```

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

                           THE DIGITAL DIVIDE

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

                             FIELD HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON EMPOWERMENT

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                               CARSON, CA

                               __________

                             APRIL 25, 2000

                               __________

                           Serial No. 106-54

                               __________

         Printed for the use of the Committee on Small Business

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
67-350                     WASHINGTON : 2001

_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sale Office, Washington, DC 
                                 20402

                      COMMITTEE ON SMALL BUSINESS

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

                      Subcommittee on Empowerment

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

                            C O N T E N T S

                              ----------                              

                               WITNESSES

Hearing held on April 25, 2000:
                                                                   Page
    Mora, Francisco, Co-Author, ``Online Content For Low-Income 
      and Underserved Americans''................................     4
    Ashley, Warren, Director, Distance Learning, California State 
      University, Dominguez Hills................................     5
    Sutton, Jack, Executive Officer, UCLA Outreach Steering 
      Committee, Office of the President.........................     7
    Rogers, Lynnejoy, Director, Ron Brown Business Center, Urban 
      League.....................................................    26
    Covington, Sam, Director, Information Vortex, Inc............    29
    Bryant, John, Founder and CEO, Operation Hope, Inc...........    31
    Parks, Perry, Vice-President, Government and Public 
      Relations, Media One.......................................    33

                                Appendix

Prepared statements:
    Mora, Francisco..............................................    46
    Ashley, Warren...............................................    97
    Sutton, Jack.................................................    99

 
                           THE DIGITAL DIVIDE

                              ----------                              

                        TUESDAY, APRIL 25, 2000

                  House of Representatives,
                       Subcommittee on Empowerment,
                               Committee on Small Business,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10 a.m., at the 
Carson City Council Chambers, Carson City Hall, 701 East Carson 
Street, Carson, CA, Hon. Bono, Chairwoman of the Subcommittee 
presiding.
    Ms. Bono. Good morning.
    I'd like to begin and call this hearing to order. Today the 
House Subcommittee on Empowerment is convening to discuss 
issues surrounding ``The Digital Divide.''
    We're in a very exciting time in our history where we can 
move information faster than ever before, and buy and sell 
products and services electronically saving time and creating 
certain efficiencies.
    Not only has the Internet provided new opportunities in 
business, but the Internet has also allowed teachers and 
students a whole new world of options in education. However, 
there are sectors of our society that are not being given 
access to this new economy and the information super highway.
    A study that was released by the Commerce Department's 
National Telecommunication and Information Administration finds 
evidence of a widening digital divide. Data from the studies 
show significant differences between those groups with access 
to the basic components of e-commerce, personal computers, 
telephones and Internet service providers.
    Many solutions have been suggested to address the digital 
divide and the possible socioeconomic repercussions. However, I 
believe that we must encourage companies and nonprofits across 
the country to bring digital opportunities to our communities. 
Community and nonprofit groups are best equipped to address the 
specific issues affecting our areas and play an integral in 
partnering with computer and telecommunications firms.
    While I believe that all Americans should benefit from the 
progress being made in this new economy, we must look at non-
governmental ways to provide Internet access. As well as 
looking at innovative access ideas for access, we also need to 
provide these under served areas with training and education 
into the possibilities that lie within this new economy. Not 
only do careers in the growing field of information technology 
pay significantly more than average private sector wages, but 
distance learning and small business opportunities on the 
Internet are growing at an exponential rate.
    While we are seeing that Americans as a whole are advancing 
with respect to Internet connectivity, problematic issues 
remain. Some socioeconomic groups consistently fall below the 
national average with respect to access to the tools of the 
information age. The study reports that minority, low income, 
rural, tribal and single parent households are less likely to 
have access to electronic resources.
    Every indication shows that we are moving from a paper-base 
society to an electronic one where business-to-business and 
government-to-business transactions occur over the Internet 
with increased frequency.
    As we head in this direction, the personal computer paired 
with Internet access will be the most basic of tools for 
tomorrow's business and families.
    As opportunities in the high tech industries grow, the need 
for access and education of the area's information technology 
has become apparent, and therefore developing ways to bring 
technology to under served communities will ensure that more 
people have access to electronic resources and that every 
American has the ability to prosper from the opportunities 
associated with the future of technology.
    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.
    On that note, I would like to recognize my distinguished 
colleague, Ms. Millender-McDonald for her opening statement.
    Ms. Millender-McDonald. Thank you so much, Congresswoman 
Mary Bono from the great area of Palm Springs in this great 
state of California. She has really excelled in leadership on 
the full Committee on Small Business, and I am happy to welcome 
her here to the 37th Congressional District and to the city of 
Carson, a city that was dubbed the most diverse city in the 
nation by the ``Christian Monitor'' last year.
    Let me welcome all of you. Now those who are participating 
here today so that when you come to us, you will come and come 
through the gate, sit here at the desk so that you can be 
comfortable in presenting your particular issue of importance 
and letting us know exactly your feelings about this digital 
divide and e-commerce. We will begin talking about digital 
divide the first part of the hearing and then e-commerce toward 
the end.
    All of these are important to small businesses, because 
after all, you need to know what work force you have out there 
available to job training and those who are in K through 12, 
what type of training they are getting in order to close this 
gap called digital divide.
    I would like to also thank those of you who have come out 
this morning. It is very difficult to readjust schedules in the 
middle of the week, and so we appreciate your coming out 
because it's indeed a digital world that we have out there and 
it is moving very rapidly at a breathtaking pace. And, so it's 
important that you also understand the importance of how this 
digital world and digital knowledge will impact you.
    I would like to thank the Chairman in his absence, Joe 
Pitts, whom I work side-by-side with the House and on the 
Subcommittee on Empowerment. It was he who was very sensitive 
in bringing that the whole definition of digital divide to this 
committee. And so, he is out of Pennsylvania. We would 
recognize that Members are all over trying to do the work of 
their districts, and so he's unable to come, but we appreciate 
his sensitivity and his acceptance of our request, both Mary 
and mine, upon our request to have these field hearings in our 
districts.
    I would like to thank the staff who is here today and has 
traveled from Washington, as well as staff who is here with us 
in the District.
    We first have Harry Katrichis. He is counsel to us in the 
House.
    We also have Dwayne Andrews, who is staff counsel to us.
    And, we have a Michael Day, who is the minority staff 
resident counsel to us.
    These three men are always on the dais with us when we are 
holding hearings to ensure that what we have before us is 
exactly what we need to have, and any comments that we need to 
make, they're there to reply to those for us.
    We have our local district office on the dais, Jennifer 
Payne, who is legislative assistant to the Congresswoman Mary 
Bono. And I have to my right Imani Brown, who is my chief 
deputy here with me today.
    So we welcome all of you're here to Carson, the city of 
Carson. In the South Bay we have recognized the diversity in 
this area. It is the most diverse area in the state of 
California. All around us here we have, there's eighty-seven 
languages that are spoken throughout the state of California; 
we have about 80 of them right here in the South Bay area. And 
so diversity is very keen, and key to us here.
    As we look at diversity we find ourselves looking at this 
so-called digital divide and how is it affecting those of us 
who are down here in the southern California region, especially 
the South Bay in dealing with that.
    Today we will hear from experts who will tell us about this 
digital divide and how it is really absolutely widening. Unless 
we do something about it, it will absolutely create an impact 
for the work force in the twenty-first century. The work force 
in the twenty-first century will not look like the work force 
of twentieth century; there will be more minorities, more women 
making up this work force. Therefore, we must ensure that 
minorities, women and others have access to this information 
age, this internet, these myriad of programs that we have 
already. We know them; America Online, Americorp, IBM, Netscape 
and Microsoft, just to mention just a few of those companies 
now that are looking at this whole digital and e-commerce era 
and is trying to see how they can close this gap on digital 
divide.
    And so I'm very happy to have you come out today. And for 
my colleague, Mary Bono, to come, traveling from Palm Springs 
to come here, and I know how difficult it is. When we came back 
to the districts a couple of weeks ago, or last week I should 
say, we're here for 2 weeks but our schedules are really 
loaded. And I'm just most appreciative to her coming this way 
and then tomorrow I go her way. So I will be in the Palm 
Springs area as she convenes her hearing.
    So again, Madame Chair, thank you so much for being here, 
and we will begin the hearing. Thank you.
    Ms. Bono. I will thank the gentle lady for her kind 
remarks. I am here and tomorrow you will be Mecca, not the Palm 
Springs area.
    Ms. Millender-McDonald. All right. It's Mecca that I'm 
traveling to, all right.
    Ms. Bono. But I also want to commend you. It has been a 
pleasure working with you in my 2 years that I've been in 
Washington, and I am proud of you and pleased to call you not 
only my colleague, but my friend. So, I'm happy to be here.
    If we could call upon the first panel to take their seats, 
we'd like to begin with the testimony.
    Given that this is a field hearing, it's not quite as 
structured as it would be in Washington, and I think we enjoy 
it this way a little bit more, but I don't have name tags in 
front of you to identify which of you is who. So, as I call out 
your names, if you could just raise your hand briefly, we'll 
dispense with introductions that way. It's something my 
children do in second and sixth grade. But I don't see any 
better way.
    Francisco Mora, co-author of ``Online Content for Low-
Income and Underserved Americans.'' Okay.
    Dr. Warren Ashley, Director of Distance Learning, Cal State 
University, Dominguez Hills.
    And, Dr. Jack Sutton, Executive Officer, UCLA Outreach 
Steering Committee.
    All right. If we could remind you to keep your remarks 
somewhere around 5 minutes, we would appreciate it.
    We will begin with Francisco Mora.

  STATEMENT OF FRANCISCO MORA, CO-AUTHOR ``ONLINE CONTENT FOR 
             LOW-INCOME AND UNDERSERVED AMERICANS''

    Mr. Mora. I thank you for inviting me to this partnership 
to present our findings on our report about on line content for 
low income and underserved Americans.
    We conducted this study because we have seen that as access 
continues to grow and, that has not been resolved yet, but as 
access continues to grow there is more need for online content 
that meets the needs specifically of under served and low-
income Americans.
    And, so, we conducted a year long study about this kind of 
content. We spoke to focus groups, hundreds of focus groups, we 
interviewed hundreds of experts and we also conducted a web 
analysis of over a thousand sites targeted to this audience. 
And out of those sites we found major, major gaps in the kind 
of information that users said they want.
    Now, the kind of information that they said they want; they 
want local jobs that are applicable to them. They also want 
literacy improvement tools on the Internet. They want 
information at basic literacy levels; there are 44 million 
Americans who are functionally illiterate in the United States 
today. And they also want content for non-English speakers. And 
in addition, they want content geared more to their culture and 
appropriate to their cultural practices and needs.
    And out of this analysis we found that less than 1 percent 
of the information that we looked at meets these needs in terms 
of local jobs, local housing, limited literacy content, 
multilingual content and cultural content. Less than 1 percent 
of the Internet serves these needs.
