```

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

   BRIDGING THE TECHNOLOGICAL GAP: INITIATIVES TO COMBAT THE DIGITAL 
                                 DIVIDE

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

                                HEARING

                               before the

                      SUBCOMMITTEE ON EMPOWERMENT

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                     WASHINGTON, DC, MARCH 28, 2000

                               __________

                           Serial No. 106-48

                               __________

         Printed for the use of the Committee on Small Business

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
67-830                     WASHINGTON : 2000

                      COMMITTEE ON SMALL BUSINESS

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

                      Subcommittee on Empowerment

                JOSEPH R. PITTS, Pennsylvania, Chairman
PHIL ENGLISH, Pennsylvania           JUANITA MILLENDER-McDONALD, 
JIM DeMINT, South Carolina               California
FRANK A. LoBIONDO, New Jersey        DENNIS MOORE, Kansas
EDWARD PEASE, Indiana                STEPHANIE TUBBS JONES, Ohio
                                     TOM UDALL, New Mexico
               Dwayne, Andrews, Professional Staff Member

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 28, 2000...................................     1

                               WITNESSES

Mitchell, Dale, Executive Director, Delaware Valley Grantmakers, 
  Philadelphia, PA...............................................     3
Steen, Leslie, President, Community Preservation & Development 
  Corporation, Washington, DC....................................     5
Mills, Scott, Executive Vice President and Chief Operating 
  Officer, BET.com, LLC, Washington, DC..........................     8
Dash, Darien, CEO, DME Interactive Holdings, INC., Englewood 
  Cliffs, NJ.....................................................    10
Miller, Harris, President, Information Technology Association of 
  America, Arlington, VA.........................................    12
Bushkin, Katherine, Sr. Vice President & Chief Communications 
  Officer, America Online Inc., Dulles, VA.......................    14

                                APPENDIX

Opening statements:
    Pitts, Hon. Joseph R.........................................    36
Prepared statements:
    Mitchell, Dale...............................................    38
    Steen, Leslie................................................    41
    Mills, Scott.................................................    72
    Dash, Darien.................................................    75
    Miller, Harris...............................................    77
    Bushkin, Katherine...........................................    81

 
   BRIDGING THE TECHNOLOGICAL GAP: INITIATIVES TO COMBAT THE DIGITAL 
                                 DIVIDE

                              ----------                              

                        TUESDAY, MARCH 28, 2000

                  House of Representatives,
                       Subcommittee on Empowerment,
                               Committee on Small Business,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2:00 p.m., in 
room 2361, Rayburn House Office Building, Hon. Joseph R. Pitts 
(chairman of the Subcommittee) presiding.
    Chairman Pitts. All right. Ladies and gentlemen, 2:00 
having arrived we are going to call the hearing forward. Thank 
you for joining me and the other members who will soon arrive 
today to discuss private sector initiatives that are in place 
to help bridge the digital divide, the disparity between use of 
the Internet among the rich and the poor.
    This is the second hearing that this subcommittee is 
holding on this topic. The first hearing, held last July, 
discussed the findings of the National Telecommunications and 
Information Administration's report, entitled Falling Through 
the Net, which defined the term the ``digital divide.'' Since 
the release of this report there have been initiatives from the 
private sector and government that have been proposed and 
implemented to help combat the digital divide.
    Indeed, the White House has proposed $2 billion in tax 
incentives and $380 million in new spending in the fiscal year 
2001 budget to expand use of computers and training for 
teachers in computer-related skills. I believe that before this 
Congress considers any new government spending or programs it 
is imperative that we examine the methods that are already in 
place to expand the technological reach of this Nation's 
poorest citizens. To that end, this subcommittee has convened 
this distinguished panel of witnesses to receive their wisdom 
and to hear their experiences on achieving technological 
awareness and access for all.
    Since the vanquishing of the dreaded Y2K bug the digital 
divide has become the new perilous buzz word in the information 
technology sector. In fact, the term digital divide encompasses 
more than a technology gap between Americans at the highest and 
lowest income levels. The NTIA studies reveal that those living 
in urban areas were more likely to be online than Americans 
living in rural areas and that white households were more than 
twice as likely to have Internet access as black or Hispanic 
households.
    The digital divide is not just an American phenomenon. 
Italy recently announced a plan that would offer ninth grade 
students computers at a 40 percent discount to encourage them 
to use the Internet. Additionally Venezuela is considering the 
introduction of prepaid cards to allow inexpensive Internet 
access at special community centers as part of a campaign to 
popularize the Web.
    One of the overlooked issues in the national debate of the 
digital divide is the state of disrepair of the schools that 
are being targeted for new computers and upgraded technology. 
Many students there who suffer from a lack of access to 
technology also suffer from being exposed to under achieving 
schools, poorly trained teachers, and neglect from school board 
bureaucracies that become virtual economic black holes. Unless 
teachers are properly trained, and schools are held accountable 
for using their new found technologies in ways that advance the 
academic progress of their students, the introduction of new 
technology into these classrooms will not help solve most of 
these students' underlying academic deficiencies.
    Indeed, a recently released report by the Children's 
Partnership pointed out that the Internet is virtually useless 
for the estimated 44 million Americans who read below the 
average literacy level.
    The good news, though, is that there are many private 
sector initiatives that are poised to close the digital divide. 
Companies such as Microsoft, Raycom and Sun Microsystems are 
donating software, hardware and Internet access to students in 
underserved neighborhoods.
    Today's panel represents a broad cross-section of the types 
of programs that I believe will help narrow the digital divide. 
Dale Mitchell, Executive Director of the Delaware Valley 
Grantmakers, from my home State of Pennsylvania will testify 
about her organization's efforts to partner nonprofit 
organizations and philanthropic institutions. Leslie Steen, 
President of the Community Preservation and Development 
Corporation, will speak about her organization's community 
technology center and its efforts to completely wire its 800-
unit housing development. Darien Dash, who is CEO of DME 
Interactive Holdings, Inc., the first ever publicly traded 
black-owned Internet company, will discuss his tenure as 
technology chair for School District 5 in Harlem, New York. 
Robert E. Knowling, Jr., President and CE0 of Covad 
Communications, will testify about the Information Technology 
Association of America's digital opportunity initiative, which 
provides internship programs in the information technology for 
minority students. And Katherine Bushkin, Senior Vice President 
and Chief Communications Officer of America Online, will 
testify about her company's efforts to bridge the digital 
divide through the works of the AOL Foundation.
    I look forward to the enlightening testimony of our panel.
    Before I turn to--well, I guess the other members are not 
here. I will turn now to the distinguished ranking member, Ms. 
Millender-McDonald, for her opening statement.
    Ms. Millender-McDonald. Thank you, Mr. Chairman. I would 
like to again commend you on bringing this second hearing on 
the digital divide hearing to us. I would like to say that it 
was this subcommittee and its chair who brought the first 
hearing about falling through the net, defining the digital 
divide report coming out of the Department of Commerce. So I 
commend you for your efforts in continuing to keep us front and 
center on this.
    I am indeed concerned about the digital divide given the 
fact that I do represent the south central part of Los Angeles 
all the way down to Long Beach in southern California, which 
takesup not only Watts but Compton, Lynwoods. Some of the most 
impoverished areas in southern California, as far as Wilmington, a 
highly immigrated community. And we see that the ``falling through the 
net'', report which defines the digital divide, speaks about the gap 
between the haves and the have nots. It is clearly an important issue, 
an issue that those of us in the Congressional Black Caucus as well as 
those of us in the Women's Caucus are completely concerned about 
because it is small businesses that will be bringing about the jobs, 
the largest creation of jobs, and clearly small businesses need a work 
force that is highly skilled and highly trained.
    And so we welcome you here this morning as we continue the 
dialogue on the digital divide. And again I thank the chairman 
for his vision to continue to keep this before us. I do have a 
statement that I will submit to the record, Mr. Chairman. Thank 
you again.
    Chairman Pitts. All right. Without objection. Thank you. We 
will now go to our testimony. We will begin with Dale Mitchell, 
Executive Director of the Delaware Valley Grantmakers, 
Philadelphia. Welcome. You may proceed. We will use the light 
system if you haven't been here before. You have 5 minutes and 
after 4 minutes the yellow light will go on, at the end of 5 
the red light. We will try to keep as close as we can to the 
time schedule.

STATEMENT OF DALE MITCHELL, EXECUTIVE DIRECTOR, DELAWARE VALLEY 
                 GRANTMAKERS, PHILADELPHIA, PA

    Ms. Mitchell. Thank you very much. I will just start by 
giving you a little bit of background about Delaware Valley 
Grantmakers, known as the DVG. We are one of 29 regional 
associations of grantmakers nationally. We are a membership 
organization comprised of private and community foundations, 
charitable trusts, grantmaking public charities, corporate 
giving programs, and individual philanthropists in southeastern 
Pennsylvania, southern New Jersey and Delaware.
    Our mission is to promote effective and responsible 
philanthropy, corporate social investment and community 
involvement by acting as a clearing house of information, 
strengthening cooperation among funders and grantees, informing 
and educating grantmakers, recipients of grants, public policy 
makers, and the broader community about social responsibility 
and philanthropy. We develop and encourage community leadership 
and work to foster the culture of giving and to increase 
philanthropic resources. We take an active role in addressing a 
range of issues, including community needs, effective decision 
making, and public policies that concern philanthropy.
    DVG leads one of 18 coalitions from around the country who 
received funds from an organization known as New Ventures in 
Philanthropy to launch and support strategies to increase 
giving in their region. DVG's initiative is reaching out to the 
region's entrepreneurs and rapidly emerging growth businesses, 
particularly the information technology and e-commerce 
industries, to inspire and engage them in giving back to their 
communities through both long term financial support and 
volunteer assistance. Rather than encouraging this constituency 
to embrace philanthropy in general, the coalition is working to 
engage them in solving a real problem and utilize the talents 
that have made them successful in their businesses.
    Through focus groups conducted with these industry leaders 
it was determined that many feel they have a moral obligation 
to ensure that all individuals and communities have access to 
technology and that they are provided with the tools and 
knowledge to enable them to compete and share in the new 
economy. These industry leaders also believe that developing 
and implementing strategies to bridge the digital divide are in 
their own best self-interests and they see social investment as 
a way to apply their entrepreneurial skills in a different 
arena.
    The Eastern Technology Council, located just outside of 
Philadelphia, has a data base that indicates that there are 
more than 15,000 technology firms in the region, and that e-
commerce alone was responsible for the creation of more than 
$14 billion of market capital in 1999. Obviously this region 
has the potential to bridge the digital divide through both the 
intellectual and financial capital of these industries.
    Based on the theory held by many that the most effective 
solutions to social ills must come from those closest to the 
problem, DVG is developing and implementing strategies to 
foster cooperation and partnerships between the region's 
nonprofit organizations, philanthropic institutions, 
corporations, the public sector at the Federal, state and local 
level, and these rapidly emerging IT businesses to bridge the 
digital divide.
    We will encourage effective and creative new strategies, 
leverage resources and work to strengthen and replicate the 
many initiatives that are already under way in the region. 
These initiatives include but are not limited to, the Free 
Library of Philadelphia Bits and Bytes Project, funded by the 
William Penn Foundation, which conducts computer clubs where 
children and teens learn how a computer works, basic computer 
vocabulary, keyboard skills, research on the World Wide Web, et 
cetera. The project also helps children, teens, parents, 
teachers and child care providers learn to use these new 
technologies to access information and enhance learning.
    A project with the School District of Lancaster, 
Pennsylvania, funded by the recently created Lancaster 
Osteopathic Health Foundation and another local foundation, 
will provide school principals and administrators with access 
to technology to keep them on the cutting edge of child health 
and wellness development.
    The Pennsylvania Department of Community and Economic 
Development is seeking to match the State's $3 million 
investment to continue the initiative to have Internet capacity 
in licensed child care centers throughout the commonwealth. 
Based on surveys of youth in selected neighborhoods of 
Philadelphia which indicated that the activities of greatest 
interest were computer clubs--I am going over my time here.
