U.S. GOVERNMENT PRINTING OFFICE

60–580 WASHINGTON : 2001

THE DIGITAL DIVIDE: BRIDGING THE

TECHNOLOGY GAP

HEARING

BEFORE THE

SUBCOMMITTEE ON EMPOWERMENT

OF THE

COMMITTEE ON SMALL BUSINESS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

WASHINGTON, DC, JULY 27, 1999

Serial No. 106–25

Printed for the use of the Committee on Small Business

(
(II)

COMMITTEE ON SMALL BUSINESS

JAMES M. TALENT, Missouri, Chairman

LARRY COMBEST, Texas

JOEL HEFLEY, Colorado

DONALD A. MANZULLO, Illinois

ROSCOE G. BARTLETT, Maryland

FRANK A. LOBIONDO, New Jersey

SUE W. KELLY, New York

STEVEN J. CHABOT, Ohio

PHIL ENGLISH, Pennsylvania

DAVID M. MCINTOSH, Indiana

RICK HILL, Montana

JOSEPH R. PITTS, Pennsylvania

JOHN E. SWEENEY, New York

PATRICK J. TOOMEY, Pennsylvania

JIM DEMINT, South Carolina

EDWARD PEASE, Indiana

JOHN THUNE, South Dakota

MARY BONO, California

NYDIA M. VELA ́ZQUEZ, New York

JUANITA MILLENDER-MCDONALD,

California

DANNY K. DAVIS, Illinois

CAROLYN MCCARTHY, New York

BILL PASCRELL, New Jersey

RUBEN HINOJOSA, Texas

DONNA M. CHRISTIAN-CHRISTENSEN,

Virgin Islands

ROBERT A. BRADY, Pennsylvania

TOM UDALL, New Mexico

DENNIS MOORE, Kansas

STEPHANIE TUBBS JONES, Ohio

CHARLES A. GONZALEZ, Texas

DAVID D. PHELPS, Illinois

GRACE F. NAPOLITANO, 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

JIM DEMINT, South Carolina

FRANK A. LOBIONDO, New Jersey

EDWARD PEASE, Indiana

JUANITA MILLENDER-MCDONALD,

California

DENNIS MOORE, Kansas

STEPHANIE TUBBS JONES, Ohio

TOM UDALL, New Mexico

STEPHANIE O’DONNELL, Legislative Assistant
(III)

C O N T E N T S

Page

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

WITNESSES

Irving, Larry, Assistant Secretary for Communications and Information, National Telecommunications and Information Administration, U.S. Department of Commerce ............................................................................................... 4

Lewis, Maureen, General Counsel, Alliance for Public Technology .................... 6

Miller, Harris N., President, Information Technology Association of America .. 8

Fulton, B. Keith, Director of Technology Programs and Policy, National Urban

League ................................................................................................................... 33

Robinson, Timothy, Legislative Attorney, Ameritech Corporation ...................... 36

Krumholtz, Jack, Director of Government Affairs, Microsoft .............................. 37

Coleman, Thomas M., President, Technical Career Institutes, Inc ..................... 39

APPENDIX

Opening statements:

Pitts, Hon. Joseph R ......................................................................................... 47

Millender-McDonald, Hon. Juanita ................................................................. 51

Prepared statements:

Irving, Larry ..................................................................................................... 56

Lewis, Maureen ................................................................................................ 72

Miller, Harris N ................................................................................................ 76

Fulton, B. Keith ................................................................................................ 87

Robinson, Timothy ............................................................................................ 92

Krumholtz, Jack ............................................................................................... 99

Coleman, Thomas M ......................................................................................... 106

(1)

THE DIGITAL DIVIDE: BRIDGING THE

TECHNOLOGY GAP

TUESDAY, JULY 27, 1999

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON EMPOWERMENT, COMMITTEE ON SMALL BUSINESS, Washington, DC.

The subcommittee met, pursuant to call, at 2:10 p.m., in room

2360, Rayburn House Office Building, Hon. Joseph R. Pitts (chairman of the subcommittee) presiding.

Chairman PITTS. Ladies and gentlemen, the time of the hearing

having arrived, we will convene the Empowerment Subcommittee.

Good afternoon and welcome. Thank you for joining me and the

members of the Subcommittee on Empowerment to discuss the digital divide. The term ‘‘digital divide’’ refers to the differences between groups to whom computer and Internet electronic technology

is available and groups lacking such access.

A recently released study by the Commerce Department’s National Telecommunication and Information Administration finds

evidence of a widening digital divide. Data from the study shows

demographic differences between those groups with access to telephones, personal computers, and the Internet, and those without

such access.

On a positive note, the results of the study demonstrate that

Americans, as a whole, are advancing with respect to Internet

connectivity. In fact, in 1998 over 40 percent of U.S. Households

had personal computers and, of those, approximately 26 percent

had Internet access. While this finding is encouraging, a more

problematic issue remains. Some socioeconomic groups consistently

fall below the national average with respect to access to the tools

of the information age. Indeed, the study reports that minority,

low-income, rural and single-parent households are less likely to

have access to electronic resources.

As we move from a paper-based society to an electronic one, personal computers and Internet access are becoming increasingly valuable. Interactive computer networks have the potential to enhance

many aspects of our lives, including our education and career prospects. Indeed, the rapid infusion of electronic resources into our society has rendered computers and the Internet indispensable tools

in some homes, offices and schools.

As opportunities for jobs in high-tech industries grow, the ensuing need for information technology education becomes more apparent. Therefore, developing ways to bring innovative technology to

communities with a demonstrated need for it ensures that more
2

people have access to electronic resources. Increased access to technology, coupled with proper instruction, enhances the possibility

that those who are currently not computer and Internet proficient

will come to embrace these resources.

The Internet is an invaluable research tool for entrepreneurs

seeking to start or grow a small business, allowing them a means

of product and market research, as well as a method of locating financial resources. The Internet also offers the possibility of electronic commerce, allowing small businesses another medium for

conducting business transactions.

Yet with all the demonstrated benefits of computer and Internet

access, some groups remain less likely to avail themselves of technology resources. An increased awareness of this digital divide has

stimulated the private sector to intervene with initiatives focused

on expanding access of technology to include underserved groups.

Community and nonprofit groups play an integral role in

partnering with telecommunications firms in order to introduce information technology into the communities they serve.

I am pleased to introduce today two panels of witnesses who will

acquaint the Members more intimately with the nature of the problem and propose solutions.

On the first panel, we are privileged to have Larry Irving, the

Assistant Secretary of Commerce for Communications and Information, who presided over the NTIA study. Mr. Irving will explain the

problem of the digital divide by detailing the results of the study.

Following Mr. Irving, Maureen Lewis, General Counsel for the

Alliance for Public Technology, will share her thoughts regarding

the role of technology in our society.

Finally, we welcome Harris Miller, President of the Information

Technology Association of America. Mr. Miller has testified before

the full Committee regarding Y2K and e-commerce, and we are

pleased to have him back to speak about the digital divide.

Our second panel consists of four witnesses beginning with Keith

Fulton, Director of Technology Programs and Policy for the National Urban League, who will speak about the League’s efforts to

bring electronic resources into economically distressed areas.

Next we will hear from Tim Robinson, Legislative Attorney at

the Ameritech Corporation, who will detail his company’s efforts to

bridge the gap.

We will then receive testimony from Jack Krumholtz, Director of

Federal Government Relations at Microsoft, who will also speak

about the role of the private sector in introducing technology to underserved areas.

Finally, Thomas Coleman, President and CEO of the Technical

Careers Institute located in New York City, will testify about the

importance of education in creating a technology-literate workforce.

I am looking forward to hearing the testimony of all the witnesses, and I now turn to the distinguished ranking member, Ms.

Millender-McDonald, for any opening comments she would like to

make.

[Mr. Pitts’ opening statement may be found in the appendix.]

Ms. MILLENDER-MCDONALD. Mr. Chairman, let me first thank

you for convening this hearing. This is a very important hearing

and one that I have been looking forward to even before the report
3

came out. Now about the report has come out, it is just a testament

of what we have known all along, that there are some have-nots

who will not cross this bridge into the 21st century because they

are not connected and they are not online.

I would like to present my statement for the record. I am just

going to speak candidly for a few minutes, Mr. Chairman, if it is

okay with you.

You know, a couple of weeks ago it was quite telling when the

President came to visit a variation of communities, rural and

urban, and he came because he knew that the economy had been

great for this country and great for Americans but not all Americans, and this is why he chose to visit the various urban and rural

districts.

He came to my district of Watts because he recognized that a lot

of my constituents have not and will not be able to communicate

through this new medium that we call the Internet, this new web

page that we talk about. There will be no communication from

friend to friend across the waters because they are not on line. So

there are a lot of people who will not be on line, will not be able

to communicate throughout this world, and yet we talk about a

global workplace. The digital divide is strictly one that is real in

the urban communities and, yes, in the rural communities.

As the President went to Appalachia and some of those other

areas, we had folks who did not have running water, did not have

telephones, and so why do we then think that we are heading into

this whole new medium of exchange, of communication, of information, when this highway has left so many on the sidelines?

I am very pleased that I will hear from people today who will

talk about the report who will perhaps give us some solutions as

to how we start dealing with this issue, but I have young people,

young folks in junior high school and high school and, yes, in elementary school who will not be able to communicate with young

folks in Japan and China and other parts of this world if we do not

prevent this type of have-nots in this country.

We recognize that knowledge is important. Knowledge is important because it gives you the information tool that you need and

then the skills so appropriate for young folks to have, but they

need the skills and they need the computers. Those two things are

principal elements to young folks in the Watts area, in Appalachia,

in Mississippi and other places where the President visited that

will not have and will not be able to move along this superhighway

if we do not look at, very seriously, this digital divide, this divide

that will continue to make the rich richer, to erase the middle class

and make the poor poorer.

I am very excited about this hearing and look forward to the

presentations. Thank you, Mr. Chairman.

Chairman PITTS. Thank you.

[Ms. Millender-McDonald’s statement may be found in the appendix.]

Chairman PITTS. We are going to ask the members and witnesses

to abide by the 5-minute rule today. We have two panels, and if

the members who will be asking questions cannot cover them in 5

minutes, we will begin a second round.
4

So, at this time, we would like to ask the Honorable Larry Irving

to present testimony.

STATEMENT OF THE HONORABLE LARRY IRVING, ASSISTANT

SECRETARY FOR COMMUNICATIONS AND INFORMATION,

U.S. DEPARTMENT OF COMMERCE

Mr. IRVING. Thank you, Mr. Chairman.

I would like to thank you and the members of the Subcommittee

for this opportunity to testify today on the findings of Falling

Through the Net: Defining the Digital Divide, the study released

by the Commerce Department earlier this month.

President Clinton and Secretary Daley released Falling Through

the Net on July 8, 1999, in Los Angeles during the President’s New

Markets tour; and, during the tour, the President and Secretary

Daley discussed the fact that, even though information technology

underlies much of our Nation’s economic growth, far too many

Americans are left out of the digital economy and, as a result, the

digital divide, that is, the divide between the haves and have-nots

in information technology, has become a critical economic and civil

rights issue.

Access to new technologies, such as the computer and the Internet, will be keys to the future economic success of any American

business, community or individual; and, increasingly, Americans

use the net to find jobs, contact colleagues, locate public information or take courses on line.

Electronic commerce is helping small companies compete and entrepreneurs in rural, remote and traditionally underserved areas

reach out to the rest of the world.

Familiarity with new technologies will also prepare more Americans for the high-tech workplace of the 21st century. Because of the

increasingly important role of these new technologies, Secretary

Daley concluded that ensuring access to the fundamental tools of

the digital economy is one of the most significant investments our

Nation can make. And as we enter the 21st century, it will become

even more essential to ensure that all Americans, rich or poor,

urban or rural, black or white, Hispanic or native American, can

reap the benefits of these new technologies.

Falling Through the Net provides a starting point in bridging the

gap between the Nation’s rich and poor. This is our third report examining census data, looking at the digital divide, and we anticipate that it will serve as an important diagnostic tool to assist policymakers in the private sector in formulating methods to provide

greater access for more Americans, and today I would like to provide for the Subcommittee several slides showing some of our key

findings.

These slides illustrate that, overall, Americans are far more connected than they have been in years past. On the other hand, we

have also found that there are alarming disparity based chiefly on

income, education, race and geographic location in which group of

Americans have computers and who is on line. Equally disturbing,

many of these disparities are growing, and let me turn to the first

slide.

Ms. MILLENDER-MCDONALD. It shows this room and everyone

will be in the dark if we don’t get online.
5

Mr. IRVING. What this chart demonstrates, that telephone penetration has stabilized, that computer penetration has nearly doubled in just a 4-year period and that Internet penetration in a 1-

year period from 1997 to 1998 rose by more than 40 percent.

When you look at the income, the slide is almost a straight line

up. You will see a disparity, that under families at 5,000 to 10,000

have a lower penetration rate than households under 5,000. We believe the reason for that is primarily because under 5,000 reflects

a number of students. But one of the things you will notice is that

family income is a huge determinant, and if you have a $75,000 income, you are five times more likely than a household with less

than $10,000 to own a computer.

We have also found that whites and Asian Pacific Americans

have the highest rate of computer ownership—whites at 46 percent, Asian Americans at 55 percent—and whites are almost twice

as likely to own a computer as African American or Hispanic American.

This is the so-called digital divide right in here. This is the gap

between white America and black and brown America. The gap increased. In 1994, the computer penetration gap was 14.8 percent

between whites and Hispanics. Today, it is 21.8 percent. In 1994,

the gap between whites and blacks was 16.8 percent. Today, it is

23.4 percent. And this difference in here is the so-called digital divide.

The west is the clearcut leader for PC ownership. Approximately

50 percent of western households own computers. In the south, it

is approximately 38 percent, a 10 percent difference. And northeast

central cities and the rural south have the lowest overall penetration rates. So if you are rural or central city, you are disproportionately less likely to have computer access.

Again, when we look at Internet we have almost that same kind

of a hockey stick curve. Again, you will notice the anomaly under

5,000. Again, we think that is because of students. But households

with a $75,000 income are seven times more likely to use the Internet than those households earning less than $10,000. And, again,

this is a digital divide in regard to Internet access; and, again, it

has grown. It went from 12.5 to 19.5 between whites and Hispanics

and increased from 13.5 to 20.7 percent between whites and blacks.

Interestingly, one point that is not on the graph is that at

$75,000 a year household income the gap virtually erases itself.

There is almost no statistical difference. You will find that in your

report. It is not on the slides.

The west leads in home Internet access at 31.3 percent. The

south again is the lowest, and northeast central cities and the rural

south again have the lowest rates of any region.

And quickly, with regard to regions, 32.7 percent of Americans

have use of the Internet at any location. That is home, work or

schools or libraries.

One of the most interesting statistics we found is that whites

have more Internet access at home than African Americans or Hispanics have anywhere. The overall cumulative rate, home use,

work use, school, library, community center, at a friend’s house for

African Americans and Hispanics, is 19 percent and 16 percent respectively, but white Americans just home use is 26.7 percent.
6

And where people use it outside of home is actually interesting,

also. White, nonHispanics, are much more likely outside the home

to have access at work. What you will notice is the blacks and Hispanics are much more likely to have it at community centers, at

schools, public libraries and similar kinds of public institutions as

opposed to work; and blacks and Hispanics are more likely to use

the Internet for educational purposes and for job searches.

We also found that low income and lesser educated Americans

are more likely, when they use the Internet, to use the Internet for

things like looking for jobs, getting educational skills, than are

their more highly educated or higher income counterparts.

Thank you very much.

Chairman PITTS. Thank you. Thank you for that slide presentation.

[Mr. Irving’s statement may be found in the appendix.]

Chairman PITTS. Now we will go to Ms. Lewis.

STATEMENT OF MAUREEN LEWIS, GENERAL COUNSEL,

ALLIANCE FOR PUBLIC TECHNOLOGY

Ms. LEWIS. Good afternoon, Chairman Pitts, Congresswoman

Millender-McDonald, and other distinguished members of the Subcommittee. My name is Maureen Lewis, and I am the General

Counsel of the Alliance for Public Technology or APT. Thank you

so much for inviting me to discuss the alarming growth in what

has come to be known as the digital divide.

Unfortunately, the divide is wide and deep, and it describes the

disparity between those who have access to information and new

technologies and those who do not. The divide has the potential of

exacerbating the problems of people who already lack quality education, affordable health care, satisfactory employment and decent

housing.

Telemedicine, local and distance learning, and telecommuting,

among other applications, are possible through emerging highspeed, high-capacity networks which permit users to send and receive voice, data, graphics and video using telephone, cable, wireless and satellite technologies. These broadband networks can connect people and help communities to address some of their pressing

problems but only if the networks reach everyone, everywhere.

For more than 10 years, the Alliance for Public Technology has

been advocating for public policies that promote access to affordable, usable information and communications tools for all consumers, regardless of their income level, place of residence or physical limitations. APT is a national, nonprofit coalition of individuals

and a variety of organizations, such as the National Urban League,

the American Foundation of the Blind, the National Association of

Community Action Agencies, the National Education Association,

and many other organizations that serve senior citizens, people

with disabilities, low-income families, rural residents and small

business owners.

Recently, APT has been defending the interests of consumers in

the telecommunications revolution by urging the Federal Communications Commission to implement section 706 of the 1996 Telecommunications Act. That provision commands State and Federal

regulators to encourage the reasonable and timely deployment of
7

advanced telecommunications capabilities to all Americans through

the use of various regulated methods and market incentives.

Well, in 1999, the FCC issued a report in February that concluded that deployment of advanced capability is proceeding satisfactorily. Well, the Alliance disputes this conclusion and remains

very concerned that new high-speed network providers are bypassing many inner city and rural areas, competing instead for lucrative high-volume large business users. Consequently, millions of

residential and small business consumers are falling into the digital divide.

To combat this problem, APT has been advocating that the FCC

undertake a number of measures, including eliminating certain

rules that we believe discourage the large telephone companies

that currently have the most ubiquitous network that can reach

more people more quickly from deploying broadband infrastructure.

In addition, the Alliance has urged the Commission to actively

stimulate deployment of advanced technologies in communities that

have been left behind. For example, the Alliance has suggested

that the FCC develop policies that foster partnerships between

community-based organizations which pool their demand for telecommunications services and service providers. The partners will

then work together to develop technology applications that address

the critical needs of traditionally underserved communities.

APT believes that these partnerships will help to educate communities about the benefits of telecommunications infrastructure

while demonstrating to providers the viability and sustainability of

markets they typically overlook as unprofitable.

The Alliance has long believed that community efforts to aggregate demand for telecommunications products and service can help

to attract providers. Accordingly, APT has suggested that Congress

clarify that incumbent local telephone companies may offer at

wholesale rates digital subscriber lines, a broadband technology

that is offered through conditioned copper telephone lines, and

other advanced services to entities that are ineligible for the wholesale rates that currently apply only to telecommunications carriers.

One of the major barriers to demand aggregation is the absence

of meaningful economic incentives for communities themselves to

undertake the cost of aggregating their demand. Therefore, the

availability of wholesale rates for advanced services could provide

an important catalyst for community-based organizations, municipalities, academic, medical and other nonprofit organizations to resell advanced services to residents and small businesses.

Another way of promoting demand aggregation has been an effort that APT has undertaken with the National Association of

State Regulatory Utility Commissioners to develop a proposal that

enables State and Federal regulators to work together on implementing section 706. The proposal asks the Federal Communications Commission to convene an ongoing Federal/State conference

on advanced services to address the challenges of providing advanced services to low-income and rural communities and to people

with disabilities.

The conferees, with input from consumers, industry and other

stakeholders, would, among other things, monitor the scope and

pace of advanced telecommunications deployment; develop deploy-
8

ment strategies that include private initiatives and leveraging Federal programs of the National Telecommunications Information Administration, the Rural Utility Service and the Small Business Administration, among others; disseminate best practices and other

information; and experiment through opportunities to encourage investment of private resources through education and through regulatory methods in ‘‘706 zones’’ as ways of promoting broadband deployment.

Thank you very much.

Chairman PITTS. Thank you, Ms. Lewis.

[Ms. Lewis’ statement may be found in the appendix.]

Chairman PITTS. Mr. Miller’s testimony will conclude the final

panel.

Mr. Miller.

STATEMENT OF HARRIS MILLER, PRESIDENT, INFORMATION

TECHNOLOGY ASSOCIATION OF AMERICA

Mr. MILLER. Mr. Chairman, members of the Subcommittee, when

Winston Churchill was Prime Minister, he was approached by a

leader of the British Women’s Temperance Union in Westminster

Hall. The woman said, Mr. Prime Minister, do you realize that all

the alcohol you have drunk in your life would fill half this room?

And Churchill looked up at the ceiling and said, ‘‘So far to go and

so little time.’’ Clearly, the room that she saw as being half full he

saw as being half empty; and so, as I testify today on behalf of my

11,000 IT company members, rather than referring to this as a

‘‘digital divide,’’ we prefer to call it as a ‘‘digital opportunity.’’

For the reasons I will outline, this issue or its perception is very

important to my members and my industry which is at the forefront of electronic commerce. Based on our own surveys, we see a

doubling of electronic commerce in just the next 6 months. Given

this dramatic growth, assuring the opportunity to access the Internet and to participate in the digital economy is not just an empowerment issue, it is an economic performance issue. So let us

talk about the digital opportunity.

As Mr. Irving discussed, we find that black and Hispanic households are far less likely to have Internet access than white households. I note that between 1997 and 1998 Internet access jumped

40 percent across the board, but disparities exist for factors such

as income, race, education and household type.

I do not believe that the numerical disparities reported by Mr.

Irving are unbridgeable, and I believe natural markets forces, as

opposed to government intervention, will quickly fill the breach.

The opportunity here is for technology sellers, including those who

create the content to transmit on the web and those who want to

sell electronically, to work with their actual and potential customers to make this marketplace work and to realize the full digital opportunity.

What are some of the factors involved? Well, the World Wide

Web is just 6 years old. Yet, we see almost one-third of all U.S.

homes tapping into the Internet. Typical technology cycles take 20

years. The web has gone mainstream in less than one-third of that

time, a phenomenal rate of adoption. This is in large part a func-
9

tion of price. The cost of personal computers and related equipment

has nose-dived.

Just last week the Federal Communications Commission released a thoughtful report which traced how government nonintervention in the data and information market contributed to the

development of the Internet. The Commission has tried to maintain

essentially a hands-off approach to these markets, and it deserves

great credit because these policies have led to the quick adoption

of Internet technology.

As a result of the FCC, we all enjoy the benefits of competitive

marketplace. The incredible increase in performance with lower

prices brings the Internet within the reach of a majority of consumers, but it does not seal the deal. To be successful, technology

must solve a problem or it must scratch an itch.

Clearly, economics plays a major role in whether you are the first

kid on the block to have a GPS mapping system in your car or a

Palm Pilot in your pocket. Economics aside, I think that people, regardless of class or origin, are different and naturally take different

approaches to technology adoption. So if affordable technology is

the first plank in my digital opportunity platform, making it compelling for people who are currently not part of the digital network

is the second.

Convenient access is the third critical aspect of a true digital opportunity. Internet access is clearly a good situation that is getting

better every day. In fact, according to the FCC, over 6,000 Internet

service providers offer dial-up service, and 95 percent of Americans

today can shop from among at least four of these local companies.

In classrooms, Internet access has chalked up gains from 35 percent just 4 years ago to 51 percent last year. Convenience and

choice are bringing the Internet home to consumers, no matter

where those homes happen to be.

Bandwidth is still critical. Demand is growing even faster than

the growth for more digital power. The answer is simple: competition, especially in the so-called ‘‘last mile’’ to homes and small businesses. Aggressive enforcement of the 1996 Telecommunications

Reform Act is essential if we are going to give consumers more

bandwidth and more options to obtain bandwidth at a lower price.

Let me add a word about the e-rate, the program that pays for

Internet access for schools and libraries. We have actively participated in debate defending the issues of specific interest to the IT

industry. ITAA believes that schools and libraries should have access to the services of the broadest selection of possible vendors in

order to select the most cost-effective provider of Internet access.

But even if we have affordable price, compelling need and easy

access, the digital opportunity is still not complete. I refer to a woeful lack of participation by most minority groups in the information

technology workforce. The problem is not small-minded employers

raising barriers to entry. Rather, it is a shortage of appropriately

skilled and educated professionals in the pipeline. As an example,

last year, according to the Computer Research Association’s

Taulbee Survey, only 10 African Americans received Ph.D.s in computer science and only six Hispanic Americans did likewise. Similarly, only 2 percent of undergraduate computer science degrees

were awarded to African American and Hispanic Americans.
10

These numbers are unacceptably low, both from the perspective

of finding this common ground and, frankly, finding workers period

for the IT economy. Our own studies indicate that one of ten jobs

for computer programmers now goes begging.

We have set ourself on a course to attract underrepresented

groups to the IT industry. This issue has been front and center at

the National IT Workforce Convocations we held in both 1998 and

1999. We are currently working with the White House to assess

this situation, and this month cosponsored an industry forum on

the topic at the National Institute of Standards and Technology.

And we are also working with programs designed to outreach to

people with disabilities and low-income women.

So the question is, do we have a digital divide or a digital opportunity? The future, Mr. Chairman, is what we want to make it. To

reach its greatest potential, we must strive in every way possible

to give this incredible resource its greatest possible reach. The

issue is how we achieve it. We say the market has worked wonders

to date, and I assure you that this economic show is just starting.

Thank you very much, and I will be happy to answer any questions you and the colleagues on the Subcommittee may have.

Chairman PITTS. Thank you, Mr. Miller.

[Mr. Miller’s statement may be found in the appendix.]

Chairman PITTS. We will now begin the first round of questioning, and I will start with Secretary Irving.

Mr. Irving, you speculate as to why certain groups are not embracing computers and the Internet. Can you speculate as to why

they are not doing this? Obviously, lack of infrastructure would inhibit some, but what about the rest? Do some people just think

that technology does not have a place in their lives? If so, what can

be done to enhance awareness?

Mr. IRVING. A number of things. I think in America it is interesting you will see more computer executives on the front page and

covers of magazines than you will see celebrities on some weeks.

There has been the adoption of geek chic in some parts of America,

and it hasn’t expanded to some of the minority communities.

I think the marketing of some computer companies in which they

will look at the high-income—if you are a businessperson, you go

for the low-hanging fruit. If you are a high-income family and if

you look at golf magazines, travel magazines, lifestyle magazines

geared toward upper income people, you will see targeted advertizing looking to sell computers to those folks. I think if you look

at Ebony, Jet, Hispanic business magazines and other minority-oriented magazines, you won’t see the same kind of targeted advertisements. As you get all the low-hanging fruit you may see

changes in that and as computer prices come down below 1,000,

but I also think there is something cultural that is going on different. There isn’t as much on the net of interest to some communities.

Asian Americans have the highest penetration rate of both computers and Internet access, and I think part of the reason for that

is, if you are an Asian American, given the different number of languages, the way you might find content of interest to you may be

by going on the net. If you are an African American, Hispanic

American there may be free over-the-air broadcasting options, some
11

local options through newspapers, and you may not feel the same

incumbent need. And, to date, if you look at the top 100 web sites,

none of them are by, for or about African Americans or Hispanic

Americans, and that has got to change, the compelling content,

that Harris was talking about.

So I think it is a combination of cultural, economic, how the industry markets itself, all of those things are playing a role. But you

hit a very critical issue, Mr. Chairman, and that is infrastructure.

The infrastructure in our inner cities and in our rural areas, particularly the rural south, has got to be focused on as well, particularly as we move to the broadband networks that both Ms. Lewis

and Mr. Harris spoke about.

Chairman PITTS. Thank you.

Ms. Lewis, what kind of feedback have you received from communities that have not benefited from advanced technology communications capabilities? Are members of these communities speaking

out?

Ms. LEWIS. Yes. In fact, there is a great alarm among many

members of traditionally underserved communities. As more information about technologies become available through more traditional media, people are beginning to understand it. They are getting left out.