    And this has a huge implication, because without content 
there is no real access. There is no value on the Internet for 
these populations to go online.
    And we've also learned from--these figures come from the 
U.S. Department of the Commerce study ``Falling Through the 
Net,'' that 25 percent of Americans who earn between $10,000 
and $14,000 are more likely to use the Internet for job 
searching in comparison to 12 percent of Americans earning 
$75,000 or more.
    In terms of online courses and online learning, 45 percent 
of Americans earning between $10,000 and $15,000 are more 
likely--will use the Internet to learn and study online, 
whereas only about 35 percent of Americans earning $75,000 or 
more will use it that way.
    So, clearly if information is online under served Americans 
will use it.
    And in addition to identifying these major gaps in terms of 
content, we provide some solutions in this report. Some of the 
solutions recommend to empower the communities to use the 
information that already exists by identifying and training how 
to collect information and create information that is useful to 
them.
    We also recommend to provide information technology 
training for low income users and community leaders so they can 
develop content locally.
    In addition, we recommend more research. Our study is 
really the first ever looked at online content. And we 
recommend to conduct more market research on low income users 
and also to provide venture capital to create micro enterprises 
in underserved communities. That's a recommendation to look at 
money in a new way; to deploy money more for e-commerce 
solutions in underserved communities and really look at it as 
social venture capital.
    Finally, we recommend to invest in a nationwide network of 
community technology centers as hubs to help residents produce 
and use relevant content. These community technology centers 
are found in libraries, stand alone centers, schools and the 
like.
    And, that provides a review of the report. Thank you very 
much.
    [Mr. Mora's statement may be found in appendix.]
    Ms. Bono. Thank you.
    Next, we'll have Dr. Warren Ashley.

 STATEMENT OF DR. WARREN ASHLEY, DIRECTOR, DISTANCE LEARNING, 
          CALIFORNIA STATE UNIVERSITY, DOMINGUEZ HILLS

    Mr. Ashley. Good morning. My name is Warren Ashley, Dr. 
Warren Ashley. I am the Director of the Center for Mediated 
Instruction and Distance Learning at California State 
University Dominguez Hills.
    Ten years ago our university made a major commitment to 
distance learning. Five years we were the first university to 
offer a complete graduate degree, a Master of Science in 
Quality Assurance, over the Internet. Today we offer six 
degrees programs and five certificate programs that can be 
completed without ever coming to our campus. Three years ago 
``Forbes'' magazine included Dominguez Hills in their list of 
the top 20 cyber-universities. In January 1999 we were the 
first university to begin broadcasting live, interactive 
classes over the Internet.
    Technology has developed so rapidly it is easy to forget 
but for the general public, the Internet is only five years 
old. Like all new technologies there is a lag between the early 
adopters and those who are slower to use the Internet. Many 
times this distinction between early adopters and later groups 
has been economic.
    Initially this was true for the Internet, but that may no 
longer be the case. Last week an advertisement for a local 
electronics store, which shall go nameless, offered consumers a 
500 MHz PC with 32 MB RAM and a 17 inch monitor for $129.00. 
This was after rebates. $49.00 if you were to get the color 
printer to go with it. This is less than half what my parents 
paid for the electric typewriter which they gave me as a high 
school graduation present in 1960. Some companies are even 
offering free computers to consumers to will sign a contract 
for internet service.
    Software used to be an expense but the computer that was 
advertised for $129 comes with Windows 98 and Sun Star Office. 
Internet service was also an additional cost, but now there are 
a number of companies who provide free internet access. One of 
the newest entries into the free Internet market is 
bluelight.com from K-Mart. And, if you live close enough to 
your phone company's switching office, you can even get free 
broadband service from freedsl.com.
    Free Internet services are underwritten by advertising, but 
that's also true for commercial television and much of our 
print media. Companies are willing to pay to have their 
messages on your computer screen. They are also afraid that if 
they don't provide the services, someone else will.
    What then is holding people back from this technology? Why 
have cell phones become commonplace in neighborhoods where few 
homes have a computer? People get cell phones when they begin 
to feel they needed a cell phone to do business and stay in 
touch with their friends. Many of these people do not feel they 
need the Internet to do business and stay in touch with their 
friends.
    And, to some extent this is true even at our university. 
Most of our students cannot get through a day without using a 
computer and going on the Internet, but there are some who do 
not feel the need and have never logged on.
    Over the years university communities were formed and 
meetings were held to find a way that would ensure that no 
student, graduated from Dominguez Hills without a basic 
understanding of computer applications and Internet technology. 
Suggestions ranged from a mandatory one-unit technology course 
to an Internet component for every syllabus. Fortunately, none 
of these solutions were ever implemented.
    This summer, however, we are installing an application that 
will automatically create websites for every student, twelve 
thousand students, every faculty member and every course in the 
class schedule. When a student or a faculty member goes to 
their website they will find links to all of their classes. 
They will also find news about campus events and links to 
campus services. Now even if only a fraction of the faculty use 
the class websites as part of their instruction in the fall, we 
will have created a virtual community and all students will 
feel the need to be online.
    The same principles apply in business, government and 
society. Businesses should be subsidizing online training for 
their employees. We know from our experience that when 
businesses do subsidize, employees will take the on-line 
training. Municipal and county governments should be putting 
all of their forms and as many of their activities as possible 
online. Schools should begin using the Internet for 
communicating with parents and the community.
    Parents should be able to go a website and find out exactly 
what the homework is that night. Civic organizations should be 
encouraged to use the Internet for virtual meetings and online 
events. Libraries should be given even more equipment and 
greater bandwidth for public access to the Internet.
    In Palm Springs, they--Palm Springs Library created a 
virtual university. They will be listing courses from Cal State 
Dominguez Hills, on-line courses from Cal State Dominguez 
Hills. And finally, commerce on the Internet should be 
encouraged to the fullest extent possible.
    Because, when people feel they need that they need the 
Internet to do business and stay in touch with their friends 
they will get the equipment and they will get the access, and 
they will get any help they need to use this technology.
    [Dr. Ashley's statement may be found in appendix.]
    Ms. Millender-McDonald. See Mary, we're already connected 
here all the way from Palm Springs down to Cal State Dominguez.
    Ms. Bono. That's right.
    Dr. Sutton.

STATEMENT OF DR. JACK SUTTON, EXECUTIVE OFFICER, UCLA OUTREACH 
          STEERING COMMITTEE, OFFICE OF THE PRESIDENT

    Mr. Sutton. Good morning. My name is Jack Sutton.
    I'm part of the UCLA Outreach Steering Committee, and the 
Outreach Steering Committee was formed as a result of 
Proposition 409 and the regent's action on Affirmative Action. 
So we've work with fifty-eight high schools and feeder schools 
in our outreach programs so that this particular presentation 
is going to be about the implications for education that we see 
at those schools.
    You can see on the overhead, Alvin Toffler has a very 
interesting comment that ``No nation can operate a 21st century 
economy without a 21st century electronic infrastructure 
embracing computers, data communication and other new media.''
    Then he goes onto say that * * * ``This requires a 
population that's familiar with this information infrastructure 
as it is with cars, roads, highways, and so on.'' And so the 
question is how do we get there? And one comment when we feel 
the need we will get there and the next transition period we 
need to be able to fill that.
    Looking at work in America over the last couple hundred 
years, you will see that we've gone through the agricultural 
age, we've gone through the industrial age and service, and we 
now into an information age. Now over half of the jobs require 
and work with information.
    If you look at from 1950 to 2000, that the professional 
jobs have stayed very much the same in terms of percentage. 
Notice the big difference between skilled and unskilled, and in 
many cases skilled means at work you have to be technology 
literate. Ford Motor Company no longer has handles for their 
cars. Everything's electronic. If you build in improvements to 
the car, you now have to have the serial number and the date 
that the car was built to know where you go to get the data to 
get it fixed.
    So the bottom line is welcome to the information age. 
Emilio Gonzales says that ``60% of the new jobs in 2010 will 
require jobs which--skills possessed by 22% of the workers 
today.'' So the question is how do we get the workers--those 
workers of today and workers of tomorrow, many of them are in 
school right now. We all know that we will go through three or 
four jobs, and so school is something like that is going to be 
pretty critical.
    If you take a look of the map of Los Angeles County in a 
geographical sense, this is what it looks like. But if you look 
at it from a population perspective, it's a little larger. And 
it takes on a significant rate. So, the question is how are the 
students in Los Angeles County doing schoolwise?
    Seventy percent of the high school students in LA County 
attend schools performing below state average on UCLA's 
Academic Competitiveness Index. And that index is essentially 
to look at how many--what's the percentage of applicants to the 
school who are competitively eligible to UCLA or to Berkeley. 
And if they're in the top half, we consider you to be 
competitively eligible. The chance of getting in is good.
    So it's a percentage of competitive applicants from a 
school. We have academic competitiveness index calculated for 
almost every school in the state.
    If you look at the way that those schools lay out in the 
state, this is what the distribution is. Notice that the 
average is about 41. If you take a look at where LA County sits 
in there, you will notice that the average drops to 30. If you 
take a look at LA Unified, that's half the schools in the 
county, then that drops to 20.
    If you take a look at a map of distribution, the green dots 
are the high schools that are above the state average. Anything 
else is below the state average on an academic competitiveness 
index. If an index is very high, you're looking at the 
competitiveness.
    Very quickly, we can look at a chart developed on schools 
in districts. They have the API which is the state academic 
performance index based on test scores, the academic 
competitiveness index, which is UCLA's, the number of 
computers, the computer to student ratio, and then the internet 
connected rooms. You'll notice that along Los Angeles Jordan 
and Long Beach Poly both were digital divide high schools the 
first year so they have started to implement that particular 
plan.
    Recognize that--the quote by I think it was Louis Gerstner 
puts it best when he looks at ``We need to recognize that our 
public schools are low-tech institutions in a high-tech 
society. The same changes that have brought cataclysmic change 
to every facet of business can improve the way we teach 
students and teachers.''
    I think the next quote of probably is, maybe the most 
important of the entire presentation. The real challenge we are 
about is not challenge of technology, it's a challenge of 
people. How do you work with teachers as there are a number of 
teachers who have technology in their room and one of the 
things that they generally do is take it out of the way. 
Because when it comes to using it, the students pick up very 
quick.
    There's a couple of charts that I think illustrate--the 
difference if you have a higher education you're going to make 
more money. Great implications for that digital divide. If we 
don't have access to the technology, if we don't have access to 
the information, we won't develop the skills there's going to 
be a broader divide.
    If you take a look at changes from '69 to '89 if you're in 
that bottom quintal, you're paid--how much you earn drops 
almost 25%, but if you're in that top quintal you earn another 
12% to 13%. And again, so what you earn and what you are 
educated for makes a significant difference.
    Now we talk about a digital divide. I think the next two 
charts with the black really show where the digital really hits 
them. The green bars are high income, the red bars are low 
income. The bottom line is these are indications of using the 
computer at home.
