-Rural Texans,'' http://
                    www.connectedtx.org/sites/default/files/connected-
                    nation/Texas/files/tx_rural_non_rural_final.pdf

                    b. Connect South Carolina, ``Technology Adoption among
                    Agribusiness and Rural Businesses,'' http://
                    www.connectsc.org/sites/default/files/connected-nation/
                    South%20Carolina/files/
                    sc_agribusiness_final_dec172012.pdf

                    c. Connect Nevada, ``Technology Use among Rural Nevada
                    Businesses,'' http://www.connectnv.org/sites/default/
                    files/connected-nation/Nevada/files/
                    nv_rural_biz_final.pdf

            C. Digital Literacy and Education

            Because relevance is such a significant barrier to broadband
            adoption, Connected Nation's programs have produced state-
            specific research papers to help those state-based public
            private partnerships craft appropriate strategies to spur
            broadband adoption:

                    a. Education

                            i. Connect South Carolina, ``Broadband--A
                            Technology Tool for Lifelong Learning,'' http:/
                            /www.connectsc.org/sites/default/files/
                            connected-nation/South%20Carolina/files/
                            sc_adoption_sept2012_final.pdf

                            ii. Connected Texas, ``Providing Learning
                            Anywhere: K-12 Education in Texas,'' http://
                            www.connectedtx.org/sites/default/files/
                            connected-nation/Texas/files/tx_elearning.pdf

                            iii. Connect Nevada, ``The Power of Broadband:
                            Boosting Nevada's Education System,'' http://
                            www.connectnv.org/sites/default/files/
                            connected-nation/Nevada/files/
                            nv_elearning_final.pdf

                    b. Digital Literacy

                            i Connected Texas, ``Making the Connection
                            through Digital Literacy,'' http://
                            www.connectedtx.org/sites/default/files/
                            connected-nation/Texas/files/
                            tx_digital_literacy_final.pdf

                            ii. AConnect Minnesota, ``Digital Literacy: A
                            Critical Skills for All Minnesotans,'' http://
                            www.connectmn.org/sites/default/files/
                            connected-nation/Minnesota/files/
                            mn_digital_literacy_final.pdf

            D. Demographics

                    As shown in Figure 2, at-risk demographic groups adopt
                    broadband at lower than average rates, and as a result
                    Connected Nation's programs continue to explore this
                    area of concern:

                            a. Connect South Carolina, ``Closing the
                            Digital Divide in South Carolina,'' http://
                            www.connectsc.org/sites/default/files/
                            connected-nation/South%20Carolina/files/
                            sc_gap_analysis_final.pdf

                            b. Connect Nevada, ``Technology Adoption among
                            Hispanics in Nevada,'' http://
                            www.connectnv.org/sites/default/files/
                            connected-nation/Neva
                            da/files/nv_hispanic_adoption.pdf
    IV. Conclusion
        Broadband technology is becoming pervasive in American life, and
    digital skills are rapidly becoming ``must have'' tools for American
    workers and students. Whether students can research and complete their
    homework, whether adults can improve their skills, whether a mother can
    shop for health insurance options online, whether a senior can see his
    or her own medical records and understand his or her care and
    prescriptions efficiently--all of these require wide adoption and broad
    knowledge as to how to use broadband. Broadband is not a luxury item,
    and this nation can ill-afford to have 3 in 10 adults remain off-line
    for very much longer.
        The gaps demonstrate the need for Federal leadership and support
    for public-private partnerships that will increase broadband adoption
    and use. Programs that can drive broadband adoption represent a highly
    efficient use of taxpayer funds because data show that once someone
    begins using broadband, they tend to keep it, thus driving economic
    impact for their community. For example, an April 2009 survey by the
    Pew Foundation's Internet Project reported that people are twice as
    likely to sacrifice cell-phone service or cable television service than
    Internet service, with 22 percent of adults reporting that they had
    cancelled or cut back cable TV service in the previous 12 months, 22
    percent of adults reporting that they have cancelled or cut back cell-
    phone service in the previous 12 months, compared to only 9 percent of
    Internet users reporting cancelling or cutting back on broadband.\3\
    ---------------------------------------------------------------------------
        \3\ (http://www.pewinternet.org/Press-Releases/2009/Home-broadband-
    adoption-increases-sharply-in-2009.aspx)
    ---------------------------------------------------------------------------
        Public-private partnerships, such as those that Connected Nation
    works to foster, have proven themselves as an effective vehicle for
    improving broadband availability and adoption. Successful public-
    private partnerships will recruit local leaders, such as public
    libraries, school administrators, and public officials, behind
    initiatives to develop locally-relevant broadband applications and
    solutions that target the specific needs of each community. Converting
    non-adopters requires more than simply ``broadband cheerleading'' or
    splashy awareness raising campaigns- it frequently requires
    demonstrating directly to the community how broadband will improve
    quality of life and provide wealth-creating opportunities.
        At Connected Nation, we have had the privilege to see firsthand the
    positive outcomes of collaboration and public-private partnerships in
    this arena, and never cease to be amazed at what is possible when a
    community and individuals have the desire and opportunity to connect
    and access transformative broadband technology.
        Nonprofit organizations such as my own and fellow travelers such as
    the Blandin Foundation in Minnesota, the Prima Civitas Foundation in
    Michigan, and ITology in South Carolina have an important role to play
    working with both public and private sector stakeholders to foster and
    facilitate localized strategies for broadband expansion. It is
    imperative that as a nation we focus on programs that have a proven
    record of success working with local communities to identify and
    address the challenges that each community is experiencing. We look
    forward to continue working with Congress, the Federal government,
    states, and thousands of local champions who understand and share our
    mission for universal digital inclusion across America.
        Thank you again, Chairman Pryor, Full Committee Chairman
    Rockefeller, Ranking Member Wicker, and Members of the Subcommittee for
    this opportunity to provide this testimony for the record, and
    Connected Nation stands ready to continue working with you on this and
    other broadband related issues and policies.

        Senator Wicker. I think it has been a great hearing----
        Senator Pryor. Thank you.
        Senator Wicker.--Mr. Chairman. Appreciate it.
        Senator Pryor. I do have one last question, for Mr. Smith.
        Do you have any other questions, Senator Ayotte?
        Senator Ayotte. I don't think so.
        Senator Pryor. OK.
        I do have one last question, for Mr. Smith. I don't want
    you to feel left out of this----
        Mr. Smith. I was going to say, I thought you forgot about
    me over here.
        [Laughter.]
        Senator Pryor. No, no. I'll tell you, we appreciate Pew,
    because you guys do great work----
        Mr. Smith. Thank you.
        Senator Pryor.--and you provide a lot of good information
    and data, and just a great resource for us. So, I do want to
    mention that and thank you.
        Part of your testimony was, you mentioned that there's a
    slowdown in adoption in recent years. And I'd like to get your
    insight on that. And you mentioned some of this before, but I'm
    wondering if it's kind of a saturation issue that, sort of, the
    people who want it have already gotten it, and things like
    that. You went through some demographics, you know, older
    adults, low education, et cetera, that seemed to be resistant
    to taking this, for one reason or another. So, I'm curious
    about that, but I'm also curious about your reasons that you
    think that it's more difficult in rural areas to get the
    adoption rate where we want it to be. So, are we hitting a
    saturation point? And then, tell us specifically about rural
    America.
        Mr. Smith. Sure. So, in terms of a saturation point, I
    don't know that we've necessarily hit a saturation point, but
    it's pretty clear that the people who are easy converts have
    already converted, and the folks who are left over, you know, a
    lot of them, as I mentioned, don't use the Internet at all. So,
    not only do they, you know, not have broadband, they don't have
    a computer, they probably have very little experience with what
    they need to do and feel a lot of apprehension about going
    online. So, there's that group that obviously has some severe
    issues as far as that goes.
        The other group, a lot of those folks, generally, what we
    see and what the FCC has seen in their work is that they want
    it, they like the idea of access, they see the benefit of it,
    but, for various reasons, a lot of them financial, don't have
    the ability to have broadband at home.
        And I was going to mention to Senator Rubio, a significant
    number of those folks, so about 10 percent of the population
    now, we find doesn't have broadband at home but does have a
    smartphone. So, in many instances, that group is getting access
    of one kind or another through a smartphone, but not
    necessarily through a home connection.
        But, I think, you know, in addition to the--sort of, the
    economic climate that we've had recently, a lot of the issue is
    just that the folks who are left in the pool are not going to
    be as easy to bring on board as the folks that have already
    been brought on board, thus far.
        So, as to the rural question, definitely we see continued
    gaps in rural residents versus urban and suburban. That gap has
    gotten smaller over the years. And there are sort of two issues
    that go into play there. Part of that is--as Senator Ayotte
    mentioned, an access issue for certain rural areas. In a lot of
    sort of rural areas, you simply can't get access in a
    reasonable way. It also plays into the--the sort of
    demographics of the rural population. So, in general, they tend
    to be older, for example, and we know that the biggest group of
    non-adopters is people over the age of 65. So, there's sort of
    a demographic issue as well as an access or deployment issue
    when it comes to the rural population.
        Senator Pryor. OK. Well, thank you.
        And--you good?
        Senator Wicker. Yes.
        Senator Pryor. OK.
        Listen, thank you all for being here. I appreciate all of
    our panelists. I know some people need to travel back to where
    they came from. So, again, thank you.
        What we're going to do is, we'll leave the record open.
    Some of our members couldn't make it here today, and we will
    leave the record open for 2 weeks and allow members to submit
    questions. We would ask you all to get those back to us as
    quickly as you could.
        But, again, I just want to say thank you all for doing
    this. This is helpful, and we appreciate it.
        And, with that, we'll conclude the hearing.
        [Whereupon, at 12 p.m., the hearing was adjourned.]

                                A P P E N D I X

     Prepared Statement of Hon. John D. (Jay) Rockefeller IV, U.S. Senator
      from West Virginia and Chairman, U.S. Senate Committee on Commerce,
                          Science, and Transportation

        Over the last decade, the Nation has made great strides toward the
    goal of ubiquitous broadband availability around the Nation. While much
    work must be done in deploying broadband to the approximately 19
    million Americans that still lack access to broadband, the increase in
    broadband availability during the past 10 years is something to
    applaud. This achievement came through a concerted effort by both the
    public and private sectors, with billions of dollars in investment to
    bring the benefits of broadband to all Americans. [And I am proud of
    the role the Broadband Technology Opportunities Program (BTOP) that I
    championed has played in this effort toward achieving universal
    broadband availability and adoption.]
        Broadband empowers our people with the digital resources they need
    to succeed in their communities, across the Nation, and around the
    world. Broadband offers businesses, no matter their size, entry into
    the world's markets. It provides job seekers access to new
    opportunities to find employment. Broadband offers access to previously
    unavailable educational and health care resources. As I have seen in my
    travels around West Virginia, bringing broadband to citizens in
    unserved areas of the country can fundamentally change their lives.
        Making broadband available to all Americans, however, is only part
    of the challenge. That is why I am pleased that Subcommittee Chairman
    Pryor has convened today's hearing on broadband adoption. According to
    the National Telecommunications and Information Administration (NTIA)'s
    most recent report, approximately 27.8 percent of homes in America that
    have access to broadband do not subscribe to that service. The reasons
    for not subscribing can be varied, but the truth is that these homes
    risk being left behind as everyone around them takes advantage of the
    digital revolution brought about through broadband infrastructure.
        I am particularly interested in hearing witnesses discuss how
    broadband access by our students can positively impact large broadband
    adoption issues. Evidence from the Census Bureau shows a positive
    relationship between a child's exposure to broadband at school and
    adoption of broadband by the child's parents at home. Children are
    broadband advocates--as the world is opened up to them through the use
    of broadband and digital technology in the classroom, their parents and
    caregivers come to understand just how important it is to have
    broadband at home. This is yet another reason why the Federal
    Communications Commission must act quickly to strengthen and expand the
    E-Rate program in our Nation's classrooms and libraries.
        I want to thank our witnesses today and look forward hearing about
    their real-world experiences with broadband adoption efforts and the
    lessons learned from the field.
                                     ______

      Follow-up Submission to Testimony Submitted by Sunne Wright McPeak,
             President and CEO, California Emerging Technology Fund
    Purpose and Focus of Follow-Up Submission to Testimony

        The purpose of this document is to provide additional information
    and clarification regarding the written testimony submitted by the
    California Emerging Technology Fund (CETF) and responses to questions
    for the Senate Subcommittee on Communications, Technology and the
    Internet hearing on ``Broadband Adoption: The Next Mile'' on October
    29, 2013. This document addresses three major issues discussed during
    the hearing:

        Challenges of Increasing Broadband Adoption

        Policy Goals, Performance-Based Regulatory Framework, and
            Incentives for Partnerships

        Community Experiences with Industry Broadband Adoption
            Programs

    Challenges of Increasing Broadband Adoption
        Chairman Pryor and Ranking Member Wicker both eloquently described
    in their opening comments the challenges of increasing broadband
    adoption which must be addressed by formulating national policy and
    designing an effective strategy to close the Digital Divide. Those who
    remain off-line are largely remote rural residents without access and
    urban poor residents without digital literacy skills or the resources
    to afford market rate Internet service. (The data published by the Pew
    Charitable Trust regarding broadband adoption are discussed below.)
    Clearly, broadband access (infrastructure deployment) is ``necessary''
    for broadband adoption, but it is not ``sufficient'' for the most
    disadvantaged residents--low income families and people with
    disabilities. And, it is for these residents that broadband has the
    greatest potential to transform their lives and help them become
    productive citizens and contributing taxpayers for the benefit of the
    Nation.
        CETF summarized the challenges of broadband adoption in the written
    testimony based on extensive experience working with more than 80
    community-based organizations (CBOs) in disadvantaged communities
    throughout California. Dr. John Horrigan summarizes the challenges as
    three-fold, which were set forth in the CETF testimony:

      1.  Cost

      2.  Relevance

      3.  Digital Literacy

        CETF recommendations for action are anchored in the understanding
    that all three facets of the challenge must be addressed simultaneously
    in an integrated strategy to increase broadband adoption:

       There must be an affordable broadband subscription rate to
            address the cost challenge. Given the modest market penetration
            to date of voluntary efforts, it is likely that an Affordable
            Broadband Lifeline Rate Program at the national level will be
            pivotal to significantly increasing broadband adoption beyond
            current levels.

       Broadband adoption should be integrated into all existing
            Federal programs to address the relevance challenge. It should
            be a part of all existing and future programs related to
            education, workforce preparation, healthcare, and housing,
            especially for disadvantaged and low-income populations. And,
            that policy directive from Congress to integrate broadband
            adoption does not require additional funding.

       Training in digital literacy with access to affordable
            computing devices needs to be provided by CBOs with a positive
            track record that can serve as the ``trusted messengers and
            honest brokers'' in a way that broadband companies alone are
            not able to do. And, digital literacy training is most
            effective when integrated into relevant services.

        The Pew Charitable Trust data on broadband adoption needs to be
    interpreted through the ``lens of reality'' of on-the-ground experience
    with the benefit of listening to disadvantaged residents. Several focus
    groups commissioned by CETF with low-income people who don't subscribe
    to broadband and who don't have a computer in the home (all conducted
    in language and in culture) reveal that the vast majority of residents
    currently off-line want to have the benefits of high-speed Internet
    access (which generically is referred to as broadband and includes both
    wireline and wireless technologies).
        The 2013 Pew Report on ``Who's Not Online and Why'' finds that 85
    percent of Americans do use e-mail and the Internet overall, which
    tracks with an 86 percent Internet use rate in California, and that 15
    percent are not online overall, with just 5 percent saying that ``the
    Internet is not relevant to them''. Unfortunately, some industry voices
    repeat those figures as ``34 percent of the 15 percent'' (emphasizing
    the 34 percent in graphics) without doing the math to place in
    perspective that it is just 5 percent. Further, when anyone drills down
    on the 5 percent there is a discovery that many of these people are
    senior citizens who come to see the ``relevance'' when it is related to
    better healthcare monitoring in their home, which can offset follow-up
    clinical visits by as much as 40 percent (having a significant impact
    on quality as well as cost savings in healthcare). The majority of
    those not online, 58 percent of the 15 percent (or 9 percent of the
    population) cite digital literacy, lack of a computing device to
    connect to the Internet, and cost as issues. Thus, the Pew data confirm
    that increasing broadband adoption requires an integrated approach that
    tackles in a coherent strategy the three challenges of cost, relevance,
    and digital literacy.
        Broadband adoption, however, is not just about increasing overall
    Internet use--it is about high-speed Internet access and use at home.
    That is the focus of the California goal to achieve at least 80 percent
    broadband adoption at home (with no single region or demographic group
    less than 70 percent). California today is at 75 percent home broadband
    adoption (including 6 percent mobile devices only) and is not likely to
    achieve the 80 percent goal without new Federal policy and reform of
    the Universal Services Fund (USF) by the Federal Communications
    Commission (FCC) that address all three challenges to broadband
    adoption.
        While these figures may suggest that there are just a few
    percentage points left to close the Digital Divide, it must be
    understood that they translate into lots of real people who are being
    left farther and farther behind in a Digital World--more than 633,000
    families alone in California need to be reached to subscribe to
    broadband to achieve the 80 percent adoption goal.
        Pew contends that a relatively small percentage of Americans lack
    any access. However, in every state there are rural communities--
    thousands and thousands across the county--that are being stifled
    without broadband access. Further, the infrastructure that does exist
    in many rural areas often is so slow as to be barely classified
    technically as ``broadband'' and certainly is inadequate for a vibrant
    21st Century community. And, while percentages may seem small, the
    actual number of households totally unserved (and woefully underserved)
    need to be put in perspective: in California, there are at least
    225,000 remaining unserved households to reach with broadband to
    achieve the state goal of 98 percent deployment. Fortunately, when
    broadband adoption is coordinated with deployment in California rural
    communities, then rural adoption rates quickly catch up to the
    statewide average.
        In the written testimony, CETF delineated specific recommendations
    for the integration of broadband deployment and adoption into existing
    programs within Federal departments. The U.S. Department of
    Transportation should have been included because deployment of
    broadband along with major Federal transportation projects (surface and
    transit) in public rights-of-ways (coupled with a ``Dig Once'' policy)
    can greatly assist broadband deployment into unserved areas. Further,
    broadband is a ``green strategy'' because it enables ``virtual trips''
    which reduce impacts on the environment and help relieve traffic
    congestion.

    Policy Goals, Performance-Based Regulatory Framework, and Incentives
            for Partnerships
        As Senator Wicker observed during the hearing, CETF strongly
    recommends that Congress set policy goals for broadband deployment and
    adoption along with a timetable and assignments of responsibility.
    Without a goal there is no accountability for performance. It is the
    first crucial step towards ``rolling up our sleeves'', as Senator
    Ayotte proposed. In fact, a goal is the bedrock of a ``performance-
    based'' regulatory framework that invites and rewards private-sector
    innovation versus the conventional ``command-and control'' regulatory
    scheme that inhibits investment. However, the references during the
    hearing to a ``light touch'' in regulations cannot and should not mean
    the absence of either policy goals or performance accountability--the
    very foundation for common sense regulations that serve the public
    interest while embracing the strengths of the private sector. That is
    why it is important for Congress to set national broadband deployment
    and adoption goals, as Senator Rubio questioned the witness panel.
        In this context, it is important to clarify my answer to Senator
    Klobuchar regarding ``mandates'' which in the CETF testimony refers to
    recommended actions by Congress to: (a) set policy goals for broadband
    deployment and adoption; (b) direct Federal departments to integrate
    broadband deployment and adoption into existing programs; and (c)
    provide input to the FCC on USF reform (including design of an
    Affordable Broadband Lifeline Rate Program and modernization of E-
    rate). To the extent that Congress acts to establish Federal policy,
    then that is a ``mandate'' for the Administration.
        For example, CETF repeatedly recommended that Congress encourage
    and reward partnerships in meeting the broadband adoption goals--
    federal-state, public-private, and provider-community. Thus, in this
    sense, CETF recommends that Congress ``mandate'' the FCC to reform the
    USF to provide incentives for partnerships to broadband providers such
    that design of an Affordable Broadband Lifeline Rate Program and E-rate
    reform addresses all three challenges to adoption: cost, relevance, and
    digital literacy. Likewise, CETF recommends that broadband providers
    that receive subsidies from USF should be required to submit a
    transparent plan to the FCC with goals (including percentage of
    eligible participants to be reached) and a coherent set of activities
    to achieve the goals. Further, CETF recommends that priority funding
    and/or financial incentives be available to those broadband providers
    that submit a plan to partner with intermediaries (such as EveryoneOn)
    and CBOs with proven track records as ``trusted messengers and honest
    brokers'' and which incorporates relevance and digital literacy. While
    it would be voluntary on the part of each provider whether or not to
    participate in the Affordable Broadband Lifeline Rate Program, receipt
    of USF subsidies would be accompanied by these kinds of
    ``requirements''--which some might call a ``mandate''--but which are
    needed to ensure accountability and success.