For example, the Federal Communications Commission just undertook a rulemaking to help address the needs of people with disabilities who, as you can imagine, could greatly benefit from advances in technology. Those technologies can provide much greater

independent living opportunities, much better employment opportunities for those folks who suffer from disabilities.

You can also see—and I have heard personal stories about people

who understand the potential that technology can offer but don’t

have access, and they find it very frustrating. So it is a growing

problem and one that I hope we will be able to address quickly.

Chairman PITTS. Thank you.

Mr. Miller, you referred to the digital opportunity rather than

the digital divide. Will the rapid unfolding of new technology create

an even greater rift between the technology haves and the havenots?

Mr. MILLER. I think on the contrary, Mr. Chairman. What we are

going to see is, as new technologies are rolled out—both hardware

and software—more and more price pressures downward. And so at

least that part of the equation which I mention as one of the

planks of achieving this digital opportunity will be dealt with.

There is going to be price pressures coming down. Computers that

you bought a year ago for $1,500 are now $500. The personal digital assistants, the Palm Pilots and devices like that, their prices

are coming down. So those opportunities are going to be there.

I think the real challenge is, again, scratching the itch. And the

reason I refer to the digital opportunity is I am not buying any

more personal computers for my home. I have got one for me, one

for my wife, and one for each of my teenage kids. I may upgrade

one every 3 or 4 years, but the personal computer industry isn’t

going to sell me any more personal computers. It is to the families

that they haven’t yet been sold to, that haven’t yet accepted the

compelling case that there are real opportunities, that industry
12

wants. For computers to get to the penetration rates of VCRs or

televisions, to get up to 70, 80, 90 percent, which is where the companies all want to be, because they all want to sell as many as they

can—that is really how they make their money. They are going to

need to continue to bring the prices down and continue to find a

way to attract people in those communities which are currently not

purchasing those products so they can blanket the entire marketplace, not just particular segments of the marketplace.

Chairman PITTS. I have just a little bit more time.

You express concern about the low number of minorities in the

IT industry. What is the ITAA or its individual members doing to

attract new workers or further educate current workers to move

forward within the industry?

Mr. MILLER. It is really a multiplicity of activities, Mr. Chairman. Our attitude is letting a thousand flowers bloom. It is not just

going to be traditional colleges and universities.

For example, we are talking to some historically black colleges

and universities that have not been part of this educational program which is necessarily focused on training IT workers. Some

HBCUs have, but a lot of them have not. So we are starting to

reach out to them.

We are working more closely with community colleges which frequently do a better job of reaching out to minorities and people

who don’t have as much income or who are not thinking about

going to college because a lot of the skills can be obtained through

a community college program. For-profit schools are also doing an

energetic effort. We are also looking at working with particular organizations. We have been talking—for example, I know Mr. Fulton is testifying in your next panel—to the National Urban League

because we have to find channels into those communities to help

convince people that they should be part of the IT workforce.

Chairman PITTS. Thank you. I see my 5 minutes are up.

Ms. Millender-McDonald.

Ms. MILLENDER-MCDONALD. Thank you, Mr. Chairman.

I am going to first go to Mr. Miller, because I want to see whether I either misunderstood you or understood you and want to get

a clarification, one or the other.

You spoke of a few Ph.D.s that African Americans have, and I

hope you were not translating that into the need for one to be proficient on a computer one has to have a Ph.D. Because clearly there

are many folks who even develop computer programs at the age of

14, even before they go out to universities and colleges. So I would

like for you to clarify that, if I misunderstood what you said, because certainly Ph.D.s should not be a factor in one becoming proficient on the computer.

Mr. MILLER. I agree with you 100 percent, Congresswoman; and

if I misspoke or misled the Subcommittee it was not my intention.

But I was trying to make a more generic point. We believe that getting people from minority communities who are not currently a

major part of the IT workforce excited about the IT industry is one

way, one element of achieving this digital opportunity; and the fact

that such a small number of African Americans and Hispanic

Americans got Ph.D.s, that such a small percentage of the computer science graduates from our 4-year colleges and universities
13

are minorities, is indicative of the fact that we haven’t been able

to penetrate into those communities and convince them about the

great opportunities of working in our industry. Does that necessarily translate into more penetration into minority communities? Not necessarily. But we think it is one element of making

sure we get this digital opportunity achieved across the board.

Ms. MILLENDER-MCDONALD. Well, I like your optimism about

digital opportunities. However, I suppose I still have to be a little

pessimistic about it, given the fact that we do not see these opportunities at all in the inner city, especially in the Watts and Compton and Lynwood areas.

I am interested, though, in your presentation as I have tried to

underscore it. You spoke about the importance of electronic commerce and the Internet, and I have heard that theme going

through just about all three of them. Clearly, electronic commerce

is an important factor, and the word commerce or economy and all

of that coming together, that is the main source and the main problem.

In this economy, we are talking about folks who do not have jobs

to even gain $10,000 a year or have $10,000 incomes. So how do

we expect this electronic commerce to play in inner cities or to even

have this type of concept brought into our communities if, in fact,

we do not have the computers, we do not even have, as you said,

the aspirations of even going into that because we don’t know how

exciting it is if you do not have the opportunity to surf on the Internet, if you will.

Mr. MILLER. I think a couple of things are going to be important

here. The e-rate is bringing the computers into the public libraries

and into the schools. Even if an individual can’t afford one or

doesn’t choose to make it enough of a priority to put it in his or

her home, at least you have a chance to be exposed to it. Again,

if there is a digital divide, I would say it is not just economic, it

is more age. Young kids, if they see it and understand the excitement of it, they can be the people that go home to mummy and

daddy and say, ‘‘Mom, dad, I just downloaded some really neat

music off the Internet; I don’t have to go across town to Tower

Records or wherever I buy; I can buy this stuff off the Internet.’’

Which may not make mummy and daddy real happy but at least

they have that opportunity. They can also say, ‘‘Mom, dad, I was

able to do my homework on the Internet.’’

Ms. MILLENDER-MCDONALD. I wish I could agree with you on

that. Unfortunately, as I have gone to my schools, there are fewer

computers in the schools. They are old computers that have been

given by computer companies to them. They are no longer working.

There are about 20 to 25 kids per two computers, so they never

build up that excitement about it because they never get an opportunity to work on it. If they do, it is such a short time. So e-rate

would be a very effective tool for us to begin to work on that, but

at this juncture, we do not have it. We need that. We need to work

with you in concert with others to bring this type of concept into

our schools and to our community.

Mr. MILLER. I will be glad to work with you on that, Congresswoman.
14

Ms. MILLENDER-MCDONALD. You spoke about HBCUs. How

many of those colleges and universities are working with you to try

to bring this whole Internet and software and computer concept

into our communities?

Mr. MILLER. I am currently working on a board organized by Mr.

Mark Warner, who is a businessman in Virginia, just working with

the Virginia HBCUs. That has been a pilot program, and there are

currently, for example, 65 students out of those historically black

colleges and universities who are in mentoring programs working

with companies in northern Virginia where they are able to work

during the summer, or during the school year. That seems to be a

most effective way to start.

We have begun discussions now trying to expand that beyond

Virginia. We have had some preliminary conversations, and I will

be able to give you a further report probably in 3 or 4 months. We

are just going through the process right now. In fact, we had a

meeting, as I mentioned, at NIST about 2 weeks ago, which was

very productive, and now we are trying to figure out the most effective way to implement that.

Ms. MILLENDER-MCDONALD. I certainly would like you to get

back with me on this because it is very important.

Again, when we talk about perception, this perception is real. It

is absolutely critical in our communities, because we don’t have

any of the tools, we don’t even have the knowledge, we do not even

have teachers who come to us ofttimes with the knowledge of computers, a literacy, so, you know, to enable them to teach it to the

students. So you have just——

I think, getting back to what Ms. Lewis said, that infrastructure

is not in place. Therefore, you cannot teach what you don’t know,

and they cannot learn what has not been taught to them. And so

it is just critical for this natural market that you talk about, that

you help me to understand where they are and who they are and

how we can tap into them. Because government has to intrude

when no one else is going to sufficiently provide the opportunities

for these youngsters to get digitized, if you will, to get on this digital opportunity that you are riding the crest on. And we know that

the workforce is going to be the minorities, for the most part, and

women, and we have to train and to get them geared up for this

new millennium, and the only way we can do that is to have you

help us to make that happen.

I will talk to the others, but I see the chairman is flickering with

his speakerphone.

Chairman PITTS. Thank you. We have been called for a vote. Let

us take one more 5-minute round of questioning before we go to the

floor. Mr. DeMint.

Ms. MILLENDER-MCDONALD. I hadn’t finished.

Chairman PITTS. Your first 5 minutes is up. You may continue

in the next round, if that is okay.

Mr. DEMINT. Thank you, Mr. Chairman.

As you probably know, one of the goals of this Committee is to

use private sector, free enterprise concepts to make sure there is

equal opportunity for everyone in America, and the Internet certainly represents one of those key opportunities. As I sit here and

listen to you, I am appreciative that you are sharing your ideas and
15

hope that you can help us determine how we can create equal opportunity to the Internet without creating another Federal entitlement program that cannot possibly keep pace with this industry.

This is one of those things that is changing so quickly, it is going

to take continued private sector involvement, competition, a lot of

the free enterprise ideas to keep it alive and active. So this is not

something we can do as a Federal Government, but we can act as

a catalyst in some ways.

So my question to the panel is, is there a role for the Federal

Government here? Is the Federal Government now creating any obstacles to this happening? Are there incentives that we could offer

to make it happen?

And I will start to my far left to just get some quick comments

before we have to vote. Mr. Irving.

Mr. IRVING. Yes, there is a role for the Federal government. I

think one of the key roles is to continue promoting pro-competitive

policies.

I have to disagree with my friend, Mr. Miller, just briefly. I think

the administration and Congress have been at least as responsible

to hands off high-tech, hands off the Internet policy as the FCC,

which shouldn’t have a role in the Internet in our mind, which

should be leaving this alone. And I think for the last 6 years, Republicans, Democrats, administration and Congress have all agreed

that we need to grow this using the private sector, but there are

also other roles.

There are some market dysfunctionalities. I mean, one of the

things we have recognize that 75 percent of white families don’t

have access to the Internet. When we get into rural America we are

talking about a significant number. Native American families don’t

have access to the Internet, low-income families, rural families, and

some of those communities we find that having access in public

centers is important. So the e-rate becomes important. Community

technology centers become important places. If I don’t have a computer at home—and 90 percent of African Americans and Hispanic

Americans don’t have computers at home, roughly 90 percent of

low-income white Americans don’t have computers at home. They

need access today. And having access in schools and libraries and

computer centers can be helpful.

We also need to continue trying to use the bully pulpit, trying

to get things like what Sysco Company is doing with its network

academies, what the Gates Foundation is doing with libraries,

what AOL Foundation is doing with regard to its philanthropic activities, trying to make sure the companies are promoting, when

they have a 286, 386, Pentium I, Pentium II, that they are giving

that computer to a school or library or community center that can

use it. And Members of Congress and the administration can be

key there.

And there are a number of other things I could throw out, but

I think one of the things that I think is very, very important is we

need to try to find ways of making sure that the industry is training American children for the jobs that are coming in the future.

I am not trying to get into H–1b, but it is a tragedy we have an

industry that is virtually devoid of rural workers, virtually devoid

of black and brown workers, and we have to import people for jobs
16

that pay 40, 50, 60, $70,000 a year, and we need to find ways of

working with HBCUs, community colleges, tribal colleges, rural colleges, to give our young kids the skills that they need.

Mr. DEMINT. Ms. Lewis.

Ms. LEWIS. Yes. In fact, I do believe the government has an important role to play, and while I do understand the 1996 Telecommunications Act’s emphasis on competition as a way of helping

to encourage the widespread, ubiquitous deployment of advanced

telecommunications infrastructure, there will be some pockets in

some communities where competition won’t come readily, and it

may be important for the government to step-in in those instances,

and some of the partnerships that I talked about earlier are some

of the ways we think that can occur.

The other thing that government can do I think is to continue

to promote programs like NTIA’s TIIAP program, which helps to

demonstrate throughout communities how technology can be useful

and important in addressing various community needs.

I also believe continued support for the e-rate program is necessary, and I understand that there is legislation that will help

provide some Federal funding for community technology centers.

Again, providing more opportunities for access is important, but

the Alliance’s view is to try to bring access into everybody’s home.

So we hope that policies to promote that end can occur.

Chairman PITTS. You still have a minute left.

Mr. DEMINT. Mr. Miller, comment before we take off?

Mr. MILLER. Number one issue for government is education and

worker training. Again, if people are not understanding the Internet, if they don’t have the skill sets, then whether they are actually

going to become a computer worker or just happen to use a computer for their lives, then we have a problem.

Yesterday, one of my CEOs was calling for a GI plan for the 21st

century. We may to have go that far. That wouldn’t just apply to

African Americans or Hispanic Americans. That would be across

the board. But, obviously, people in lower incomes would be able

to take most advantage of that. So, certainly training and education.

Secondly, I agree with Mr. Irving. Competition, particularly in

the last mile. We need to have competition to bring the prices

down. It gives people options.

And, thirdly, since this is a Small Business Committee, I will repeat something I suggested to the full Committee, which is more

training for small businesses in what electronic commerce is all

about, working with the SBA to set up training and education programs. And many of those programs could be targeted at African

American and Hispanic American owned businesses or tribal businesses. It doesn’t have to just be suburban white owned businesses.

It could be businesses across the country. And if you get those

small businesses hooked on the Internet and seeing the advantages

of computers, many of those people will take it into their homes

also.

Mr. DEMINT. Thank you, Mr. Chairman.

Chairman PITTS. Thank you. I would like to remind everyone we

will have another round of questions for this panel, but at this
17

point we have got to go vote. And so we will recess, and I would

ask the members to come back right after the vote. Thank you.

[Recess.]

Chairman PITTS. The time of the recess having expired, we will

continue the first round of questioning, and I think we are ready

for Mr. Udall at this time.

Mr. TOM UDALL. Thank you very much, Chairman Pitts, and

thank you to the members of the panel for being here today and

sharing your insights with us.