    So regardless of what is available at school, what is 
available at home is going to--those are first graders to sixth 
graders. The next chart shows 7th to 12th graders. So you have 
again, very much the same differentiation with your high 
income. If you're using the computer at home where there's a 
lot more time and a lot more things of interest to do, you're 
going to end up with the higher income.
    And finally, there were some recommendations made by the 
President Committee of Advisors on Science and Technology, 
Panel on Educational Technology.
    Focus on the learning, not on the technology. Emphasize the 
content, not just the hardware. You have to have the hardware, 
but the other stuff is really important.
    Give special attention to--to professional development. If 
you don't--if the teachers don't feel comfortable, they're not 
going to want to use it. You're not going to see it in 
classrooms. The computers are there, but they won't use it.
    Engage in realistic budgeting. That budget has to include a 
cost range for maybe a third of that budget going into 
professional development.
    Ensure equitable, universal access. I think that's come 
across the board and there are going to be lot of places where 
that can occur. It's going to have to occur at schools if we 
are going to teach people how to be information literate.
    And finally, to really initiate a major program of 
experimental research to find out what works and doesn't work. 
Thank you.
    [Dr. Sutton's statement may be found in appendix.]
    Ms. Bono. Thank you. I'm going to go ahead and defer to you 
for questions.
    Ms. Millender-McDonald. Thank you Madame Chair.
    Before I begin the questioning, I want to acknowledge two 
persons who have come in. One of the great council members of 
the City of Carson is with us, Councilman Darryl Sweeney at the 
back. Good to see you here. Applaud. And we also have, 
representing Congresswoman Grace Napolitano, Mr. Ray Cordova. 
Ray, do you want to stand?
    I'm not sure I see anyone else who's representing 
Congresspersons but if I have ignored or--not ignored you but, 
if I have not seen you please send a card to the front.
    These were just telling presentations Madame Chair as we 
have heard from these three outstanding presenters. The first 
one, Mr. Mora you said that you had done a year long study on--
particularly--specifically I should say, on the web, was it the 
web that you did this analysis? And if so, was this study done 
for K-12 or was it done for K-12 and higher learning?
    Mr. Mora.  The analysis included educational information 
for K-12 students. And in addition, we also focused on life 
information, just general life information that people need to 
go on beyond high school because many people will leave high 
school, they don't have basic literacy, basic math skills. And 
so we looked at the whole spectrum of basic information and in 
addition--basic learning information in addition to living 
information. The availability to hold jobs, availability to 
available housing, affordable housing, and health and 
government, et cetera, all kinds of information.
    Ms. Millender-McDonald. It was quite interesting that you 
said less than 1% meet the basic needs, meets just basic 
literacy, and that is very telling. Would this be because a lot 
of our citizens, certainly speaking from the California 
perspective, are immigrants and therefore there is a language 
barrier that circumvents this, or is it just simply the low 
income and persons who just have been unskilled for years?
    Mr. Mora.  Well it's really a combination of all those. 
Many people are illiterate just basically because of lack of 
involvement with education in general. Then many people are 
also in transition. They're immigrants and so they're in the 
process of becoming more fluent in the language. So it's really 
a combination of both.
    Ms. Millender-McDonald. Combination of both, but then 
learning and education has been the main focus of this, would 
you say, or is it half and half? Is it lack of really quality 
education and job skills training or is it more or less the 
literacy based on the immigrant issue?
    Mr. Mora.  No, it's really a huge problem with actually--
instruction in literacy and building fine--functional literacy 
skills.
    Ms. Millender-McDonald. So that's it. The knowledge that 
you had and you compiled, who did you or have you imparted this 
information to anyone or any of the companies that I outlined? 
AOL, Netscape or Microsoft. Have you talked with a group of 
high tech companies on this information that you--the analysis?
    Mr. Mora.  Yes, we're in the process--have been speaking 
and are in the process of speaking with and talking about 
interventions that they could implement, whether it's local 
education, content, learning how to solve this whole dilemma. 
We have also spoken with the Congress.
    We've been working with the Congress to influence the next 
study to follow and then we'll have follow through because this 
data already is pretty much done, then the following one will 
be on 2001. We're also involved with several foundations who 
are partners such as the AT&T Foundation, the Pac Bell 
Foundation, to look at the whole problem and come up with 
different solutions because there are really various types of 
solutions that would be required to address the problem of this 
magnitude.
    Ms. Millender-McDonald. This is very true. I had a 
breakfast meeting, it was an informal meeting with some of the 
companies that I've outlined to talk about who's doing what and 
where and with whom.
    And it was amazing that there are so many commutations of 
companies doing things that I have started a steering committee 
asking to look at what each company does, when they're doing 
it, for whom they're doing it, what education levels are they 
doing it, so that we can then start to see, you know, bring 
together a compilation of all of this and try to synthesize it 
wherein it will be maximum success in schools with low income 
level kids.
    And so I am very clear that what you have imparted today is 
something that we need to have you come to the table with us on 
to talk about as we hear the--
    Mr. Mora.  Excuse me, if I may say that in addition we're 
complementing that kind of work because we're in the process of 
building an on-line resource specifically so synthesize that 
kind of information so we don't duplicate what another company 
is already involved in.
    Ms. Millender-McDonald. I love it.
    Mr. Mora.  An extensive----
    Ms. Millender-McDonald. I love it. I just saw us all 
running around trying to catch tails. And I thought wait, let's 
stop and see if we can bridge this, bridge at that time the 
information sharing.
    I do want to say that we would like to see you in 
Washington to help us. I'm speaking, and I hope I speak on 
behalf of my colleague and friend, Congresswoman Bono. We're 
all interested in--in closing that line so that once we get the 
players, if you will, together and start synthesizing this, 
we'll be able to see then how we have moved in to areas of 
hopefully helping that new job--work force, I should say to 
move into the realm of success and job skills.
    Dr. Ashley, let me first commend this university that sits 
right here in my district, Cal State Dominguez Hills, which I 
knew--and which I have known for years has been just absolutely 
the premier university that deals with innovative types of 
things sometimes before any other university, albeit the ivy 
leagues, the UC's or the CSU sisters.
    And you do this because of the need and I'd like to think 
your--your student population represents this whole area of 
immigrants and this diversity that we speak of.
    But let me just ask you a few questions here. One is 
distance learning is something that we recognize now is just 
phenomenal. We've got to make sure that we get this going 
across the nation because the average student at Cal State 
Dominguez Hills, last I heard was about twenty- eight to thirty 
something, they're in that range. And so they're working folks 
and they need to have something that's more applicable to that 
working style.
    But you're telling me that with rebates and all, we can get 
computers and get the necessary equipment, if you will, to 
become more knowledgeable and more skilled and more into the 
internet for just a hundred and twenty-nine dollars ($129). You 
said some color ones we can get are forty dollars ($40). Why 
aren't we saying this to our students at Dominguez Hills who 
perhaps are leaving, as you said in your statement, without at 
least the understanding of computer application?
    Mr. Ashley. Well I think for most of the students that go 
through Dominguez Hills, I think they do have experience that 
includes technology, and I think they leave with the skills to 
deal with the demands of this--this century.
    One of the things, and I think this is true not just for a 
university, but for any institution is that there is a natural 
lag for us in terms of information that we just go through a 
purchasing cycle and make a decision about what we're going to 
buy and then go ahead and issue the purchase order or the 
requisition, and then process that order. And it can easily 
take, it can take a year, it can take eighteen months, and many 
times by the time you've bought it it's already obsolete. In 
fact Dell is now running websites that you can have what they 
believe--you can have what is available.
    For instance you can no longer get a 500 MHZ Dell computer 
because they no longer offer them, 600 is minimum, and they've 
just started a whole series of new ones. So there's a lag in 
terms of the speed of the technology, and the way that we can 
respond.
    The other thing is--is that we make plans based upon what 
we know today rather than, perhaps, what we know tomorrow. It 
remains a tremendous investment in many places and also in 
school systems in hardwiring the schools, and we're finding 
it's incredibly difficult because the schools are not designed 
for this and they're running conduits on outside and over 
roofs, and we're doing all kinds of things. And we know that 
the future is going to be wireless. That my laptop is--today is 
wireless laptop. I can get a wireless connection anywhere in 
Los Angeles and most places in California without any phone 
line, without any wire at all.
    Ms. Millender-McDonald. So you are saying then that this e-
rate is not needed because some of us are trying to implement 
e-rate to wire these schools.
    Mr. Ashley. First of all, no one is suggesting that we 
start tearing out wires and anybody who has good hardware 
connection should use it and keep it. But the fact is--is that 
when you look at the future, and the future now is about three 
years, I mean when you look at the future it may be a better 
use of money in some situations, for instance we're looking at 
a housing complex on the Dominguez Hills campus, to create a 
wireless environment than to try and wire that particular 
building.
    What I see within a very short time, twelve, eighteen 
months, that a computer lab in an elementary school could be a 
part of wireless computers. You take it into Mr. Jones' class 
in the morning and you say you're the lab, you're the computer 
lab.
    And this afternoon this cart will move over to Mrs. Smith's 
room and she will be the computer lab. It's a whole different 
concept than what we've been doing in the past. We're just 
creating rooms and looking and hardware and, you know, 
basically creating a very static environment. You know it's 
going to be much more dynamic.
    Ms. Millender-McDonald. You know, it's amazing you would 
say that because we had a hearing about two or three weeks ago 
to talk about closing this divide, and one of the presenters 
spoke about the distance learning and broadband and other new 
technologies that are coming out. And so my question is to you 
as it was to him, are you suggesting that our kids who have not 
even gotten on the internet will already have lost a lot 
because we are going along in a whole new concept of high tech?
    Mr. Ashley. What's incredible about this technology is that 
you could go from zero to full speed in three to six months. 
This is the case, Dominguez Hills has ten years of experience 
in distance learning. We would like to think that's what makes 
us better and makes us more qualified than other universities. 
But the reality is that a university or a college that has 
never done any distance learning could today adopt a technology 
and within six months, could be up and running and soon have 
the infrastructure to do a very good job.
    So I think it's mainly getting the computers and the access 
into the hands of the students. Again then doing that in such a 
way that there is a real need or at least experience a need----
    Ms. Millender-McDonald. Irrespective of the fact that 
you're saying that you have computers that are old, that is 
not--but again in my area of Watts, I go down and I see old 
hardware and some of it you can't even get any software for it.
    Now that is not--it's not cost effective. It's not 
effective at all, and efficient for trying to train kids who 
have not had any access. What do you say to that?
    Mr. Ashley. There is--there is--it's true. There are some 
schools--schools have a way of sort of hanging on to things 
long after the----
    Ms. Millender-McDonald. No, this is just given to these----
    Mr. Ashley. The thing is it's a lot of what is old 
computers--my four year old grandson has a 6200 power MAC. The 
reason he has that is because when his parents did an upgrade, 
and they felt they needed a more--a faster computer, there's no 
market for used computers. What are you going to do with it? 
They couldn't even sell it at a garage sale. So they gave it to 
the child.
    There--so there's--actually there's a lot of slightly older 
computers out there that are serviceable, that are more than 
sufficient for what people need, which frequently is just word 
process and internet access. And you don't need 500 megahertz 
to do that. You don't need 128 megs of ram to do that.
    Ms. Millender-McDonald. So you're saying that I can go out 
and ask agencies there in Washington if they have these 
outdated computers, as they see it, please give them to me so 
we can put them in community centers, put them in libraries, 
put them in schools first and make sure that I can get some 
kind of adaptable--or adapt to the internet.
    Mr. Ashley. Anything from a Pentium 1 on now I would 
certainly, you know, feel comfortable with them using. There 
will come a time, and there is coming a time when you're going 
to have full video coming over the internet and then you will, 
perhaps, need a little more robust equipment. But that doesn't 
mean that you have to just stop now. I mean, it basically 
means--Hewlett Packard is actually--has a series of what are 
sort of mini lap tops that they are discontinuing and they have 
them out--you can get those for about three hundred and eighty-
five dollars. And these are like, little lap tops that they 
would go on the internet and they would do word processing.
    You know, but the thing is, nobody thinks in those terms. I 
mean, they're thinking of, you know, we have to get the--you 
know, it's almost a--we have to have the biggest and the best.
    Ms. Millender-McDonald. Are you saying that the--well it's 
been stated that you have to first start here and then you 
graduate to this. They don't know that you don't have to start 
there. If you haven't started there, you can start some other 
place along this continuum.
    Mr. Ashley. Uh huh.
    Ms. Millender-McDonald. If you don't say this, people don't 
know that. I would like to suggest that I have talked to 
parents so parents can understand the need to invest in these 
less expensive computers. I would certainly like you to travel 
with me around to my schools and talk to parents, have parent 
nights, and let parents understand that it's more important to 
get these computers than to get the Michael Jordan shoes.
    I mean really, you've got to make sure that our kids get on 
with the service of--what this whole notion of--getting back to 
the 21st century, I tell students whom I talk with we were 
excited when we knew that we could have a job outside of 
California. Now you can have a job outside of the United 
States. But you've got to get prepared and ready for that.
    And in my last question to you, Dr. Ashley, you state here 
that this--you subsidize on-line training for your employees. 
Do you know how many businesses do that on-line training? Do 
you have any idea?
    Mr. Ashley. Yes. Some of the larger industries we work 
with, you know, Raytheon and Boeing, and some of the really 
large industries, but I think even the small industries if they 
gave their employees a small subsidy, I'm not talking about 
even necessarily the entire tuition, I think you would have 
many more employees taking advantage of these opportunities, 
because it--it somehow, if the employers were willing to pay a 
part of it, it somehow it just makes--it makes sense to then 
participate.
    And I, you know, I really know nothing at all about the tax 
structure, but it makes sense that if you could make that kind 
of investment in your employees then it would then also improve 
your business.
    Ms. Millender-McDonald. Well we're busy. We've have a 
moratorium on the whole notion of taxes. So we won't even get 
into that today. But have you asked technology companies what 
are the skills needed upon graduation for those students whom 
you are dealing with not to participate in the business 
community?
    Mr. Ashley. Basically, because things are moving so quickly 
as long as the student has a familiarity and a comfort level 
with the technology, then they're going to learn everything 
when they go to the business.
    Ms. Millender-McDonald. Uh huh.
    Mr. Ashley. There's no way that we can give them the 
skills, the specific skills because by--even within two years 
that will have changed.
    Ms. Millender-McDonald. I, indeed, will be telling and have 
my chest out returning back to Washington to let them know 
Forbes Foundation--Forbes Magazine stating you as one of the 
top cyber universities. We knew that ten years ago, I can 
reiterate that, I was not in congress ten years ago so I can go 
back and tout that.
    Dr. Sutton, I am absolutely, I suppose, very touched by 
your presentation because it was visual. You see that gap, that 
digital divide so clearly there. I have got to ask my staff 
here to do what you've already done, so we'd ask that you have 
these types of slides for us, and I'm sure that Congresswoman 
Bono might want that too, but she's not L.A. County so she 
might want to get hers in her area.
    But I've been saying all along let's go to the teacher's 
side of it. I am the only Congressperson who sits on the 
National Commission on Teaching on America's Future of which I 
am to do whole methodology change of teaching throughout this 
country.
    But professional development is so critical, and as I have 
said to them, as a former teacher, this cannot be we can teach 
professional development. It has to be ongoing. It's the same 
thing with developing of skills, not only for students but for 
the teachers and administration.
    What are the fifty-eight feeder schools that you are 
dealing now, and how can we get students, parents, teachers, 
administration to fill the need that we are talking about so 
that we can get this over 70% of the lowest percentile of the 
lowest state average schools of students into a mode of high 
technology?
    Mr. Sutton. I think there's a couple of things in terms of 
the professional development that are critical. My wife just 
finished her doctorate in educational technology, and so I 
lived through a second dissertation, which was a case study. 
She was looking at elementary schools that had really 
implemented technology in the curriculum so it was a seamless 
tool. She could find three in the state, elementary that met 
those criteria because she didn't want a very rich district, 
and she didn't want a very poor----
    Ms. Millender-McDonald. You are going to need the mic, turn 
mic on at your desk. Now you're going to have repeat everything 
you said.
    Mr. Sutton. I think that professional development is the 
key. I mentioned that my wife had just finished her doctorate, 
did a case study and looked at elementary schools that had 
implemented technology and made it a seamless part of the every 
day life of students.
    She could find three in the state that didn't come from 
very affluent districts or very poor districts, and had a 
racial diversity. One of those was in L.A. Unified, was the 
only charter, one was down in San Diego, one was in Vista.
    She is the outreach and the technology coordinator at the 
University Elementary School which is the lab school and UCLA, 
and they have two hundred and fifty or so computers. They 
rotate. They buy new computers and the new ones go to the older 
students, and the other ones go down. And so every year they 
recycle on down.
    But one of the things that has been very--very important in 
the success that she's working with teachers and others that 
have, is a concept called ``just in time learning.'' And it 
really requires a coach. Both of our outreach programs have a 
coach at a school site because one of the things that we have 
found, if you want schools to make a change everybody that 
works at school right now has more than a full time job. So 
you're going to have to add resources for them to be able to do 
that.
    And so when a teacher starts to do something or wants to do 
something, there is somebody that's there right away that can 
work with that teacher, maybe come in and teach a lesson or two 
with the idea that the teacher will take over. There's a 
support system not only from that coach but from the other 
teachers that are working on it.
    So you have, not a technology committee, but a technology 
integration into the curriculum committee because it's not a 
separate issue. It is, how does this become a tool? You look at 
the little kids who can use the computer just like they use a 
pencil.
    The story the other night, one of the professors has a six 
year old who was on the web, got onto Amazon.com, called out 
and said, is this your credit card number? Yeah. Well, the 
kid's six years old, ordered the books that he wanted over the 
internet on Amazon.com.
    And so we talk about the very young ones not being able to 
do it, not being able to read, that's not a problem. Even 
though students who are second language students at the school, 
when you have something that you want to learn how to do, and 
if you have access to the tools and you have access to the 
support system, whether you are a six year old or whether you 
are a sixty year old, you'll be able to do it.
    So your--our task in the professional development area is, 
how do we provide people who know instruction, who know 
curriculum and know technology, because it takes all three of 
those not just somebody who knows the hardware to come in, not 
that you can't have to keep hardware up to date, but it's all 
those issues together. And so when we talked about that 
budgeting issue, you have to budget for the human part of it if 
you're going to be successful.
    Ms. Millender-McDonald. Excellent. Have you ever been in 
any school districts to talk about the 70% below average, state 
average with the students?
    Mr. Sutton. That figure is--is a very high figure for us, 
because you're looking at the two most selected university 
campuses in the system. But it does show a difference between 
the state and the county, and if you're looking at the number 
of students coming in and out, I think we were going to write a 
grant last year and several schools, elementary and middle 
schools, the gear up grant, we calculated, I think that the 
transiency rate was 47% in the participating schools. And if--
--
    Ms. Millender-McDonald. I'm sorry, the transient rate was--
--
    Mr. Sutton. 47% for students. So you're going to turn over. 
If it were equal we would have ended up starting out with over 
three thousand kids. We would have ended up with two hundred 
and some kids who would have been there at the beginning over a 
six year period. Well it's not an even transiency rate, but all 
of those factors go together, and so the task is how do we move 
to that next step?
    If you want teaching behavior to change, if you want 
teaching to become more in line with how we know we learn in 
terms of inquiry, technology is an excellent way to do it 
because if you have technology in a classroom, if you are 
hooked up to the internet or an intranet where you build the 
curriculum resource and kept it current, the teacher no longer 
has to be the source of information.
    If the teacher is no longer the source of information, the 
teacher's role has just changed dramatically because now that 
teacher can be a facilitator. Now that teacher can work 
literally with small groups and not have to worry about our 
students--other students accessing their information. You don't 
have to worry anymore because, how out of date is this science 
textbook? I mean, given the fact that a science book is 
probably out of date as soon as it's published now anyway. This 
way, if you're running your intranet or intranet site, you can 
keep it up to date.
    Ms. Millender-McDonald. See, this is why we're trying to 
change the whole teaching methodology in our country because 
right now we're not there yet. I'm hoping that we're gradually 
going there and we having different projects around the country 
trying to see what we can add to the process.
    But the teacher is absolutely leader in her classroom in 
that she has that timing to develop and move a curriculum that 
will adjust to the students in her classroom and on a much more 
individualized basis than just this one size fit all textbook 
that really aren't interesting for kids, books that aren't 
interesting to kids anyway. These kids look at these books and 
find they're not interested. So we need to bring something in 
that will help to enhance that.
    The last thing that I want to say, the last question that I 
have Dr. Sutton, is that education and job training needs are 
very quickly becoming the top issue for the business community. 
Recently a business survey by American Express showed job 
training is now the number one business issue, ahead of other 
items like regulations, reductions, and tax breaks.
    Have you, or any of the panel members, started to talk with 
the business industry, or business community I should say, to 
look at ways to change and begin to solve this problem? Job 
training, as I said when the welfare bill came before us in 
Congress, if you don't have enough money for job training, 
you're not going to move people from welfare to work in a 
constant basis and sustain a sustainable position because you 
just haven't put the money in there, and you're talking about 
unskilled from the beginning. So that's a question to Dr. 
Sutton, and then we'll let the other panel get on the bench.
    Mr. Sutton. I'd like to refocus it a little bit to say, 
almost career training. One of the things that we noticed in 
our lowest performing school, the high schools, is there is no 
sense of future.
    Ms. Millender-McDonald. I'm sorry, there's no what?
    Mr. Sutton. There is no sense of future as far as the kids. 
If you look at your lock cluster, and you're talking to the 
cluster administrator, there is no business with whom they can 
establish a business relationship. If that's the case, then 
students have no sense of career to look forward to. It's 
unlikely that they have a sense of even maybe job as they grow 
up.
    So that part of what we are looking at is, and it's--I 
think that the focus on school as the only sources, is probably 
misplaced in the sense that this is really a community issue, 
community in the largest sense and the smallest sense, that 
we're looking at the career awareness. We're looking at the 
fact that I have a future. That means that everybody has to 
learn. We have to add in working with schools.
    We don't have--we as a university don't have the resources, 
the state doesn't have the resources, the local school district 
doesn't have the resources. It is that combination of how do 
you leverage, how do you build that synergistic move? How do 
you get teachers from a variety of schools to work together to 
become a very large team to share? It is a problem that--the 
coordination issue is a problem by itself and if I were looking 
at ways of spending funds, looking at how you allocate, is that 
you allocate toward partnerships, and give those partnerships a 
chance to develop and mature before you've asked them to come 
up with a product or present a grant.
    Because in many cases you're asked to do a grant, you have 
a six month planning time which is great except the grant is 
due half way through the planning time. Not a federal but a 
state grant. You don't have the time to establish those 
personal relationships and those business relationships and 
those school relationship that are going to allow this to 
continue on.
    And meanwhile we lose teachers because they're looking 
someplace else because they don't see the support coming that 
they need. And so, if we can build a community, that learning 
community around the school and around the career issues, and 
the issues that are important to people, then we'll be 
successful. If we don't do that, we'll either divide--we'll 
become a chasm or more of a chasm, and then we will have even 
more problems than ever.
    Ms. Millender-McDonald. I see. Mr. Mora, you wanted to say 
something?
    Mr. Mora. Yeah, we're working with a group of 
superintendents and cluster leaders in the Watts area, and to 
really build a strong----
    Ms. Millender-McDonald. You're working with schools around 
the Watts area?
    Mr. Mora. With the superintendents and cluster leaders.
    Ms. Millender-McDonald. I'll need to know who they are 
within the district. Let my staff know who those people are.
    Mr. Mora. Absolutely. And we are working to build their 
school to work force, because funding for these programs and 
support for high schools programs, for high school programs or 
these partnership type programs and other school to work 
position jobs, is diminishing, is decreasing.
    And another problem is that students don't even know about 
these programs. They don't take advantage of them, and don't 
have the skills that are needed to take advantage of them, the 
soft skills. How to relate on a job, how to hold a job, things 
like that. So there are many areas to address this problem.
    Another group we're working with is the Candle Corporation, 
and they have a very interesting internship program with Foshay 
Learning Center where they have taken forty-five interns and 
have integrated--integrated them into the corporation, and have 
shown them all facets of the company. And these students work, 
you know, in advanced communications careers, in marketing, and 
human resources, and build job skills which led them--which 
give them skills to obtain jobs after graduation.
    Many of them even take part time jobs there at Candle 
Corporation while they're attending colleges. And Candle 
Corporation has built the knowledge base for this. So they have 
this information ready for other corporations. Last week, they 
had an open house with different companies in the area 
encouraging them to start these programs.
    Ms. Millender-McDonald. Cannel Corporation?
    Mr. Mora. Candle, Candle Corporation. They're right here in 
El Segundo. And so they have the knowledge of how to bring and 
integrate a small group of young teenagers into the 
corporation. And these are types of interventions that I think 
go a long way to building a stronger workforce.
    Ms. Millender-McDonald. Thank you so much, Mr. Mora. Dr. 
Ashley, you wanted to add something?
    Mr. Ashley. Well I think just in conclusion, I would say my 
experience is that the tools are there. It's really now a 
matter of raising our expectations and letting not just every--
every school, but every group within the community, letting 
them know that we expect more than business as usual. And that 
it can be done. There's nothing, certainly nothing that the 
Dominguez Hills has done, there's nothing that other schools 
haven't done that others can't do.
    Ms. Millender-McDonald. Who should say that we expect more 
than business as usual?
    Mr. Ashley. I think it's across the board.
    Ms. Millender-McDonald. Absolutely.
    Mr. Ashley. I think it goes from, it goes from the 
superintendent of schools to the mayor in the community to the 
Congress people. I----
    Ms. Millender-McDonald. I hear that all the time.
    Mr. Ashley. And I think it's--I think there's too often, 
what we see is people----
    Ms. Millender-McDonald. And parents.
    Mr. Ashley. And parents. But too often, we see people 
saying well we're just doing the best we can. And I'm not sure 
that that's good enough.
    Ms. Millender-McDonald. I know that's right. Let me thank 
this chairwoman. I think I will ask speaker to remove Chairman 
Pitts and put her there because she certainly has allowed me 
more time than what typically would have been if it had been 
the regular committee. So we thank you so much Madame Chair. I 
know you're doing this because I'm in my district and I would 
like to just state it for the record as well.
    Ms. Bono. Without objection. I also have found your 
questions very informative and enlightening. So I have enjoyed 
the dialogue that has occurred here. But I too have some 
questions. I don't know if they're going to be as extensive as 
my colleague's, but I want to begin by thanking all of you for 
being here today, and your input and your insight into this.
    You know, not too long ago I had the pleasure of having 
dinner with the head imagineers from Disney. And I, first of 
all, I don't know if you know these guys. They're all, you 
know, physicists from MIT and Cal Tech and I don't even think 
they spoke English. It sounded like English, but I couldn't 
understand what they were saying. They were so intelligent. And 
they talked about the future and where we were going, and I was 
very, very dismayed when I heard them say that they believe, in 
the next twenty or thirty years, that the written will be no 
longer.
    And I, as a parent, am bothered by this. Meanwhile my 
twelve year old son just competed and came in sixth in a 
Shakespeare contest; he recited a soliloquy from Julius Caesar. 
So I hope that they were wrong actually.
    My point here is that people out there with brilliant minds 
are thinking thirty years down the road, and I am not quite 
capable, and I get a chuckle out of you talking about 
antiquated computer systems and people donating them to people, 
and companies donating those antiquated systems. I would like 
to see us begin with Congress because we do not have state of 
the art computers and I believe it hurts us. And with all due 
respect to all of my colleagues, there are a number of members 
of Congress who, I don't believe, have ever actually touched a 
computer keyboard. And it's hard to believe.
    I'm sort of rolling into my questions here, and my first 
one is to explain to you all that I have two children as I 
said, and I have parents who are in their late seventies, and 
there's a part of the digital divide that I don't think we've 
talked about here. I honestly believe that many, many senior 
citizens are afraid of touching the computer keyboard. My 
children have never felt that way. Are you kidding? They 
started pounding on that keyboard as soon as they could. I 
don't know if my father, who is a retired surgeon at USC LA 
County Medical Center, has ever touched a keyboard.
    He has a fear of computers. But my mother is a wiz. She's 
educated herself and she's taken it upon herself to educate 
herself. So I'm afraid that seniors are being left out here, 
and we've talked a great deal about K through twelve and higher 
education. But my question to all three of you is, do you have 
any programs or have you worked with or thought about this 
segment of our society that is being left out, our seniors?
    Mr. Ashley. I have two aunts, both in their eighties who 
recently went on line. One of them is [email protected].
    Ms. Millender-McDonald. Go granny, I love it.
    Mr. Ashley. But both--and both of them are using the 
internet in order to maintain the relationship with family at a 
time when they're not as mobile as they used to be. And both of 
them were basically brought on line by their families. And I 
just feel that that's the way it's going to happen. I have 
spoken to senior groups and I have talked to different people, 
but I really think it's going to be through the family that 
they're going to get that access. But once they get the access 
and once they can get the pictures of the grandchildren showing 
up on the computer screen, and once they can send a message to 
a hundred and fifty family members all at once, or a greeting 
card. I get greeting cards for holidays I didn't even know 
existed. I think it is going to be for--particularly for 
seniors, it's going to be a tremendous boon.
    Mr. Mora. In our of our focus groups we spoke to about 
twenty-five seniors, and it was amazing to see how eager these 
seniors were to go on line, because they wanted to talk to 
their grandkids, they wanted to see their grandkids pictures, 
or put their own pictures. And they generally are 
communicating, and they were also interested in finding 
resources to help them as they, you know, lose some of their 
mobility and can depend on some of the services that will be 
facilitated as the on line realm makes it easier for them. So 
the want to, you know, shop for groceries on line and fill 
their medications.
    And we have a few programs that are excellent. One is 
called ``surfing seniors'' back on the east coast which is 
basically a community of seniors where they teach each other, 
that is seniors teaching seniors, how to use the internet, how 
to even build stuff, how to create digital stories and things 
like that.
    Another really active community, incredibly active 
community and very inspirational, is the--happens in the 
Boulder, Colorado community network where you have seniors who 
are some of the most active members of the community in terms 
of teaching other people how to use the resources, how to be on 
the internet and how to gain access and things like that.
    So we're seeing an emergence of these community centers and 
community type of networks, and some of the on line spaces 
targeted for seniors will continue to grow as the population 
becomes huge, as the senior population grows.
    Ms. Bono. Thank you.
    Mr. Sutton. I can't speak to specific programs, but one of 
the things that we are looking at in terms of the outreach 
program is a resource of seniors to work with students online. 
The concept of virtual community is a very powerful one. You 
can talk to somebody next door with a computer.
    You can talk to somebody half way around the world via the 
computer. As we go on, we'll be talking about the broader the 
bandwidth, the more the video, we're going to be able to hold 
virtual classroom between a grandparent and anybody.
    So that the concept of looking at seniors, for example, we 
have a significant number of emeritus professors who have 
volunteered to be able to work with teachers on content. They 
have not gone so far as to say we want to go work in 
classrooms, but they do want to work with teachers on content. 
And that is their expertise. In some cases, we will get them 
together face to face, but to a large degree we're going to 
have to build that electronic community that is going to allow 
everybody to benefit so that we are taking advantage of all the 
resources that we have.
    You have a former surgeon. If he had--if he saw the need, 
he would be on. In talking to my eighty-five year old father--
--
    Ms. Bono. You tell him that.
    Mr. Sutton. Well sometimes----
    Mr. Ashley. He has someone else--he has someone else that's 
doing it for him.
    Mr. Sutton. Somebody else. But when you get to the point 
where it becomes a need, you will do it. Part of it is to be 
able to tap those resources so that we continue to take 
advantage back to that larger community we talked about.
    Ms. Bono. You know, two things have sort of spun off from 
your comments. And first of all, I also believe that as 
technology has grown, certainly the fear of touching the 
keyboard has changed, and I remember ten years ago you needed 
to know, you know, DOS to get anywhere. And now with touch 
screen technology, I think seniors are a lot more likely to be 
less afraid of this.
    Dr. Sutton, you just mentioned content, and that leads me 
to my next question. And it's something we haven't touched on 
yet but I have huge concerns on. With the future of the 
internet here and how--the explosion that's going to occur, how 
are we going to protect people who have intellectual property 
rights, copyright holders and people who write the textbooks or 
write the songs? How are we going to protect them? And they do 
have a right, certainly, to be compensated for the work that as 
you put it on the internet, it knows no bounds or boundaries. 
So how does UCLA address that?
    Mr. Sutton. I have no idea how UCLA addresses that. I'm 
sure that there are people that are working on it. I think 
there's an interesting point about the content, and if we're 
going to look at content and say K-12, or even K-14, one of the 
bits of content that we're looking at that might be the most 
critical is that content that the teachers themselves working 
together, whether it's face to face or electronically build 
themselves. We're looking at websites in terms of professional 
development where teachers can work with each other.
    The product they come up with would be powerful because it 
would also be accessible to students. And there's no 
intellectual property right there necessarily. At the same 
time, the process will be even more powerful because they will 
learn that much more in the process.
    Ms. Bono. Wait a minute. So you're saying here that authors 
and composers will be no longer be existent here? That this is 
going to be a collaboration of teachers?
    Mr. Sutton. No, no. I'm talking about the use of material 
to put together for particular students. We talked about that 
``just in time'' learning of how you meet the needs of all 
those various students. Well for one teacher to do that is 
difficult.
    If you get twenty teachers working with their twenty 
classrooms to build that curriculum along with others, then you 
can--you don't have to put that particular content on the 
internet. It can go on an intranet that is closed off. You take 
care of a lot of problems of surfing where one ought not to be 
surfing. You have some control over the content. It's a great 
place to train before you turn somebody loose to the broader 
range. If you want them to be successful early on, you can 
control it.
    To the broader reaches of new content and anything else, 
that's beyond me at this particular point. But it is an issue 
that I--that I know that fellow professors at UCLA have a great 
interest in as they publish research and so on.
    Ms. Bono. Thank you.
    Mr. Mora. I have a comment about that. I think that it's 
going to require much of the effort currently going on the 
internet in terms of regulation, especially as it relates to 
taxes, it's going to require joining forces with the computer 
industry and the government sector to look at this issue and 
the industry unfortunately is going to have to step up a little 
bit and be a little more responsible.
    If you look at the case of Napster.com and doubleclick who 
are really in big trouble and have CEO's who are not really 
being very direct about the situation and not very responsive 
to the fact that people are, you know, infringing on 
intellectual--intellectual content rights. So it's going to 
require collaboration of the industry and the government to 
really come to a solution and responsibly manage this.
    Ms. Bono. Thank you.
    Mr. Ashley. I don't know. I'm thinking of the cassette 
recorders that came with the two different ones, and they said 
this is going to ruin the music industry because now 
everybody's going to make their own cassettes. I think what 
we're seeing with the internet is the incredibly sophisticated 
technology currently being used for marketing. Most of it is 
covert rather than overt. But the fact that they cannot only 
track who you are but where you're coming from and where you 
were before you got to that site would seem to indicate that 
they can also find out who is going to which sites and what 
they're doing, what they're copying, what they're taking.
    All of our sites, all of our class websites are password 
protected. So any instructor who puts material on a class 
website knows that the only people who can access it are their 
students. But then, of course, students could copy that 
material.
    But I--I do think that what we're seeing right now, we have 
done searches just to see how many different places our name is 
on the internet, and there's--there's software that you can do 
that, and you can go around and find out that your name is in 
places where you never thought it would be. And sometimes you 
want to have your name removed.
    Ms. Millender-McDonald [continuing]. Survey material that 
you're giving through this----
    Mr. Ashley. No, it's actually by people just sort of just 
listing the university as being part of something that we're 
not part of. But the internet allows us to do that. We could 
never do that through print. There would be no way we could 
survey all print materials. But on the internet we can do a 
search and find out all the places.
    I understand the concern. I understand why--why authors and 
people who create art are concerned. At the same time, I think 
that the safeguards are going to be there, and if they don't 
feel comfortable at this time perhaps they want to sort of hold 
back and wait. But I think those safeguards are going to be in 
place as much as we can ever have them.
    Ms. Bono. Thank you. You mentioned again your--the virtual 
university, and I did partake in one class at Palm Springs 
Library. It was fun. The images were a bit slow in loading. I 
guess as we progress with broadband, it will be a lot smoother. 
But I have a question for you, and it's a great opportunity for 
the lawyer joke, a bad lawyer joke, but will law schools ever 
be on line? And then the question is what quality assurance are 
included in your distance learning programs to assure that 
students are honest?
    Mr. Ashley. That's a very good question. Until we have the 
face recognition software, which I understand is coming, it's 
being developed for the ATM's, and we actually will be able to 
tell who is sitting in front of that screen. But at this time, 
all of the significant exams for any of the programs are 
proctored.
    And that means that every student, regardless of where they 
are in the world must find, nominate and have a proctor 
approved who will then be there when the exam is given. And 
it's given under our conditions. So we are still using 
proctors, a very, very old system because we don't--aren't able 
to authenticate the person.
    Ms. Bono. What about a stay at home mom?
    Mr. Ashley. Stay at home--we have stay at home moms who are 
enrolled in our programs. Usually our exams are on the weekend 
or in the evening. We find that local librarians are more than 
willing to be proctors, but sometimes it's a person from a 
local church. Sometimes it's a--we have a whole variety of 
people, a principal, a school principal is willing to stay late 
and proctor an exam for someone. So our people have never had a 
problem finding a proctor. It seems like in every community, 
there's someone who's saying, sure I'll do that.
    Ms. Bono. That's great. Shifting gears here a little bit. 
No one's really talked about training or developing high 
skilled information technology workers so we can avoid the H1B 
visa extension that we've been voting on.
    How do we encourage students at college age to begin to 
become programmers and address this lack of skilled workers 
that we need so desperately?
    Mr. Ashley. We have to be careful because then they'll 
leave the university which is what they're all doing. The 
people who are very--really attracted to those--to those 
industries. But there is a--that's a real question because the 
thing is it's usually at the university we're teaching our 
instructors, who probably received the Ph.D. ten years ago, are 
teaching from material that they were taught frequently.
    And so that there is a more or less of a historical quality 
to much of what we teach at the university. And it's hard to 
get the latest information into--into the classroom. But that's 
a constant effort.
    Ms. Bono. Thank you. Do you want to comment further?
    Mr. Mora. I have a brief comment. I think you have to start 
early, and really encourage technical fluency at a very early 
age. And there are some programs that are beginning to do that, 
that are doing that effectively. Programs called--a program 
called Computer Clubhouse started at MIT with some--a local 
museum where they have kids working with robotics at a very 
early age, actually doing programming, building video games 
early on.
    We have a program also called Education Place out of New 
York City in public libraries, where girls are partnered up 
with mentors and do activities off line about actual designed 
products. And then they go online into that online realm with a 
huge number of pallets and develop and design tools and learn 
the process of design and get that very, very early on. And I 
think that builds the force and encourages that skill 
development early on.
    Ms. Bono. All right, I'm going to go ahead and wrap up this 
panel. I know that we could continue all day long, and I 
appreciate your time again. And I want to thank you for your 
testimony and your answers. And at this time, we'll----
    Ms. Millender-McDonald. I just want to ask one question of 
the chair. As you speak about the H1B, I'm concerned that the 
audience is not aware of that. There's a piece of legislation 
that we are now engaging in to bring over three hundred and 
fifty thousand high tech personnel from overseas to come in 
because of the silicon valley and other areas that are in need 
of high tech workers and we do not have them here in the United 
States.
    My argument is that why is it that we did not forecast or 
see that early on where we could have trained personnel in 
these--various jobs or varied jobs so that we would not have to 
go overseas to bring personnel here. And so Dr. Sutton or Dr. 
Ashley, when you do all of this research and even Mr. Mora, 
when you do this research for all other things, why is it that 
we could not foresee this down the line?
    When I was director of gender equity programs and we were 
looking at jobs for the ten year out, fifteen year out, we did 
those kinds of projections, and I'm just really curious why a 
state like
    California or a nation could not have projected that, those 
needs for those jobs. I think three hundred and fifty 
thousand----
    Mr. Sutton. I think it's one thing--I think it's one thing 
to be able to project what the needs would be. I think it is 
another thing to be able to put programs together when you're 
not sure down the road. Because you're looking at several years 
down the road. You're looking, I guess Francisco said, you're 
looking at starting this early. This is not something you turn 
around and say gee, we need three hundred and fifty thousand 
workers for tomorrow. Let's put a program together and we'll 
whip them out. Part of the--part of----
    Ms. Millender-McDonald. No that's right, you don't do 
that----
    Mr. Sutton. It goes back to the conversation we had earlier 
with the career awareness. What are the--what are the options? 
I'm not sure that five years ago say, how many high school 
students would have looked at programming as a viable job or a 
viable career.
    Ms. Millender-McDonald. How many did you say, five years 
ago?
    Mr. Sutton. Say five years ago.
    Ms. Millender-McDonald. Microsoft was around, so we should 
have.
    Mr. Sutton. Looking at the typical student in schools and 
go back to the map, that because of that lack of connection to 
future and to career and to looking at what's possible. You 
have to be able to play a little, because--one of the physics 
teachers that I work with said that one of the biggest problems 
he'd seen over twenty years of teaching was that kids today 
haven't played with the hardware and the radio, the ham radio 
kind of stuff and the crystal sets like they used to. They 
don't have the background experience.
    Being able to go into a community center or an after school 
program and play with robotics, where you can write a program 
and make this little machine do something is very powerful. One 
of the hardest things to do with a computer is--you have to 
realize, the computer does not control you. The computer will 
only do what you tell it. And if you don't give it the right 
instructions, it's going to sit there and wait for you to do it 
right.
    Well, there is a certain message and lesson to be learned 
by going through the program. I'm not going to advocate 
everybody should take a programming class, but understanding 
the concept and having lived that and written a simple program 
to make something happen is very powerful.
    Some people, when they do that for the first time, that 
will--that's their career. They will go that way. We have a lot 
of kids who have never had that opportunity. If they do have 
it, it is in a technology only class that doesn't build the 
connection, and they would rather not be there because it's not 
an exciting thing. It's a requirement that they have to take 
and it's with old machines that have nothing to do with 
current. It's not built around anything that is of interest to 
get their interest to look at the potential of job or career.
    One thing I think is interesting. There is a environmental 
careers academy at Leuzinger High School and they have a 
variety of experiences, and it is geared toward students being 
able to get jobs in various careers. They can go through and 
get a certificate and get a job right out of high school.
    One of the kids, when he--when they were talking about 
this, started to do this thing and he suddenly realized, he 
said, you mean I can get a job that pays nine, ten dollars an 
hour just by going to school for two weeks this summer? He 
never thought of that. And there are a lot of those kinds of 
opportunities that we don't take advantage of.
    Ms. Millender-Mcdonald. Thank you all very much.
    Ms. Bono. Thank you very much. Again, I thank the 
panelists. You're dismissed, and if we could call the second 
set of panelists up to the witness table.
    We're going to take a five minute break at this time and 
stretch our legs. Thank you.
    [Recess.]
    Ms. Bono. We will now begin the second panel which focuses 
on e-commerce.
    We're ready to begin with testimony, and I'd like to 
welcome our panelists beginning with--actually I'll introduce 
you as we go forward. We'll start with LynneJoy Rogers who's 
the Director of the Los Angeles Urban League, Ron Brown 
Business Center.
    Lynne, you have roughly about five minutes if you could.

  STATEMENT OF LYNNEJOY ROGERS, DIRECTOR, RON BROWN BUSINESS 
                      CENTER, URBAN LEAGUE

    Ms. Rogers. I'll try to stick as close as possible. Good 
morning. Essentially we represent small business, and this is 
pretty much dealing with business. The advancement of 
technologies provided numerous opportunities for big business 
to become more efficient and competitive in the global economy.
    In fact, the primary focus for business today is to utilize 
technological advancement to become bigger and better with less 
overhead. Thus, we are seeing the evolution of multinational 
companies who, through mergers, acquisitions, restructuring or 
re-engineering are positioning themselves for these 21st 
century global opportunities.
    The key word here is global. As corporations become more 
global in focus, they will become less supportive of urban 
issues. This is a major question we must address. The quest for 
efficiency and competitiveness using the advances of automation 
has changed the nature of the job and work as we've known it.
    These changes have had a direct impact on the inner or 
urban centers of what used to be major industrial communities. 
It is almost impossible for semi-skilled, low-skilled or 
unskilled workers to find jobs in manufacturing. In the US 
alone, ninety million jobs in the labor force of a hundred and 
twenty-four million are potentially vulnerable to replacement 
by machines. Scholars warn that with the introduction of more 
sophisticated computers, the role of the human will be a less 
significant factor in the area of production.
    In fact, the role of the human is bound to diminish as did 
the role of the horse in the agricultural age. As the--as 
machines were introduced more readily, horses became less 
necessary and, in fact, eliminated by machines. Right now, the 
majority of manufacturers in the United States have increased 
efficiency and competitiveness using automation for smart 
machines.
    According to Jeremy Rifkin, author of The End of Work, it 
is automation and not offshore manufacturing which has impacted 
American factory workers. Utilizing technology, companies have 
become more productive, efficient and profitable with fewer 
employees.
    Additionally, smart machines don't take vacations, get 
sick, file stress claims or talk back. Technology will continue 
to help corporations to become more efficient, profitable and 
productive.
    However, the price to America will probably be the loss of 
the middle class as we know it. No longer will there be high 
paying jobs for low skilled workers. In fact, as machines 
become more smart, there will be little need for blue collar 
skilled--blue collar skilled workers or white collar 
professionals unless they are technology workers.
    Technological advancement is one reason we're beginning to 
see the flattening of the organizational structure. No longer 
is there a need for middle management. As we continue to 
utilize the team approach to problem solving in innovation 
process, there will be less need for a middle layer to 
interpret or implement process from the top down or bottom up.
    More and more, professional employees will find themselves 
doing more general types of assignments, placing people with 
only one specialty or profession in jeopardy. Advanced 
technology coupled with global capitalism will be less inclined 
to consider community issues as relevant. Thus, people who have 
been historically disenfranchised from the economic process 
which develops ownership and wealth, will continue to drift 
towards an existence mirroring the survival of the fittest.
    There is another very troubling possibility as we become 
more technological, and that is ignoring the human potential, 
and with it human needs. The new technology worker tends to be 
younger and less apt to feel responsible for human needs. This 
lack of social responsibility coupled with corporate 
restructuring may explain the trend away from philanthropic 
activities.
    As corporations continue to merge and become more globally 
competitive, there will continue to be less focus on local 
needs unless they directly impact the bottom line. There is 
certainly a trend to abandon any commitments to programs for 
establishing inclusion in diversity and opportunity. We must 
understand that this global technological revolution will tend 
to make us less people conscious and more machine oriented.
    This coupled with our increased capacity to connect with 
worldwide networks of information will make us less local in 
focus and more global in orientation. We may look to the world 
before we look to our local community. We must understand that 
the purpose for technology is to help all of us live a better 
life; and the life is not just for a few who are privileged to 
wealthy or have access to technology.
    The challenge for those of us who are concerned with 
serving the public interest is to ensure that human needs are 
met and people are considered before profits. I'm especially 
concerned that small business who is currently taxed with 
employing 90% of the population is really less apt to be able 
to enjoy some of the technological advances that we have today. 
It's almost impossible for small business to afford the kind of 
information infrastructure that is necessary to be competitive 
in the global economy.
    With some of the changes that are occurring in the global 
economy today, when we think in terms of who small business 
employs, because they cannot afford the high technology paid 
workers, they must in fact, employ those who have the least 
skills, those who have lower skills, and those who are less 
technologically inclined, making small business less 
competitive in this global economy and more dependent upon the 
larger multi-national corporations to provide them with 
contracts which then begins to control their ability to be 
competitive.
    Coupled with this is the growing increase on cost that the 
distribution system behind this wonderful thing called the 
internet. It's called the telephone companies. And when we 
think in terms of telephone costs and we think in terms of how 
those telephone costs have escalated as a result of 
deregulation, we must concern ourselves with how a small 
business who is taxed today with essentially being the one 
provider of the majority of employment opportunities, how will 
they begin to be and continue to be competitive in this global 
economy.
    Small business must be free to be enterprising and have the 
ability to grow. It is small business which becomes the mega-
corporations. But without small business and without there 
being the opportunity to be able to afford the infrastructure, 
they will not be able to continue to employ the many people 
that they employ today. Thank you.
    Ms. Bono. Thank you.
    Next, we have Sam Covington, the Director of Information, 
Vortex, Incorporated.

 STATEMENT OF SAM COVINGTON, DIRECTOR INFORMATION VORTEX, INC.

    Mr. Covington. Thank you. And I want to thank Lynn for what 
she just said because it echoes some of the things that I also 
believe.
    One of the interesting things is that the guys that were on 
before us made some very interesting comments and illuminated a 
subject that's really near and dear to my heart. But one of the 
things that we noticed from what they talked about is they 
talked more about the symptoms of the problem than the real 
problem.
    And we do have a serious problem in America today. Is there 
a digital divide? Absolutely there's a digital divide. But that 
divide really is only a reflection of the other divides that 
exist in the economy. Right now there is no competitive economy 
except among a certain group. In this moment in Washington, 
Janet Reno is suing Microsoft as a monopoly. And there's almost 
no question that Microsoft is, indeed, a monopoly.
    But one of the characteristics of a monopoly are the things 
that occur when a monopoly is in existence. The laws of physics 
simply do not apply. Competition simply does not exist. That 
situation exists in the small business market and in the 
education market and it affects minorities the most.
    Let me explain sort of what I'm talking about. Education, 
if we really wanted competitive education, I mean in basketball 
when somebody scores they give the other team the ball. If they 
lose all of their games during the season, they get to pick the 
best player from the draft. Our schools are pathetic, and yet 
and still they don't get funded more, they get funded less.
    This reduces competition. You failed to deliver and build 
the next generation of competitors. In business, it's really 
interesting that--that we say it's a competitive environment 
when if you live in the real world out here in business, you 
find that you go and talk to other businesses and you say, look 
I can save you money. And the answer is, what do I need that 
for? And why do they say that? They say it for real legitimate 
business reasons.
    They have relationships with other people. They'd rather 
pay more and keep those relationships than compete anything. 
Competition to business is evil. It's a very evil thing. No 
business wants to compete unless they absolutely are forced to. 
And so they don't typically compete. Most companies, and I 
won't mention any names but most companies, and I think someone 
on the panel mentioned one of them, will intentionally not 
compete projects because it's more expensive to compete. 
Competition is expensive. It requires that you look at all the 
competitors, that you decide which one is the best.
    If you already have someone you know can do the job, why 
compete? Or only compete to get a price so that that competitor 
can reduce his price, and you get the benefit of competition, 
but not the cost of it.
    So in the business world, we have this non-competitive 
thing going on, and it's all because there is a monopoly. And 
that monopoly forces the inability to compete for small 
businesses. It doesn't just affect minority business. It 
actually affects every business across the board.
    So we have monopolies that don't allow the competition to 
occur in the business world. we have this monopoly that doesn't 
allow competition to occur in the education world, and we get 
these results that these guys have basically talked about. And 
it's sort of like my nose is running, but you know, I'm not 
fighting the cold I'm just wiping my nose.
    We can't change this, and the solution is really simple. We 
can change this, if not overnight, over some period of time. 
The way to change this is to really reinvigorate this country 
and promote competition. People say, you know, why do African 
Americans excel in sports so well? Well there's simple reasons 
why. The reasons why is that there are defined set of rules. 
Those rules are enforced. In the business economy, there is a 
defined set of rules, but none of them are enforced.
    And so you don't get the same result that you get in 
sports. But if the competition fields are level and opened up, 
you will get basically exact same result you get in the 
sporting arena. You will get a healthy set of competitors 
competing for contract and--and money, and lifestyles that 
currently the majority enjoys.
    In addition to that, all of a sudden these other problems 
will somehow tend to go away. When people start to make money, 
when people are building cities and environments and 
communities, all of a sudden their kids do a lot better in 
school. So these things are self defeating and self--how do you 
say that? They defeat themselves.
    So when things are bad, they will continue to feed on 
themselves. And when things are good, they will also produce 
continually good results. So my plea really, is that we open up 
the doors for competition. That for people that are really 
willing to look and open their eyes and see what the 
competitive landscape looks like for small business, and see 
the way the majority literally just cheats to get ahead and 
stay ahead.
    Monopolies can't help but abuse their monopoly power. And 
it's not like they're either good, bad or evil. They just do 
what's most important for their business model. And so you can 
fault the result, but you can't fault--you really must fault 
the system that makes the result come out the way it does. So, 
thank you for your time.
    Ms. Bono. Thank you.
    Ms. Millender-McDonald. Before we go on to the next panel, 
I just wanted to acknowledge one of our principles here from 
Carson High School, Mr. Douglas Wainright. Mr. Wainright, he's 
one of the principals of the fine Carson High School. Good 
seeing you here. Thank you.
    Ms. Bono. Now we'll move on to John Bryant, founder and CEO 
of Operation Hope, Incorporated.
    Mr. Bryant. Good morning.
    Ms. Millender-McDonald. You have five minutes.

STATEMENT OF JOHN BRYANT, FOUNDER AND CEO, OPERATION HOPE, INC.

    Mr. Bryant. Before I read my formal remarks which will be 
about five minutes in length, I do want to just lay a template 
out by saying that there is a new economy that is before us is. 
It is a reality. I would not be surprised if half of all 
commerce in the next five to seven years is electronic 
commerce. And as my friend Kevin Ross would say when you get in 
front of the town--get in front crowd, they're going to parade.
    We've got to find a way to make something positive out of 
something which could be potentially damaging. The capitalist 
market that we have in America today is a wonderful market, but 
nothing in the absolute except God is good.
    Those things kept in balance can be good. Alcohol in 
balance reduces heart failure. Drugs on balance are prescribed. 
All things in balance, including the information technology age 
can be for good. So first and foremost before I give these 
remarks I'd like to, of course, commend my friend and 
Congresswoman Juanita Millender-McDonald, to Congresswoman Bono 
and the other distinguished members of the Empowerment 
Subcommittee of the Small Business Committee of the U.S. House 
of Representatives. I thank you, of course, for having me here 
today.
    Operation Hope, which I represent, is America's first 
nonprofit investment bank serving the underserved communities 
of America. I'm here to share with you my vision for a brick 
and mortar information technology learning tool and a practical 
means of bridging the digital divide.
    It is called the Inner City Cyber Cafe, and it is sponsored 
by Operation Hope.
    I want to provide a subtext here. The portals that have 
been created by many African American and Latinos to bridge 
digital divide often times just enable more middle class black 
folks to talk to more middle class black folks. Or more middle 
class Latinos to communicate with more middle class Latinos. 
We're not bridging the digital divide. We're just walking 
across the street. We have to go to the people where they are. 
Going to the market.
    Since 1992, the year of the civil unrest here in Los 
Angeles, Operation Hope has literally done this in the area of 
economic education, economic literacy, banking and finance. 
Meeting the people where they are and finding unique and 
innovative ways to bridge the divide for them in economic 
education and economic opportunity.
    The operational strategy of going to the market has netted 
results. We have invested some sixty million dollars ($60 
million) into south central, east L.A. with some sixty 
partners, bank partners in tow educating some fifteen thousand 
adults and thirty-eight thousand youths in economic education 
and economic literacy. Every loan before is paid as agreed.
    Bridging the digital divide, a place to sit. Operation Hope 
now seeks to utilize this same direct bottom up entrepreneurial 
approach to bridging the digital divide in inner city and 
underserved communities. The Inner City Cyber Cafe, now located 
at 3721 South La Brea in Central L.A. is a bold, yet fairly 
straightforward empowerment initiative of Operation Hope 
joining other innovative initiative like the Urban League 
Business Development Center designed to literally bridge the 
technological and prospective gaps separating inner city and 
mainstream communities. We're not dumb, or stupid, or 
misinformed, or ill-informed at worse.
    The Inner City Cafe,--Cyber Cafe, complete with gourmet 
coffee kiosk will provide the local community with a 
comfortable, relaxed and positive atmosphere in which to meet 
to conduct e-commerce related business and research, to hold 
one on one business meetings, and to unleash the enormous power 
of the internet and world wide web.
    The Cyber Cafe, has eighteen cutting edge technology 
stations, and through a unique partnership with leading edge 
high tech hardware and software providers, access to the most 
cutting edge up to date pc tools and equipment available today.
    Valuable market research. We're not asking for a hand out, 
but a hand up. These cyber cafes which--with privacy 
authorization by the clients will provide valuable research 
back to the companies seeking to do business in these markets. 
The growth--the area with the highest growth of internet use in 
today's market irrespective of race are African Americans. That 
is the highest number of increase of users of the internet.
    Education. Working closely with software manufacturer 
Intuit, the manufacturer of the immensely popular financial 
software Quicken and Quickbooks, Operation Hope using the power 
of technology also plans to teach the individual financial 
responsibility ethic to low and moderate income individuals 
with a genuine desire to learn and better themselves.
    We are working closely with a full time information system 
technician who will be there to help them operate the systems 
and to provide education free of charge on our computers every 
night of the week that the Cyber Cafe, is open and it will be 
open from 9:00 in the morning until 9:00 at night.
    Division. Inaugurated by Vice President Gore on April 15th, 
the first Inner City Cyber Cafe, came on line with a mission no 
only to provide learning, but to make learning cool. 
Aesthetically pleasing to the eye, the Cyber Cafe, features a 
twenty-five--twenty five hundred square foot footprint and an 
attractive and easy to use gourmet coffee kiosk, DVD movies, 
high speed internet connections, because we meet not only 
information but entertainment; we call it infotainment, cutting 
edge hardware and software, an Inner City Cyber Cafe, website 
and web portal, and most importantly, technology education.
    In closing, the partners. The private/public partners for 
this innovative collaborative, an on the ground model for 
bridging the divide includes the U.S. Economic Development 
Administration, the U.S. Department of Commerce, Intuit, P.S.I. 
Net, GTE, Unisys, E.D.P. Furniture and Turner Construction.
    As a result of the Union Bank and Operation Hope 
acquisition of a 45% interest in Next Check Cashing Network 
recently, we hope to move folks from check cashing customers to 
depository customers. We now have access to six hundred 
thousand of their low income customers who we also hope to link 
to the Inner City Cyber Cafe, network, and to give them a hand 
up, then a hand over.
    Yes, the Cyber Cafe, is now up and running. We also believe 
it can be self sustainable. We believe that there's enough 
revenue that can come from fifty cents per minute usage--I'm 
sorry, yes fifty cents per minute usage, and if you buy a cup 
of coffee, half off, to sustain the operation of this Cyber 
Cafe. In that way, it's doing well by doing good.
    And I close my comments by making a commitment. We commit 
today to build an Inner City Cyber Cafe, in every one of our 
existing operational banking centers. That means our 
operational banking center in Watts/Willowbrook, the district 
of Congresswoman Juanita Millender-McDonald, within twelve 
months we will build a Cyber Cafe, in your district.
    Ms. Bono. Thank you.
    And now we'll move on to Perry Parks for a technology 
demonstration. Correct? Perry is the Vice-President of 
Government and Public Relations with Media One.

STATEMENT OF PERRY PARKS, VICE-PRESIDENT, GOVERNMENT AND PUBLIC 
                      RELATIONS, MEDIA ONE

    Mr. Parks. Perry Parks, Media One, Vice President, 
Government and Public Affairs.
    First of all, I want to thank the distinguished panel for 
inviting me out today for this particular inquiry. And I want 
to take the opportunity--the agenda said technical 
demonstration. So we will have that done on CD Rom, but I want 
to kind of set the context for the demonstration.
    First of all, I think that as we start talking about the 
digital divide, the agenda and material that we have seen so 
far has billed infrastructure as a very important aspect of 
that. It's not the total aspect, but it's a foundational piece, 
and that Media One essentially is an infrastructure builder. 
It's a cable network that has been investing and deploying high 
speed internet cable plant nationally, but in California in 
particular.
    As we sit here today, Media One and the franchises that it 
covers in its franchise then, has built 75% of all its 
franchises to seven hundred and fifty mega hertz two way 
capability, and we're deploying products in the market. In 
California and in the 37th District in particular, by the end 
of the year we will be 100% deployed here with that two way 
capability in residential neighborhoods.
    The reason this is important is that this is the backbone 
infrastructure that will provide high speed internet access to 
these communities in the 37th Congressional District and all 
districts that we provide service in.
    We have invested over seven billion dollars ($7 billion) 
starting in 1996 to upgrade our networks nationally, and over 
five hundred sixty-nine million ($569 million) in California. 
We have upgraded these networks and it pretty much positions us 
to be in a very competitive positive posture with other 
telecommunication providers like the Bell operating companies, 
direct satellite and wireless.
    On the previous panel, one of the speakers indicated that 
it was all going to be wireless. I hope not, given that we have 
five hundred and sixty-nine million dollars ($569 million) 
invested here. To think I was going to be out of business in 
five years.
    But I think what it points to is the fact there are going 
to be multiple platforms that are going to be available in 
these communities, wire, hard wire, wireless satellite, that 
are going to provide the foundation of competition for these 
particular communities.
    What we've seen since our deployment is we actually have 
seen prices begin to come down. We are providing our high speed 
internet access at thirty-nine ninety-five ($39.95) a month. 
Prior to our deployment, it was a minimum eighty-four dollars 
($84) or eighty-nine dollars ($89) a month and the speeds were 
about half as fast. And there's discussion now that it's going 
to drop another ten dollars ($10) to twenty-nine ninety-five 
($29.95) a month. So as the competition begins to take hold 
here, we'll be seeing prices come down and more access will be 
made available to the people in this particular community.
    We've launched three products. High speed internet access. 
We've launched digital telephone in direct competition with the 
telephone company, and we're launching digital satellite--
digital television now to compete with the direct satellite 
companies offering two hundred, two hundred fifty channels of 
product.
    The map in your folder that I passed out and the one that 
the audience can see on the wall depicts where Media One 
properties are deployed in Southern California. And what you 
can see that is that we have actually upgraded every community 
that we're serving.
    Now what we've done essentially is we've connected over 
eight hundred thousand homes in California to a two way 
network, and we've also connected over fourteen thousand 
schools to the network using video product. Where we're 
beginning to approach this notion of a digital divide isn't in 
the hardware, it's more or less in what I'm going to call the 
peopleware and informationware.
    The schools that we've approached, we're actually offering 
school connections at no cost. We'll provide that free, and 
we've sent out letters to every school in our service area, and 
we've gotten about two hundred and--two hundred and twenty-six 
responses back that have indicated a desire to want more 
information or to be installed, and we've installed eighteen of 
those schools so far to date with a connection to the internet.
    I think that what it points to is that this notion of build 
it and they will come isn't necessarily going to hold true in 
this particular market. I think that what it points to is that 
where the digital divide exists, it exists in the literacy 
levels that were pointed out earlier. It exists in the lack of 
familiarity with the technology that maybe our school personnel 
and other community people have. It exists in the lack of 
wiring or the capability wire facilities.
    So I think that the infrastructure is in place and that we 
have been able to now identify where the digital divide is 
actually existing, and I think it is existing in the area of 
people, software, literacy, those particular kind of issues 
where I guess the good new is is that we do know how to attack 
those particular problems if we focus our attention on those 
issues. The community and this country is pretty creative 
enough to come up with those solutions.
    At the local level, I think that it's important to us that 
we recognize as a business given that we've wired communities 
that are predominantly minority that we're looking for a return 
on that investment. That the community isn't going to come 
immediately to these particular products without some outreach 
and education, and some solutions to this issue about the 
digital divide.
    We have been looking at solutions both internally and 
externally and what we have been doing and experimenting with 
these solutions, and I have some of the boards up here, is that 
we have Culver City High School that we've developed a hundred 
and thirty computer labs at that particular school to support 
education in that particular community.
    We have taken Challengers Boys Club as a community service 
center in South Central L.A., coupled it with the Venice Dream 
Team, which is a nonprofit organization which is training kids 
in the use of photographic information.
    We're marrying out network, the photographic capability and 
the internet by hosting and putting on line these photographs 
and digital stories that are going to be developed by kids in 
the community for the community. We've billed it as--over here 
I have behind me the broadband stories which is the theme, but 
the website that it's hosted on is called Street Scenes. So 
it's on line and hosted, and the kids are Street Scenes.
    Street Scenes, