**Remarks of FCC Commissioner Gloria Tristani**

**before the**

**Minority Business Development Agency**

**September 22, 1999**

**Thank you so much for that wonderful introduction. I am extremely
happy to be here today for the closing luncheon of such an historic
conference -- 17 years is quite an achievement and you should feel proud
that you have contributed so much over the last two decades assisting
minority businesses. My congratulations on such a great track record.**

**E-commerce is increasing almost exponentially. Internet traffic is
doubling every 100 days, with a yearly growth rate of 700 percent. One
study indicates that the Internet generated \$300 billion dollars in
revenue last year. Indeed, Forrester Research predicts that global
Internet sales could reach \$3.2 trillion by 2003.**

**New websites are added to the worldwide web hourly. You can use the
Internet to purchase anything from tickets on the Concorde to Civil War
antiques, clothing from shoes to hats, and books both paper and
electronic. You can refinance your house, calculate your credit card
bill and pay both your mortgage and credit card bill without ever
leaving your home or office.**

**The possibilities of E-commerce are limited only by the imagination,
as a young boy in New Mexico named Luke Merry recently demonstrated to
me. Luke and his mother have had a computer and Internet connection for
almost three years, since Luke was in first grade. The bill for their
Internet access had always been \$20 a month, until one month when his
mother received a bill for \$65. Shocked, she called her access provider
and asked what had happened. The provider replied that the Internet
access fee was still \$20 a month but that the commercial account that
had been set up was an additional \$45 per month. She, of course, asked
"what commercial account?" and was advised that "K and L Website Design"
had opened an account under her access code.**

**She soon learned that her son Luke -- the L of "K and L Website
Design" -- and his friend Kyle had decided that they could design
websites for people through the Internet. They had seen a market
opportunity and acted on it. Fortunately, the Internet access provider
saw the humor in the situation and cancelled the account with no
charges, telling Luke's mom that if Luke lived another 9 years to the
age of 18, he should call about a job. E-commerce and entrepreneurs, the
sky is the limit.**

**I believe E-commerce holds promise for minorities, as both consumers
and entrepreneurs. I'd like to talk first about what E-commerce offers
minority consumers.**

**In Santa Fe, New Mexico we have El Mercado, or the Marketplace. Now at
that marketplace, usually open under wide blue skies, you can buy
something to eat, something to wear or just something for fun. If we
look at the Internet as a virtual Mercado, how do the two compare? We
have already noted the vast array of things one can find on the
Internet. But if the Internet is a marketplace, why do most people go
there? Obviously, not for the sun or the blue sky. What are they looking
for? What are they hoping to find? Jupiter Communications, a large
E-commerce consulting firm, reports that the majority of Internet users
search the web for utility, rather than for entertainment. That is,
individuals use the Internet to research products and services,
restaurants, and local events, as opposed to using the Internet for
passive entertainment. And, although at this point most people are not
making major purchases of cars or appliances over the Internet, many
consumers regularly purchase smaller items such as books and CDs.**

**But, do these electronic consumers include minorities? Three
minorities to watch for E-commerce use, are African Americans, Hispanics
and Asian Americans: African Americans because they are the largest
minority, Hispanics because they are the fastest growing minority and
Asian Americans because they are the minority most likely to own
computers and have Internet access.**

**In a recent *Hispanic Market Weekly*, an article indicated that the
Hispanic presence on the Internet has reached a level where it is now
feasible to use the Internet as a Hispanic-advertising medium. In 1995
there were less than 25 Hispanic targeted websites; as of May 1999 there
were more than 200. Moreover, Spanish on-line content has arrived:
*Prodigy.Spanish*, *espanola.yahoo*, and *Spanish AOL* to name a few.**

**Some of the newest popular sites are the ethnic grocery stores.
Kitchenlink.com has an African section that offers foods and recipes
from Ethiopia, Mozambique and Kenya. Also available are AsianGrocer.com
and LatinGrocer.com. eHOLA.com offers consumers a variety of Hispanic
selections of food, beverages, movies, videos, and computer accessories.
At last, a place to order Café Yaucono, so I don't have to bring it back
from Puerto Rico when I travel.**

**But minorities are not just consumers of E-commerce, they are also
entrepreneurs. USA Today reported that \$8 billion in venture capital
had poured into Internet companies between January and August of 1999.
How much of that capital is going into the pockets of minority men and
women? We don't know. What we do know is that there is a continual need
for funding of minority E-commerce businesses. We also know that
minority businesspeople are already out there working to tap into that
well of venture capital. Many entrepreneurs believe that the Internet is
color-blind and that the desire for profit will win out over racial
stereotyping and prejudice. Nonetheless, Dwayne Walker, CEO of
E-commerce company ShopNow.com, said he can feel the reaction when he
walks into a room and the people he's meeting for the first time realize
that he is Black. Entrepreneurs have run into the same barriers in
raising capital for their Internet ventures as they have in other
markets. Businesspeople want to network with people they know from
graduate and business school, and those people are still predominantly
White.**

**Funding for start-up businesses is critical. The major costs for an
E-commerce business can be divided into start-up costs -- typically
advertising and production --and back-end system integration. A *Chicago
Tribune* article estimates that the ratio of start-up costs to back-end
costs is 1 to 4. Getting people to your website can be expensive. But
once you sell the product or service, you incur even greater costs. You
have to be able to deliver the product or service in a timely manner, or
you lose the customer.**

**As businesspeople, minorities cannot count on color-blindness and
profit motive to help make our businesses a success. We need to be
working together and one place to do that networking is on the Internet.
Two extremely successful networking groups -- one for women and one for
technology workers from India -- have been started. As members of other
minority groups we must do the same. We must help one another into this
new marketplace, or many will be left behind. Can we imagine an AmigoNet
or AfricaNetNow -- networking groups to help with financing, start-up
questions and business plan development for minority businesses in
E-commerce?**

**But what about those homes and families where there are no computers
and no Internet access? Between 1994 and 1997, ownership of personal
computers increased 52 percent and e-mail access expanded by almost 400
percent. Not surprisingly, this growth has occurred to a greater extent
in some communities than in others. The Commerce Department's latest
report confirms that poorer families have much less access to computers
and e-mail than families with more money. In fact, in 1997 there was an
even wider gap in computer ownership levels between upper income
households and lower income levels than there was in 1994.**

**The Report further states that "even though all racial groups now own
more computers than they did in 1994, Blacks and Hispanics now lag *even
further behind* Whites in their levels of PC-ownership and on-line
access than they did five years ago." White households are twice as
likely as Black or Hispanic households to own a personal computer and
three times more likely to have on-line access. This gap holds true even
at income levels greater than \$75,000 a year.**

**We must work to ensure all Americans have access to this new
technology. In particular, families, especially minorities in low-income
households, must have access to computers and to the Internet through
schools and libraries. This is one reason why I strongly support the
schools and libraries program, better known as the education-rate or
e-rate. The e-rate is the discount that schools and libraries receive
for internal wiring, Internet connections and Internet service. The
e-rate is funded by contributions from all telecommunications carriers
as a small percentage of their revenues. The e-rate helps to expose
Black and Hispanic children to computers and the Internet. It will make
it easier for them to obtain important job skills and to seek
employment.**

**The Internet offers minorities tremendous opportunities. On the
Internet, we have a virtual Mercado, where we can buy and sell, where
all indications are that shoppers will continue to increase in number if
we can figure out how best to respond to consumer needs. The Internet
also provides us with an opportunity to network, to help one another
enter this new marketplace, to build solid businesses. Finally, with the
Internet comes an enormous responsibility to our children. We owe a duty
to the next generation to make sure that they have Internet access in
order to gain the skills, the expertise, and the resources necessary to
compete in a whole new marketplace.**

**E-commerce and entrepreneurs, the sky is the limit. And, if you don't
believe [me]{.underline}, just ask Luke.**