I also represent a district that is very much like the areas that

have already been described as underserved, where there is a digital divide. It is northern New Mexico—Santa Fe, Taos and a number of other rural areas—where we have many native Americans

and many Hispanics that aren’t hooked up, and there is clearly a

digital divide. I was very interested to hear from Maureen Lewis

about FCC rules and regulations that are holding us back, and I

was wondering if you could tell me specifically what these rules

and regulations are, because I am aware that the phone company

that is in the district is not putting in the infrastructure. Could you

please describe specifically for me those rules and how you see how

they should be changed.

Ms. LEWIS. Certainly.

One of the things that seems to be a deterrent to widespread deployment of high-capacity infrastructure has to do with the inability of some of the larger telephone companies to have their traffic

cross what are called toll areas, and that has to do with the local

telephone companies being confined to local telephone service and

not being able to provide long distance service.

One of the things that I know that some Members of Congress

are talking about is providing some relief to large carriers that will

allow them to cross LATA boundaries with data so that companies

will have more incentive to roll out capacity that will serve underserved areas.

One of the other things that the FCC is considering in some proposed rules is requiring companies in order to have relief from

some of its current rules is to set up separate subsidiaries to offer

advanced data services. Those separate subsidiaries have the incentive to act like competitive carriers and compete for some of the

low-hanging fruit that Mr. Irving referred to earlier; and, as a consequence, there won’t be incentive to go to some of the underserved

areas that APT is most concerned about.

So in APT’s view companies that are able to provide data service

without the additional expense of setting up a separate subsidiary

may have more of an incentive to penetrate further into underserved markets than they might otherwise.

Mr. TOM UDALL. Thank you. And that is I think what we need

to do in northern New Mexico, and I imagine it is what we need

to do in a lot of the rural areas around the country. I think a lot

of us are in the same boat on that.

Mr. Irving, your report indicates that—and I am repeating myself here a little bit—but that native Americans and Hispanics in

rural areas are falling behind; and I am wondering, you know,

what special steps should be taken to, that you believe, to address

this aspect of the problem.
18

Mr. IRVING. I think the problem is particularly acute in New

Mexico, Congressman. I spent some time in your part of the world,

and I can tell you that, right now, 87.1 percent of New Mexico has

telephones, and that compares with about 95 percent for the Nation. And a large part of that statistic is skewed because of the low

telephone penetration rate on native American reservations. We

have reservations where two out of three people don’t have a

phone. Many reservations only half the people have a phone. And

across the Nation rural native Americans are 75 percent penetration, meaning one out of four native Americans don’t have a phone,

by far the least served people in this country.

And I think one of the things we need to focus on are newer technological solutions. It is more expensive to run a telephone line out

to distant rural areas, and we need to start letting technology and

the market work to some degree by looking at wireless technology,

satellite technologies as well, and it is a place that government can

work by trying to create incentive and trying to make sure that we

have the right regulatory policies that will afford that.

But one other thing that I found interesting is Hispanics, native

Americans, low-income people, are more likely to use community

centers and technological centers, and we have to have those available. Because when you have a community where nine out of ten

people don’t have a computer or Internet access on the day, they

are not going to have it near term for many of those families, but

they cannot afford to go 5, 10, 15 years without access anywhere.

I do think that, in addition to getting new technological solutions

to the telephone and Internet penetration to the home, we have got

to get these technologies at least in the community for people; and

one of the benefits of having community centers is you have trained

people who can teach people how to use these technologies in those

centers, opposed to just putting a computer there and folks have

no idea how to use it.

Mr. TOM UDALL. Thank you.

And, Mr. Miller, do you have any thoughts on either one of those

subjects?

Mr. MILLER. Just to put an emphasis on competition, Mr. Udall.

About 2 years ago, my family and I took a vacation to Chile, and

we started in Santiago and then went to Patagonia. We were closer

to Antarctica than we were to the equator. I walked into a phone

booth. There were six telephone companies to choose from, including one of the local Bell Operating Companies here in the United

States, which was down there competing. It was cheaper for me to

use their phone service to call back to the U.S. than it was to use

my long distance calling card that I had brought with me from the

United States. So when competition comes, there is money to be

made doing telephone calls.

Again, maybe it is not a land line, as Mr. Irving suggested.

Maybe it is wireless or satellite. But, believe me, these companies

want to do business. But as long as there are too many rules and

regulations and lack of competition, you are going to find these

kind of situations where the market is not going to work properly.

People who frequently suffer the most are people who are less advantaged because they can’t figure the work-arounds. They can’t

deal with the work-arounds. So we have to make sure that competi-
19

tion comes to the marketplace so that native Americans have just

as much access to telecommunications as people in wealthy suburbs do.

Mr. TOM UDALL. Thank you very much.

Chairman PITTS. Thank you.

Mr. English.

Mr. ENGLISH. Thank you, Mr. Chairman.

Mr. Chairman, I, first of all, want to thank you for having this

hearing today, because it has highlighted an issue which is of particular importance to a district like mine which does have rural

areas, does have parts of the midwest, northeast, rustbelt area

which has the potential to be underserved in this situation.

I am curious, though, one of the things that we have not covered

in our discussion is how other advanced industrialized countries

are approaching the digital divide. They obviously have some of the

same challenges, they have some of the same problems, and given

that this is obviously an issue which is going the affect our longterm competitiveness, Mr. Miller, can you comment on what you

have seen in other countries, and are there market-oriented solutions that are being tried there or is it primarily a governmentdriven response?

Mr. MILLER. Thank you, Mr. English. An excellent question.

We have done a study, which I will be glad to supply to the

record for the Committee, called Digital Planet which actually compares software, hardware, Internet access in 50 different countries,

and those data are very telling. But, in general, I would say in the

industrialized countries of the world that have the highest rates of

telephone access, countries like the Scandinavian countries and

Canada, they really have relied primarily on the market forces and,

as Mr. Irving suggested, not just traditional land lines but huge

use of cellular telephones. In fact, there is a front-page article

today in The New York Times about how cellular penetration is so

much higher in parts of Europe and Asia because they, in a sense,

skipped over the cost of installing a land line and went right to the

cellular lines.

In terms of Internet access, unfortunately, most other countries

of the world, including the developing world, are well behind us,

and one of the reasons is too much regulation. For example, in

many cases, an individual from his or her home accessing the

Internet pays per minute charges for the local dial-up. So even

though you hear stories this week about free Internet access in

Britain, so that even AOL is waiving its monthly fee in Britain, the

reports can be deceiving. Yes, the fee for the Internet access is free,

but the per minute charges are clicking along. So if you stay on

line for 15 or 20 or 25 minutes, you suddenly find yourself with a

$10 or $15 or $20 phone bill. Whereas here, in most cases, that is

a local call and therefore just part of your local monthly charge.

So in many countries, one of the reasons that they are anywhere

from one year to 3 years behind us in terms of Internet access,

even when you hold constant variables such as income, is because

their charges for Internet access are too high, and that is because

of the lack of competition in the marketplace there.
20

Mr. ENGLISH. Ms. Lewis, do you want to get your arms around

this as well? I would be curious to get your observation on the

international dimension of this problem.

Ms. LEWIS. I really can’t speak to that issue, Mr. English.

Mr. ENGLISH. I appreciate that.

Mr. Miller, going back, obviously this is an issue that is going to

have a big impact on the competitiveness of places within regions

of the United States as well as internationally. Can you, from your

international study, identify for us some of the pitfalls that we

need to avoid. For example, some of the cul-de-sacs that other

countries have tried from a policy standpoint and maybe we should

be avoiding?

Mr. MILLER. Well, again, the number one pitfall is overregulation. When they tried to control access to the Internet through centralized services or the local monopolistic telephone company controls the Internet access, you get very high rates, very low takeup rates, very low competition. The other cul-de-sac, of course, are

attempts to control content in countries like Singapore and Saudi

Arabia. The Internet is such a wonderful medium that people have

worked around it.

Let me tell you where I think the successes are; and I point, for

example, to India as a success. Their success, even with a lot of

problems that India has—and it is a 980 million person country,

they have a lot of problems—in information technology is staggering because they made a conscious decision to combine industry,

government and the education community in the early 1980s, to

train an information technology workforce. Their workforce now is

estimated to be between 350,000 and 400,000 trained computer

programmers, which makes it the second or third largest in the

world.

Now, what does that mean? That means when companies in the

United States or Japan or Europe find that they don’t have enough

workers with the right skills to do particular jobs and they are

looking for an alternative place to have the work done, frequently

they turn to India as a location. The same thing is going on in

China. It is going on in Ireland. It is going on in South Africa. It

is going on in Israel. So they have figured out, if you will, the Rosetta stone here, Mr. English, which is having the trained workforce. If you don’t have a trained workforce, people who understand

these skill, then it is tough to be attractive.

So if the cul-de-sac is overregulation, I think the open road is

training the workforce. Education. Obviously, India has a lot more

people to train than 350,000, but if you are looking for a model of

success, India is an example. It is even happening here in the U.S.

In South Boston, Virginia, there is a project that was started about

3 years ago by some refugees from northern Virginia, who got kind

of tired of the traffic and wanted to get out of here. And they started a company and they trained computer programmers there in the

South Boston area. People who used to be in the more traditional

tobacco industry down in South Boston, which is near the North

Carolina border. And they developed what I call ‘‘offshore onshore,’’

so that northern Virginia technology companies, instead of sending

their work to India or Ireland or some other country outside the

United States, are outsourcing work to this company in South Bos-
21

ton, Virginia. It is called the Software Factory, and that model, in

‘‘offshore onshore,’’ I think, could be brought to a lot of rural areas

around the country if we can get the people trained with the software skills they need.

Mr. ENGLISH. That is an exciting vista, and I appreciate your testimony.

Mr. Chairman, I will yield back the balance of my time.

Chairman PITTS. Thank you.

Mr. Davis.

Mr. DAVIS. Thank you, Mr. Chairman. I really appreciate the opportunity to be here. Let me just use the opportunity to ask a couple of questions.

I came because I am very interested in this subject matter, as

obviously lots of people are. It seems to me that whenever we talk

about disparities, immediately many people’s mind goes to the

whole question of race and ethnicity relative to trying to figure out

the why of it. Then, of course, there are others who look at the

whole question of economics and income. What can be done I think

is what I am really trying to get at—if income has much to do with

the disparities, what can be done about reducing the gaps of regulation, legislation? That is really my question.

Mr. IRVING. Can I take a crack at this?

The three biggest determinants we find—income, education and

race—lower income people, lesser educated people and certain

races are less likely to have access, and I think that a critical point

for all of those is informing the communities about the importance

of these technologies. I think mostly what is going to happen with

regard to this technology there are going to be community-based

solutions. They are not going to necessarily be solutions just out of

Washington, though Washington can help, but communities have to

be informed that if they are going to be viable competitors in this

new economy, they are going to have to restructure their educational—at the school board level, at the individual school level investment has got to be made.

I keep getting questions from people, well, how can we afford to

put computers in school when we can’t afford to give kids books

that are less than 30 years old or safe places to study? And I keep

saying, this is the richest Nation in the world. We have to find a

way to do both. We cannot have a child that isn’t computer literate

and send him out to Mr. Miller’s workforce, just as we can’t have

a kid who can’t read or do math and send him out to Mr. Miller’s

workforce. All of those skills are going to be necessary.

We are going to have a generation of entrepreneurs who understand that if they are going to compete in a global economy they

have to have global connectivity and they have to make the investment. As you would make the investment in insurance, security,

you have got to make the investment on connectivity. You wouldn’t

have a business without a telephone, you are not going to have a

business in 2010 that doesn’t have Internet connectivity. You better figure out now how to get there.

We need to figure out to make sure that our local officials understand that isn’t a solution to age, it is not a solution to violence,

to poverty or to health care, but it is one of the solutions. It is a

tool that can be used.
22

Telemedicine, distance education are things that this technology

empowers, and I think the problem is people are looking at this as

an isolated issue and not as part of a holistic approach to governance and being a citizen as we go forward. And I think one of the

things that Members of Congress and other Federal officials and

industry can do are just inform people of the power of the technology to improve lives. But I think when people see this and have

access to it, they get it and they will make the economic decision.

And what drives me to say that is, anecdotally, we haven’t been

able to dig this statistic out, but if you look at who is most likely

to have a computer at home, it is a person whose child has access

to technology at school or a person who has access to technology

at work. If you use this, you understand it, you make the purchase

for yourself. And the reason that native Americans, African Americans, Hispanic Americans and rural whites are less likely to have

access at home, they don’t have access at work and their kids are

less likely to have access at school.

So we have to make this is a little bit more ubiquitous. The market is beginning to work, but it is not going to be a perfect fix.

I had to disagree strongly with Mr. Miller on one point he said.

Broadband can create a bigger chasm. You are going to have people

20, 30, 40 percent of this Nation in 4 or 5 years streaming audio,

the child he was talking about having audio at home. You are

going to have 20, 30 percent of this Nation watching movies over

the Internet, but who are those 60 percent who don’t? Where are

they going to be? And government can play a role in terms of making sure that this technology is deployed ubiquitously and fairly

and that some folks aren’t red-lined economically and electronically. And those are the kind of issues we have got to continue to

be cognizant of.

This report every year gets a little thicker, with more questions.

I think a question we will have to answer in the future is

broadband access is a question we are going to have to start asking

as well as wireless and other technologies, because they are all

playing a role in the solution to the question you asked, Mr. Congressman.

Mr. MILLER. Can I just look at the question somewhat differently?

I am looking at the table on page 27 of Digital Divide, the top

table which Mr. Irving’s department did. What is very interesting

is, if you get over $75,000 in income, Internet usage is pretty close,

breaking out by race. Slightly higher for white nonHispanic and

other nonHispanic but it is pretty close. But when you drop down

to the next cohort, which is the $35,000 to $75,000 bracket, all of

a sudden white usage is almost twice the rate of black access to

the Internet. What has happened? Is it just income or is there

something else going on that when people make $75,000 a year it

doesn’t make a lot of difference what their race is, but when you

talk about the next cohort, it is so different?

My gut feeling is, and I don’t have any data to support this, is

that the difference has a lot to do with content and making the

compelling case. That people in the $35,000 to $75,000 income

range probably can afford the newer, lower priced computers and

probably can afford the access, but they don’t have a compelling
23

case. If I could figure out what it is which would appeal to the African Americans who are making enough to buy a computer but don’t

want to get hooked up to the Internet, I could become a rich entrepreneur on the Internet. I don’t know what that is. I don’t know

whether Mr. Bob Johnson from Black Entertainment Television is

going to figure it out or whether Steven Spielberg is going to figure

it out. But someone is going to figure it out, and, when they do,

I think they are going to bring their broadband just as much into

the central cities and into the rural areas. Because they want to

sell movies to everybody, they want to sell records to everybody,

and they are going to push to make sure that they can reach into

every community.

Mr. DAVIS. I thank you very much, Mr. Chairman. I see that the

time has expired.

It seems to me that both of you are saying that education is the

key, in a sense. Either way you cut it, education really becomes the

key.

Ms. MILLENDER-MCDONALD. Would the gentleman yield for a second?

I just want to piggy-back on what Mr. Miller is saying.

Mr. Miller, usually the $35,000 range parents have smaller kids.

They are in school. These kids still aren’t getting computer learning, and a lot of them do not have medical coverage. So they are

paying a lot within that $35,000 scope, and if their kids aren’t

being taught on the computers in school, then they will not be excited about bringing this information to the home and the home

getting involved in it. So, really, as you look at $35,000 salaries,

as I have looked at them, especially with women, there are so

many things that they are having to provide to the family that they

just cannot afford these computers.

Mr. IRVING. Can I add one thing, Mr. Chairman? Because there

is one point, there is a graph in here that is kind of interesting

that demonstrates that families that have two parents are much

more likely to have access to the Internet than a family with one

parent, for every income group above 35,000 and below 35,000, for

every racial group except for Hispanics below 35,000, where it is

roughly equivalent. So having two parents in the household, interestingly, is not intuitive, but two parents are much more likely to

give their children connectivity than one parent. Every racial

group, every income level, there is a huge gap, and that is just

something that I think underscores what Congresswoman

Millender-McDonald is saying, that there is something going on

with our families that we need to focus on.

Chairman PITTS. All right. Thank you.

We are ready for our second round of questioning, and I will go

to Mr. DeMint.

Mr. DEMINT. Ms. Lewis, you mentioned the e-rate, and I would

just like a little more explanation of how that would work, how do

you think that would help this problem, just briefly.

Ms. LEWIS. Well, the e-rate has I think been an effective tool

helping to bring technologies to communities, and I think it is a

wonderful first step to providing exposure to young children about

the advantages, the possibilities that computer technology can

offer.
24

But, unfortunately, there is a great disparity between homes that

have computers and those that don’t, and children’s education, unfortunately, is impacted by that. So APT’s goal is to further the

penetration of computers not just to schools and libraries but to

homes. But the e-rate is an effective, in my view, an effective way

of providing some early exposure to communities that may not

have any exposure at all.

Mr. DEMINT. You are not suggesting using the e-rate to get computers in homes but more in public places?

Ms. LEWIS. In public spaces. It is a way to help expose some communities that don’t have, as Mr. Irving was talking about before,

access at work and access in other places, to provide at least early

learning for children, and then perhaps those children’s involvement and excitement with computers can help stimulate some interest in their parents.

Mr. DEMINT. Mr. Miller, any comment about the e-rate, how it

relates to what we are trying to do?

Mr. MILLER. I agree with what Ms. Lewis said. I think it is a

question of exposure. I am a little biased, but if I were starting a

school, the first thing I would do is put in the computers.

But I think the reality, as Ms. Millender-McDonald said earlier,

is a lot of schools are striving just to keep erasers and chalk in supply. So the idea of getting computers in is far from them. So having

this e-rate does enable them to bring in the computer technology

which, in turn, exposes the children. In turn, you hope they go

home and tell their parents to think about it, and next thing you

know we will have everybody with the Internet. That would make

my industry very, very happy.

Mr. DEMINT. Mr. Irving, I think I have gotten more calls and letters about an Internet tax than anything else, which would make

it very difficult to ever suggest that. Is that what we are talking

about or are there other ways to accomplish the same thing or just

what would you add?

Mr. IRVING. Well, the e-rate is not an Internet tax. The e-rate is

basically built upon an existing subsidy system. And we have had

a system in for years where—I grew up in New York City, and my

mom paid more in New York City so that my aunts in other parts

of the world, in rural communities could access telephones at a

subsidized rate.

What this basically does is take that rural urban subsidization

system and use that same type of model to give some additional income revenue or dollars to schools in high-cost areas and low-income areas.

I always use the analogy of a cell phone. The first time I got a

cell phone, I couldn’t resist calling everybody I knew and then I got

this bill and couldn’t afford it. We don’t want to have kids on line

and school districts get that first bill and they found that they can’t

afford it. And the e-rate helps keep it affordable, particularly for

high-cost areas and low-income areas, but it is not a tax on Internet users, and this administration and I believe this Congress

would fight against any tax on the Internet. We want to see the

Internet deployed as ubiquitously, as rapidly as possible, but that

has to be in public spaces. Far too many Americans don’t have access anywhere else.
25

Mr. DEMINT. Thank you. I yield back.

Chairman PITTS. Thank you.

Ms. Millender-McDonald.

Ms. MILLENDER-MCDONALD. Yes, Mr. Chairman, I really have so

much here to talk about until I really need to take up the other

time of the other members and would like to do that.

Ms. Lewis, I just want to commend you for your presentation and

especially touching on the telecommunications products and services that will help attract providers, and I think through the e-rate

this will be the conduit by which this happens. And certainly the

CBC has gone on record encouraging the FCC to continue to expand and apply the e-rate so that our kids can have access to computers in the schools, and that is what that was intended to be.

I also want to commend you on your statement about small businesses falling through the cracks. Indeed, small businesses are the

ones who are the job creators. If we do not put them online, give

them the computers, technology that they need, then we will not

have the jobs that are necessary to provide for us.

Mr. Irving, H–1b, absolutely. I just do not think we need to be

going internationally to find workers and not train workers here.

So the H–1b program that you are talking about or that provision

of the law, I really did and will vote against again because we need

to bring in people, we need to train people here in America for the

high-tech jobs that we have here and not go overseas and bring

people in. So I am adamantly opposed to that. I think that is what

you spoke of.

Mr. IRVING. I don’t want to get in trouble with the President,

Vice President, Secretary.

Ms. MILLENDER-MCDONALD. That is all right. I have gotten in

trouble with them. That is what I said, not you.

I will say, as you mentioned the program, I will reiterate my position on it. I really do think, especially with Silicon Valley and all

of those high-tech programs we have in California, we do not need

to have anyone going overseas bringing people in. So that is what

I say.

Mr. Irving, and let me just say, we must recognize that government must play a role in providing the type of training and skills

that will allow us to have a workforce 2000 that is equipped to

move into this global workforce. I just want to bring attention to

this panel and to those in the outer community that it was many

administrations like the Rural Electrification Administration that

was set up in the 1930s that established the rural services because

the established electric companies would not do that.

We also want to call attention to the myriad of—going back to

the 1860s, where the Signal Corporation and Defense Advancement

Research and all of these took place through governmental entities.

Well, in 1960, the IBM Air Force Sage computer system, and it

goes on and on, the 1971, my person, this expert over here just

gave me this information to let the public know that the government has played a role. In fact, they have been primary, principal,

in starting the whole hardware and software when it comes to computer systems, and we must not forget that. Therefore, they must

play a vital role in this.
26

And my question to you, Mr. Irving, is what is this administration doing to try to bring this divide, gap closer? Because when you

say more connected, that doesn’t say anything to me. It doesn’t tell

me anything. Because these percentages, are they children? Are

they adults? Who are they that have gotten to a degree where they

are more connected? Who are these people and what is the administration doing to help us with this divide?

Mr. IRVING. We are doing a number of things. The principal

thing we are doing is working with Congress to promote competition to bring prices down, which it will help.

I think the second thing we are doing that is very, very important is this President and Vice President, again working with Congress, redefined universal service to include public institutions such

as schools and libraries. This administration have been a strong

and forceful advocate for the e-rate and will continue to be a strong

and forceful advocate for the e-rate. President Clinton and Vice

President Gore and others in the administration have focused on

the need for community technology centers. We have increased by,

I think, 600 percent funding for community technology centers that

are storefronts in rural areas and low-income areas where people

can go in and get training and access to computers.

Ms. MILLENDER-MCDONALD. So your program, this T-I-A-P, how

do you pronounce it?

Mr. IRVING. TIIAP.

Ms. MILLENDER-MCDONALD. What type of grant money will there

be for us to access to provide more computers for these community

centers that you talk about? Because it is great to put up these

centers, but you have got to put computers in there. What is your

grant program like?

Mr. IRVING. TIIAP does a number of different things. We have

about 400 grants out there right now, everywhere from rural Kentucky and Mississippi to a program in East Palo Alto. Right in the

shadow of Silicon Valley there is a community called East Palo Alto

that is disproportionately black, disproportionately Hispanic and a

lot of single-family households. Those kids that are in there are

making technological changes. They have contracts with Sega and

AOL to do computer animation. They paid more in taxes their second and third year in existence than we gave in our first year of

grants, because when you give kids access to technology and set

them loose, they can do wonderful things.

I was just down in Kentucky where we have a program with the

Center for Rural Development that is training people how to use

technology. In small, little counties, they put little technology centers, counties that I had never heard of, but the people in those

communities are embracing it and learning how to use skills.

I was in Chicago, and another one of our grant programs is in

the south side of Chicago. We have grant programs at a learning

center in Los Angeles, low-income, Hispanic, who are teaching

young kids 7, 8, 9 years old computer literacy so they are not intimidated by these technologies.

But TIIAP is really a model program. What we do is demonstrate

models and then hope the communities and States will fund on

their own those types of models. I only have about $20 million a

year, so I can’t do every State.
27

Ms. MILLENDER-MCDONALD. Are you working with the States to

try to bring that partnership about?

Mr. IRVING. Yes, and the most important thing about TIIAP, we

disseminate what we learn. We put it up on line. We make sure

that anybody we give a grant—the National Urban League has a

grant that we gave both in Seattle and in Baltimore.

Ms. MILLENDER-MCDONALD. What about Los Angeles?

Mr. IRVING. There is one there, but we didn’t fund that. But

what they do is they give information about what is working and

not working in those States.

Ms. MILLENDER-MCDONALD. I will say—and, Mr. Chairman,

thank you so much for the extended time—this is a number one

civil rights issue, and we must address it. Thank you so much.

Chairman PITTS. Thank you.

Mr. English.

Mr. ENGLISH. Thank you, Mr. Chairman.

Mr. Irving, in my earlier round of questions, I neglected you.

That was unintentional, and actually, the line of questioning by my

colleague, I would like to follow up on and maybe see if I can clarify some of your points.

In your report you stress community action centers as the key to

finding a solution to addressing some of the problems of the digital

divide within communities that are not as well wired. May I ask,

in your testimony, why you don’t stress the community action centers as much? Also, you don’t give us as clear an idea of what the

Federal role should be in promoting these access points. In your

comments you pointed to the availability of some money for some

prototypes for some pilot projects, but I don’t have a sense of where

the administration would like to go in establishing a firm Federal

role for promoting the creation of these centers. Can you give us

a sense, is this the administration’s next programmatic initiative or

ideally how much money should the Federal Government be putting in this direction?

Mr. IRVING. If I can, it is a multilayered question. The administration feels strongly that community access centers are a key.

Community access centers can be broadly defined. Community access centers include schools and libraries and other public spaces.

Mr. ENGLISH. Do they include churches?

Mr. IRVING. They could include churches, although there is an establishment clause question that I don’t have the capability of——

Mr. ENGLISH. So there is a concern on your part that any funding

for churches to set up this sort of center might create an establishment problem?

Mr. IRVING. It might. I am a lawyer, but I am not competent to

answer that question.

Mr. ENGLISH. I understand.

Mr. IRVING. I have to constantly look at those issues in my grant

programs as to what types of grants I can give and what type

grants I can’t. Churches, community centers, barbershops, shopping malls, wherever there are community points where people will

go. If a young student—I mean, I grew up in southeast Queens,

New York. It is a working class neighborhood. There are a lot of

kids that I went to high school with, half my class from freshman

year to senior year dropped out. For me to think that those kids
28

are going to go back to my high school or go to a library to learn

the computer is just fiction. Those kids have already said that

these institutions have failed me. They are walking away. There

are places in the community that they might go where they will

feel comfortable, where they will be around peers, and we need to

have those kind of centers in rural and in urban areas. That is why

we use the generic term, community access centers.

The specific program that the administration, the President introduced last year in his budget and asked for increased funding

this year are called community technology centers. Those are storefront shops where you not only have computers but you have

trained people to train people how to use these technologies. We

have asked for a 650 percent increase I think from fiscal year 1999

to fiscal year 2000. It was $10 million last year, $65 million this

year.

Mr. ENGLISH. Which has produced how many centers?

Mr. IRVING. The grant round was just completed by the Department of Education last year for community technology centers.

Another thing that Secretary Cuomo has introduced are computers of learning and technology centers in housing projects where

you can have people in the housing centers and in the housing

projects teaching other. We have had some prototype projects

through my TIIAP in housing projects. We have shown it can work.

Now other agencies are taking what we have learned and others

have learned and extending it.

I think you need programs like TIIAP that can show what works

and doesn’t work, and then you need the agencies in the Bureau

of Indian Affairs, in HUD, in Department of Education, who can

build upon what we are learning, but we also need private initiatives, and we need community initiatives.

Mr. ENGLISH. And how would what you are proposing actually

promote that?

Mr. IRVING. I think that when you have these community technology centers it is incumbent and important for local businesses

to be part of the solution and the design of these community technology centers and also to contribute.

I was in Billings, Montana, at the invitation of Senator Burns a

few years ago, and the owner of the local Wendy’s had made huge

contributions to the library to make the library a community technology center because he learned he had computer illiterates working in his Wendy’s and they needed computer skills just to be a

burger maven or a burger employee, and he realized right then

that he needed to make an investment.

This is a call for action across not just the Federal Government

but also State and local governments and the private sector. We

are not going to cure this with one silver bullet. We need a whole

arsenal of tools to go in and fight this problem if we are really

going to make every American ready for the 21st century.

Mr. ENGLISH. And I agree with that, and my concern is there is

a tendency in Washington to identify a problem and then come up

with a whole range of small niche programs aimed at it. What you

are proposing here, I understand you would like to see more Federal funding for these community action centers broadly defined,

but I am still trying to get my arms around the concept. My sense
29

is you are right to be flexible, but my concern is you have just listed a whole range of programs, and I wonder if we can move away

from producing a lot of prototypes to trying to come up with a focused policy that will, with goals, set some clear parameters for

how we can promote this access with a limited Federal role and in

partnership with communities and State.

Mr. IRVING. I think all of us in the administration, the President

and Secretary Daley down to me, would love to work with you on

that, but there is one thing that I find as I have traveled across

this country. A solution in rural Pennsylvania is going to be very

different from a solution in the south side of Chicago, very different

from Lynwood, California, very different from a native American

reservation in Hopi or Navajo parts of Arizona. And so if I try to

do a single shot or try to get my arms around this with one holistic

solution, I am going to have some things fall through the gaps, and

this technology moves so fast we need to be flexible and focused.

Mr. ENGLISH. I agree. But, Mr. Chairman, if I could continue

briefly this line of questioning, Mr. Irving, my concern is that if you

come up with 50 programs for doing this you may come up with

50 great photo opportunities in the process, and that will gratify

some people in the political arena, but I am not sure you are coming up with a policy that is actually going to be measurable, that

we are going to be able to fund because we know what we are getting.

You have told some great anecdotes, but I guess what I am looking for here is a flexible framework that allows for a Federal involvement in promoting these access points in rural areas and in

urban areas, in very different settings, and not just create 40 different programs because we can think of 40 different kinds of communities we want to help. That is not a very coordinated policy.

And as someone who thinks that there is a Federal role in promoting this access, I think that we need to have maybe a better

defined policy here.

Mr. IRVING. I think we are in violent agreement. But I think one

of the issues we have got to focus on is, if you have a disease, we

are right at the diagnostic stages of the disease. And when you

have a disease and you are trying to cure the disease, you may

have to try a lot of different things. Sometimes you find that Mom’s

homemade soup is enough, but sometimes you need surgery.

And I don’t think we are at the point where I think we need surgery, but I do think we need a diagnostic evaluation of what works

best. And if I have a problem with my arm I need a different analysis than if I have a problem with my knee or in my spine. And

I am not quite sure whether this is a spinal problem or a joint

problem, but we know we have a problem. And what the cure is

I think will determine on how persistent the problem is. Will it go

away on its own? Will the marketplace take care of it?

And I don’t think we are at the point yet where we can make

this one prescription, but I would like to work with you, and I

think all of us in the administration would like to work with you

on how to find a prescription that is cost effective.

The flexible framework you mentioned is absolutely the right

type of approach, I believe, and I believe the President would be-
30

lieve. Let us find a way that is focused, that is holistic, that is flexible, that helps to resolve these problems.

Mr. ENGLISH. I think you made a very fine presentation here,

Mr. Irving; and we very much appreciate it.

I yield back.

Chairman PITTS. Thank you.

Ms. Tubbs Jones.

Ms. MILLENDER-MCDONALD. Mr. English, I agree with you. I

don’t want any prototype programs either.

Ms. TUBBS JONES. Thank you, Mr. Chairman.

To all of the witnesses that I have missed, I apologize for my

delay, and I am confident that my colleagues have done a good job

of addressing the issues in this area. I am going to be very brief.

The report, Falling Through the Net, was anybody surprised by

the fact that it was likely to be minorities that would have less access to the Internet? Was anybody surprised waiting on this result?

Mr. IRVING. This is the third one I have done, so I had a sense

of where we might be.

Mr. MILLER. I was pleasantly surprised, and it may not be a

startling finding, by the fact that when we did get above the

$75,000 income level, and I admit that is still a small percentage

of the population, that a lot of the racial divisions did seem to disappear. I think that is a hopeful finding. That is not to say that

everything is fine, but it does show that at some income level, people are willing to say, regardless of race or nationality, this Internet is important to me.

And one of the tricks of the trade that we haven’t figured out as

an Internet industry is how do we appeal to groups. As Larry said

earlier, it is interesting that of the top 100 Internet sites, none of

them is targeted to a minority community. Why hasn’t anybody, in

a sense, figured that out? Why isn’t some great creative person figuring out the message?

Ms. TUBBS JONES. In campaigns, they use focus groups. Have

you thought about that? I mean, ask the people who don’t use it,

it seems to me, might be the easy way.

Mr. MILLER. Exactly.

Ms. TUBBS JONES. Anybody ever thought about tax incentives for

companies providing access to the Internet or computer opportunities?

Mr. IRVING. I am sure it has been thought of.

Ms. TUBBS JONES. But not implemented?

Mr. IRVING. You have a scenario in which the Internet is 6 years

old, really, as a public space. You are seeing 50 percent per year

increases across every income group now, although minority started later. People are giving away PCs now if you sign on to AOL

or you sign on to various things. So those numbers are going to

probably increase a little bit, but you are not going to get to equity

anytime soon. We are not at equity with telephone penetration. African Americans are about one in every five——

Ms. TUBBS JONES. Maybe you misunderstood me. I didn’t mean

to the person who accesses the Internet. I am talking about to the

people who control the Internet, the people who control computers.

But the idea as we are moving from welfare to work of giving companies’ tax incentives for employing welfare folk, why not give
31

them tax incentives for accessing computers and training people to

use the Internet and this technology? I am just throwing it out as

a possible suggestion.

Mr. MILLER. A bill has been introduced in the House by Congressman Moran and in the Senate by Senator Conrad which

would provide tax incentives for companies to do IT training. And,

obviously, we believe that most of the people who take advantage

of that would be people who are less economically advantaged.

Ms. TUBBS JONES. But what I am saying is that those of you who

are in the business of creating the Internet and dealing with computers and so forth may have to go on the offensive, and we reward

you for going on the offensive if you do more than sign somebody

up and say I signed them up and they failed the course and I am

done, if you do something a little more than that, and that is something that quickly comes to mind to me.

I would like to thank you very much.

Mr. Chairman, I yield the balance of my time.

Chairman PITTS. Thank you.

Mr. Davis, do you have any questions?

Mr. DAVIS. Yes. Thank you very much, Mr. Chairman.

And I really am pleased because I just wanted to follow the trend

of thought that I thought I had picked up from Mr. English. And

while I am in agreement with all of the community access centers,

all of the programs, all of the opportunities, as I listened I was

thinking that I have seen about as many storefront programs as I

want to see. I have been in about as many basements as I really

want to go in. With certain kinds of programs, that they are good

as the only thing that you can get.

I mean, if you get down to the point where this is all that you

can get, then put it in the storefront. If this is all that you can get,

then put it in the church basement. But if there is a coherent policy in terms of actually putting into public education, into the

school systems where there is an environment, where there is an

atmosphere, where young people can really learn to make the

greatest use of this technology and these instruments, then I really

think that goes to another level.

And so, while I am not denigrating storefronts and small programs and initiatives, as I have been dealing with those all of my

adult life—I mean, ever since I have lived in inner city America,

which is all of my adult life, that is what I have seen. But I have

never seen the kind of results that could really come if we were to

anchor down and put into public education the kind of resources,

the kind of equity so that some school systems are not being funded at a level three times as high as others, where all of the children really get the opportunity, then I think we can reduce the disparity.

I mean, anything less than that, I think the same disparities

that we experience we will continue to experience because we are

putting Band-Aids on cancer, and it just keeps breaking out, keeps

breaking out.

But I really appreciate the testimony and the responses that all

of you have given, and I find it intriguing, but I really think we

need to go to another level.

Mr. IRVING. May I briefly respond?
32

Congressman, I couldn’t agree more about the importance of focusing this on education, but I also hope when Mr. Fulton and others testify in the next panel you will hear about some of the success stories. And, interestingly, the Baltimore grant we gave is in

a church. So there is some way churches can be involved.

Some of the success stories in community centers, there are literally hundreds of people in Baltimore working in high-tech today

because the Urban League and the Federal Government made investment and gave people computer training. There are literally

hundreds of young people in East Palo Alto, hundreds of young

people in Newark, New Jersey—Keith and I were just down in the

west side of Chicago looking at a community technology center that

the Urban League has there, and young people there are going to

have opportunities because we made those investments.

And, again, as somebody who was formerly young, I know that

at a certain age, in certain communities, there are kids who are not

going to go to school and are not going to go to libraries for the

training, and we have to reach them as well if they are not going

to be lost to this economy. And that is why, while I don’t disagree

that we have to focus on schools, I think if we only focus on schools

we are going to have a generation of people who aren’t equipped

that we could otherwise reach.

Mr. DAVIS. And I didn’t want to, again, denigrate in any way.

And I agree that if anything you take, if that is all that you can

get, I agree with that. I have just seen all that you can get so

much, knowing that if we do 10, there are 10,000 that we needed

to do. If we do 100, there were 50,000 that we needed to do, and

I just want to go after the 50,000. It is kind of my like daddy used

to tell us when we were farmers and one of the crops would come.

He would say, pray for a good harvest, but keep on hoeing. And so

let us keep doing what we are doing while we really go for the big

one.

Put it in education where everybody has a shot at it.

Mr. MILLER. Congressman, I couldn’t hope to match your eloquence about the importance of education. Every business person

believes in it. I heard a story yesterday which I found very disconcerting. One of my large member companies is trying to give

away to some school districts brand new PCs. Because of various

bureaucratic rules some of these public school systems cannot accept them. So I agree money is part of the solution, but sometimes

it is overcoming old fashioned thinking. So anything we can do to

work with local school districts and state governments which fund

so much of education to get them past some of this old thinking

would also be helpful. The thought that a school district would turn

away free PC’s in this day and age is pretty appalling.

Ms. MILLENDER-MCDONALD. Mr. Miller, see me after the hearing.

Ms. TUBBS JONES. Mr. Chairman, could I ask one more thing,

please. There is in fact a significant amount of legislation that prohibits public schools from accepting PC’s and it may be the direction of going to the legislature in that particular jurisdiction to try

to get some change. Because I have heard of it and not only where

you are but a number of other places.

Lastly I want to add in I know you are talking about this group

of young people who are not in school. But there are also a signifi-
33

cant group of people somewhere between 35 and 65 who won’t

even—I mean, have you ever stood behind one of them at an ATM

machine? And the reality of it is there is an issue for retraining

that we need to address as well as the young people, but retraining

where people who probably have another 30 years in the work

force, who have never touched a computer. We need to get there

some way too.

Thanks, Mr. Chairman.

Chairman PITTS. Ms. Lewis.

Ms. LEWIS. I am so glad that you raised that issue, Ms. Tubbs

Jones, because one of the concerns that APT has is that schools

and libraries and community access centers are a wonderful first

step but the technology needs to be brought to the home. The infrastructure has to be brought from the neighborhoods into

everybody’s home so that people can feel comfortable to play

around with technology and not feel intimidated. And it is important to support all of these efforts. But it takes the entire community working together to empower the community through the use

of technology.

Ms. TUBBS JONES. Thank you.

Chairman PITTS. I wish we could go on. We have gone over two

hours with the first panel. We have heard some excellent and timely testimony. But at this time I would like to dismiss and thank

the first panel and call the second panel to the witness table.

Ms. MILLENDER-MCDONALD. It is a nation state. Thank you very

much.

Chairman PITTS. All right. The Chair would like to welcome the

second panel of Mr. Fulton, Mr. Robinson, Mr. Krumholtz, and Mr.

Coleman. Welcome. And I would like to ask Mr. Fulton, who is the

Director, Technology Programs and Policy for the National Urban

League, to begin.

STATEMENT OF B. KEITH FULTON, DIRECTOR, TECHNOLOGY

PROGRAMS AND POLICY, NATIONAL URBAN LEAGUE

Mr. FULTON. Certainly. Thank you, Mr. Chairman and members

of the Subcommittee. As the others have already done, we want to

thank you for this opportunity to testify about the Urban League’s

efforts to partner with industry and government to bridge the Nation’s digital divide. Today I would like to share insights from our

more than 30 years of experience in bringing technology based programs to low income communities and working with industry and

inner city communities to develop a skilled information technology

work force.

First, I will briefly characterize the National Urban League and

our technology based programs. The League was founded in 1910.

Our mission is simply to assist African Americans and the urban

poor in the achievement of social and economic equality. In short,

that means we help people to help themselves. We achieve our mission through direct service programs, public education, collaboration with industry, government, other community based organizations and bridge building between different racial and ethnic

groups.

We have 115 Urban League affiliates throughout the United

States operating in 35 states and the District of Columbia. We
34

have 3,000 professionals and approximately 30,000 volunteers serving a client base of approximately 2 million people. We have a rich

history in technology based programs. Our first program opened in

1968 in Los Angeles, at the IBM training center. At that time there

was no Internet and no PC’s, so the programs focused on COBOL

programming, mainframe upkeep and data entry, again on

mainframes as they were the industry standard. That program

grew over the years and by the early 90’s we had approximately

32 programs operating, and the training had shifted to PC’s, which

are now the dominant computing tool in industry.

More recently companies like Bell Atlantic, AT&T, EDS, Microsoft, Ameritech as well as volunteers in the small business community have worked with us to continue our work to train entrants

for the information technology work force.

Our current vision is to build 115 state of the art technology education and access centers across our footprint of local Urban

League affiliates. Also known as digital campuses, we expect each

center to train approximately 600 entry level workers per year. Finally, we produce a number of books and other writings. Some of

you may recall that we sent you a copy of the proceedings from

your Urban Technology Summit and a copy of the book we developed with the Benton Foundation called Losing Ground Bit by Bit.

The information went to your offices a few weeks ago. We do these

writings and hold other forums as part of our public service to help

policy makers and practitioners to make appropriate program and

policy connections.

You have heard Mr. Irving and others talk about the specifics of

the digital divide. I want to hone in on some of the implications

that arise when there is uneven distribution of information technology resources. Several areas are impacted. I will focus on jobs,

education and opportunity. With respect to jobs, advances in information and communications technologies are driving our information economy. We have heard this. Some experts estimate that information technology jobs pay as much as 78 percent more than

jobs in other industries.

However, less than 10 percent of the information technology

work force is made up of women and minorities. Interestingly,

while two-thirds of all core IT workers have a Bachelor’s Degree,

26 percent have less than four years of college and 6 percent have

only a high school diploma or less.

If the digital divide is not bridged the underrepresentation of minorities in the IT work force will proliferate and contribute to the

further erosion of inner cities; e.g., the outflow of work to suburbs,

closing bank branches, and falling home ownership.

With respect to education, while programs like the e-rate have

been critically important for getting Internet access into schools

and libraries in the aggregate, recent studies show that only 16

percent of schools in low income areas are actually connected to the

Internet. In contrast, 80 percent of schools in more affluent areas

have Internet connections. Further, most libraries do not have the

available staff, space or instructor know-how to teach marketable

information technology skills. These factors will combine to jeopardize the achievement and competitiveness of children in low in-
35

come communities, leaving them and their parents relegated to a

low wage and low skill economy.

Finally, with respect to opportunity, infrastructure disinvestments characterize low income communities. Accordingly, businesses in these communities must pay a premium for services and

they are not able to compete with entrepreneurs in saturated infrastructure areas in the central business district and emerging fringe

development areas. Resulting savings based on location away from

low income areas can run as high as 30 percent. These inequities

will result in fewer minority owned IT ventures and fewer small

business generated opportunities in these communities.

The National Urban League plans to work with industry and

government to build 115 state of the art digital campus centers by

the year 2006. We believe that this substantial investment in low

income communities is necessary as part of the emerging technical

training infrastructure of America. At full operation we expect our

technology training centers to produce 68,400 new entry level IT

workers per year.

We are currently at 65 centers across the country. National efforts like the Department of Commerce’s TIIAP program have done

a great deal to leverage government and private sector resources

for local training projects. The National Urban League was the

beneficiary of a 1997 TIIAP grant. That grant combined with a

generous investment from the Bell Atlantic Foundation helped the

League to pilot our technology and education access center model

in four U.S. Cities. These centers served over 7,000 adults and

youth in their first 14 months of operation.

Most recently we received grants from the Ameritech Foundation

and AT&T to develop eight additional digital campus technology

education and access centers. Each of these centers will have 30 to

42 PCs, a network, Internet access, on-site training, 24-hour toll

free call support and access to 50 Internet based courses for training and industry standard applications and career development.

We have tied our work in this area squarely to work force development and academic achievement. The computer centers will be safe

places for children and caring adults to use computers for work

force development and academic enrichment. In each city that we

bring these technology projects, our local affiliates have created collaborations with industry, government, academic institutions and

other community based organizations. These local partnerships

serve to expand the reach of a given project and the probability of

their long term success and survival. Government resources provide incentives for these community investments.

For example, our Los Angeles technology center in 1997 they

trained 1,400 workers. Those workers earned $31 million and paid

$2.1 million in taxes. We anticipate similar returns on investment

in the other cities where we begin these projects.

In summary, public-private partnerships to build community

technology centers can make a significant impact on the digital divide. Practitioners will need reliable pools of resources from government and industry. Programs will also need resources for evaluation and assistance in disseminating findings. Last, organizations

with IT know-how should be encouraged to use their convening

power and influence to compel other stakeholders to invest in de-
36

veloping an inclusive IT work force and for preparing our children

to succeed in the 21st century.

Thank you.

[Mr. Fulton’s statement may be found in the appendix.]

Mr. DEMINT [presiding]. Thank you, Mr. Fulton. Mr. Robinson.

STATEMENT OF TIM ROBINSON, LEGISLATIVE ATTORNEY,

AMERITECH CORP.

Mr. ROBINSON. Good afternoon. Mr. Chairman and esteemed

members of this Subcommittee, I want to thank you for inviting me

here today to talk about the digital divide which is not getting better, but is getting worse. I would like to tell you what Ameritech

has done to combat that divide and what Congress can do to help

small business and minorities in particular gain equal footing with

larger businesses and nonminorities.

At Ameritech we are actually trying in conjunction with our community based organizations to satisfy the exploding demand for information resources and services. Just two weeks ago we announced that we would provide financial assistance in the form of

a $350,000 grant to help in establishing five community technology

centers. These centers, which are to be known as Ameritech digital

campuses, will be located in central cities——

Mr. DEMINT. Sorry to interrupt but I need to ask you, and everyone on this second panel, to summarize to some degree. We will include your full statements in the record, but for now, if you could

just touch upon your major points that would be helpful. I don’t

want to cut you short, and if you need to read through the whole

thing, certainly feel free to do so, but I want Members to be able

to hear from the entire panel. So thank you.

Mr. ROBINSON. Thank you. I will be mindful of that. In inner cities, where a disproportionate number of black and Hispanic Americans live, recent studies show that retail buying power amounts to

$100 billion a year. And although blacks comprise nearly 13 percent and Hispanics comprise 10 percent of the population they respectively own less than 4 percent and 6 percent of all businesses.

These numbers demonstrate there is considerable room for growth

in the formation of minority businesses. Ameritech believes it can

tap into that growth while also providing some of the tools and information resources to spark that growth.

More can be done to turn the digital divide into a digital dawn

of opportunities for underserved groups. And we can help in creating some of those solutions. That is why Ameritech petitioned the

Federal Communications Commission for authority to provide data

services to its customers across arbitrarily defined geographic

boundaries known as LATAs. According to the FCC’s rules,

Ameritech and other RBOCs cannot transport voice or data services from a user in one LATA to a user in another LATA. This prohibition which the FCC has interpreted as applying equally to voice

and data, is excessively broad in scope and has hindered our ability

to offer appealing and useful data service packages to our customers.

For example, we cannot carry data from a low income or minority

customer in Chicago who might want to register electronically for

an online course 150 miles away at the University of Illinois in
37

Champaign-Urbana. Nor can we carry data across our networks for

a retail goods firm that needs to download inventory data from its

suburban warehouse to its urban retail outlets so long as those two

facilities are located in different LATAs. The perverse result is that

a capable communications company like Ameritech is needlessly

shut out of the burgeoning data market denying customers another

viable choice among service providers.

Congressmen Billy Tauzin and John Dingell have introduced

H.R. 2420 and Congressmen Bob Goodlatte and Rick Boucher have

introduced others—H.R. 1685 and H.R. 1686—that would wisely

eliminate this restrictive prohibition, which only serves to impede

growth and availability of high speed Internet access. We would

ask that you consider supporting these bills because they are good

for our country’s economic health, our businesses, and our employees.

Thank you for the opportunity to testify before this Subcommittee, and I look forward to addressing any questions you

might have.

[Mr. Robinson’s statement may be found in the appendix.]

Mr. DEMINT. Thank you, Mr. Robinson.

And other members, the chairman will return in a moment and

I will leave to vote and we will continue the testimony. So if you

need to leave to vote, please return for the questioning. So again

thank you, Mr. Robinson.

Mr. Krumholtz.

STATEMENT OF JACK KRUMHOLTZ, DIRECTOR, FEDERAL

GOVERNMENT AFFAIRS, MICROSOFT CORP.

Mr. KRUMHOLTZ. Thank you, Mr. Chairman, Congresswoman

Millender-McDonald and members of the Subcommittee. I would

like to commend the Subcommittee and the chairman for holding

this hearing on what we too see as a critical issue. I would like to

take what time I have this afternoon to comment briefly on

Microsoft’s approach in this issue and discuss some of the lessons

we have learned from our efforts. Our approach is to start small

with pilot projects, form partnerships with interested parties on

both the local and national level, evaluate what works and what

doesn’t and expend our efforts and programs based on what we

have learned.

As a Nation we are reaching a new and exciting stage in the

technology revolution where computers are easier to use and less

expensive to manufacture and own. New devices providing many of

the capabilities we now expect from a personal computer, including

connectivity to the wealth of information and services on the Internet, are being introduced at a wide range of prices, yet despite the

advances made in these lower cost devices and the increasing affordability of information technology generally, we continue to face

the challenge of ensuring that all Americans have access to the

Internet and the opportunities it affords.

Microsoft’s vision of a computer in every home would be incomplete without the vision of access to technology for all Americans

in the Nation. As we pursued this vision we have learned that

there are no simple solutions and that a successful effort to close

the digital divide will require partnerships between the public and
38

private sectors, between businesses, government and nonprofit organizations. I would like to describe briefly how we have pursued

this approach with two specific initiatives.

In 1996 we launched a pilot program called Libraries Online in

the public libraries across the country. Partnering with the American Library Association and the local library officials, the objective

of Libraries Online was to provide access to information technology

and the resources of the Internet to some of the most disadvantaged and underserved communities in the U.S. Because libraries

are a vital informational resource for communities we believed that

this initiative would reach most members of the community from

school age children to senior citizens.

We learned a great deal from this initial pilot program that year.

Perhaps most importantly we learned that training librarians to

use and maintain the technology is as important as providing the

funding and donating the technology itself. With that lesson in

mind we began a one-week training program for participating librarians and provided ongoing technical support. When it became

apparent that the model used in Libraries Online was a success,

the Gates Learning Foundation established by our Chairman Bill

Gates and his wife Melinda expanded the program to library systems across the Nation. The ultimate goal is to wire every public

library in the country. Microsoft now partners with the foundation

by providing software to the participating libraries.

Briefly, the second example is Microsoft’s working connections

program. Working connections is a 5-year $9 million program administered to the American Association of Community Colleges. We

believe the community colleges play a critical role in providing education and work force training to disadvantaged and underserved

communities. Visiting several of these institutions, we concluded

that community colleges have both the capacity and the interest to

prepare their students to enter the information technology work

force.

Mr. DEMINT. Mr. Krumholtz, I apologize but I have to go vote.

I thought the Chairman would be back. I will just adjourn the

Committee momentarily. I am sure he is on his way. I apologize

to all of you for jumping up and down. Let’s take a brief recess.

I am sure Chairman Pitts will be right back.

[Brief recess.]

Chairman PITTS. All right. We will reconvene the hearing at this

time and ask Mr. Krumholtz if he will continue where he left off.

Mr. KRUMHOLTZ. Thank you, Mr. Chairman. Just before the recess, I was just mentioning briefly a program we have with community colleges called Working Connections, administered by the

American Association of Community Colleges. We established

Working Connections to encourage the development of innovative

information technology programs. Its goal is to train workers to

succeed in IT careers and to open the IT world up to minorities and

women where jobs and opportunities are plentiful when the work

force supply is not. Grants to community colleges from Microsoft

fund an IT curriculum, faculty training and outreach to local community groups and industries.

As we move forward with these and other efforts, we continue to

learn more about what works and where to best invest our re-
39

sources. We have learned that training people to use technology is

just as important as providing them access. We have also learned

that closing the digital divide will take a coordinated effort; no single party or entity can do it all. The best programs must include

partnerships between the public sector, private sector, and nonprofit entities.

We look forward to continuing our collaboration with educators,

legislators and members of the business community to bridge this

gap and bring technology to everyone, everywhere. Thank you

again for the opportunity to testify. I would be happy to respond

to any questions.

[Mr. Krumholtz’ statement may be found in the appendix.]

Chairman PITTS. Thank you. Mr. Coleman.

STATEMENT OF THOMAS COLEMAN, PRESIDENT AND CEO,

TECHNICAL CAREERS INSTITUTE, INC.

Mr. COLEMAN. Thank you, Mr. Chairman, members of the Subcommittee. My name is Tom Coleman. I am president of the Technical Career Institute, a two-year degree granting proprietary

school located in Manhattan. It is a pleasure to be here today to

discuss the digital divide and to share our experiences in providing

access to technology to the Nation’s most economically disadvantaged.

At TCI we serve more than 3,500 students in programs designed

to prepare a well-trained work force in various fields of technology.

75 percent of our students are African American and Hispanic; 55

percent of our students come from families with an average annual

income of less than $12,000. Some are new Americans requiring instruction in English as a second language. Many are products of

the New York City Public School System. And suffice it to say that

remedial training is a critical component in preparing our students

for today’s highly technical work place.

Despite all these challenges we at TCI were recently identified

by Community College Week as ranking first nationally in the production of two-year engineering related associate degrees. We are

very proud of the accomplishments of our students, particularly in

view of the extraordinary challenges many of them must overcome

to receive their degrees.

At TCI we have been educating the economically and socially disadvantaged inner city student for a long time and we continue to

use new and varied approaches to raise the academic, technical,

and employability skills of our students.

For example, in 1988 we initiated a program to introduce computer technology training to community and faith-based organizations in the Flatbush section of Brooklyn. Working with the clergy

and community, we invited women who were returning to the work

place after raising a family, as well as those attempting to move

there from welfare to work, to come to our campus for free computer training. In the 11 years the program has been in effect,

1,300 women have participated. Some have left the program for

good jobs that were previously unavailable to them. Approximately

20 percent have enrolled at TCI and many have enrolled in other

post secondary institutions.
40

Our personalized student success program assists students in improving their basic academic skills and essential work place competencies. New students have the opportunity to participate in a

boot camp experience prior to attending classes at the college. This

intensive program emphasizes the math skills required for academic success.

While this boot camp approach has increased the chances for success of many of our students, we quickly came to realize it takes

more than a couple of weeks to overcome many of our students’

lifelong underexposure to technology. Our technology-based after

school initiative introduces computer technology to 11th and 12th

graders enrolled in New York City Public Schools.

We have also learned that community service is a strong self-esteem booster which assists our students in developing the tools for

success in the work place. In a program our students have dubbed

Dare to Dream, old computers are contributed by corporate donors

and are refurbished by our students. We have received and donated

more than 300 computers to organizations such as the New York

Public Schools, community facilities for the handicapped, AIDS residential facilities, community based organizations and individuals

with disabilities.

Another recent initiative which has provided me with a great

amount of personal satisfaction has been our Women in Technology

Program. The program assists women entering into careers in technology by providing them with mentoring to prepare them to succeed in nontraditional occupations. Since the inception of the program, the percentage of women enrolled in our technology programs has increased by almost 20 percent.

In conclusion, I am here today to tell you that the digital divide

is real, and that it is getting wider every day. But for the programs

I have spoken to you about this afternoon, many of TCI’s students

and graduates would have fallen through the divide already. If I

were to offer one observation based on my experiences of the past

few years, it would be this: If we are to succeed in closing the technology gap for future generations, we must be willing to blur the

distinctions among business, academia, and community.

Institutions such as TCI cannot afford to isolate our students and

faculty in ivory towers of academic thought. We must reach out to

the communities where our students and prospective students live,

to lay a solid groundwork in math and technology at the high

school level and before. We must reach out to our local businesses,

where our graduates will work, to be constantly sure that our skills

we are providing are the skills prospective employers need and

want. And we must reach into the hearts and minds of the students we serve to give them the skills, the confidence, and the opportunity to succeed in our Nation’s increasing digital economy.

I want to thank the chairman and members of the Subcommittee

for your interest in this important issue and for the opportunity to

appear today before you. I would be happy to answer any questions.

[Mr. Coleman’s statement may be found in the appendix.]

Chairman PITTS. Thank you very much. Mr. Coleman, let’s start

with you. You mentioned that 55 percent of TCI students come

from families with an average annual income of less than $12,000.
41

What is the average salary that TCI graduates can expect when

they enter the technical career with their associates degree?

Mr. COLEMAN. It varies on the program, whether it is an office

technology program or whether it is a more highly skilled program.

But if we talk to the highly skilled programs typically we are seeing salaries that begin in the late 20’s to the mid-30’s in that area

and we have seen some as high as 45 but that is a rarity.

Chairman PITTS. Do most of the TCI students receiving two-year

degrees go immediately into the work force or do some pursue more

advanced degrees?

Mr. COLEMAN. Most of them go directly into the work force. Some

later on may attempt to go for the four-year program.

Chairman PITTS. Do many of your graduates have entrepreneurial aspirations to your knowledge? Do some of them own small

businesses or do most grads take jobs in the private sector and are

they going to large telecommunication companies or are they apt

to work in smaller enterprises within their communities?

Mr. COLEMAN. About 60 percent of our students end up with

small employers; that is, the employers of less than 1 or 200 employees. As far as the entrepreneurial aspect of it goes, I only have

some anecdotal evidence and just last Thursday I met a student

who I didn’t have time to spend with, spend any time with him,

but he told me that he has just developed his own web page and

he has got a little business selling some kind of health products.

But I hope to talk to him more about what he is doing. But it is

that kind of thing that is really great.

Chairman PITTS. You suggest integrated training initiatives between schools and businesses. Is TCI currently taking steps to create such training initiatives?

Mr. COLEMAN. Yes, right now we are working within one county

a community of churches to donate a number of computers to them

so they can establish a center there, and we would like to work

with others.

Chairman PITTS. You mentioned after school programs for high

school students. Do you track the scholastic improvement of those

participants; for instance, what percentage of those participants go

into developing careers in technology?

Mr. COLEMAN. I can’t answer that because we just started this

program in late June where we offer two programs. One is introduction to computers and the other is visual basic. When the fall

comes along we will continue those as an after school program. We

will add to that remedial math, which is really needed by the New

York City school students but we do plan to track them. I would

be happy at a later date to brief you.

Chairman PITTS. Can you discuss in more detail TCI’s program

for women preparing to re-enter the workforce. What were some of

the difficulties you encountered, what were some of the successes?

Mr. COLEMAN. Day care is a problem for the women. It is a huge

problem for them. And the successes that we have had, we have

had women who have just worked in the $5 an hour jobs for a

great part of their life, they have been on public assistance, and

now they get some education and they find themselves making

$30,000 and they feel so much different and they are able to support themselves and their families.
42

Chairman PITTS. I think also you mentioned service learning

projects where students assist those learning English or rebuilding

computers. How does the volunteering component enhance the student’s experience? Have you found that a very positive experience?

Mr. COLEMAN. This is our Dare to Dream project, which was

originally started as a project to help students improve their

English. Some of—it has grown over the years. It has become a

number of things. One of the things the students do is they go into

the schools and they help tutor in the community. This is good for

the students. It has built their self-esteem. It also improves their

skills. It has been a very positive experience. And those students

as a group do better than students who are not involved in community service.

Chairman PITTS. Very good. Thank you.

Mr. Krumholtz, in light of the results of the NTIA study what

do you see as the future of the Information Age? Will the divide

continue to get wider? And what can we do to make sure it does

not expand?

Mr. KRUMHOLTZ. Well, I am pretty optimistic about the future of

the Information Age. In fact I think it is telling that the name of

the Subcommittee is the Empowerment Subcommittee because I

think one of the great things about the benefits of the Internet and

information technology is how empowering it is to so many individuals, businesses of all sizes. So, I am very bullish on it.

Are there things that need to be done to make sure we address

the digital divide? Absolutely. As I pointed out in my remarks, I

think it is important that there be, you know, that we look for and

encourage partnerships both between the private and public sector

working with nonprofits, like the Urban League for instance, to

really address some of these issues. As I think was suggested earlier by Mr. Irving, there is no silver bullet to address this challenge. And it really is going to take some work at the local level

and working with people that have the expertise as we did in our

libraries project, working with the American Libraries Association.

At Microsoft we went into this knowing very little about libraries, so we brought in experts who could tell us what were the hurdles going to be in working with libraries—where were there areas

where we really could make a difference. Unfortunately, there is

not a single answer but I think that there is a lot of opportunity

to help address the problem.

Chairman PITTS. Now, regarding your partnerships and trying to

reach underserved groups, how does Microsoft decide where to invest its time, its money, its resources?

Mr. KRUMHOLTZ. We would like to think that we are very

thoughtful and strategic in doing that. We spend a lot of time looking at different opportunities. As you might imagine, a company or

Microsoft or Ameritech or many other large corporations, there is

no lack of opportunities to try to engage and participate in efforts

of this nature. So we really spend a lot of time.

I think probably the thing that we try to do the most is we try

to start small. In all of our major national efforts and initiatives

we have started them as pilot projects. And we have really gone

back and studied what worked, what didn’t work. Again in the libraries initiative we actually had an independent advisory board of
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librarians and other experts in that community to go out and look

at the individual projects in those 9 pilot sites and report back and

give us their recommendations on what was working well and what

may be needed to be redirected.

Chairman PITTS. Did you come up with the most successful

method for providing instruction with libraries?

Mr. KRUMHOLTZ. Well, I think training is absolutely key. And we

learned there—perhaps it is self-evident, but we learned maybe the

hard way that you can’t go in and just expect that the individuals

on the ground, the librarians, are going to necessarily have the

skills they need to use the technology, maintain the technology. Because maintaining a computer, as we all know—we all have our

computers crash unfortunately from time to time—takes a certain

amount of training and expertise, and I think that realizing that

and working to address that was one of the key findings.

Chairman PITTS. You mentioned that Microsoft participates in a

program called Working Connections in conjunction with community colleges. In your opinion, are two-year degrees from community colleges going to be instrumental in preparing workers for the

IT field?

Mr. KRUMHOLTZ. We think that the community colleges play an

absolutely critical role in preparing our work force, not only retraining workers but also preparing younger kids that are coming

out of high school to enter the IT work force. And a number of witnesses today have discussed the real challenge that IT companies

have—and not just IT companies, really companies across the

board who have IT needs and requirements in filling those jobs. I

think listening to Mr. Coleman’s testimony about some of the people that they had trained, you know not all of those people are necessarily going to end up being a programmer or a developer of tools

that others may use to develop software programs, but there is a

wealth of opportunity for those individuals to enter all levels of the

IT work force.

Chairman PITTS. Thank you. Mr. Robinson, Ameritech has forged

strong partnerships with community groups like National Urban

League. What incentives do private sector firms have to invest in

underserved areas?

Mr. ROBINSON. I think firms like Ameritech have a tremendous

number of incentives to invest in areas that have been historically

underserved. If we look—if we project out 20 years from now, 60

percent of the jobs in this work force will require some level of IT

literacy, information technology literacy. Today only 20 percent of

the work force possesses those skills. So it is very important that

we invest in our communities and invest in those people that we

serve. Because we will be looking to them in the future not only

as consumers of our products and services but also as employable

talent.

Chairman PITTS. In light of the results of your digital divide

study, what are some solutions in addition to community technology centers that will help bridge the gap?

Mr. ROBINSON. One of the benefits of going second is that you

can hear the first panel. The answers given by Maureen Lewis and

I believe Mr. Miller on the first panel with regard to overregulation

were right on target. Too much regulation can retard growth by
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stripping away incentives that are already in place to bring more

information and data services more quickly to small business and

low income households.

Businesses do need and require some incentives to move into

areas where they might not be able to otherwise recoup their investment. And to that point I commend Congresswoman Tubbs

Jones for thinking ‘‘out of the box.’’ I think we need to have some

creative solutions, some incentives in place that would encourage

firms like ourselves to go in and deploy broadband access more

quickly than we might otherwise.

Chairman PITTS. Thank you. Mr. Fulton, the Urban League certainly plans for a large network of digital campuses nationwide.

What criteria do you use when deciding which cities to establish

community technology centers in? And do you typically rent space;

do you use existing community facilities, do you build new structures? If would you explain that.

Mr. FULTON. The type of space we use varies. In the 114 communities across the country where we have Urban League affiliates,

half of them own their facilities, their building, and other resources, and that facility might choose to use existing space. In

other cases we will rent out an office if the owned space isn’t suitable. Some of the criteria we use for selecting cities are a demonstrated capability to deliver on the expected results of the centers we want to create. Do they have resources for staff? Do they

have community support? Do they have interest from the local government? Those kind of things we find come together to make for

the most successful outcomes.

Chairman PITTS. Now, you estimated the cost of a community

technology center with 20 computers I think at $70,000 to

$100,000, including staff, office space, other overhead.

Mr. FULTON. That doesn’t include the staff and office space. The

staff and office space and other factors could ultimately make that

number increase.

Chairman PITTS. With the emphasis on volunteerism here, could

the cost be reduced by using industry volunteers to supplement

permanent staff?

Mr. FULTON. Volunteers help. We have aligned ourselves with

several affinity groups in the information technology industry to

help us with that. The issue becomes accountability. We have

aligned our technology centers with work force development and

achievement. At the end of the day we want to be able to demonstrate that we have trained a certain number of workers who are

capable and ready to enter the IT work force. When you have volunteers doing the training, in a structured program that can become difficult as a volunteer may give a couple of hours but they

may not be able to give a full day or a series of days over a 10-

week period. So we think that hired professionals are an important

element to the most successful training programs.

Chairman PITTS. You mentioned evaluation is an important aspect to the process of running a successful program. Does the

Urban League keep track of how many community members are

using the centers? If so, have you found that communities make an

immediate use of the digital campuses or does it take some time

for them to embrace the opportunities offered by the centers?
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Mr. FULTON. We do track. Initially a lot of the tracking happened

locally. When I came into place in 1996 the objective has been to

standardize some of that tracking. So moving forward, we will

track in a national way the activity that goes on. What we find is

that the community tends to embrace the center. They want to

come in and find out what kind of programs are available for the

adults and children. So what we do is we have structured programs

and unstructured programs. The structured programs focus on

training for entry level information technology work force jobs. The

nonstructured programs focus on academic enrichment and allow

adults and young people to enter into an environment where there

are resources and there is a professional, but where they can explore the technology and conduct job searches as well as other

things and on a drop-in basis.

Chairman PITTS. Thank you. Miss Millender-McDonald.

Ms. MILLENDER-MCDONALD. Thank you, Mr. Chairman. And I

would like to thank this panel and apologize for having to step

away but in the people’s House you have to do the people’s business and that’s oftimes having to leave committees. I commend you

because it seems like the common thread with this panel, especially

of corporate heads, is that of partnership. And it is clearly impossible to touch any of these disconnects without a partnership, partnership between Federal, state local and private firms.

I just wanted to make clear though that the government does

play a role. I am also interested in, as my colleague on the other

side said, that we must not have a lot of fractionalizing with programs, programs that are just feel good programs, but programs

that would really go to the heart of the issue. And if it does mean

any types of tax incentives, we would be happy to look at that to

ensure that we continue to expand these partnerships. I am not adverse to tax incentives. I did them in the state legislature and I

certainly will not have a problem with doing them here. But what

we want to do is expand so that you can reach those who have not

had the opportunity of getting online with these various digital

campus centers. I am very impressed with that Mr. Fulton and Mr.

Krumholtz. Is that the way——

Mr. KRUMHOLTZ. Krumholtz.

Ms. MILLENDER-MCDONALD. Krumholtz. Your community college—I have often said that the community colleges have not been

tapped in the way that they should and we must continue to tap

them on a larger basis promoting the types of community working

connections that you have with your program.

Mr. Robinson, I am impressed and also encouraged by what

Ameritech has done with $350,000, opening up at least 5 centers.

We would like to work with you, for you, to expand those to more

and see what we can do to help you expand to more centers.

Mr. Fulton, when you do volunteers, I am wondering if we can

pull from the pool of the companies that do partnership with you

to get some of their people to come and volunteer because they

have a stake in this as well, as well as your former grads to return

back to utilize their expertise. One is a Jack Priester. I am told

that he is doing quite well in this area in Virginia, having finished

the LA Urban League and now has become I think a Washington’s

Businessman of the Year. That validates what can be done when
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we do do partnerships with the corporate sector, with the public

sector and with community based organizations such as the Urban

League. So I am encouraged today.

I will go away from here having said that we have formed a type

of partnership now with all of you because I will be calling on you

to form partnerships with me. You are not going to go too far before I call you. Because I want you to now help me to help those

young folks and even the ones who are returning, those old folks

like I am, to bridge that gap, that we must do to make sure that

this digital divide becomes more narrow.

Thank you, Mr. Chairman, again for this outstanding hearing.

Chairman PITTS. Thank you. I apologize for going over time. You

have been very patient.

The hearing has been very informative, excellent testimony on a

very important issue, and the Committee thanks you very much for

coming today. So at this time, the hearing is adjourned.

We will keep the record open for 5 legislative days should anyone

have any additional information to include.

[Whereupon, at 5:07 p.m., the Subcommittee was adjourned.]
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