```

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

            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

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
60-580                     WASHINGTON : 2001

                      COMMITTEE ON SMALL BUSINESS

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

                      Subcommittee on Empowerment

                JOSEPH R. PITTS, Pennsylvania, Chairman
PHIL ENGLISH, Pennsylvania           JUANITA MILLENDER-McDONALD, 
JIM DeMINT, South Carolina               California
FRANK A. LoBIONDO, New Jersey        DENNIS MOORE, Kansas
EDWARD PEASE, Indiana                STEPHANIE TUBBS JONES, Ohio
                                     TOM UDALL, New Mexico
               Stephanie O'Donnell, Legislative Assistant

                            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

 
            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 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 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 newweb 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.
    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.
    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.
    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 high-speed, 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 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 undertakenwith 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 deployment 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 function 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.
    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 
thatone 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 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 have-nots?
    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 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 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.
    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 tointrude 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 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 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 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.
    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 competition 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 anissue which is 
going the affect our long-term 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 
government-driven 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.
    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 take-up 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 Boston, 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.
    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 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.
    But, unfortunately, there is a great disparity between 
homes that have computers and those thatdon'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.
    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.
    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 forcommunity 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.
    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 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 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 believe. 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, 
althoughminority 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 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?
    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 significant group of people somewhere between 35 and 65 
whowon'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 
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 income 
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 
newentry 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 developing 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 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 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 resources. 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.
    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. 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.
    Chairman Pitts. I think also you mentioned service learning 
projects where students assist those learning English or 
rebuilding computers. How does the volunteering component 
enhancethe 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 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 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 anoffice 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?
    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 atthat 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 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.]

    [GRAPHIC] [TIFF OMITTED] T0580.001
    
    [GRAPHIC] [TIFF OMITTED] T0580.002
    
    [GRAPHIC] [TIFF OMITTED] T0580.003
    
    [GRAPHIC] [TIFF OMITTED] T0580.004
    
    [GRAPHIC] [TIFF OMITTED] T0580.005
    
    [GRAPHIC] [TIFF OMITTED] T0580.006
    
    [GRAPHIC] [TIFF OMITTED] T0580.007
    
    [GRAPHIC] [TIFF OMITTED] T0580.008
    
    [GRAPHIC] [TIFF OMITTED] T0580.009
    
    [GRAPHIC] [TIFF OMITTED] T0580.010
    
    [GRAPHIC] [TIFF OMITTED] T0580.011
    
    [GRAPHIC] [TIFF OMITTED] T0580.012
    
    [GRAPHIC] [TIFF OMITTED] T0580.013
    
    [GRAPHIC] [TIFF OMITTED] T0580.014
    
    [GRAPHIC] [TIFF OMITTED] T0580.015
    
    [GRAPHIC] [TIFF OMITTED] T0580.016
    
    [GRAPHIC] [TIFF OMITTED] T0580.017
    
    [GRAPHIC] [TIFF OMITTED] T0580.018
    
    [GRAPHIC] [TIFF OMITTED] T0580.019
    
    [GRAPHIC] [TIFF OMITTED] T0580.020
    
    [GRAPHIC] [TIFF OMITTED] T0580.021
    
    [GRAPHIC] [TIFF OMITTED] T0580.022
    
    [GRAPHIC] [TIFF OMITTED] T0580.023
    
    [GRAPHIC] [TIFF OMITTED] T0580.024
    
    [GRAPHIC] [TIFF OMITTED] T0580.025
    
    [GRAPHIC] [TIFF OMITTED] T0580.026
    
    [GRAPHIC] [TIFF OMITTED] T0580.027
    
    [GRAPHIC] [TIFF OMITTED] T0580.028
    
    [GRAPHIC] [TIFF OMITTED] T0580.029
    
    [GRAPHIC] [TIFF OMITTED] T0580.030
    
    [GRAPHIC] [TIFF OMITTED] T0580.031
    
    [GRAPHIC] [TIFF OMITTED] T0580.032
    
    [GRAPHIC] [TIFF OMITTED] T0580.033
    
    [GRAPHIC] [TIFF OMITTED] T0580.034
    
    [GRAPHIC] [TIFF OMITTED] T0580.035
    
    [GRAPHIC] [TIFF OMITTED] T0580.036
    
    [GRAPHIC] [TIFF OMITTED] T0580.037
    
    [GRAPHIC] [TIFF OMITTED] T0580.038
    
    [GRAPHIC] [TIFF OMITTED] T0580.039
    
    [GRAPHIC] [TIFF OMITTED] T0580.040
    
    [GRAPHIC] [TIFF OMITTED] T0580.042
    
    [GRAPHIC] [TIFF OMITTED] T0580.043
    
    [GRAPHIC] [TIFF OMITTED] T0580.044
    
    [GRAPHIC] [TIFF OMITTED] T0580.045
    
    [GRAPHIC] [TIFF OMITTED] T0580.046
    
    [GRAPHIC] [TIFF OMITTED] T0580.047
    
    [GRAPHIC] [TIFF OMITTED] T0580.048
    
    [GRAPHIC] [TIFF OMITTED] T0580.049
    
    [GRAPHIC] [TIFF OMITTED] T0580.050
    
    [GRAPHIC] [TIFF OMITTED] T0580.051
    
    [GRAPHIC] [TIFF OMITTED] T0580.052
    
    [GRAPHIC] [TIFF OMITTED] T0580.053
    
    [GRAPHIC] [TIFF OMITTED] T0580.054
    
    [GRAPHIC] [TIFF OMITTED] T0580.055
    
    [GRAPHIC] [TIFF OMITTED] T0580.056
    
    [GRAPHIC] [TIFF OMITTED] T0580.057
    
    [GRAPHIC] [TIFF OMITTED] T0580.058
    
    [GRAPHIC] [TIFF OMITTED] T0580.059
    
    [GRAPHIC] [TIFF OMITTED] T0580.060
    
    [GRAPHIC] [TIFF OMITTED] T0580.061
    
    [GRAPHIC] [TIFF OMITTED] T0580.062
    
    [GRAPHIC] [TIFF OMITTED] T0580.063
    
    [GRAPHIC] [TIFF OMITTED] T0580.064
    
    [GRAPHIC] [TIFF OMITTED] T0580.065
    

```