    Chairman Pitts. That is all right. You can wrap it up.
    Ms. Mitchell. Their interest was in computer clubs, a 
collaboration of community groups, foundations, corporations, 
the city's Department of Recreation, the school districts and 
others are establishing technology resource and research 
centers to provide resident youths, age 6 to 16, with access to 
technology by collectively increasing the capacity of after 
school projects that are existing and currently exposing 
program participants to technology.
    The CIGNA Corporation funded the computer learning centers 
at elementary and high schoolsin Philadelphia and Hartford, 
Connecticut, entitled Technology Training for Integrating Math and 
Enhancing Science. The IBM Corporation's We Have Narrowed the Digital 
Divide, You Can Too, which showcases the success of IBM and the United 
Way Teaming for Technology and KidSmart initiative, which provides 
early literacy tools to children 3 to 6 years of age. IBM's Global 
Reinventing Education Initiative, where in Philadelphia the reinventing 
education model for teachers focuses on effective use of technology 
integrated into the curriculum and voice recognition technology for 
special needs students and those who have English as a second language.
    Through funding provided by the Howard Heinz Endowment, the 
Pennsylvania Humanities Council will offer programs on 
technology and community at 10 sites in southwestern 
Pennsylvania. Programs will include both face to face and 
virtual discussions on the ways that information technologies 
are changing society.
    And finally our Pennsylvania Education Secretary announced 
5.2 million in grants awarded to 26 projects to strengthen 
information technology training across the State. And this 
morning's Philadelphia Inquirer noted that the newly created 
Lendfest Foundation in Chester County provided $600,000 to 
provide software, free software and training in Internet use 
for elderly. And that grant was presented to an organization 
called Generations On Line in Philadelphia. Thank you.
    [Ms. Mitchell's statement may be found in appendix.]
    Chairman Pitts. Thank you, Ms. Mitchell. We will have 
questions to explore these a little bit more. I would like to 
welcome Representative Mark Udall from Colorado. He is not a 
member of the subcommittee, but he is a member of the full 
committee and he has expressed a great deal of interest in 
this--Tom Udall. I am sorry.
    So we will go now to Leslie Steen, President of Community 
Preservation Development Corporation, Washington, D.C.

 STATEMENT OF LESLIE STEEN, PRESIDENT, COMMUNITY PRESERVATION 
         AND DEVELOPMENT CORPORATION, WASHINGTON, D.C.

    Ms. Steen. Good afternoon, Mr. Chairman and subcommittee 
members. I want to thank you for this opportunity to appear 
before the subcommittee and offer the views of Community 
Preservation and Development Corporation on the digital divide. 
You are to be congratulated for having the forethought to 
convene this hearing and investigate the issues.
    Community Preservation and Development Corporation, known 
as CPDC, has been actively bridging the digital divide for 4\1/
2\ years in seven low income communities. CPDC works to 
revitalize communities by providing affordable housing and 
connecting people with resources and with their neighbors to 
enable communities to be strong, self-reliant and sustainable.
    I don't have to tell you about the reports like the 
Department of Commerce's Falling Through the Net, you are very 
aware of this. But I do want to call to your attention how a 
real community is embodying the power, speed, and what is 
rapidly becoming a basic need of technology. What I do want to 
emphasize is the need for all of us to make a conscious effort 
to help prevent citizens from falling through the net, not 
tomorrow but today.
    Edgewood Terrace in Northeast Washington, D.C., offers a 
prime example of how CPDC and a community work together to 
implement the goal of revitalization. In 1995, CPDC received a 
request for jobs from the residents of Edgewood Terrace, then a 
development of 884 HUD subsidized apartments that were 
seriously deteriorated and subject to significant criminal 
activity and economic depression.
    This is a picture of a community needing solutions. To find 
that solution CPDC turned to technology. In 1995, it was clear 
that the jobs of the future would be in technology so we set 
out to bring that resource to Edgewood Terrace. When we 
graduated our first job training class, we gained, for the 
first time, a real appreciation of how powerful technology 
could be as a redevelopment tool.
    Our approach to revitalizing this community combined a 
substantial rehabilitation of the physical structures with the 
community building programs centered on the use of technology. 
This produced both safe and attractive housing appealing to 
people of all incomes and even engaged and civic minded 
community.
    With us today is Bridget McLaurin, a graduate of our first 
class. Today after several jobs and promotions Bridget works 
for National Geographic.com earning over $30,000 and she is a 
junior at Catholic University. One after another her aunt and 
cousin also have graduated to successful employment from our 
classes. Bridget, her family, and her neighbors have recognized 
what technology can do for them. Technology provides for them 
the opportunity to leapfrog numerous obstacles and to join the 
economic mainstream of the 21st century.
    Today our average graduate earns $23,000 upon graduation 
and is prepared to succeed with a career plan, hard skills, the 
right attitude and appearance and an understanding of what it 
takes to make it. The availability of technology has motivated 
the residents of this community and its surrounding 
neighborhood to overfill our four computer classrooms. The 
technology is a drawing card like none we have ever seen. The 
people know what it can do for them and they want it.
    Edgewood terrace is being turned into an electronic 
village. Our goal is to wire all of the apartments to access to 
a community network, community Web site, and high speed access 
to the Internet. Using a newer technology known as thin 
clients, we have created a manageable and sustainable community 
network giving all apartments use of a full range of Microsoft 
software without the headaches of daily care and feeding of 
computers in apartments.
    CPDC has been able to make all of this technology available 
through the efforts of numerous partnerships. This all started 
when the Department of Housing and Urban Development gave us 
the critical seed money and created the outstanding 
Neighborhood Networks Program. Microsoft followed with a 
meaningful relationship to help us access more resources and of 
course its software for everyone. Netier donated thin clients. 
Data General donated servers. Data Transit gave time and 
expertise in integration and support.
    Our educational partners include Catholic University of 
America, which teaches part of ourcareer enhancement programs 
and provides graduates with college scholarships; Bell Atlantic, which 
sponsors one of our technology employment programs; George Washington 
University, which provides interns in career assessment and evaluation; 
Morino Institute, which is teaching us how to use the Internet to 
effectively grow children's minds; and corporate leaders on our 
advisory board such as Fannie Mae, Edelman Public Relations and Bell 
Atlantic. And now the Department of Commerce's National 
Telecommunication Information Administration's Technology Opportunities 
Program is enabling the extension of the community network to the rest 
of the apartments to serve the needs of the residents who are clamoring 
for access to the resource.
    Koenie Carter, who is also with us today, graduated from 
our employment program and entered college after overcoming 
many obstacles common to people in disadvantaged neighborhoods 
and working at several menial jobs. She represents the win-win 
relationship between CPDC and its business partners. She has 
tripled her income and is working for a biomedical division of 
Catholic University.
    It is important to recognize that this technology is being 
used as a community building tool. This is not just about 
access. Access is a tool given to people. Strong, economically 
vibrant communities are the result of what we can do with this 
tool. Mr. Chairman, it has been a long road to bridging the 
digital divide at Edgewood Terrace but we will continue to 
expand this model. Why? Because as Jonathan Alter of Newsweek 
put it, the computer is not a deus ex-machina, a god that can 
fix every social injustice. Access to technology won't by 
itself level the playing field. If you wire them, they won't 
necessarily prosper. You have got to facilitate the 
possibilities. CPDC is doing just that with the Edgewood 
Residents Technology Advisory Board, e-Tab.
    Also with us today is Patricia Fisher, an active member of 
e-Tab and one of our newest graduates of the employment 
program. She is a single mother with a 5-year-old son. She has 
been on and off public assistance and her last job before 
entering our employment program was at Starbucks. Pat 
graduated, took a term contract job with a business and policy 
research firm, and now has three job offers. And best of all, 
Pat moved to Edgewood Terrace to be part of the electronic 
village and join e-Tab.
    To use the resource called access, e-Tab and CPDC are in 
the process of building a Web site to serve the needs of the 
community, a chat room for the teens to talk about self-esteem 
and relationship issues, a community bulletin board for notices 
of meetings, a portal to educational Web sites for the 
children, health screening for the seniors, and whatever else 
the community determines are worthwhile endeavors.
    To make this happen, a governance structure is evolving 
within the community. People come to meetings to discuss the 
community network and how it should be deployed. They have 
formed committees and have established rules of conduct for the 
use of the network. They are teaching each other how to use the 
technology. We do not have a help desk at Edgewood Terrace. The 
residents are their own help desk. They are creating 
relationships with their neighbors where none existed before. 
In short, they are relying on each other, not on CPDC or the 
government.
    I urge you to be a catalyst to encourage the Silicon 
Valleys of America to invest in our cities, our underserved 
citizens, our community based organizations that can fill the 
void and given the Nation a return on its investment that has 
not been seen before. Technology is radically changing the 
social landscape of Edgewood Terrace. If CPDC can find the 
financial means, we intend to replicate this model to turn 
other depressed communities into vibrant, self-reliant centers 
of economic activity. In 3 years the electronic village at 
Edgewood Terrace will be the click heard round the world.
    Thank you.
    [Ms. Steen's statement may be found in appendix.]
    Chairman Pitts. Thank you. That is quite a story. Scott 
Mills, Executive Vice President, Chief Operating Officer of 
BET.com.

 STATEMENT OF SCOTT MILLS, EXECUTIVE VICE PRESIDENT AND CHIEF 
        OPERATING OFFICER, BET.COM, LLC, WASHINGTON, DC

    Mr. Mills. Good afternoon, and thank you for this 
opportunity to share BET.com's efforts to address the digital 
divide in the African American. BET.com is a joint venture 
between BET Holdings, Microsoft Corporation, News Corporation, 
USA Network and Liberty Digital. The company is majority owned 
and controlled by BET Holdings and is based here in the 
District of Columbia. The company's mission is to educate, 
empower, enrich and entertain the African American online 
population.
    BET.com launched our Web site on February 7th, containing 
over 20,000 pages of original and partner provided content, 
robust online communities and leading edge communication 
features, all tailored to the African American perspective.
    African Americans currently underutilize the Internet 
relative to other ethnic segments; however, African Americans 
are projected to be the fastest growing online ethic population 
in 2000. However, failure by any community to fully utilize the 
Internet will adversely affect its effectiveness and ability to 
compete in the 21st century. As a company dedicated to serving 
the African American online population, BET.com has focused on 
understanding and developing strategies to address the digital 
divide.
    We believe that market activity, including our own, will 
eliminate the vast majority of the digital divide facing the 
African American community. We also believe that the portion of 
the digital divide that cannot be bridged by pure market forces 
should be addressed through a combination of public and private 
efforts. A great deal of focus has been appropriately placed on 
the role economics play in the digital divide.
    Cost and related issues are impediments for a portion of 
the African American population that is not currently online. 
However, changes in PC and ISP pricing models are making cost 
less of an impediment. With the proliferation of free ISPs, 
free Internet access is now widely available. And there are 
many new moderately priced PC-ISP packages and a growing list 
of low cost non-PC based Internet access devices available. As 
a result consumers can now buy bundled PC-ISP packages for a monthly 
fee that is less than the cost of basic cable service in many areas.
    BET.com is planning to deploy two new services based on 
these pricing models. The first service is a completely free 
BET branded ISP. This free service will not require credit 
approval nor require consumers to surrender excessive amounts 
of personal data. The service will be available via software 
download on the BET.com Web site and may be distributed via CD-
ROMs and BET Holdings' magazines, which have a circulation of 
over 2 million African Americans. We believe this free ISP 
offering will be very attractive to African Americans who 
already own Internet access devices and are seeking a low cost 
Internet access alternative.
    Our second planned offering is a low cost bundled PC-ISP 
package. This offering will provide consumers with a high 
quality PC, a comprehensive software package, unlimited 
Internet access and robust customer service for less than $30 a 
month. Recognizing that credit may be an issue for some, 
BET.com is evaluating credit facilities that will allow us to 
provide a package to consumers with relatively low credit 
scores. We plan to market this service throughout BET Holdings' 
media properties and distribute directly to consumers. We 
believe that both free Internet access and bundled low cost PC-
ISP offerings will significantly reduce the economic barriers 
to Internet access.