    Community Experience with Industry Broadband Adoption Programs
        CETF strongly encourages public-private partnerships to leverage
    public investment and harness the innovation of the private sector.
    Such partnerships must be transparent, explicit about goals, and
    accountable for results. As stated during the hearing, CETF commends
    industry efforts, such as Comcast Internet Essentials (CIE) program,
    but observes that the results to date have been modest, with less than
    10 percent of the eligible households actually participating. It is
    worth noting that Comcast executive David Cohen did clarify at a
    Washington Post forum last week (November 5, 2013) that his reference
    during the hearing to ``1 million Americans'' participating in CIE was
    a calculated projection of all persons in about 250,000 households that
    actually have signed up. In California, 25,739 households out of
    313,805 eligible households, or only 8.2 percent of the prospective
    market, have signed up for CIE (according the last public release by
    Comcast on June 21, 2013). Other companies have done even less:
    according to EveryoneOn, Time Warner Cable operated their affordable
    broadband pilot for only 2 months (although the launch was highly-
    touted in media) and signed up just 1,235 households around 502
    participating disadvantaged schools. To be sure, these companies know
    how to market and are successful when they are committed to a goal.
    They have not produced the hoped-for results because they have not been
    accountable to anyone for performance, have ignored the ``lessons
    learned'' from on-theground experience, and have invested too little in
    partnering with CBOs with a track record to integrate relevance and
    digital literacy into their broadband adoption programs.
        Attached are letters from knowledgeable sources close to the
    community and consumer realities of these voluntary affordable
    broadband adoption programs that set forth the nature of the existing
    problems. Representatives in California of Comcast and other companies
    have been open to receiving this kind of input and have tried to
    respond to the extent of their authority; and some issues have been
    resolved, but enough problems persist to conclude that there must be
    substantive changes to the programs to increase market penetration and
    broadband adoption.

    Conclusion
        Closing the Digital Divide is an imperative for U.S. global
    competitiveness. The Senate Subcommittee hearing was a very good
    beginning to identify the challenges and formulate strategies to
    accelerate broadband adoption. It is essential that Congress act to
    establish policy goals that leverage existing resources, foster
    partnerships, and reward results. There is no substitute for
    Congressional leadership to empower and mobilize the Nation's
    imagination, talent and innovation.
        As was repeatedly said during the hearing, ``there is no silver
    bullet'' for broadband adoption, but as was stated in the CETF written
    testimony, ``there is silver buckshot'' in that there is a ``critical
    mass'' of actions required close the Digital Divide which must be
    infused in Federal policy. As was discussed during the hearing, there
    are well-known, documented primary challenges to broadband adoption:

      1.  Cost

      2.  Relevance

      3.  Digital Literacy

        Closing the Digital Divide and accelerating broadband adoption
    requires an affordable broadband rate for low-income families. As FCC
    Commission Mignon Clyburn has observed, ``100 million American homes
    are without broadband and the #1 reason is affordability.'' Thus, there
    is a need to step up the voluntary efforts by broadband providers and
    establish a Federal Affordable Broadband Lifeline Rate Program that is
    coupled with incentives for partnerships to integrate broadband into
    other relevant programs for disadvantaged residents that incorporate
    digital literacy training.
        As a result of the Senate Subcommittee hearing, the Senators should
    take heart that it is entirely possible to succeed in closing the
    Digital Divide. Congressional leadership, focus and commitment make a
    huge difference in this quest.
    Attachments

    Letters from:

      --2-1-1/United Ways of California, Los Angeles

      --Chicana/Latina Foundation, Burlingame

      --Mission Economic Development Agency, San Francisco

      --Office of Community & Economic Development, California State
            University, Fresno

      --Santee Educational Complex, Los Angeles Unified School District,
            Los Angeles
                                     ______

    Attachments to Letter

                                               2-1-1 California
                                  South Pasadena, CA, November 11, 2013

    Hon. Mark Pryor,
    Chairman, Subcommittee Committee on Communications, Technology, and the
    Internet,
    United States Senate
    Washington, DC.

    Hon. Roger Wicker,
    Ranking Member, Subcommittee Committee on Communications, Technology,
    and the Internet,
    United States Senate
    Washington, DC.

               Re: Hearing on Broadband Adoption: The Next Mile

    Dear Chairman Pryor and Ranking Member Wicker:

        My name is Lilian P. Coral, and I serve as the Director of 2-1-1
    California. Under the fiscal sponsorship of the United Ways of
    California, 2-1-1 California is a statewide network of local 2-1-1
    information and referral providers authorized by the California Public
    Utilities Commission and the Federal Communications Commission to use
    the 2-1-1 code as an easy-to-remember and universally recognizable
    number that would enable a critical connection between individuals and
    families in need and the appropriate community-based organizations and
    government agencies. 2-1-1 California's mission is to develop the
    statewide infrastructure and support necessary to ensure quality 2-1-1
    services for everyone. In California, 2-1-1 is accessible in 30
    counties servicing 93 percent of Californians.
        I am writing this letter to add additional information to the
    record for the Broadband Adoption: The Next Mile hearing. We were
    fortunate to be recipients of an American Recovery and Reinvestment Act
    grant through the National Telecommunications and Information
    Administration to focus on Broadband Awareness and Adoption and between
    March 2010 and June 2013 2-1-1 California through its 2-1-1 partners:

       Provided outreach and education to 229,481 callers

       Screened and referred 59,775 callers to computer and
            Internet-related resources

        As follow-up, 2-1-1 California through its 2-1-1 partners,
    conducted surveys and interviews with approximately 6 percent of these
    callers to find out whether they had participated in any computer/
    Internet related training classes, subscribed to broadband or received
    a free or low cost computer as a result of the referrals they received
    from 2-1-1. Based on the survey results, we estimate that:

       7,478 households subscribed to broadband

       4,318 adults participated in a training class

       3,659 households received a computer

       4,555 children were connected to the Internet

        Unfortunately, the Digital Divide continues to disproportionally
    impact thousands of low-income families throughout California and
    especially in some of our major urban centers. Based on in-depth
    screening and referral protocols, callers told 2-1-1 Specialists that
    the main reason they did not have broadband at home was that they did
    not own a computer (41 percent). The second biggest reason was cost (36
    percent).
        We believe broadband adoption is an imperative for economic
    prosperity, quality of life and family self-sufficiency and support the
    recommendations put forth by the California Emerging Technology Fund
    for accelerating Broadband adoption. Our Data and experience indicate
    that the majority of people without broadband at home do want to adopt
    the technology and understand the value proposition.
        We think it is particularly important that there be stronger
    partnerships that can help community-based organizations like our own,
    who are trusted messengers, connect those still unconnected to truly
    affordable broadband options that will ensure low-income families
    connect, and stay connected, to broadband, to access the richness of
    resources and education that the Internet affords.
                Respectfully,
                                               Lilian P. Coral,
                                                              Director,
                                                          2-1-1 California.
                                     ______

                                      Chicana/Latina Foundation
                                       Burlingame, CA, November 8, 2013

    Hon. Mark Pryor,
    Chairman, Subcommittee Committee on Communications, Technology, and the
    Internet,
    United States Senate,
    Washington, DC.

    Hon. Roger Wicker,
    Ranking Member, Subcommittee Committee on Communications, Technology,
    and the Internet,
    United States Senate,
    Washington, DC.

               Re: Hearing on Broadband Adoption: The Next Mile

    Dear Chairman Pryor and Ranking Member Wicker:

        My name is Alicia Orozco, and I serve as Project Manager of the Get
    Latinos Connected project (GLC) of the Chicana Latina Foundation, based
    in the San Francisco Bay Area. The GLC project seeks to end the digital
    divide that keeps the Latino community from connecting to the Internet,
    and thus fully participating in the 21st Century. We are a non-profit
    organization which promotes professional and leadership development of
    Latinas. The Foundation's mission is to empower Chicanas/Latinas
    through personal, educational, and professional advancement.
        I am writing this letter to add additional information to the
    record for Broadband Adoption: The Next Mile hearing. We were fortunate
    to be recipients of an American Recovery and Reinvestment Act grant
    through the National Telecommunications and Information Administration
    to focus on Broadband Awareness and Adoption. With that project, were
    able to sign up 1,070 first-time Internet users. That is 1,070 new
    Latino Internet users. The majority of these homes have children who
    now enjoy access to the online world and who have improved their class
    work.
        We strongly advocate for broadband at home and Digital Literacy
    training as described in the National Broadband Plan, and we are making
    the suggestions described in this letter with the goal of giving all
    Americans access to digital tools and skills to improve their lives.
        While we find the Comcast Internet Essentials program to be helpful
    to some Bay Area families, there are several barriers that impede many
    more households from participating.
        We recommend that:

        Comcast extend its program from 2014 until 2017 and set adoption
    goals. As Comcast Executive Vice President David Cohen testified before
    your subcommittee, the company has ``learned a lot over the first two
    years'' of the three-year program. Currently, Internet Essentials is
    scheduled to end 1 June 2014. From a California perspective, where
    nearly half of Latino households do not have access to high-speed
    Internet at home, this is not the time to halt the program. Comcast is
    the main cable provider in the San Francisco Bay Area. We also
    recommend that Comcast set national adoption targets as a percentage of
    eligible households, and similar targets in major markets, such as the
    San Francisco Bay Area. In addition to disclosing adoption goals, it
    would be very helpful for non-profits like ours if Comcast would share
    information about where they are targeting the broadband offer,
    including providing lists of schools where students are eligible for
    Comcast Internet Essentials. We have been asking for the list of auto-
    qualified schools since the program started and we're still waiting for
    that list.
        The online application is useless. We have yet to be able to
    actually use it. We've held Technology Fairs where we have set up
    computer banks so that they can actually sign up people for Internet
    Essentials, but have been unable to because the online application does
    not work. We keep getting bounced off.
        We also have become aware of the fact that when a person calls
    Comcast to sign up for Internet Essentials, they are being asked how
    many children they have in the program. Then the Comcast agent chooses
    the oldest child to enroll in the program. This means the family will
    be ``kicked out'' of the program sooner, because the discount only
    lasts as long as the child is in school. So if an eligible family has a
    child in high school and another in elementary schools (both on the
    National Lunch program) by enrolling the high school student, the
    family loses several years of eligibility for Internet Essentials.
        Comcast remove the 90-day requirement. Comcast will not allow low-
    income families who are already Internet subscribers, or have
    subscribed in the past 90 days, to switch to the cheaper Internet
    Essentials service. If a family has subscribed to the Internet as part
    of a Comcast bundled service, they must stop service for 90 days before
    they become eligible for the $9.95 month Internet service.
        Comcast increase support of local and regional digital literacy
    programs. Many of the families we serve need computer literacy training
    to take full advantages of their broadband connections. CLF has worked
    effectively with schools, faith-based communities, local employers,
    health clinics and job-training programs to incorporate digital
    literacy and workforce training. We would welcome additional
    commitments by Comcast to help fund essential training programs like
    these.
        Comcast increase support of local and regional digital literacy
    programs. Many of the families we serve need computer literacy training
    to take full advantage of their broadband connections to the Internet.
    The Chicana/Latina Foundation has worked effectively with schools,
    churches, health clinics, job-training programs and social service
    providers to incorporate digital literacy and workforce training. We
    would welcome additional commitments by Comcast to help fund essential
    training programs like these.
        Comcast expand the program to include low-income seniors, people
    with disabilities and veterans. Recent polling on home broadband use in
    California shows that seniors and people with disabilities adopt high-
    speed home Internet at significantly lower rates than other
    populations. Often homebound, these clients are among the most
    vulnerable we serve, and an affordable Internet connection would
    significantly improve their access to vital services and the quality of
    their lives.
        Elected officials and policymakers should know that while Comcast
    has made improvements to its discounted broadband offer, the company
    should make Internet Essentials available beyond June 2014 and expand
    eligibility as described above if it desires to be a leader in closing
    the Digital Divide in California.
                Respectfully,
                                                 Alicia Orozco,
                                                       Project Manager,
                                                     Get Latinos Connected.
                                     ______

                            Mission Economic Development Agency
                                                      San Francisco, CA

    Hon. Mark Pryor,
    Chairman, Subcommittee Committee on Communications, Technology, and the
    Internet,
    United States Senate,
    Washington, DC.

    Hon. Roger Wicker,
    Ranking Member, Subcommittee Committee on Communications, Technology,
    and the Internet,
    United States Senate,
    Washington, DC.

               Re: Hearing on Broadband Adoption: The Next Mile

        My name is Luis Granados, and I serve as Executive Director of the
    Mission Economic Development Agency (MEDA), based in San Francisco. The
    Mission Economic Development Agency (MEDA) is a community-based, local
    economic development corporation located in the Mission District of San
    Francisco. For 40 years MEDA has worked to improve economic and social
    conditions in the neighborhood by stimulating investment, enhancing the
    business environment, and creating jobs for area residents, with an
    emphasis on the Latino community in San Francisco. MEDA engages the
    local community with homeownership counseling, foreclosure
    intervention, small business development services, financial education,
    free tax preparation, and technology training and workforce
    development.
        I am writing this letter on behalf of MEDA to add additional
    information to the record for the Broadband Adoption: The Next Mile
    hearing. We were fortunate to be recipients of an American Recovery and
    Reinvestment Act grant through the National Telecommunications and
    Information Administration to focus on Access to Careers in Technology
    and, earlier this year the Department of Education granted MEDA a $30
    million Mission Promise Neighborhood Grant aimed at helping students at
    underperforming schools San Francisco.
        We strongly advocate for broadband at home and digital literacy
    training as described in the National Broadband Plan, and we are making
    the suggestions described in this letter with the goal of giving all
    Americans access to digital tools and skills to improve their lives.
        In our work with Comcast we have found the Internet Essentials
    program to offer high-quality, reliable broadband service to some of
    the people who need it most. Our clients who have subscribed are
    generally happy with the program. However, there are several barriers
    that impede many more households from participating.
        We recommend that Comcast take the following steps to ensure that
    the maximum amount of eligible and needy families can benefit from
    Internet Essentials:

        Extend Internet Essentials from 2014 until 2017. As Comcast
    Executive Vice President David Cohen testified recently before your
    subcommittee, the company has ``learned a lot over the first two
    years'' of the three-year program. Currently, Internet Essentials is
    scheduled to end in June 2014. From a California perspective, where
    nearly half of Latino households do not have high-speed Internet access
    at home, Comcast should continue the program.
        In addition, in the first years of the program Internet Essentials
    sign-ups were impacted as we worked with eligible families to overcome
    hurdles in the subscription process, challenges that resulted in
    damaged community confidence in the product. These hurdles included:

       Clients receiving letters from Comcast saying that they had
            failed a credit check. Internet Essentials specifically
            advertised there would be no credit check.

       The application process took up to 3 months--far too long
            for clients that are skeptical about the product in the first
            place and have other pressing demands on their budget.

       Initial Internet Essentials customer service representatives
            suggested that Internet Essentials clients could pay $150
            deposit to avoid a credit check.

       Families were charged $50 by the technicians that installed
            their modem, even though Internet Essentials guarantees free
            installation.

        Through advocacy with Comcast and the actions of regional staff,
    these issues have been addressed by Comcast. However, MEDA is concerned
    that these issues have prevented eligible and needy families from fully
    taking advantage of this benefit. Due to these early barriers MEDA
    believes Comcast should extend the Internet Essentials program until
    2017.
        Comcast increase support of community-based programs. If it weren't
    for community-based organizations helping clients learn about and
    subscribe to Internet Essentials, Comcast wouldn't even have the 8
    percent penetration it is currently reporting among eligible families.
    These organizations also provide critical ongoing support to
    subscribers, including digital literacy training. At MEDA, we spend
    significant resources on these support activities. We would welcome
    additional commitments by Comcast to help fund essential programs like
    these.
        Comcast expand the program to include low-income individuals. Even
    as government and other social services are more exclusively available
    online, the clients they are meant to serve adopt high-speed home
    Internet at significantly lower rates than other populations. Low-
    income households, people with disabilities and seniors are among the
    most vulnerable we serve, and an affordable Internet connection would
    significantly improve their access to vital services and the quality of
    their lives.
        Elected officials and policymakers should know that while Comcast
    has made improvements to its discounted broadband offer, the company
    should offer Internet Essentials beyond June 2014 and expand
    eligibility as described above if it desires to truly play a leadership
    role in closing the Digital Divide and achievement gap in our state.
                Respectfully,
                                                 Luis Granados.
                                     ______

                            California State University, Fresno
                                                             Fresno, CA

    Hon. Mark Pryor,
    Chairman, Subcommittee Committee on Communications, Technology, and the
    Internet,
    United States Senate,
    Washington, DC.

    Hon. Roger Wicker,
    Ranking Member, Subcommittee Committee on Communications, Technology,
    and the Internet,
    United States Senate,
    Washington, DC.

               Re: Hearing on Broadband Adoption: The Next Mile

    Dear Chairman Pryor and Ranking Member Wicker:

        I am writing on behalf of the Office of Community and Economic
    Development (OCED) at California State University, Fresno (Fresno
    State). Through our community-based programs, we and our partners
    annually help thousands of San Joaquin Valley (Valley) residents gain
    access to services vital to their lives, including high-speed Internet
    at home.
        This letter is to provide input to the record for the Broadband
    Adoption: The Next Mile hearing. Specifically, we wish to comment on
    the disappointing experience we have had in trying to connect families
    to the Internet Essentials Program offered by Comcast. Also, we ask you
    to support this much-needed program by extending the program beyond the
    proposed June 2014 date.
        Comcast is one of the largest broadband providers for rural areas
    of the San Joaquin Valley, one of the poorest regions of California.
    When first introduced, we welcomed Internet Essentials as an
    opportunity to connect our traditionally un-served population. However,
    based on the substantial hurdles our residents face when signing up for
    Internet Essentials, we find ourselves reluctant to support the program
    due to the long wait before customers can begin using the Internet at
    home.
        The waiting period between the initial call to Internet Essentials
    and the application arriving in the mail is 8-12 weeks, if the letter
    comes at all. After submitting the application, another 2-4 weeks
    elapse before the equipment arrives. Many Valley residents do not have
    Social Security numbers and are therefore forced to drive long
    distances to verify identification since Comcast has closed many of its
    regional offices.
        Leaders in the San Joaquin Valley have been pushing for online
    registration since the beginning of the Internet Essentials Program.
    Despite what Comcast says, the system is not working properly. The site
    is often unable to complete address eligibility searches and simply
    redirects the customer to the 1-855 number again. We understand that
    new systems need time to work out the bugs, but we have been trying to
    work with Comcast for many weeks to provide consumer feedback about the
    poor website operations, to no avail.
        Comcast does not effectively advertise Internet Essentials in our
    area, so our community partners use grassroots educational campaigns to
    let families know about the program. Comcast also does not provide
    timely data to tell us which schools are undersubscribed for Internet
    Essentials so our partners can make best use of their resources to
    target un-served families for adoption.
        My greatest concern, with the program scheduled to end in June
    2014, is that the discounted offer will only be available for new
    enrollments for a few more months, leaving many Valley residents unable
    to take advantage of this opportunity to connect to broadband at home.
        Please consider the Office of Community and Economic Development at
    California State University, Fresno a supporter of extending the
    Internet Essentials Program.
        If you have any questions regarding our support of expanding the
    Internet Essentials Program please contact me at mdozier@csufresno.edu.
                Sincerely,
                                                   Mike Dozier,
                                                    Executive Director,
                                       California State University, Fresno.
                                     ______

                                       Santee Education Complex
                                                        Los Angeles, CA
    Hon. Mark Pryor,
    Chairman, Subcommittee Committee on Communications, Technology, and the
    Internet,
    United States Senate,
    Washington, DC.

    Hon. Roger Wicker,
    Ranking Member, Subcommittee Committee on Communications, Technology,
    and the Internet,
    United States Senate,
    Washington, DC.

               Re: Hearing on Broadband Adoption: The Next Mile

        My name is Martin O. Gomez and I serve as Principal at Santee
    Education Complex based in Los Angeles. We serve 1,850 college bound
    students in the South L.A. community in which 100 percent of our
    students qualify for free and reduced lunch.
        I am writing this letter on behalf of Santee Education Complex and
    our community to add additional information to the record for the
    Broadband Adoption: The Next Mile hearing. Unfortunately, the Digital
    Divide continues to disproportionally impact thousands of low-income
    students attending Los Angeles schools. Last year, several of those
    schools located in some of the most economically challenged areas in
    Los Angeles were invited to participate in a pilot program sponsored by
    Time Warner Cable (TWC), which according to the company's own estimates
    serves one quarter of California households.
        With much national publicity, TWC announced that it would offer a
    low-cost broadband offer at $9.95 for families with students
    participating in the National School Lunch program at 19 Los Angeles-
    area schools. This pilot was offered for only two months, from October
    1 until November 30, 2012, and without visible outreach by TWC to
    promote the program. Many of us had hoped that the two-month pilot
    would offer valuable lessons on the enrollment process and marketing
    and customer service, which then would allow TWC to scale up the
    program to reach all students in the National School Lunch program. In
    fact, the pilot turned out to be a very short ``limited time offer''.
    According to the California Emerging Technology Fund, TWC enrolled just
    1,200 families nationally in 500 schools.
        Even more disappointing, TWC did not offer any explanation as to
    why they stopped the discount program completely while other cable
    providers in California saw the value of helping low-income families
    subscribe to broadband at home.
        We think elected officials and policymakers should know that this
    is a missed opportunity for the largest cable provider in California to
    play a leadership role in closing the Digital Divide and achievement
    gap in our state.
                Respectfully,
                                       Martin O. Gormez, Ph.D.,
                                                  Instructional Leader,
                                                  Santee Education Complex.
                                     ______

          Prepared Statement of the National Hispanic Media Coalition
        To the Honorable Chairman Mark Pryor, Ranking Member Roger Wicker,
    and Members of the Subcommittee:

        The National Hispanic Media Coalition (``NHMC'') writes to
    supplement the record of the hearing held by the Senate Committee on
    Commerce, Science, and Transportation, Subcommittee on Communications,
    Technology, and the Internet entitled ``Broadband Adoption: The Next
    Mile'' on October 29, 2013. Thank you for providing me with the
    opportunity to submit this written testimony.
    Slowing Adoption Rates, the Issue of Affordability, and the Cost of
            Digital Exclusion
        While home broadband adoption rates have improved since broadband
    service was introduced, the adoption rate still lags among certain
    segments of the population--to include Latinos, African-Americans,
    seniors, struggling families, people with disabilities, and the less
    educated. Indeed, as Aaron Smith of the Pew Research Center's Internet
    Project pointed out during his testimony at the hearing, the pace of
    broadband adoption overall has ``slowed substantially'' in recent
    years.\1\
    ---------------------------------------------------------------------------
        \1\ Broadband Adoption: The Next Mile Before the Subcomm. On
    Commc'ns., Tech., and the Internet of the S. Comm. On Commerce, Sci.,
    and Transp., 113th Cong. 1 (2013) (statement of Aaron Smith, Senior
    Researcher, Pew Research Center's Internet Project), available at
    http://www.commerce.senate.gov/public/?a=Files.Serve&File_id=8919d402-
    a852-4246-916e-de623778
    e7e5 (pointing out that ``[a]fter increasing by an average of nearly
    seven percentage points per year from 2000 through 2009, the national
    broadband adoption level increased by a total of just seven percentage
    points from 2009 through 2013.'').
    ---------------------------------------------------------------------------
        The Latino community, in particular, has struggled to adopt
    broadband at home. According to a recent Pew report, only 53 percent of
    Latinos have adopted broadband at home, meaning that almost half of
    Latinos remain disconnected.\2\ And those who prefer to speak Spanish
    at home have proven to be one of the most difficult groups to reach,
    with only 38 percent having broadband within the home.\3\
    ---------------------------------------------------------------------------
        \2\ Kathryn Zickuhr & Aaron Smith, Pew Internet and American Life
    Project, Home Broadband 2013 3 (2013), available at http://
    www.pewinternet.org//media//Files/Reports/2013/
    PIP_Broadband%202013_082613.pdf.
        \3\ Lee Rainie, Director, Pew Internet and American Life Project,
    Presentation at Washington Post Live 2013 Bridging the Digital Divide
    forum (Nov. 5, 2013), available at http://www.pewinternet.org/
    Presentations/2013/Nov/The-State-of-Digital-Divides.aspx.
    ---------------------------------------------------------------------------
        Cost of service and relevance have been cited in a number of
    reports as reasons why many fail to adopt broadband, although it is
    important to note that a social desirability bias can exist in answers
    to survey questions about personal income and spending power. In other
    words, a respondent may point to relevance or lack of interest or
    necessity as a reason for failing to adopt broadband so that they do
    not have to admit to the surveyor that they cannot afford to pay the
    costs associated with service. Further, beyond this bias, there is an
    important relationship between cost and relevance that should not be
    overlooked. As Zach Leverenz, the Chief Executive Officer of
    EveryoneOn, a national non-profit working on bridging the digital
    divide, mentioned at a recent event, the issue of relevance can be
    problematic because ``people that can't afford [broadband] also think
    of it as being not relevant.'' \4\
    ---------------------------------------------------------------------------
        \4\ Video Clip: I came from the digital divide, Wash. Post Live,
    available at http://www.washingtonpost.com/postlive/conferences/
    digital-divide.
    ---------------------------------------------------------------------------
        The failure to adopt broadband at home will serve to exacerbate
    existing socio-economic disparities, putting Latinos and others who
    have failed to adopt broadband at a significant disadvantage. The
    Federal Communications Commission (``FCC'') Broadband Adoption
    Taskforce has defined the digital divide that exists between those that
    have broadband and those that do not, as an ``opportunity divide'' that
    manifests itself in a number of ways.\5\ For instance, more than 80
    percent of Fortune 500 companies, including huge employers like Wal-
    Mart and Target, only accept job applications online.\6\ In the next
    decade, nearly 80 percent of jobs will require some digital literacy
    skills.\7\ And students with broadband at home graduate at a rate 6-8
    percent higher than students who lack such access.\8\ Consumers with
    broadband at home can save up to $7,000 per year on goods and services,
    and annual revenues of small businesses with broadband access are, on
    average, $200,000 higher than those without broadband.\9\
    ---------------------------------------------------------------------------
        \5\ FCC Broadband Adoption Taskforce, Broadband Adoption
    Presentation to FCC Open Meeting, at slide 4-5 (Nov. 30. 2011),
    available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-
    311281A1.pdf.
        \6\ Id. at slide 10.
        \7\ Id. at slide 11.
        \8\ Id. at slide 14.
        \9\ Id. at slide 19.
    ---------------------------------------------------------------------------
    Industry and Government Each Have an Important Role to Play
        Private initiatives and public-private partnerships are a valiant
    effort to solve the problem of lagging home broadband adoption but,
    while valuable, some have significant limitations when it comes to
    trying to reach the remaining hold outs. For instance, many low-cost
    broadband programs require a household to have a student in the
    National School Lunch Program in order to be eligible to receive the
    reduced rate.\10\ However, this eligibility criterion targets a group
    that has outperformed others when it comes to home broadband adoption--
    families with school-age children. According to a recent National
    Telecommunications and Information Administration (``NTIA'') report,
    households with school-age children are already adopting broadband at
    home at a rate of 79 percent. That rate is 13 percentage points higher
    than households without school-age children, which only adopted home
    broadband at a rate of 66 percent.\11\
    ---------------------------------------------------------------------------
        \10\ See e.g., How It Works--Comcast Internet Essentials, http://
    www.internet
    essentials.com/how-it-works.
        \11\ NTIA, U.S. Dept. of Commerce, Exploring the Digital Nation:
    America's Emerging Online Experience 26 (June 2013) available at http:/
    /www.ntia.doc.gov/files/ntia/publications/
    exploring_the_digital_nation_-_americas_emerging_online_experience.pdf.
    ---------------------------------------------------------------------------
        Government initiatives can subsidize the cost of service for a
    wider range of people, potentially creating a price point lower than
    that offered by Internet service providers, and collect important data
    associated with any efforts along the way. The Universal Service Fund
    already subsidizes the cost of broadband connections for schools and
    libraries through the E-Rate program, and the cost of basic phone
    service (or broadband bundled with phone service) for low-income
    households through the Lifeline program. Both programs have already
    demonstrated success at connecting underserved communities to valuable
    communications services. Further, the FCC has conducted a number of
    pilots to determine how it can best leverage existing programs to make
    broadband more affordable and accessible in the home and important data
    has been collected as a result.\12\ This data should be analyzed and
    released to the public. NHMC also agrees with the California Emerging
    Technology Fund (``CETF'') that any efforts should incorporate the
    ``wealth of knowledge'' and the lessons learned by the NTIA through its
    administration of a number of broadband programs.\13\
    ---------------------------------------------------------------------------
        \12\ For instance, the FCC's Learning-On-The-Go pilot launched in
    2011 to test a program in which students were provided with devices and
    Internet access at home and in the school. The results of this pilot
    program have yet to be released. Further, the FCC is currently
    conducting Lifeline Broadband Pilot, to explore the variables
    associated with home broadband adoption in low-income households. Once
    completed, the data collected during this pilot must be analyzed. See
    Lifeline and Link Up Reform and Modernization, WC Docket No. 11-42,
    Order, 27 FCC Rcd. 15842 (rel. Dec. 19, 2012) available at http://
    hraunfoss.fcc.gov/edocs_public/attachmatch/DA-12-2045A1.pdf.
        \13\ Broadband Adoption: The Next Mile Before the Subcomm. On
    Commc'ns., Tech., and the Internet of the S. Comm. On Commerce, Sci.,
    and Transp., 113th Cong. 5 (2013) (statement of Sunne Wright McPeak,
    President and CEO, California Emerging Technology Fund), available at
    http://www.commerce.senate.gov/public/?a=Files.Serve&File_id=dae0b397-
    babc-45b5-8751-2cd7622fbe11.
    ---------------------------------------------------------------------------
        Important lessons learned by other, public initiatives, such as
    those carried out by CETF, can also provide valuable insight into how
    any future, national programs should be structured for maximum
    efficacy. For instance, CETF's School2Home initiative is similar to
    some of the existing private initiatives in that community engagement
    happens at the school. However, by targeting low-performing middle
    schools and stressing parent engagement, the program was able to yield
    impressive broadband adoption results in hard to reach groups.
    According to CETF's testimony, the School2Home initiative increased
    home broadband adoption among Spanish-speaking parents from 48 percent
    to 76 percent--a dramatic increase within a group that has historically
    struggled with broadband adoption.\14\ By examining this type of
    success story and extracting lessons from it, we may have a real shot
    at significantly increasing home broadband adoption rates in lagging
    communities.
    ---------------------------------------------------------------------------
        \14\ Id. at 6.
    ---------------------------------------------------------------------------
        NHMC believes that spurring home broadband adoption will lead to
    greater equity in our society and allow historically disadvantaged
    communities to access opportunities that have been previously
    unattainable. It was encouraging to see the Subcommittee take up this
    issue and to see so many Members speak passionately about the
    importance of bridging the digital divide during the hearing. NHMC
    looks forward to remaining engaged on this important issue and welcomes
    any questions from the Subcommittee.
                Testimony Prepared By:
                                               Michael Scurato,
                                                       Policy Director,
                                         National Hispanic Media Coalition.
                                     ______

                     United States Hispanic Chamber of Commerce
                                                       October 29, 2013

    Senator Mark Pryor,
    Chairman,
    U.S. Senate Subcommittee on Communications, Technology, and the
    Internet,
    Washington, DC.

    Senator Roger Wicker,
    Ranking Member,
    U.S. Senate Subcommittee on Communications, Technology, and the
    Internet,
    Washington, DC.

    Chairman Pryor and Ranking Member Wicker:

        I write today to thank the Subcommittee on Communications,
    Technology, and the Internet for its timely hearing entitled Broadband
    Adoption: The Next Mile to discuss the access and adoption of broadband
    in the United States. As the President and CEO of the United States
    Hispanic Chamber of Commerce (USHCC), I have had the unique opportunity
    to observe closely private industry's investment in closing the digital
    divide. I want to take this opportunity to highlight a few of the most
    innovative approaches, programs, and investments undertaken by the
    private sector to date.
        The National Telecommunications & Information Administration (NTIA)
    recently published a report entitled Exploring the Digital Nation:
    America's Emerging Online Experience, which identified those American
    communities most affected by the persistent technology gap. Among the
    communities identified were Hispanic families, who lagged significantly
    behind their White counterparts in computer ownership, Internet use,
    and broadband adoption. In fact, only 58 percent of Hispanic households
    surveyed were connected to the internet.
        What is particularly troubling about these adoption rates is that
    they persist in the face of near universal broadband access. Pro-
    broadband efforts of the Obama Administration coupled with extensive
    and sustained investment from the private sector have pushed rates of
    broadband access to 98 percent. Today, the Internet has become an
    indispensable tool for educational exploration, social interaction, and
    entrepreneurial innovation. Broadband further extends opportunities in
    e-commerce, telecommuting, distance learning, and telemedicine. In the
    information age, still more need be done to ensure that the
    opportunities offered by the Internet are expanded to all Americans.
        The private sector has essential role to play, and has played an
    important role. Industry has contributed to the expansion of the
    Internet infrastructure, designed original programming to bolster
    broadband adoption rates among the public, partnered with other
    community institutions to demonstrate and broaden Internet
    applications, and continues to deliver faster speeds of access.
        AT&T is making an impressive investment in the infrastructure
    delivering high-speed Internet across the country. Just last year, AT&T
    announced that it would spend $14 billion over three years expanding
    its broadband service and high-speed wireless to the majority of its
    extensive landline network. This considerable contribution will broaden
    high-speed Internet access to some 8.5 million homes in some of the
    most difficult to reach communities around the country.
        Comcast has instituted an important program in closing the digital
    divide. Its Internet Essentials program provides discounted broadband
    rates to lower-income households, as well as access to low-cost
    computers and digital training. Over one million American households--
    often connecting to the Internet from their home for the first time--
    have been served by this pioneering program to date.
        Verizon has been at the fore of demonstrating the innovative
    applications of broadband in daily life. Verizon's Innovative Learning
    School Program has provided comprehensive training to hundreds of
    teachers in the utilization and leveraging of online technology in STEM
    focused classrooms. This has delivered the benefits of broadband to
    thousands of students in lower-income communities.
        Google has not only been a staple of making information accessible
    to individuals on the web, but has also worked in communities to unveil
    demonstration projects delivering even faster broadband speeds. Google
    Fiber is boosting Internet-connection speeds exponentially--to speeds
    heretofore unseen in the United States. Such deployment of new
    technology will give rise to new applications making access even more
    important for the public in the years to come.
        While the NTIA's recent report reminds us that still more needs to
    be done to close the digital divide, leading American companies of the
    Internet ecosystem are producing groundbreaking tools allowing for
    connection to the global community, the dissemination of information,
    and the broad distribution of services. Such investment,
    experimentation, and ingenuity are bridging the technology gap as we
    move into the future.
        The USHCC looks forward to working with the Senate Subcommittee on
    Communications, Technology, and the Internet to expand Internet
    adoption across American households. Should you have any questions
    regarding this issue please feel free to contact Marco De Leon, the
    USHCC Vice President of Government Affairs & Policy, at
    mdeleon@ushcc.com.
        Thank you for your time and consideration of this matter.
                Sincerely,
                                              Javier Palomarez,
                                                     President and CEO,
                                                                     USHCC.
                                     ______

        Response to Written Question Submitted by Hon. Amy Klobuchar to
                                  Aaron Smith

        Question. Please describe how the United States compares to other
    countries when it comes to broadband adoption? Countries that excel in
    adoption, what are they doing that can be replicated here? How do our
    broadband adoption rates impact our ability to compete globally?
        Answer. Unfortunately I do not have any definitive answers to your
    question, as my organization has to this point collected only a modest
    amount of data on technology adoption and usage outside of the United
    States. The Pew Research Center's Global Attitudes Project has
    collected data on general Internet usage rates in select countries
    worldwide, and has found that the United States is comparable to
    developed countries such as Britain and Germany in terms of the
    proportion of its population that goes online.\1\ However, we have up
    to this point never attempted to systematically track broadband access/
    adoption internationally.
    ---------------------------------------------------------------------------
        \1\ See http://www.pewglobal.org/2012/12/12/social-networking-
    popular-across-globe/
    ---------------------------------------------------------------------------
        Several other organizations have attempted to examine this issue,
    but much of the existing data is inconsistently collected or based on a
    limited subset of counties. One of the more widely accepted measures is
    a 34-country ranking of fixed and wireless broadband penetration
    produced regularly by the OECD. On this measure, the United States'
    ranking in fixed broadband penetration has fallen from 6th in 2002 to
    15th in 2012. We currently rank more highly (6th out of 34) in mobile
    broadband penetration.
        Additionally, the Council on Foreign Relations recently released a
    very nice ``backgrounder'' document that summarizes the current
    research on broadband adoption across the globe, the economic impact of
    increased access to broadband, and the steps different countries are
    taking to promote increased access to high speed Internet service.
    Their report is available at http://www.cfr.org/digital-infrastructure/
    us-broadband-policy-competitiveness/p30687, and I highly recommend it
    if you would like a short yet very informative summary of the latest
    research on the subject.
                                     ______

       Response to Written Questions Submitted by Hon. Amy Klobuchar to
                               Bernadine Joselyn

        Question 1. NTIA BTOP grants to Sustainable Broadband Adoption
    programs, like the Blandin Foundation's program, have proved extremely
    successful. How important was the Federal funding seed money to
    securing partnerships and other sources of funding?
        Answer. Blandin Foundation used the NTIA BTOP application process
    to spur the interest of statewide, regional and local partners in
    tackling the digital divide and broadband adoption. When funding was
    received from NTIA, the promise of the partnership was achieved through
    a collaborative and detailed design process that respected
    organizational priorities, capabilities and existing partnership
    networks.
        It is highly unlikely that the MN Intelligent Rural Community
    Project (MIRC) could or would have been launched without the NTIA
    funding for the following reasons:

       Sustainable broadband adoption strategies were generally not
            high on the priority list of our prospective partners.

       Many of these partners have dedicated funding for specific
            activities; even if sustainable broadband adoption was a
            priority, there were no dedicated and/or available funds to
            address the issue.

       With its broad mission of ``strengthening rural Minnesota
            communities,'' broadband adoption is only one of Blandin
            Foundation's priorities. Without matching Federal dollars to
            leverage the foundation's own investment, it is highly doubtful
            that the foundation would have made the scope of commitment to
            this work as it did under MIRC.

       Spurred by MIRC's palpable positive impact on the vibrancy
            of the communities we serve, Blandin Foundation Trustees
            authorized continued funding of broadband adoption work in
            2013-14 at a lesser funding level than MIRC. Absent the NTIA
            BTOP funds, our current program cannot support the state-wide
            partnerships enjoyed under MIRC, and thus we have less
            technical, programmatic, and staff support to offer the
            participating communities than was available through the
            federally-funded program.

        Our MIRC partners used the NTIA SBA funds to involve a ``third
    ring'' of organizations across Minnesota. For example, University of
    Minnesota Extension used their funds to collaborate with local economic
    development agencies and chambers of commerce in the delivery of e-
    commerce training programs. The MN Department of Employment and
    Economic Development offers another example of cascading partnerships
    sparked by the Federal funding: they partnered with workforce centers,
    libraries, and community education programs to reach un and under-
    employed workers in diverse settings. As a result of these
    partnerships, digital literacy curricula developed through MIRC were
    incorporated into Adult Basic Education program offerings across the
    state.
        Blandin Foundation would have been hard pressed to commit technical
    and process consulting, community coaching and financial resources to
    our demonstration communities without the NTIA SBA funds. Federal
    financial resources made it possible for the foundation to help
    communities move relatively quickly from community planning processes
    to project implementation.

        Question 2. What makes your program sustainable and how can any
    lessons learned be exported to other regions of the country?
        Answer. The Minnesota Intelligent Rural Communities project has
    illustrated sustainability in a number of ways:
        With NTIA SBA funding, MN Department of Employment and Economic
    Development, a MIRC partner, designed and delivered effective, learner-
    centric, culturally adapted and self-paced digital literacy curricula.
    But perhaps of equal importance, thanks to diligent coordination
    efforts, a sustainable system for course delivery is now in place
    through innovative partnerships with workforce centers, libraries and
    adult basic education classes provided through community education. By
    embedding these curricula into adult basic education, the costs to
    offer these classes are reimbursable to local school districts through
    state education funding.
        In the case of PCs for People, our computer refurbishing and
    distribution partner, participation in the MIRC project enabled them to
    reach a scale of sustainable operations, attracting Digital Citizen as
    a low-cost Internet Service Provider (ISP) partner. Through the
    project, PCs for People opened four affiliate offices across rural
    Minnesota. Inspired by their model, other independent community-based
    computer refurbishment efforts are growing, including with the
    participation of ISPs enticed by findings that over 80 percent of
    first-time Internet subscribers retain their subscriptions even after
    their initial income-adjusted subscriptions expire.
        The broadband adoption initiative in the town of Thief River Falls,
    one of the MIRC communities, has grown to a regional effort. Just
    recently, regional broadband champions organized the collection of
    approximately 200 monitors and 100 computers from area businesses. This
    equipment will be refurbished and distributed to qualifying families.
    High school students, under supervision of workforce agency staff, do
    the computer refurbishment and train the new computer owners in basic
    skills.
        Blandin Foundation, in its MIRC design, invested in evaluation. The
    data provided by the evaluation strategies demonstrated the value and
    results of the work. That evidence led the Foundation to continue its
    investment in broadband access and adoption. We also use this data to
    make the case to local and regional leaders that broadband access and
    adoption is key to economic vitality.
        The Intelligent Community \1\ benchmarking and planning processes
    embedded in MIRC design provided citizens and leaders with a solid
    understanding of community technology needs and opportunities, and led
    to each community identifying its own unique priorities and utilizing
    its unique assets to develop and implement projects to address those
    needs and seize those opportunities. The benchmarking provided clear
    evidence of progress in each of the Intelligent Community framework's
    five focus areas: broadband connectivity; knowledge workforce;
    innovation; digital inclusion; and marketing and advocacy. This system
    gives communities tools to quantify their progress and encourages them
    to continue to move forward.
    ---------------------------------------------------------------------------
        \1\ Intelligent Community Forum; www.intelligentcommunity.org
    ---------------------------------------------------------------------------
        The websites, applications, school programs and community-based
    projects launched with the help of NTIA SBA funding (over 100 in all)
    continue to yield benefits to MIRC communities. For example, the eleven
    public access Internet sites opened in libraries, grocery stores,
    American Legion halls, parks, YMCAs, laundromats and many other venues,
    remain open as part of these organization's ``new way of doing
    business.''
        Even more importantly, community leaders, organized as teams
    through the MIRC project, are now motivated, coached in community
    leadership skills, informed through ongoing information and training
    services (webinars, e-newsletters), and determined to ``stay the
    course.'' They continue to respond to community technology
    opportunities and challenges. For example, when a Minnesota state
    senator wanted to call host a series of roundtable broadband policy
    events across the state's rural counties, MIRC communities stepped
    forward to host these discussions which helped to elevate the
    importance of connectivity as a key determinant of Minnesota
    communities' economic and social well-being.
        Below are some of the lessons we've learned about what makes
    broadband adoption programs effective:

       Our experience in Minnesota supports research results
            showing that economic growth follows telecommunications
            investment. However, we've also learned that investment in
            infrastructure is not enough. ``If you build it they will
            come'' does not apply to broadband. Concerted, sustained cross-
            sectoral engagement at the community level is required to
            create the ``culture of use'' necessary to deliver on the full
            promise of digital literacy and global connectivity.

       Even given the socioeconomic and demographic barriers to
            increasing broadband adoption encountered by the MIRC
            demonstration communities, it is our experience that programs
            designed to increase computer access and Internet use for low-
            income populations can address these disparities, although
            recruiting these target populations to participate in offered
            programs can be challenging.

       The greatest impacts are achieved when decisions are made
            closest to home. It has been our experience that rural
            communities can achieve big results with relatively small of
            amounts of funding when that funding is locally controlled.
            Encouraging and resourcing community-based teams to set goals
            and develop plans to achieve them increases community impact.

        Communities know best. Involve citizens directly in articulating
    their community's broadband adoption and utilization goals to catalyze
    long-term engagement needed to increase adoption.
        ``It seems as though communities impacted by this project felt a
    rejuvenated sense of community because there were so many people
    rallying to get these projects done for their school, community or
    organization.''--Jacki Anderson, Upper MN Valley RDC
        Local leadership matters. Help local broadband champions get and
    use skills to frame issues, build and sustain relationships and
    mobilize people to build a community's capacity to achieve its
    broadband goals. Train community leaders and champions to use
    participatory facilitation skills; effective meeting facilitation can
    make a big difference in keeping folks coming back to the planning and
    implementation table.
        ``Our elected officials now see the importance of broadband for
    economic development and community vitality.''--Nancy Hoffman, Benton
    County Economic Development Director
        Broadband is not an end in itself. It is a means to the higher ends
    of increased economic vitality and improved quality of life. Framing
    this work in these terms, or as a necessary but not sufficient
    condition for innovation, connectivity, and equal opportunity for all,
    or as a prerequisite for full participation in our democracy, is likely
    to be more successful than by calling out the technical infrastructure
    itself.
        ``In an era when digital access is an essential element of full
    participation in modern society, when digital technology can be the
    deciding factor between economic opportunity and isolation, between
    social change and increasing inequality, and between democratic
    participation and standing on the outside looking in, it is critical to
    the future of our country . . . to ensure that everyone has high-speed
    . . . access to an open Internet.--Luis Ubinas, President, Ford
    Foundation
        High-touch outreach works. Effective recruitment strategies for
    technologically-challenged small business and for historically
    marginalized populations are intra-community, hyper-local, ``high
    touch,'' and personalized. Change follows relationship lines.
        ``These technology classes have encouraged our Hispanic and Somali
    immigrants to interact, really for the first time.''--Fatima Said,
    Project FINE, Winona
        Peers make great teachers. Peer-based learning formats that
    encourage local businesses to share practices, questions and
    experiments are a popular, low-cost, and easily sustainable tool to
    build a community's technological savvy.
        [Digital presence course] ``Basically gets you acclimated to it
    [online marketing], and learn how to make it work for you.''--Susan
    Reiter, Coffee Choices coffee shop, Jackson
        Cross-community communication is key. Signage, local media support,
    and online social media are effective, low-cost ways to spur and
    sustain energy and excitement for community projects.
        ``This effort has helped us develop wonderful community
    connections. We have reached out to our whole community.''--Keri
    Bergeson, Principal, Dawson/Boyd High School
        Engage tomorrow's leaders today. Recognize and authentically engage
    the talents of young people. This next generation of leaders bring
    energy and sustainability to any community initiative. Youth can serve
    as co-trainers, technology mentors, partners in computer refurbishment
    projects, and use their video and other social media to promote their
    communities.
        ``My customers are couples planning weddings, so I need my website
    updated and fresh, and to be found using mobile devices. The students'
    work on my site and Google Map location was great.''--Donna Henry,
    Henry Catering, Foley
        Connect the economic dots. Framing increased sustainable broadband
    use a necessary but not sufficient ingredient in a ``whole systems''
    approach to strengthening community vitality can help communities see
    and leverage the connection between technology and benefits to
    community life. The ``whole picture'' Intelligent Community framework
    for community and economic development used in MIRC can help community
    leaders see how workforce, infrastructure, inclusivity, innovation and
    marketing/advocacy are mutually interdependent aspects of community
    vitality.
        ``This framework brings people together that have not always worked
    together--technology advocates, workforce, social service agencies, and
    economic development professionals.''--Danna MacKenzie, Cook County IT
    director
        ``The involvement of local citizens, government, business and non-
    profit groups working together to enhance the effort to make the
    community better by forming a partnership that shares the same goals,
    aspirations and hope for the future of the whole county.''--Michael
    Haynes, Stevens County Economic Development Director
        Have patience. This work takes time. Look for and celebrate early
    and easy ``wins'' along the way, but think long-term and build capacity
    and energy for the long-haul. Money and other resources follow vision
    and commitment.

        Question 3. Can you discuss how investing in broadband adoption is
    good for the economy? What level of return on investment do you tend to
    see from broadband adoption programs? What is the best way to measure
    broadband use and its impacts?
        Answer. Broadband is a key driver of innovation and economic
    development. Evidence abounds that high-speed Internet access has
    powerful economic benefits (positive impact on median household income,
    employment, and business growth).
        Broadband access is key. . .but so is adoption. Investing in
    programs that stimulate the use of broadband delivers meaningful
    economic benefits. According to the report, ``Broadband's Contribution
    to Economic Health in Rural Areas: A Causal Analysis,'' by B. Whitacre,
    S. Strover, and R. Gallardo (March 26, 2013), ``Non-metro counties with
    high levels of broadband adoption in 2010 had significantly higher
    growth in median household income between 2001 and 2010 compared to
    counties that had similar characteristics in the 1990s but were not as
    successful at adopting broadband.''
        Strategic Networks Group, an economic consultant firm working with
    local governments in North America, Europe and Australia on the
    benefits of broadband, has compiled evidence from studies they have
    conducted in North Carolina, Virginia, Kentucky, Illinois, and Nebraska
    that demonstrate a $5 million economic development impact for every
    1,000 broadband passes installed.\2\ Their data show that 23.4 percent
    of all new jobs created in the economies they have studied are directly
    attributable to broadband (i.e., if it had not been for broadband,
    those jobs would not exist). These are not only IT jobs, but include
    jobs like shipping, account management, etc. that are needed as the
    business grows. For example, a study they conducted in North Carolina
    in 2010 showed that 32 percent of all households surveyed report having
    home-based businesses or telecommuting, and 14 percent plan to start
    using broadband at home to support their households. Of businesses
    surveyed, 56 percent said that access to high-speed broadband was
    essential for remaining in their current location.
    ---------------------------------------------------------------------------
        \2\ http://sngroup.com/tag/broadband-economic-impacts
    ---------------------------------------------------------------------------
        Moreover, businesses that increase their utilization of broadband
    by ten percent realize a 24 percent gain in revenue and a seven percent
    reduction in costs. And the higher the degree of sophistication of use
    of broadband-enabled services, the higher the benefit: 54 percent of
    revenue from businesses using high levels of broadband utilization come
    from the Internet.
        Blandin Foundation recently commissioned SNG to study the ROI in
    broadband infrastructure and utilization initiatives in two Minnesota
    counties, Lac qui Parle and Kanabec. The results of this study were
    illustrative and on par with SNG research and findings in other regions
    as described above. Generally speaking, an investment of $120-145,000
    in Lac qui Parle and $175-225,000 in Kanabec might leverage effect as
    much as 10 to 1; so for every $1 invested, $10 is returned in direct
    and spinoff impacts to the local economies.\3\
    ---------------------------------------------------------------------------
        \3\ The Return from Investment in Broadband Infrastructure and
    Utilization Initiatives, Jan 2014, http://bit.ly/1ko1kJT
    ---------------------------------------------------------------------------
        Economic Benefits of Broadband. The following are key findings from
    SNG's ongoing research into the economic benefits of broadband.
        Using broadband creates jobs. Over 22 percent of all new full-time
    jobs created by 3,326 surveyed businesses are attributed to their use
    of broadband. This effect is even stronger for the 2, 337 surveyed
    small businesses (fewer than 50 employees) where over one in four new
    jobs created (26 percent) are attributed to using broadband. Small
    businesses represent over 95 percent of establishments and almost half
    of total employment.
        Using broadband increases business revenues. 963 small businesses
    surveyed (fewer than 50 employees) report that over 30 percent of their
    revenue is attributed to using broadband. More importantly, businesses
    that make greater use of broadband generate a higher percentage of
    revenue than businesses that use fewer applications--almost 37 percent
    of revenue for high users versus less than 10 percent of revenue for
    low users--a ratio of almost 4 to 1.
        Using broadband contributes to economic growth. As businesses
    increase their use of broadband their new revenues and cost savings
    contribute to economic growth. For example, increasing utilization of
    broadband by 5 percent for 1,000 businesses would increase regional GDP
    by $17M, add $1.8M in taxes, create $9.5M in household income, and
    create 185 new jobs.
        Broadband benefits communities. The availability of broadband is a
    significant factor in attracting and retaining businesses and
    households for communities. Over 38 percent of 8,416 broadband
    households surveyed report that they would very likely relocate to
    another community if broadband was not available. Over 48 percent of
    11,870 businesses with broadband surveyed say that the availability of
    broadband is essential or very important for selecting their business
    location. Over 75 percent of these businesses reported that broadband
    is essential or very important for remaining in their present location.
    Communities that do not have adequate broadband services risk losing
    households and businesses over time.
        Broadband enables income opportunities for households. Eighteen
    percent of 9,478 households surveyed operate a home business and 17
    percent telework, creating new or improved income opportunities for
    households. Almost 90 percent of these surveyed home businesses say
    that broadband is essential for operating their business. Almost half
    of teleworkers say that they would not have their present job without
    being able to telework.
        Measurement. Measuring broadband use is a tricky problem and one
    that may be best considered on a case-by-case basis. In Minnesota, for
    the MIRC project, evaluators utilized three separate methodologies to
    estimate broadband use in terms of subscribership. First, baseline
    surveys were conducted in each demonstration community, along with a
    statewide survey to estimate broadband penetration across all
    geographies. Second, Minnesota Cable and DSL providers agreed to
    provide new subscriber information in aggregate, to assist, but still
    maintain provider confidentiality. And third, we contracted with a
    private firm to provide detailed Internet transactional data for each
    of the 11 demonstration areas. Using these three methods project
    evaluators triangulated the data to derive accurate subscription
    estimates. Project benchmark surveys on broadband penetration were
    performed at the end of the project period.

        Question 4. What recommendations would you give to this committee
    on shaping policies to continue promoting broadband adoption, both in
    terms of funding and programming assistance from Federal agencies? How
    can NTIA and the FCC effectively support ongoing broadband adoption and
    meet the goals of the National Broadband Plan?
        Answer.

       Provide support to take broadband adoption to higher levels
            of utilization and sophistication. As important as it is for
            all Americans to have a basic level of digital literacy, it is
            also critical that both workforce and business continue to
            drive their sophistication of use higher so as to fully capture
            the potential value of the network.

       As wireless technologies are increasingly counted as an
            acceptable broadband technology to reach 4 Mbps, ensure that
            bandwidth caps are set high enough to enable critical customer
            applications such as telehealth and online/Internet-based
            learning. Benefits of being connected are diminished if
            bandwidth caps inhibit sophisticated use of the network.

       Reward programs that focus on the ``so what'' of adoption.
            In other words, programs that lead directly to enhanced
            education, workforce opportunities, business creation and
            expansion, improved health care outcomes, etc. should be
            encouraged and supported.

       Four Mbps is not enough bandwidth, now and into the future,
            to support advanced or even every-day technology use. To
            attract Federal CAF or other support, providers must invest in
            network technology improvements that can provide significantly
            higher capacity.

       Adopt life-line programs for broadband.
                                     ______

        Response to Written Questions Submitted by Hon. Marco Rubio to
                                Hon. John Sununu

        Question 1. In your testimony you state that ``government should
    ensure that regulations do not hinder or crowd out investment in the
    broadband and Internet industries.'' Can you expand on that--why do you
    believe government regulations will hinder broadband deployment and
    investment?
        Answer. In the Telecommunications Act of 1996, Congress adopted a
    light-touch regulatory approach for the broadband and Internet
    industries that has led to enormous levels of capital investment. Since
    that year, telephone, cable, and wireless providers have invested over
    $1.2 trillion to build a robust broadband network, and the results are
    evident. Approximately 99 percent of Americans now have access to
    broadband, and new Internet-based industries have been created.
        There is no sound basis to revisit the regulatory approach that has
    enabled this success.
        Over-regulating broadband would risk dampening providers'
    incentives to invest, and because broadband technologies advance so
    quickly, it would also risk inhibiting the development of new and
    innovative technologies and practices. Regulation, if any, must be the
    last option in order to allow the Internet to realize its full
    potential without the persistent threat of government intrusion.
        Broadband adoption is one of the best examples of how the light-
    touch approach has worked effectively, as broadband adoption has
    increased faster than almost any other technology. Policymakers should
    be mindful of this success. Any future regulatory action should avoid
    applying old regulations to new technologies, and should be tied to
    actual market failures. Regulation should not be used to pick winners
    and losers in the broadband marketplace.
        And government should not build, or fund other entities to build,
    broadband networks in areas where unsubsidized private entities have
    already built such networks.
        Government should promote, not hinder, broadband deployment and
    adoption.

        Question 2. I would like you to talk about the importance role
    wireless broadband plays in the digital economy and in broadband
    expansion. How important is making more spectrum available to the
    future of wireless broadband and to promoting competition in the
    broadband market?
        Answer. It is critical. The U.S. is the global leader in mobile
    broadband across virtually every metric:

       American wireless companies invested more than $30 billion
            in building out cutting edge networks last year alone.

       We have roughly half of the world's 4G LTE customers.

       Smartphones now account for 60 percent of all U.S. mobile
            phones, and 25 percent of adults own a tablet.

       1 out of 10 American's only broadband connection is their
            smartphone.

       By 2012, 82 percent of Americans were able to choose between
            at least 4 wireless broadband providers.

       Traffic on licensed mobile wireless networks increased 70
            percent in 2012.

       Over one-third of all IP traffic is now carried over
            unlicensed Wi-Fi networks, and Wi-Fi traffic is expected to
            triple between 2011 and 2016.

       The wireless industry supports more than 3.8 million high-
            paying American jobs--2.6 percent of all U.S. employment.
            Wireless employees are paid 65 percent higher than the average
            worker. Wi-Fi and other unlicensed services support billions
            more in investment and economic opportunity.

        Spectrum is the lifeblood of this mobile revolution--yet the
    spectrum in use, and in the pipeline, is not sufficient to handle the
    anticipated growth in demand. As a result, there is a looming threat
    that, just around the corner, we will see congested networks leading to
    slower speeds and lost opportunities for consumers. If we want to
    continue our global leadership, more spectrum is needed for the private
    sector, both licensed and unlicensed.
        Consumers want reliable high-speed wireless services. These
    services are not possible without more spectrum being made available to
    private companies. Wireless broadband has unleashed waves of innovation
    that have driven industries like the apps economy--which now employs
    over 750,000. Making more spectrum available will only further drive
    innovation and job growth.
        Sufficient spectrum is vital to ensure the availability of future
    wireless capacity that Americans demand as well as to promote
    competition among existing providers and new entrants alike. With
    sufficient spectrum resources, providers will have the ability and
    incentive to invest in faster and more robust networks and to provide
    new and innovative broadband offerings.
        It is very important for the FCC to move quickly on these issues.
    It can take up to 10 years and cost billions of dollars for newly
    acquired spectrum to be used in the marketplace. If we want to stay at
    the forefront of the wireless technology tomorrow, the FCC must release
    new spectrum as soon as possible.

        Question 2a. Do you think that the FCC neglects to consider
    wireless broadband a vibrant competitor to wireline broadband because
    doing otherwise would destroy the ``scarcity'' argument that underlies
    the very need for regulation?
        Answer. Wireless broadband can, and should, be considered a
    competitor to wired broadband. Today's high-speed wireless networks are
    capable of speeds that meet, and sometimes exceed, the speeds offered
    by some wired broadband services. A study conducted last year by
    RootMetrics found that the average downstream speed across the three
    national LTE networks at that time ranged from 10.3 Mbps to 18.6 Mbps
    with maximum speeds up to 57.7 Mbps. To put this into context, the FCC
    requires a service to provide only 4 Mbps downstream in order to be
    considered ``broadband.''
        Roughly two-thirds of U.S. broadband connections are wireless
    today, and minority communities have far higher than average mobile
    adoption and utilization levels. Each household makes its own decisions
    based on its needs and budget. Some prefer to subscribe to both wired
    and wireless broadband options, while others select one or the other.
    The FCC should not second guess those decisions.

        Question 3. Pew says that because there is ``no widespread
    consensus as to whether 3G or 4G smartphones qualify as 'broadband'
    speed, and [because] many would question whether they offer the same
    utility to users as a dedicated home Internet connection'', wireless
    broadband connections are not included in Pew's definition of
    ``broadband user.'' Given the widespread deployment and significant
    adoption of 4G technology, is this ``wireless isn't equal'' thinking
    correct?
        Answer. No, the notion that wireless services cannot qualify as
    ``broadband'' is simply outdated and inaccurate. The characteristics of
    LTE wireless broadband service--including the speeds noted above--and
    the popularity of wireless broadband offerings today contradict any
    efforts to systemically exclude or discount them.
        Both wired and wireless broadband connections allow users to stream
    videos and music, access news and social media websites, edit online
    documents, and access cloud-based software. In addition, both wired and
    wireless connections provide access to health care, education, and job
    information (functions which the FCC has rightly identified as
    essential). Given the exponential growth in wireless broadband, it is
    imperative for the government to consider wireless services in any
    assessment of the broadband market in order to properly evaluate
    competition across platforms.