    Cost however is not a barrier for some portion of the 
African American population that is currently off line. 
Instead, weak consumer demand and alternative expenditure 
priorities are responsible for this segment's underutilization 
of the Internet. For example, according to the Target Market 
News report on buying power of black Americans in 1999, African 
Americans spent $3.5 billion on cable television subscriptions 
and only $89 million on online computer services. This lagging 
consumer demand in the African American community stems in part 
from limited targeted marketing of the Internet to African 
Americans and the relative paucity of online offerings tailored 
to this community.
    Over the past several years there has been a proliferation 
of well-funded Web sites targeting various affinity groups, 
including women, Hispanics, Asian Americans and the gay and 
lesbian community. These sites were able to apply their capital 
to develop compelling and comprehensive online destinations. 
Until recently African American oriented Web sites and Internet 
ventures had great difficulty attracting the capital required 
to develop comparable online destinations. As a result, online 
offerings tailored to African American community paled relative 
to those of other affinity groups.
    Of course the appeal to the Internet for African Americans 
is not limited to culturally oriented Web sites. African 
Americans visit a vast array of Web sites, many having nothing 
to do with ethnicity. However, until very recently most 
Internet companies, both general market and African American, 
did not aggressively market their offerings to the African 
American community. This is evidenced by the historic disparity 
in advertisement for online services in African American media 
properties versus general media properties.
    Fortunately this is changing. A number of major well-funded 
African American-oriented Web sites will be launched in 2000. 
BET.com is the first of the new sites to enter the market. With 
$35 million in initial capital and power strategic investors, 
BET.com had the resources to build the comprehensive online 
destination and aggressively market to the African American 
community. By applying these resources BET.com was able to 
become the largest and most heavily trafficked African American 
portal during its first month.
    Other similarly resourced sites tailored to African 
Americans in urban communities are scheduled to launch this 
year. We believe that the combined effect of the substantial 
increase in online offerings tailored to African Americans and 
the active marketing of these offerings to African Americans 
will also significantly increase African American awareness of 
and use of the Internet.
    In conclusion, we believe that African American utilization 
of the Net will increase substantially over the next 18 months 
and the effects of, one, low cost Internet access devices, two, 
the deployment of compelling African American oriented Web 
sites and, three, the targeted marketing of the Internet to the 
African American population are realized. However, there will 
be a segment of the community for whom these forces will be 
insufficient. This segment will be best served by combined 
public and private sector initiatives to bridge the digital 
divide.
    [Mr. Mills' statement may be found in appendix.]
    Chairman Pitts. Thank you, Scott. Next witness is Darien 
Dash, CEO of DME Interactive Holdings from Englewood Cliffs, 
New Jersey.

STATEMENT OF DARIEN DASH, CEO, DME INTERACTIVE HOLDINGS, INC., 
                      ENGLEWOOD CLIFFS, NJ

    Mr. Dash. First, I would like to thank the subcommittee for 
continuing to support this issue of the digital divide and 
keeping it in front of everybody's minds because we all know 
how important this is. I have come today without a speech 
because I wanted to speak from my heart.
    I founded my company 5\1/2\ years ago on the mission of 
expanding the hardware and software infrastructure within 
minority communities. After being in the cable industry for a 
year and seeing the disparities that were going on between new 
digital technologies that were being marketed in 1993 and 1994 
in African American communities and Hispanic communities versus 
majority communities, I decided to do something about it and I 
quit my job the day after I was married and founded our company 
in a one bedroom apartment. Last year we became, after self-
financing for the first 4\1/2\ years, the first African 
American Internet company to be publicly traded in U.S. 
history. For us that is a testament to one thing, and that is 
that hard work and striving in any community can lead to 
development and that African Americans as a consumer group, 
like Scott has just eloquently said, are a true consumer group 
that represents over $533 billion and there are business models 
that need to be built.
    Our company's whole agenda is to try to perceive a business 
to people in the communities so they can be inspired to want to 
participate in the digital revolution. African Americans and 
Hispanics have not perceived the Internet as something that is 
for them from a business perspective. They have not seen role 
models that have represented this Internet generation in 
themedia. Not only have PC manufacturers, ISPs as well as content 
developers not marketed their e-commerce and content services towards 
this community, the role models have not been represented in the Forbes 
400. The role models have not been represented to African American and 
Hispanic youth.
    Our company's goal is to be able to build that sort of 
perception in the marketplace. I am now the chairman of 
District 5 for Technology Committee in Harlem. What we have 
done is put together a consortium of public and private 
partnerships to allow the children in that community to see 
company names like Oracle involved in this community, company 
names like Mouse, which is a very big nonprofit in New York 
that goes in and wires schools, Eureka Broadband. They see 
these companies' names and at a young age can start to identify 
with the technology and the people who are providing these 
technologies to them.
    Our goal is also to be able to support the entrepreneur who 
wants to put their business online. Our core business has 
traditionally been in B to B where we go out and actually 
support the Queen Latifahs and the Puff Daddies of the world 
who are the big role models in the African American community 
on putting their businesses online. We provide them with 
backing solutions to help them do their e-commerce, content 
development, strategic planning, and long term planning.
    Well, the digital divide from a dial-up perspective has 
been something that has passed these inner city communities 
today. We have to look long term, we can't just look today and 
we give dial-up ISP service and PC service and say, hey, we 
solved the digital divide because that is not true. While these 
communities are now just starting to catch up in the old school 
model of Internet we are about to launch the new school model 
of Internet, which is called I-2. And I-2 is based on broadband 
and wireless deployment, network computers and wireless 
devices. What we cannot fail to see is that broadband 
deployment has to be pushed by the telecommunications companies 
within these inner city communities, because we cannot put 
people onto an old system while the whole new generation passes 
them by, because we would have bridged the gap only to create a 
new one.
    Our company's goal is to continue to support the 
perspective of these inner city communities as they look at 
technology and helping them to understand and retain the 
knowledge of technology, because that is really what needs to 
happen to bridge in divide.
    I applaud all of my peers' efforts in going into our 
community, and we have recently announced a strategic 
partnership with America Online to build a relevant branded 
service called Places of Color, where we can go in and build on 
a nucleus of training, distance learning, certification, job 
placement, and relevant content for a price point that is 
affordable. And we are also bundling with PC manufacturers so 
that we can go in with both solutions. But we have to continue 
to look outward and look on to the horizon as the rest of our 
peer groups are doing in this Internet industry and see that 
broadbands and wireless are the next generation. We also have 
to go in and let these inner city kids realize that they too 
can participate. It is the economic future of our country that 
we have a generation of youth that understands technology, 
embraces it, can deploy it, can be entrepreneurial with it. 
Otherwise this country will fail. Our economy will fail and we 
will continue to have to look outwardly instead of inwardly for 
the next generation to support what we are doing.
    Thank you.
    [Mr. Dash's statement may be found in appendix.]
    Chairman Pitts. Thank you very much. The next witness is 
Harris Miller, President of the Information Technology 
Association of America, Arlington, Virginia. Welcome.

     STATEMENT OF HARRIS N. MILLER, PRESIDENT, INFORMATION 
        TECHNOLOGY ASSOCIATION OF AMERICA, ARLINGTON, VA

    Mr. Miller. Thank you, Mr. Chairman. Bob Knowling, the CEO 
of Covad, wanted to be with you today but he had a last minute 
emergency. But he is the Chairman of ITAA's Digital Opportunity 
Initiative, and so I am speaking for the entire committee. Just 
a couple of small data points, Mr. Chairman.
    Since I visited with you at your first hearing last year, 
about 10 million more Americans have come online, about 80 
million more people around the world, just to give you an idea 
of how fast this industry and this Internet grows and how 
rapidly it does.
    I would also mention that the individual from the 
administration who was here last year to speak about the 
digital divide report, Mr. Larry Irving, is now himself out in 
the private sector helping to create content to attract more 
African Americans to the Internet. So obviously maybe you 
helped convince him that was one of the obstacles.
    I would also mentioned, I am sure, great minds think alike. 
I mentioned that perhaps BET could create an idea of a Web 
site, and I am very pleased that BET has come to fruition 
though I have not been given any shares in the company. But I 
do commend them for that opportunity.
    The incredible growth of the Internet still convinces me, 
Mr. Chairman, that we are still using the wrong phrase 
``digital divide,'' so I encourage this committee to change its 
terminology to ``digital opportunity.'' in fact, if you notice 
President Clinton's recent announcement he headlined from 
digital divide to digital opportunity. Now the head of the 
World Bank is talking about the digital opportunity, the OECD, 
the United Nations.
    Because of this rapid growth you have heard from the 
previous witnesses, the creation of new content, the creation 
of new options, the creation of new incentives for people to 
come to the Internet is what is making this so exciting.
    As we discussed last summer, Mr. Chairman, no technology 
has ever grown as rapidly to Main Street and even down into 
lower income as has the Internet. Not television, not radio not 
automobiles, not cable television, nothing has ever grown 
faster as a technology and in terms of adoption as the 
Internet.
    As Mr. Mills pointed out, every indication is that the 
fastest growing community now on the Internet is in fact the 
African American community. So I think these are all very 
positive signs. But we still have some major opportunities to 
address.
    One of the opportunities we must address is the absence of 
minorities as IT workers. Theproblem is not, I would contend, 
discrimination that we have had traditionally where some industries as 
they grew up in the Industrial Age intentionally discriminated against 
people of color. Really the issue is training and education. As an 
example, in 1998 according to the Computer Research Association's 
study, only 10 African Americans received Ph.D.'s in computer science. 
Only 6 Hispanic Americans did likewise. Other 2 percent of 
undergraduate computer science degrees went to African Americans or 
Hispanic Americans.
    The IT work force data we have examined similarly is 
somewhat disheartening. African Americans represent only 5.4 
percent of all computer programmers, yet they are over 10 
percent of the U.S. working population. Hispanic Americans only 
4.6 percent of all computer programming jobs and native 
Americans only .2 percent of the total science and engineering 
labor force. Clearly, many minority groups are severely 
underrepresented in the IT work force. And again I do not 
believe it is a case of employer discrimination, rather a case 
of education and training.
    So ITAA is focusing on what we call the digital opportunity 
initiatives intended to create new opportunities, to create a 
more diverse cross-section of Americans into the IT community, 
primarily through comprehensive internship programs and a broad 
based commitment from our member companies and targeted 
education and outreach. As I mentioned, Robert Knowling, the 
President and CEO of Covad Communications, is chairing the 
initiative and is working hard to recruit companies to 
participate in this activity.
    We have already created, for example, a Web based 
internship program located at WWW.digitaljobs.com, which is 
targeted to attract underrepresented groups. Companies that 
have already signed on to offer internships include Covad, 
Lucent Technologies and Cyborg Systems. This opportunity is for 
minority students who are in 2-year or 4-year accredited 
institutions and have at least a 3.0 or better to apply online 
for internships working in high tech companies, and the high 
tech companies in turn will post online their job 
opportunities.
    Now, the only challenge we have here then is to use the 
technology itself to link the prospective minority interns with 
the companies who are actively looking to recruit these people 
into their companies. We will then track the progress of these 
students to try to make sure that they continue with their 
education and training, and we hope become part of the work 
force so that when I come back to you next year or the year 
after we can report a much higher percentage of minority 
students in these programs.
    We are also working with various groups such as 
Blackvoices.com, the Black Data Processors Association and the 
Society for Hispanic Professional Engineers to work on programs 
to create awareness of these kind of opportunities. We are also 
partnering with the Tech World Public Charter School in 
Washington, D.C., which prepares students for careers in 
information technology. I have been very impressed, for 
example, by the president of the sophomore class who last year 
did an internship, an IT internship at a local company here and 
made more money than his family had ever made in 1 year in just 
2 months.
    We are also creating a digital opportunity think tank to 
bring together people of all walks of life to figure out ways 
to create even more opportunities to bring people who have not 
been in the IT industry previously into the IT industry. 
Admittedly this is selfish to some extent, Mr. Chairman, 
because the IT industry has a well-documented shortage of 
skilled IT workers. To solve the problem we have to reach out 
to women and minorities to bring them in. We believe that this 
initiative, these internship programs, working with the charter 
schools and others will bring more underrepresented groups into 
the IT industry and help make the digital opportunity even more 
of a reality.
    Thank you very much, Mr. Chairman.
    [Mr. Miller's statement may be found in appendix.]
    Chairman Pitts. Thank you very much for your testimony this 
year as well and for reminding us to use the term ``digital 
opportunity.'' I will try to remember that.
    Our last witness is Katherine Bushkin, Senior Vice 
President, Chief Communications Officer of America Online.

STATEMENT OF KATHERINE BUSHKIN, SENIOR VICE PRESIDENT AND CHIEF 
    COMMUNICATIONS OFFICER, AMERICA ONLINE, INC., DULLES, VA

    Ms. Bushkin. Thank you, Chairman Pitts and other members of 
the subcommittee. On behalf of America Online and the AOL 
Foundation, I appreciate the opportunity to appear before you 
today and discuss the digital opportunity.
    America Online, as most of you know, is an Internet 
services company. It is based in northern Virginia. And just as 
committed as we are to building a company that serves now 22 
million consumers, we are equally committed to ensuring that 
the medium we are building is one that can serve all Americans 
regardless of their station in life. Clearly in order to 
fulfill that potential all communities and all people must be 
able to participate in the new digital economy regardless of 
income, race, geography, or disability. So we salute the 
subcommittee for focusing today on the importance of ensuring 
digital opportunity for all.
    Our assessment is that progress is being made in closing 
the digital technology gap. Yet it is also the case that there 
are still significant disparities in access to and use of the 
Internet. The bottom line is that this medium won't have 
fulfilled its full potential if people with disabilities don't 
have access to its rich content, if kids in inner cities never 
experience the magic of interactivity and if entire rural 
communities are isolated from this revolution.
    We believe, as another witness said today, that we have a 
moral responsibility to make sure that every person has the 
chance to succeed and to be part of the digital economy. And it 
is an economic challenge as well because in a networked economy 
people who are already connected benefit each time more people 
are connected. So beyond the statistics that are well known now 
about the gap in demographics, there is also another issue that 
is critical to our future economic health.
    Although the United States is the birthplace of the 
information revolution, the American work force is not yet 
ready fully to reap its benefits. The Department of Commerce 
estimates that in just 2 years some 60 percent of jobs will 
require high tech skills. By 2005 there will be a growthof 70 
percent in technology related jobs. Yet according to a recent study 
more than 340,000 high tech jobs in the U.S. computer industry remain 
unfilled, and we are not training students for the skills they will 
need.
    AOL believes that the online medium holds extraordinary 
promise for low income and underserved communities to join the 
economic, political and social mainstream. That is why we 
believe it is so critical to find ways to turn the digital 
divide into digital opportunity and use it to close the gap. We 
think there are four elements necessary to achieve meaningful 
access to information technology.
    The first is that we must ensure that all people have 
physical, structural access to information technology on the 
Internet. This includes hardware, software and affordable 
connectivity. Second, we must ensure that people have 
sufficient skills and training. Not only is it necessary to 
have the skills to use the equipment, but analytical skills are 
also critical to being able to use it effectively to 
participate in today's high tech workplace.
    Third, as several witnesses have noted, we must provide 
content that is useful and relevant to traditionally 
underserved communities, including low literacy content, 
content with diverse cultural perspectives, content in many 
different languages and content reflecting the unique needs of 
individual underserved communities.
    And fourth, we must undertake the necessary public 
education to ensure the communities appreciate the need to 
adopt and integrate the new medium so that communities can 
participate in the digital economy and their children can be 
successful. These four elements are the underpinnings of what 
AOL and the AOL Foundation has tried to achieve in the last few 
years as we have worked in partnership with other companies and 
governments and nonprofits to find ways to bridge the digital 
divide. We focus first on schools because we think schools are 
where the skills are most important to be established and built 
from the top down. We don't think this is a matter simply of 
hand me down computers or continuing the debate whether 
technology matters in education. We must make every attempt to 
ensure that those who need support in schools can have it.
    Two years ago we established an Education Initiatives Grant 
Program that awards seed money to teams of educators, parents 
and school administrators with innovative ideas for using 
interactive technology. We have done over 110 of those grants 
and we have learned a lot already about what works and what 
doesn't. But we know schools aren't the only source of 
solutions for the digital divide in that it will take a lot 
more to get past it.
    So this past November we initiated a program called 
PowerUp, comprised of more than a dozen nonprofit organizations 
major corporations and Federal agencies. The idea behind power 
up is quite simple. It is not enough to give people access to 
the computers and the Internet we have to teach them the skills 
to make the most of that technology and the guidance they need 
to make the most of their lives. Based in schools and community 
centers around the country, PowerUp not only will provide young 
people with access to a wide range of content and information 
on the Internet, it will also help them develop the additional 
skills they will need in the 21st century. We think PowerUp can 
be scaled quickly and we intend to have centers in 250 
locations by the end of this year.
    We are also working with the Leadership Conference on Civil 
Rights to help bring participation into the 180 organizations 
that are involved in the leadership conference and we are 
working with a number of other organizations to build nonprofit 
capacity as people are starting to use the Internet more in 
other ways.
    I want to close with four things that I think the 
subcommittee needs to keep in mind as you follow this issue. 
The first is that we are just at the very beginning of this 
evolution of information society. We are going to see much more 
innovation and growth. And now is the time to help shape it.
    Second, it is critical to remember that the new medium 
offers as much opportunity to bridge the gap as it does to 
widen it. The paradox of this medium is that with very little 
money and a Web site anyone can have the skills to reach a 
market that was previously unheard. Communities that have not 
had access to traditional investment capital can use it for 
economic development. Underserved populations that have been 
marginalized politically can use to have their voices heard.
    Third, keep in mind that the role of intermediary 
organizations, nonprofits and others can be critical in 
bridging the digital divide. We cannot see underserved and 
remote communities fully embracing the opportunities and 
benefits of the Internet unless those organizations are fully 
prepared to help their constituents.
    And finally, we believe it is important to make sure that 
entrepreneurs from all walks of life, racial and socioeconomic 
backgrounds are given the same opportunity that Steve Case had 
15 years ago when he was able to start AOL. We think we have a 
golden opportunity to make the Internet a medium that serves 
and empowers all segments of our economy so its transformative 
success is truly integrated throughout our society. We think we 
can meet this challenge if we work together to ensure that the 
21st century is about digital opportunity for all and a new 
opportunity for all Americans to come into the economic and 
political mainstream.
    Thank you.
    [Ms. Bushkin's statement may be found in appendix.]
    Chairman Pitts. We will now go to questioning by the 
members of the subcommittee. I am pleased to note that the 
gentleman from Kansas, Dennis Moore, has joined us. First, we 
would like to do one round for Dale Mitchell. Dale has to leave 
to catch a train at 3:15. So if I can ask the members in the 
first round to just ask Dale questions. I will start.
    Dale, could you provide the subcommittee with a little bit 
more information regarding the project you mentioned, the 
School District of Lancaster and the Lancaster Osteopathic 
Health Foundation? Can you tell us more about that?
    Ms. Mitchell. I cannot tell you a great deal more about it. 
I believe it is being announced publicly today. Bob Haig, who 
is head of the Lancaster Osteopathic Health Foundation, just 
gave me this information late last week but they are very 
excited about it and hope to work with all the schools and the 
principals in the Lancaster County area.
    I think there is a news release that is going to come out 
on it today. I will ensure that youroffice gets it.
    Chairman Pitts. In your testimony you mentioned several 
Delaware Valley Grantmaker partnerships that involve programs 
for young children. How important do you believe it is for 
children to be exposed to information technology at an early 
age and what is the key to closing the gap with these 
partnerships?
    Ms. Mitchell. Well, it is critically important. Before 
joining DVG as its executive director 5 years ago, I spent 30 
years of my career with the IBM Corporation. So I learned early 
on what a critical tool technology is for people to succeed. 
And as was mentioned by other panelists here today, there is a 
growing need in the information technology industry itself for 
employees as many of you I am sure know we are bringing in 
employees from other countries because there aren't enough 
people in this country who have been trained and educated in 
information technology. And that is why it is so important if 
we want to remain competitive.
    Chairman Pitts. How receptive have information technology 
firms in your region been towards the Delaware Valley 
Grantmaker initiatives to bridge the gap?
    Ms. Mitchell. We are starting to see a great deal more 
receptivity to it. In working with the Eastern Technology 
Council, and these firms are all members of that council, I 
will say that I felt for a while over the past 2 years that we 
have been working on this initiative that I wasn't getting 
anywhere. And just in the past few months and I certainly think 
all the national attention that is being paid to it by not only 
the Clinton administration but certainly others and seeing 
organizations like Microsoft and AOL becoming so involved in 
it, they are now starting to express a great deal of interest 
and want to know what is going on out there and how they can be 
of help and partner with our more traditional philanthropists 
and the nonprofit organizations. I think what we need to ensure 
is that we not only keep having discussions like this but that 
incentives are put in place to encourage these businesses to 
get involved, tax incentives being one of them.
    Chairman Pitts. Ms. Millender-McDonald.
    Ms. Millender-McDonald. Thank you, Mr. Chairman, and thank 
you, Ms. Mitchell, for your great testimony this morning along 
with all the others. You were very insightful and certainly 
encouraging. But I want to ask you this, Delaware Valley 
Grantmakers group, how many folks do you have, how many 
corporations and charitable trusts make up that group?
    Ms. Mitchell. It is 154 organizational members and within 
those organizations we have close to 700 people who are members 
of the organizations because--of our association because they 
are either staff or trustees of those organizations. About a 
third of them are corporate, either corporate giving programs 
or corporate foundations.
    Ms. Millender-McDonald. A lot of the groups conducted with 
this industry leadership determined that they felt a moral 
obligation, which I think is so critical. What do you think 
made them get to that point of seeing this as a moral 
obligation?
    Ms. Mitchell. Well, I think as many business people in this 
country, certainly not all of them, but we have a rich history 
and tradition of corporations being socially responsible. And 
those that are in this particular industry I think are 
beginning to see that if we leave people behind and don't 
provide them with this digital opportunity, then they are not 
holding up to their moral responsibility. And it is in their 
own self-interest. It is their future employees, their future 
clients, so that is certainly a big piece of it.
    Ms. Millender-McDonald. This is the one thing that we try 
to convey to businesses when we meet with them, that it is in 
your best interest, it is your future workers. And clearly if 
they do not see it as a moral obligation, given the fact that I 
think you stated or some of the others, that we are having to 
go outside of this country to bring in skilled workers because 
of a lack of persons being eligible to go to these jobs in 
Silicon Valley and all over the country, that too should say a 
lot. That speaks volumes to the need for our business folks to 
look at this and the educational institutions too, as coming 
from an administrative position in education, we were worlds 
apart in business and education until all of a sudden they see 
that we must bridge and become partners.
    I really applaud you and all the others who are part of 
your group in trying to bring about this digital divide. I will 
not continue to move from that, Mr. Miller, until I have seen 
this divide or this gap closed.
    The other thing that I wanted to ask you, Ms. Mitchell, and 
I am pulling it from your statement, that is why I am 
underscoring all of what you have--obviously the region has the 
potential to bridge the digital divide through both the 
intellectual and financial capital of these industries. 
Explain, expound on that just a little bit more.
    Ms. Mitchell. I want to take the opportunity since the AOL 
Corporation and Foundation is represented here today, I had the 
opportunity to hear David Eisner speak from AOL a couple of 
months ago and he was the first I heard who said we have a 
moral responsibility. And then I started to talk to folks in my 
own region and they agreed with him. And one of the things in 
talking to these folks, and also David said it, many of them in 
the early stages of their business don't feel that they can 
give a lot of money to this cause at this point but they can 
certainly provide the intellectual capital to it and----
    Ms. Millender-McDonald. That is, intellectual capital.
    Ms. Mitchell. They have the knowledge since they are in the 
information technology industry to go into schools, community 
centers, et cetera, as volunteers and share their knowledge.
    Ms. Millender-McDonald. Okay. And that is very true. But in 
my area of Watts, we certainly could, and would applaud anyone 
who comes in, albeit BET, to give that intellectual knowledge 
base and mentorship if you will. But there is also a critical 
need for funding to go into the hardware-software part of it. 
Because you can mentor for days and years and yet if you don't 
have that tangible product on which you transfer that knowledge 
it is not as worthwhile.
    Ms. Mitchell. We are hoping to tap both of that, the 
intellectual as well as the financial. I think in any type of 
charitable giving in this country research reflects that those 
that go there and volunteer first then grow into the biggest 
givers in this country. So we are hoping and that is why we 
also want to partner some of these rapidly emerging growth 
businesses with our more traditionally philanthropies like the 
William Penn Foundation in Philadelphia, the Microsofts, 
theAOLs, who are higher in the curve in their success, and leverage the 
resources.
    Ms. Millender-McDonald. I know my light is on, Mr. 
Chairman. I want to mention though that is true. I think the 
intellectual part of it is so critical for those in the 
business industry to go and speak with the top level 
administration in schools and educational institutions because 
they too need that type of mentorship and training, and who 
best to give that but those who are the top brass on both ends.
    Just concluding, the IBM Corporation We Have Narrowed the 
Digital Divide, You Can Too. How many other groups are working 
with them on that outside of the United Way?
    Ms. Mitchell. They are holding a conference later this week 
to get other nonprofits to team with them on this. They are 
hoping that this just begins to be replicated all over the 
country.
    Ms. Millender-McDonald. Thank you, Ms. Mitchell. Thank you, 
Mr. Chairman.
    Chairman Pitts. Thank you, Ms. Mitchell, for your 
testimony. I think we are getting you out of here in time to 
catch the train.
    Ms. Mitchell. Thank you very much.
    Chairman Pitts.We appreciate you coming in today.
    Ms. Mitchell. I will leave some of our just off the press 
newsletters that came out yesterday that talks all about ``now 
I will call it the digital opportunity, we unfortunately call 
it the digital divide.''.
    Ms. Millender-McDonald. You keep going, Ms. Mitchell, on 
that with me.
    Chairman Pitts. All right. We will begin our second round 
of questioning. I will start with Darien Dash. Your testimony, 
Mr. Dash, was very, very interesting. You mention in your 
position as technology chair of School Board Number 5 in Harlem 
what has been the response to the technology that has been 
provided to the schools. And you also mentioned I think a 
public-private partnership. If you could explain that a little 
bit more as far as the schools.
    Mr. Dash. In Harlem it was a unique situation because I 
came into a district after the superintendent had changed that 
traditionally had been the worst district in Harlem. They 
probably were the furthest behind on technology than any other 
school district or area in Harlem. What we had to do was to 
figure out a way creatively to get machines and access 
broadband access into the schools and also to provide content 
that the kids could relate to and could embrace.
    So as chair what I did was put together a board of public-
private sector partners that I knew could bring value added to 
the table. So Oracle has come to the table with network 
computers as well as the Beehive, which is a networked based, 
Internet based community. Eureka Broadband came and wired the 
schools and Mouse, a nonprofit organization, helped to bring 
Compaq and Alta Vista to donate some 750 machines to the 
district so we can have at least 30 to 40 machines in each 
school. We launched the Secretary of Commerce Daley's digital 
divide tour in the district and he actually came and did a 
brief tour of one of the schools and had an opportunity to see 
how the kids had embraced the technology and what a difference 
it was actually starting to make in the school.
    The children often don't have access outside of the school, 
and they don't go to the public libraries after school because 
that is what they call corny. So they don't want to go to the 
public library after school. So therefore when they are in the 
class they have, you know, very brief opportunities to really 
interact with the computer. There are so many kids and there 
are so many other problems that exist in the school the few 
moments that they have with the technology has made a 
difference for them.
    Chairman Pitts. You mentioned a new school model that you 
were developing. Are you talking about a virtual classroom?
    Mr. Dash. The Internet, they say every year is a dog year, 
7 years in the regular industry. So when I said old school I 
was talking about traditional dial-up. I was talking about what 
we call the ISP model where people are getting traditional 56K 
Internet service to the household, not broadband, not wireless. 
When I said new school I was making reference to the next 
generation I-2, which is the cable modem, broadband wireless 
access where the Internet will start to be delivered in real 
time and the capacity for content and the capacity for new 
applications in the entire model on how applications are 
delivered and stored and how consumers participate with those 
applications will change.
    It will revolutionize once again. So when I made that 
reference that is what I was talking about.
    Chairman Pitts. Do you envision a classroom that is 
conducted virtually?
    Mr. Dash. Absolutely. Next generation educational system is 
going to be built on distance learning. And we have already 
started to see that today. More and more people are getting 
certified online and are participating online to get distance 
learning. I think that it really makes a lot of sense given the 
inner city communities' perspective in education. Kids don't 
always think, are not always comfortable being smart in school 
or being in that classroom and being the person who is getting 
good grades whereas on a one-on-one environment it is 
different. They have a different sort of relationship and 
interaction with education and technology is the great enabler 
to be able to do that. And the next generation of Internet is 
certainly going to be the platform to do it.
    Chairman Pitts. Since you also have ties to the record 
industry can you compare the entrepreneurial opportunities for 
young African American students in that industry as to those in 
the IT sector?
    Mr. Dash. Well, you know it is interesting that you should 
mention that that it seems more and more record executives are 
fleeing the record industry to try to get involved in the 
Internet. I actually had a very prominent record industry 
executive who runs a big label come to me the other day and say 
I want to be your ambassador to the entertainment industry and 
I want to come and help build your entertainment division in 
your company. They certainly know the next generation returns 
as entrepreneurs is going to be in the Internet and the 
opportunities are greater. And I do see that because African 
Americans are growing at such a rapid rate there will be a lot 
of saturation from a proliferation of just general Web sites 
that are not funded well enough to survive.
    Funding is an important piece of surviving as an 
entrepreneur. You can't just have the goodidea nowadays, you 
have to have the financing to be able to survive it. And the record 
industry executives have traditionally been successful because they 
have been able to self-finance their businesses or their albums to the 
point where if it is a quality product it is successful. It is not 
quite that easy in the Internet business.
    Chairman Pitts. The red light is on. I wanted to ask you 
about the strategic partnership that you mentioned but I will 
wait.
    Ms. Millender-McDonald. That tells me, Mr. Chairman, you 
want me to be careful too about the light. Listen, Mr. Dash, 
you have a cousin who is in hip-hop?
    Mr. Dash. Damon.
    Ms. Millender-McDonald. How do you think perhaps that tool 
can be used to enhance the interest of high technology among 
those in urban areas?
    Mr. Dash. We are using it now. The rappers and the 
entertainers, the ballplayers, they are the ones really today 
who are driving urban culture and they are driving urban 
businesses. So we are starting to use that now in putting those 
faces like BET has done as well in putting those faces in front 
of the medium. Technology's perception in the community has to 
change, and the ones to do it are the, quote-unquote, market 
makers. Those market makers are the JayZ's and the Puff Daddies 
of the world.
    Ms. Millender-McDonald. You have lost me completely with 
this, young man, but it is an age culture that we are talking 
about. But if you are in front of them are you actually talking 
in this rap, they are saying get on the Internet whatever, 
whatever?
    Mr. Dash. There is a rapper named Nas actually who is a 
very popular rapper I guess. He sold 2\1/2\ million on his last 
release. In one of his songs he starts to make reference to 
people getting involved in the Internet and more and more 
rappers are using the dot com in their rap. He even made 
reference to being a public company or taking companies public. 
I think that is really going to be the next generation. 
Entrepreneurs are going to have more and more public companies 
because they have seen how quickly things can change when you 
have a public vehicle behind you. I think our company has been 
a good exam of that.
    Ms. Millender-McDonald. I had last year in my CBC annual 
legislative conference weekends, I was talking about going 
public. So I need to connect with Noz, is it?
    Mr. Dash. Noz.
    Ms. Millender-McDonald. I have to connect with that. All 
right. You know, our kids, inner city kids and even rural kids, 
really the two of them are very much behind in terms of getting 
connected. And you are right they have few computers in 
schools. I mean it is about 18 to 1, in some of my schools in 
the districts of Watts. But they connect every so often when 
they get on this computer, but it really doesn't give them that 
feel and this energy and motivation, but then it is not in the 
libraries, it is not in the homes. That is where the divide 
comes in, Mr. Miller, that we are talking about, this inability 
for these children and students to really get excited about 
this.
    What can you tell me, outside of the rap groups, and that 
is very important too for young folks these days, what else can 
we do to start this avalanche of interest on the part of the 
Internet with our kids and then speak to the new schools, 
distance learning is absolutely critical, especially with adult 
students going back to school, and if they are, piped in or 
tuned into the Internet they could do this distance learning 
far more effectively as well as wireless and the broadband.
    So just your summation of that, tell us how we can get them 
more energized, motivated and get going on the Internet.
    Mr. Dash. Interestingly enough, I think that there is 
already intent. The intent in the communities are there. People 
want technology. It is not that they don't want it. It is it 
hasn't been accessible, it hasn't been marketed and it hasn't 
been made to feel sexy. It hasn't been made to be something 
that they can touch, feel and understand.
    In fact, to go back to your reference, Mr. Chairman, our 
venture with America Online is built to do just that, to bring 
tangibility to the Internet and to bring access with a bundles 
PC to the price point so that people can understand it, touch 
it and feel it. I think that as much as the young generation--
because the kids gets it. They get it more than I get it 
sometimes and the younger kids, they are already there. 
Generation Y and generation X, we are the ones who are pushing 
this thing. It is really about the baby boomer, our parents' 
generations that are intimidated by technology.
    Ms. Millender-McDonald. Indeed they are.
    Mr. Dash. It comes from being not being able to grow up 
with it. And so I think that the barrier to entry is really 
there. What we have tried to do is to go out into the faith 
based community and really reach out there and let the parents 
feel the power of technology and let the parents really be able 
to embrace the technology in a one-on-one environment. Because 
the kids get it. And even kids who are what we call lost in our 
communities, you know, the gang members, they really don't want 
to be doing that. They are looking for the new hustle. For them 
technology has to become the new hustle. Drugs and guns and 
things of that nature, that has kind of played out, as they 
say, in our communities because they are tired--kids don't want 
to go in jail.
    Ms. Millender-McDonald. I will be speaking this Friday on 
the new image of Watts, because it was once perceived that it 
was gang and drug ridden but not that way anymore. And people 
are anxious to move out of that mode into a different mode but 
they need to have the tools by which to do this. And I tell 
you, you had just an outstanding presentation.
    Thank you, Mr. Chairman.
    Chairman Pitts. Just one more question, Mr. Dash. What is 
the strategic partnership that you referred to?
    Mr. Dash. The partnership is with American Online and 
CompuServe. What we have done is developed an urban brand of 
ISP called Places of Color. The goal of the new service which 
is built on top of the American Online infrastructure is to be 
able to create core tendencies, which are training, distance 
learning, certification, job placement and to surround that 
nucleus with the relevant content that African Americans, 
Hispanic, Native Americans, rural whites, the urban culture 
that transcends color can sort of embrace the youth and bring 
the relevance at a price point that they will feel comfortable 
with.
    Chairman Pitts. Mr. Miller, you mentioned that Web based 
internship program that you have started. What has been the 
level of response to this? How many students have been placed 
in the internship?
    Mr. Miller. We haven't placed any because we literally just 
rolled it out two weeks ago. We have commitments from companies 
to hire over 60 interns. We expect that number is going to 
grow. We are getting calls from potential applicants from 
potential employers and from colleges and universities all over 
the country. So we expect to have this fully ready to roll out 
in about three to four weeks, and we expect to start placing 
interns this summer and into the fall. And again, these are all 
going to be opportunities for students to work in high tech 
companies, real jobs, not make work jobs, which we hope will 
encourage them to then become IT professionals and enter the IT 
work force.
    Chairman Pitts. All right. And what role do you see 
Congress playing with this whole thing, like programs for 
digital opportunity initiative to continue to provide students 
with opportunities in the IT sector?
    Mr. Miller. I think the key is some of the legislation that 
has been considered to provide IT tax credit training for 
companies to provide training for workers is one thing that 
this committee could look at. Because many times companies, 
particularly smaller or medium size companies when they are 
looking whether they are going to spend their next dollar on IT 
training or not, particularly when you are talking about people 
who may not be ready to join the work force in three for four 
weeks but you are talking about a year or two or three they are 
reluctant. So, for example, there have been bills introduced in 
the House and Senate to provide IT tax credit training.
    I also commend to you the bill that Congresswoman 
Millender-McDonald referred to before, the H-1B bill because as 
part of that bill employers will pay a fee of $1,000 per 
employee which will generate about $180 million in new 
nontaxpayer-funded training dollars which would go into 
regional skills training alliances. Again, much of that money 
can be focused on training minority students and others who 
have not traditionally been part of the work force. I think on 
the Senate version of the bill Senator Biden added an amendment 
which would direct some of the money into boys and girls clubs 
in inner cities, particularly for training, reaching out to 
minority youth.
    Ms. Millender-McDonald. That is our amendment for us there.
    Mr. Miller. So I think the high tech community sees this H-
1B bill, the House and Senate version. There are differences 
but it is a win-win. Because we need temporarily the short term 
workers that this is going to provide the real training 
dollars. The key that I urge the subcommittee and the 
frustration we have had is that the money that has been going 
into the H-1B program for years frankly we think the Department 
of Labor has been very slow getting that money out there. It 
has been very unfortunate because we in the employer community 
naively hope by now we can come back to Congress and say look 
at all these minority workers that have been trained. 
Unfortunately, the Department of Labor has only given out about 
$12 million worth of grants in little dribs and drabs instead 
of pumping that money out there quickly because there are 
plenty of training opportunities out there and these students 
and the small and medium size employers frequently need tax 
breaks or subsidies to do that training.
    Chairman Pitts. All right. Ms. Steen, what kind of follow 
up does CPDC provide its students once they graduate from 
technology programs?
    Ms. Steen. We follow them for a period of time as long as 
we are able to. Following them long term is not always possible 
because people move and change jobs. But there is successful 
long term employment and to the extent that they are residents 
of Edgewood Terrace we definitely follow them. We provide them 
ongoing support. We have a club, an alumni club that people can 
work with. Our job training now has expanded. We have worked 
through many of the people that needed job opportunities at 
Edgewood Terrace and now 80 percent of our students who are 
from the surrounding community, it is a little more difficult 
to keep track of those folks on an ongoing basis.
    Chairman Pitts. Could you give us a little bit more detail 
on the educational partnership between CDC and Catholic and 
George Washington Universities?
    Ms. Steen. Catholic we have been partners with for a number 
of years. They are a nearby neighbor. We have reached out to 
them and worked with them in a number of their departments. The 
Metropolitan College, which is the college that provides 
something akin to continuing education, has been very 
aggressive with working with us. They have provided 
scholarships for anyone that graduates from our employment 
training classes. And they also teach at Edgewood Terrace in a 
program we call At Home on Campus in an effort to break down 
some of the barriers for people to go to college. We have 
introduced college level courses at Edgewood Terrace that 
people will take the first class in that course and then go on 
and take the rest of classes at Catholic University. 
Georgetown--George Washington I think you asked about, I will 
tell you about both. George Washington has a department that 
has expertise in assessment that we found to be an extremely 
valuable tool in helping students identify the correct career 
path, to help students find out what their strengths are, how 
we should hone our curriculum to make it relevant so that we 
can improve skills and get them placed in jobs that are 
meaningful to them, get their interest and that they can 
succeed at.
    Georgetown University is our newest partner and they will 
be studying Edgewood Terrace to document what has happened 
there. I am not sure I am going to get the name right, Culture 
Communication and Technology I think is the name of the 
department. And they are interested to know what the impact of 
technology is on this community. And they will be assisting us 
with various parts of our Web site development as well.
    Chairman Pitts. Thank you very much. I see my time is up. 
Ms. Millender-McDonald.
    Ms. Millender-McDonald. Thank you, Mr. Chairman. Ms. Steen, 
let's see where do I get started here with all of these lines I 
have crossed over here. Let me first commend you and all of the 
young women who have come with you today who have excelled in 
your program and are now in jobs that are really not only 
creating their self-esteem but also paying them a livable wage. 
So I commend all three of you young ladies who are out there in 
the audience today and keep pushing on.
    You talked about the thin clients. I think it is thin 
clients I saw here that I wanted you to expound a little bit 
more. ``using a newer technology known as thin clients.'' 
explain that to me.
    Ms. Steen. When we embarked on creating an electronic 
village, one of the issues that we grappled with was how were 
we going to be able to sustain this technology in 800 
apartments. Desktop computers take a lot of care and feeding. 
And you can't be knocking on someone's door to go and correct 
something on the desktop. Children have access, unsupervised 
access to a computer and they can very quickly do some things 
to it that nobody knows what happened. And so we were if we 
were going to be successful in having this technology continue 
and not just have a bunch of abandoned equipment in apartments, 
we needed to find a technology that we could manage remotely. 
And the thin client is the term that the industry uses for what 
I call back to the future. It is like an old dumb terminal. It 
looks like an individual pizza box. There are more varieties of 
it coming out right now. There are all kinds of things that are 
coming out every day with different levels of use built. The 
particular one that we have allows us to--it has an embedded NT 
chip in it. And it--basically you log on, it is a little box 
you log on at your desktop, you have a monitor keyboard in this 
little pizza box. You log on and it sends signals to a server 
farm like the old mainframes but a server farm in a server room 
at Edgewood and then all of the software is loaded on that 
server farm in this remote location and it is administered, all 
the care and feeding of it happens in the server room. If we 
need to upgrade software, if we need to add a log on account, 
if we need to do any kind of administration for this system, we 
can do it remotely. So it is only when we have a hardware, a 
real hardware problem that we need to deal with anyone in their 
apartments. And by minimizing what that hardware can do in the 
apartments, we minimize how much we have to go back and forth.
    We had to look at the cost of operating the system. We are 
getting donations. We have Federal funding for various parts of 
this. The reality is we won't survive more than a year unless 
we create a sustainable environment. And all of that investment 
will disappear because there will be no one there to take care 
of it. And so this is aimed at being an interim step to bring 
technology into the home, to give people access and a way that 
they can use it for the first time, understand it, deal with 
it.
    Ms. Millender-McDonald. But it is not going to be 
sustainable.
    Ms. Steen. That is what the thin client is meant to be.
    Mr. Miller. That is the point. The thick client is not 
sustainable because it costs so much money to maintain.
    Ms. Steen. The total cost of ownership in a thick client in 
a corporation, there are numbers anywhere from----
    Ms. Millender-McDonald. The thin client will be 
sustainable.
    Ms. Steen. It is much, much more sustainable. Then the hope 
is that residents once they start using this technology will go 
on and buy their own computer. They will want to have more 
software than we will put on the network. They will want to 
customize things. They will have learned enough that they will 
want more.
    Ms. Millender-McDonald. So if they want to expand to 
broadband or distance learning.
    Ms. Steen. Broadband is the pipeline coming in. At Edgewood 
Terrace we have a T-1 line coming in and any of the committee's 
other sources could be the broadband. The thin client is just--
it is the hardware.
    Ms. Millender-McDonald. Okay, fine. Mr. Miller, you wanted 
to add to that.
    Mr. Miller. Just to point it out there is also a tremendous 
potential savings for schools. Even wealthy suburban schools 
end up with plenty of expensive PCs sitting in boxes because 
they don't have the budget to buy--they have the budget to buy 
the PC but not to maintain it. Thin client, where most of the 
brains are based in one place then, it is more like your 
telephone or the brains are somewhere else and your telephone 
is just sitting there. You are depending on someone else to fix 
the software. It is the same idea. You have access to the 
information but you don't maintain your own system. If you have 
a thick pipe you can watch television, you can do records, you 
could do anything you want. It is just you don't have to worry 
about that PC.
    Ms. Millender-McDonald. So why haven't we introduced this 
to the educational world?
    Mr. Miller. Some companies are trying real hard.
    Mr. Dash. That is the next generation.
    Ms. Mitchell. It is----
    Ms. Steen. It is new.
    Ms. Millender-McDonald. This is why I had to get some more 
explanation because it was a new concept that I had not heard 
of either.
    Mr. Miller. We would be glad to arrange a demonstration for 
you.
    Chairman Pitts. Continue. Please respond.
    Mr. Dash. There is a little bit of precaution that needs to 
be taken when you talk about the thin client machine. I have a 
7-year-old--I actually have 3 children but the 7-year-old uses 
the PC every day when he comes home from school and uses the 
CD-ROM quite a bit to learn from and also likes to sit down and 
mess around with the word processor and store his information 
to the PC in our house. When you are in a thin client 
environment and you are in what we call an ASP, which is the 
application service provider, instead of the ISP, which is kind 
of the evolution of the ASP, when you are in an ASP environment 
they are giving you the information, you give it back to them 
and they are storing it for you in what they call a digital 
closet. Well, unfortunately if they didn't pay my 19-dollar 
bill that month my son couldn't get his information out of the 
closet because the closet would be locked because the bill 
wasn't paid.
    But those are some of the potential downsides of what needs 
to be looked at. I think local storage is an important issue in 
the household. But certainly in the school and as a next 
generation second, third, fourth machine in the household 
network computers and home based networks are definitely great 
ideas but I do think that local storage and local processing 
power is an important issue.
    Ms. Steen. Local storage is possible depending on the 
equipment that you purchased. Ourequipment you can attach a 
hard drive. We have local storage at Edgewood Terrace. It is an issue. 
Also an issue is the operating system. We are using NT. And NT is not 
terribly compatible. It is built for an office environment. It is not 
terribly compatible with children's software. And so we won't be able 
to put on this network what we have in our computer learning center 
that are serving youth until a future generation of Windows comes out.
    Chairman Pitts. Ms. Bushkin, did you want to add.
    Ms. Bushkin. I think what you are going to see next is a 
leap-frogging to devices that are freed from and untethered 
from the PC. It will range from the television which will 
change dramatically the notion of using the Internet when it is 
in your home to the Palm Pilot or other handheld devices to 
having the ability to use the Internet or get messages or find 
information on your cell phone. I think we are going to see all 
of that change the way it will be important to make sure that 
no one is left behind again as the technology becomes so 
critical to the functioning of the economy, and it will be 
easier to vote and do everything else. The imperative for 
making sure that we bring everybody along will become even 
stronger.
    Mr. Dash. Can I make one more point. We are none of us 
rocket scientists. So.
    Ms. Millender-McDonald. Really.
    Mr. Dash. So while the technology is so impressive it is 
not complex. And I think that it is important that we start to 
teach the younger generations the underlying technology that is 
actually there and how this all works so that they can figure 
out for themselves how to take advantage not just being a work 
force for but actually take advantage of and participate from 
an ownership perspective in the next generation of technology.
    Ms. Millender-McDonald. I would like to propose to the 
chairman and this committee that we perhaps convene a type of 
demonstration for perhaps some of the superintendents, whoever, 
around the country, however you see fit to do this, to bring 
forth this new technology and this new concept. Because after 
all we do want to continue to be on the cutting edge.
    Chairman Pitts. That sounds like an excellent idea. We will 
talk to our staff about doing that. Let's continue now with 
questioning, Ms. Tubbs Jones.
    Ms. Jones. First of all, I want to apologize to the panel 
for not having the opportunity to hear your testimony. I was a 
speaker at a Community Development Corporation conference that 
kind of ran behind schedule. So I had to get back here. But I 
am interested in the issues that you have raised and impressed 
with what I have heard in the last 5 to 7 minutes.
    I just want to raise with you that I am currently 
sponsoring--I know my staff person mentioned to me that you 
have been talking about distance education before I came in. 
And I am actually sponsoring a piece of legislation called 
Greater Access to Distance Education. And the bill will 
establish orientation programs as part of funded distance 
education demonstration projects. And the reason I am 
sponsoring this piece of legislation is that many adults fail 
to complete a distance education course due to a lack of proper 
orientation in the package. They will get it, they will sit 
there and they will go oh, well, can't complete this and go 
onto something else. In light of the fact that currently 
orientation programs are not required, I am proposing that that 
be a requirement if someone chooses to go through a distance 
education program.
    And I put that out there just to say I am not a rocket 
scientist either. I am not even close to knowing some of these 
things. My 17-year-old is a lot better at it than I am. But I 
know that in order to bridge this digital divide we do have to 
provide opportunities for people to--even once they access it 
to figure out how they maneuver through the process.
    The other thing, the question I would ask and I am going to 
ask Mr. Dash only because I want to hear him talk and I don't 
have anything written from him and I missed--to the reporter, 
is it possible I could get Mr. Dash's testimony typed up for 
me, please? Thank you.
    My question is, what do you propose in areas for--for 
example, I come from Ohio and a friend of mine just started--
just ran for the Senate in Ohio. And he was in southern Ohio in 
an area where they don't even have lines, their telephone lines 
are not such that they can even, even if they bought a computer 
hook themselves up to a line to access information. What do you 
see as happening in the future to be able if the telephone 
lines don't get hooked up, what do we do for those folks?
    Mr. Dash. We were speaking about the next generation that 
is going on now, we were talking about things like AOL TV or 
the next generation broadband. Cable will become what they call 
a thick pipe for the Internet and for access and broadband 
environment through cable modems and wireless technology. There 
is a Palm Pilot that is sitting here now that is untethered.
    Ms. Jones. I still have a 5. I haven't gotten to 7.
    Mr. Dash. So everything will become actually untethered. So 
they have a great opportunity of talking about the digital 
opportunity, they have a great opportunity to propel themselves 
ahead of the curve.
    Ms. Jones. How would you suggest that we get that message 
to the folks that you know that aren't even at this level that 
don't--forget the infrastructure for the old method and get 
ready for the new one.
    Mr. Dash. I certainly don't say forget the old 
infrastructure but in a situation like that, getting the 
message out was what we were talking about before was about 
creating relevance. I think that is the challenge from the 
business community. Therein lies the opportunity. Whoever gets 
there first with the best messages wins. Whoever gets there 
first with the most marketing dollars, chances are is going to 
win because nobody else is there now. So it is a great 
opportunity in doing that. So it is about creating relevance 
and putting faces on it that people can relate to and putting 
it in a common sense perspective. Because I think technology, 
there has been a veil that has been placed on technology. And 
it is time for it to be lifted and for somebody to come out 
with a common sense approach on how to use it and access it.
    Mr. Miller. It seems to me that one of the great groups of 
communicators in the United States are our legislators, you and 
your 434 colleagues here and the 100 members across the way.
    Ms. Jones. We are trying.
    Mr. Miller. You have the respect of your community. You are 
well known in your community. I assure you if you said you were 
going to go to your community, you wanted to do a series of 
town meetings and you wanted IT companies and people like Mr. 
Dash and Mr. Mills and others to come along and talk about the 
products and services they could offer they would bethere in a 
heart beat because it would be a time for them to talk about the good 
things they can do without wearing their pure marketing hat. Not that 
these companies don't like to market too, but that is the opportunity. 
That is why I keep using the phrase, Congresswoman Millender-McDonald, 
because it is an opportunity.
    I just did a major event with our companies in Japan with 
the Internet wireless access in Asia. Now we are talking about 
China, 1.2 billion people, India 1 billion people. They are 
talking about wireless. They are not talking about phone lines. 
It is too late for the plain old copper or fiber. So these 
companies are excited about talking to these communities that 
you are referring to. But they could use your help in getting 
the message out. This is real stuff. It isn't science fiction. 
This isn't particularly expensive. We need to lift the veil, as 
Mr. Dash was suggesting.
    Ms. Bushkin. I also think the faster you can drive 
government services online and things that are compelling so 
that people feel that they are missing something if they are 
not online. So it is as valuable to them to have an Internet 
connection, whether it is on a PC or any other way as it is to 
have cable service or anything else in their home, that we need 
to make that a critical part of everyday life so that people 
feel it is critical to their success and their children's 
future success.
    I also want to come back to I think the long term goal for 
everyone is that there should be Internet access in every home. 
I mean that would be the vision that we would all share. I 
think the first step has got to be in every community and we 
make sure there is access for every child. If the homework 
assignment is given that requires use of the Internet not every 
child can go home and find a computer or do the homework but 
there certainly needs to be one at the community center, at the 
library, at the boys and girls club or the school needs to be 
kept open late so kids can use it. Once kids are learning how 
to use the technology they will drag the parents in. This is 
the experience we are seeing in all the PowerUp centers, the 
kids get turned on. It lowers the fear factor of the parents 
and they are coming along and learning it as well. So we are 
getting the intergenerational benefits. But I think we need to 
see this as a two-phase process. We have to go for community 
access first with the goal as all the technologies change of 
putting this in every single home.
    Ms. Jones. I want to give Mr. Mills an opportunity to 
respond.
    Mr. Mills. I would like to add when we launched BET.com one 
of our marketing efforts in addition to all the online and off-
line marketing was actually to go out and interface with people 
directly, do all the people expos, do all the events and really 
reach out grass roots. What we found was there was a tremendous 
response among the African American population. If you go to a 
people's expo you really meet the people. You have parents and 
you would have children and they would interact with the large 
displays that we had and all the computers that we had up and 
the parents would respond we really want this, we really like 
the product, but we are a little mystified about how we go from 
zero to having this product in our house. We are not sure 
exactly which ISP we should use. We don't necessarily have a 
good friend to call who can recommend this. Help me understand 
how I should approach this process.
    That is part of what drove BET.com to decide that what we 
should do is build a bundled PC-ISP, BET brand of package and 
sell it directly to our consumers. Because what we have 
discovered is that our brand, given the strength of it and 
particularly the residence of our brand with an urban audience, 
gives us the ability to communicate to this audience that we 
built a package just for you. We understand you, you understand 
us. We have been here for 20 years. We built something 
specifically for you. We will get into your home and help you 
get online. Not just for us but help you access all the things 
you find valuable in the Internet space.
    Ms. Jones. Thank you very much. Now Mr. Dash, one last 
request. You have to give me an autograph to take to my 17-
year-old. He knows about you. All right.
    Thanks.
    Ms. Millender-McDonald. I have missed something here. Show 
you how far behind I am.
    Chairman Pitts. We are going to do one more round. All the 
witnesses have to leave by 4:00, I understand, so we will do 
one more round.
    Mr. Mills, in your testimony you mentioned a dearth of 
information technology advertisements aimed at minority groups. 
What has BET.com taken, what steps have you taken to publicize 
your services and what does your Web site provide that has been 
missing from the Internet before its launch?
    Mr. Mills. When I say dearth it is not just with respect to 
the African American Web sites that are online, but if you look 
back 6 months ago very few Internet companies, whether African 
American or general marketed Internet companies, were 
specifically buying African American media to communicate the 
value proposition of their online services to our community. At 
the end of the day advertising is about generating awareness, 
generating trial. If you don't market to our community in a way 
that is relevant to our community you won't achieve the 
awareness and trial required to get overall adoption of these 
services.
    When we announced the creation of BET.com we noticed 
virtually no targeted marketing of online service to African 
Americans. Six months went by. You now have all of the national 
radio shows, whether it is the Tom Joyner show or the Donny 
Simpson show, all of those shows now have dot com sponsors. You 
have now--even on our cable network we have a proliferation of 
dot com advertisers actively buying our media to provide 
culturally relevant messages to our audience about the value 
proposition of the Internet.
    So it is not so much that it is a moral responsibility of 
these companies to communicate the value proposition to our 
audience but instead that they now have kind of an enlightened 
self-interest which is positive, and enlightened self-interest 
recognizing African Americans are projected to be such an 
incredibly fast growing population that there really is an 
opportunity to serve that community online.
    What we have done is say let's put the most marketing money 
that has ever been applied against an African American product 
for the African American audience. We spend between $8\1/2\ to 
$10 million to market BET.com. We do that using our own cable 
networks. We use other people's cable networks. We buy general 
market media. We bought radio all over the country, we bought 
prints and we bought the full universe of African American 
print. We own five magazines ourselves but in addition we 
bought everybody else's. We bought Ebony, Essence,Jet, XXL, 
Vibe, Source, Spin, Blaze, so we are basically--our mantra is that we 
are the African American Visa. We are everywhere African Americans want 
to be. We think that is important but we have gone one step further and 
said it is not just about communicating a very self-serving message 
about the value proposition of BET.com. We really have a broader 
perspective, which is about communicating the value and the importance 
of the Internet to the African American community.
    So our Chairman Bob Johnson has actually reached out to a 
number of celebrities in the African American space and said I 
am willing to dedicate time on my cable network to generate a 
message to communicate the importance of this medium to the 
African American community. And we think by doing that, by 
having individuals who have stature in our community and who 
are considered school or sexy in our community say that that is 
an important place for everyone to be, the Internet overall, 
that will really substantially affect the amount of traffic and 
utilization.
    Mr. Miller. Just another piece of jargon is called a 
vertical portal. The whole idea of people coming to the 
Internet and of course 22 million subscribers go to AOL. That 
is the biggest by far. But this whole question of whether 
people want to go to a generic Web site where there is lots of 
information or whether they want to go to something that is 
more specific to them, however they identify themselves if they 
identify themselves as New Yorkers, if they identified 
themselves as African Americans, if they identified themselves 
as Southerners, so what you have seen created are these 
vertical portals where they are specialized in one particular 
segment of society and they hope that they attract people who 
just identify with that group. They might identify themselves 
as bridge players. So as that happens then the whole marketing 
model changes too. Because you can't just market to generic 
magazines if you are going to say my target market is only 
Hispanic Americans, or primarily Hispanic Americans or 
primarily black Americans.
    I think what Mr. Mills is reflecting in particular in the 
African American community is in fact happening with a lot more 
communities because you are develop a lot more of these 
vertical portals and they have to reach out through these other 
mass market publications, cable, television, others to 
advertise to get people to come to their vertical portals.
    Chairman Pitts. Ms. Bushkin, we have heard the lack of 
Internet content geared towards minority users. What level of 
minority participation do you have within AOL's communities?
    Ms. Bushkin. We don't keep track of that information about 
our subscribers or our members. But I can tell you that we have 
some African American communities that are very active on AOL. 
We have an organization called Black Voices. We are very 
excited with the new partnership with DME, Places of Color, 
which we think will not just reach out to the communities of 
African Americans online but help bring new members online as 
well.
    I think what everybody has said already about this as this 
being the fastest growing market is absolutely true, and that 
we need to be creative about the way we reach out to finding 
those people and giving people of different backgrounds, 
different interests and different educational abilities new 
reasons to come online. I think that is going to be the focus 
going forward as everyone reaches out to provide more 
compelling reasons to use the Internet medium.
    The first, if you look at the way the Internet adoption 
rates have progressed over the past 10 years and it has been 
truly phenomenal, as Harris pointed out, it started with the 
hobbyists and the people for whom this was a tool and then we 
moved into people who were excited about using this perhaps for 
a business or a job and we are just now beginning to touch and 
tap the mainstream. But we have only begun. Only about 35 
percent of the country now is online. But when we study the 
people who have been online for say 3 years versus 1 year what 
we are seeing is phenomenal integration into their lives in 
that they move very quickly from using it one hour a month to 
one hour a week to one hour a day. It becomes critical to the 
way that they do everything from shopping to school to 
communication.
    The biggest gap in the digital divide right now is 
interestingly single mothers. I can't think of a group that 
needs the Internet more in terms of being able to shop 24 hours 
a day at home. We think it will offer tremendous benefits to 
people who are disabled. So we think we are just at the point 
where we are beginning to reach that group. And an organization 
like AOL is as committed to reaching out to them as we are 
bringing that first wave of mainstream consumers online.
    Chairman Pitts. Finally, we have had a suggestion for a 
demonstration here. I saw, Mr. Miller, you pull out a Palm 
Pilot. Did that have an antenna on it? Can you access the 
Internet with that?
    Mr. Miller. I can send e-mail messages from this. I can 
download news clips from this. I can download stock quotes from 
this. I can tell you where Starbucks is. I can order from 
Amazon.com online from this little itty-bitty thing. That is 
all available. I can find the names of my local elected 
officials using this.
    Ms. Millender-McDonald. Uh-oh.
    Mr. Miller. I can trade stocks using this online without 
going anywhere near my PC. I keep my schedule and phone 
numbers. All these other things I can do online.
    Chairman Pitts. We will pursue having a demonstration for 
the members.
    Ms. Millender-McDonald.
    Ms. Millender-McDonald. Thank you, Mr. Chairman. Let me 
first go back to Mr. Mills and, Mr. Mills, I am so happy that 
BET has been a pioneer in reaching out to the African American 
community in bringing these types of programs and this type of 
innovation to our community. Just want you to continue to reach 
out and do what you must do. However, I must say that e-
commerce is one that you didn't mention. I would like to 
suggest to you that you do look into e-commerce. Especially Ms. 
Bushkin who spoke of the fact that single parents, which are 
number one and leading up heads of households do have this type 
of access to the Internet. And everyone looks to BET for doing 
all of those things that must be done, especially African 
Americans. I certainly would like to suggest that to you.
    I would like your people expo. I would suggest that you do 
that in some of the major metropolitan areas and come to my 
district first. I have suggested it, so come first. It doesn't 
have to be in a large venue because a people's expo is just 
what we are talking about is getting people interested in this. 
So I like that concept. So do connect with me on that.
    Ms. Bushkin, your presentation was very thought provoking. 
I applaud AOL for the work that they do. PowerUp, we had a 
meeting among groups of high tech folks just last week. I was 
privy to hearing more about PowerUp. We applaud you on your 
efforts. What I want to know is whether you have 250 centers in 
various locations. I don't think you have one in my district.
    Ms. Bushkin. Not yet.
    Ms. Millender-McDonald. She is a very astute woman. She 
said not yet; she didn't say no but not yet. How do you 
identify these centers and what is the criteria for those 
centers being placed wherever they are?
    Ms. Bushkin. We actually have four up and running but we 
are aiming to have 250 by the end of the year.
    Ms. Millender-McDonald. So I am still in the running. Okay. 
Fine.
    Ms. Bushkin. What makes a success--where is the other one? 
Cleveland. There are a couple things that would make a very 
successful center. We have tried not to reinvent the wheel or 
start from scratch. So where there is a boys and girls club or 
YMCA or another center in the community, this could be the 
public housing project where already we think that there is a 
nucleus of people gathering that is number one for us. And we 
like to partner with organizations that are already serving the 
community that way.
    Second, another key part for us is having some local 
sponsors who are committed to helping the community and who 
will help us bring in Vista volunteers, because we don't think 
a center that just has computers alone is enough. It is very 
important to have caring adults teaching the kids how to use 
the Internet, guiding them to find the right information and 
teaching them to find the information online that will give 
them the skills that they need.
    Third, we are working with Gateway and a number of other 
providers to make sure that we can bring computers into centers 
that don't have them as well as some telecommunications 
companies to do the wiring.
    Fourth, we simply look for communities that have the 
greatest need. So we are broadly and widely looking around. We 
have three centers in this area and we would be happy to show 
you what is working with them. Steve Case just visited Blue 
High School with President Clinton three weeks ago where a new 
center is going on. We have one in Southern Ridge in Anacostia, 
one in Gum Springs in Alexandria. We are learning each time 
about what would be a successful one. But certainly Watts would 
be a good place for us to locate.
    Ms. Millender-McDonald. We certainly look forward to your 
coming there the next time.
    Mr. Miller, you were so energetic in your presentation so I 
will tell you although I don't want to--I am not going to scold 
you as much as I would like you're telling us to forget this 
digital divide and go to digital opportunity. I do agree with 
you we will say in order to change from the digital divide we 
must look at it in digital opportunity fashion.
    The IT workers, we have need education. Bottom line. I 
mean, you cannot have IT workers, you cannot have interns in 
all of this unless you educate folks and you cannot educate 
them if you don't have access to these computers in the schools 
that will engage them in the training to be skillful enough to 
move on into the internship program that you speak about.
    Am I correct on that?
    Mr. Miller. At least students who don't have algebra 
through their K through 12 education, the chances of them 
becoming a successful computer programmer are not very good. So 
there are other jobs they can do as IT workers, but if they 
can't at least get through those basic math and science courses 
in their K through 12 education then the chances of their post-
education leading them to become an IT worker and doing the 
wonderful things that these people back here behind us have 
done, gets to be very difficult, not impossible but much more 
difficult.
    Ms. Millender-McDonald. I agree with you. To finish up my 
questions--rather, just a comment. I talk with a lot of the 
HBCU presidents and indeed the Ph.D. Programs are really 
falling behind in those schools. And you speak of the very 
minuscule fewer people who are into the Ph.D. Programs in 
computer science. That is something that hopefully you can talk 
to me later about or whatever your suggestion is as to how we 
get folks in tune with that. Because if they don't have the 
training at all from the K-12 and don't have it in an 
internship program mode then they are not apt to go to a Ph.D. 
Program in computer science.
    Mr. Miller. One of the things that is absolutely critical 
as to what Congress can do, funding fully or maybe even going 
beyond the administration's request for additional research and 
development money in the IT field, the Congress has committed 
the last few years a lot more money to medical research but 
there is a huge role based on the President's Information 
Technology Advisory Committee for more Federal funding to 
universities for IT research. Even that has a spillover effect. 
Because when you fund those university faculty then they need 
graduate students, which means they create fellowships so then 
they attract more students to then stay on. So a lot of it is a 
spill-down effect.
    So I would commend to you what is in the President 
Clinton's budget to look at that for additional funding for IT 
research. It will create the new technologies that will make 
access simpler. As Ms. Bushkin said in her opening statement, 
we are just at the dawn of this Internet age. We are still in 
the earliest days of this Internet age, and this reach and 
development, a lot of which is being done by private industry 
but a lot of it can be done by academic institutions by 
government also.
    Ms. Millender-McDonald. Let me again commend you for this 
hearing. It has been most informative and you have really just 
outlined a great group of outstanding experts. I also want to 
say I regret that Politicallyblack.com could not be here so 
they have a statement for the record they would like to submit 
for the record.
    Chairman Pitts. Ms. Tubbs Jones.
    Ms. Jones. In light of the time I am going to forego any 
further questioning. I do have a statement that I would like to 
submit for the record personally. I want to thank each and 
every one of you for coming to our Empowerment Subcommittee and 
commend to you as part of the President's proposed budget the 
new market initiatives that you would consider the new markets 
that he is trying to go into and perhaps we can take this as a 
digital opportunity, Mr. Miller, and use the new market 
initiatives. Because it would be a great opportunity to go into 
underserved communities with dollars to be able to go in there 
in terms of equity. It would be just an exciting thing for many 
of you to take up that opportunity and go into some of these 
neighborhoods. Again I would like to commend you for your 
presentations. Apologize for not being here at the beginning.
    Chairman Pitts. Thank you. Without objection, we will end 
your comments. We will leave the record open for 5 legislative 
days for anyone who would like to add statements or any 
responses from our witnesses. I would like to say this has been 
an excellence panel today. We received some wonderful 
information, excellent recommendations, and the subcommittee 
will act accordingly.
    The time of 4:00 having arrived, the hearing is adjourned. 
Thank you.
    [Whereupon, at 4:02 p.m., the subcommittee was adjourned.]
    [GRAPHIC] [TIFF OMITTED] T7830A.001
    
    [GRAPHIC] [TIFF OMITTED] T7830A.002
    
    [GRAPHIC] [TIFF OMITTED] T7830A.003
    
    [GRAPHIC] [TIFF OMITTED] T7830A.004
    
    [GRAPHIC] [TIFF OMITTED] T7830A.005
    
    [GRAPHIC] [TIFF OMITTED] T7830A.006
    
    [GRAPHIC] [TIFF OMITTED] T7830A.007
    
    [GRAPHIC] [TIFF OMITTED] T7830A.008
    
    [GRAPHIC] [TIFF OMITTED] T7830A.009
    
    [GRAPHIC] [TIFF OMITTED] T7830A.010
    
    [GRAPHIC] [TIFF OMITTED] T7830A.011
    
    [GRAPHIC] [TIFF OMITTED] T7830A.012
    
    [GRAPHIC] [TIFF OMITTED] T7830A.013
    
    [GRAPHIC] [TIFF OMITTED] T7830A.014
    
    [GRAPHIC] [TIFF OMITTED] T7830A.015
    
    [GRAPHIC] [TIFF OMITTED] T7830A.016
    
    [GRAPHIC] [TIFF OMITTED] T7830A.017
    
    [GRAPHIC] [TIFF OMITTED] T7830A.018
    
    [GRAPHIC] [TIFF OMITTED] T7830A.019
    
    [GRAPHIC] [TIFF OMITTED] T7830A.020
    
    [GRAPHIC] [TIFF OMITTED] T7830A.021
    
    [GRAPHIC] [TIFF OMITTED] T7830A.022
    
    [GRAPHIC] [TIFF OMITTED] T7830A.023
    
    [GRAPHIC] [TIFF OMITTED] T7830A.024
    
    [GRAPHIC] [TIFF OMITTED] T7830A.025
    
    [GRAPHIC] [TIFF OMITTED] T7830A.026
    
    [GRAPHIC] [TIFF OMITTED] T7830A.027
    
    [GRAPHIC] [TIFF OMITTED] T7830A.028
    
    [GRAPHIC] [TIFF OMITTED] T7830A.029
    
    [GRAPHIC] [TIFF OMITTED] T7830A.030
    
    [GRAPHIC] [TIFF OMITTED] T7830A.031
    
    [GRAPHIC] [TIFF OMITTED] T7830A.032
    
    [GRAPHIC] [TIFF OMITTED] T7830A.033
    
    [GRAPHIC] [TIFF OMITTED] T7830A.034
    
    [GRAPHIC] [TIFF OMITTED] T7830A.035
    
    [GRAPHIC] [TIFF OMITTED] T7830A.036
    
    [GRAPHIC] [TIFF OMITTED] T7830A.037
    
    [GRAPHIC] [TIFF OMITTED] T7830A.038
    
    [GRAPHIC] [TIFF OMITTED] T7830A.039
    
    [GRAPHIC] [TIFF OMITTED] T7830A.040
    
    [GRAPHIC] [TIFF OMITTED] T7830A.041
    
    [GRAPHIC] [TIFF OMITTED] T7830A.042
    
    [GRAPHIC] [TIFF OMITTED] T7830A.043
    
    [GRAPHIC] [TIFF OMITTED] T7830A.044
    
    [GRAPHIC] [TIFF OMITTED] T7830A.045
    
    [GRAPHIC] [TIFF OMITTED] T7830A.049
    
    [GRAPHIC] [TIFF OMITTED] T7830A.050
    
    [GRAPHIC] [TIFF OMITTED] T7830A.051
    
    [GRAPHIC] [TIFF OMITTED] T7830A.052
    
    [GRAPHIC] [TIFF OMITTED] T7830A.053
    
    [GRAPHIC] [TIFF OMITTED] T7830A.054
    
    [GRAPHIC] [TIFF OMITTED] T7830A.055
    
    [GRAPHIC] [TIFF OMITTED] T7830A.056
    
    [GRAPHIC] [TIFF OMITTED] T7830A.057
    
    [GRAPHIC] [TIFF OMITTED] T7830A.058
    
    [GRAPHIC] [TIFF OMITTED] T7830A.059
    

```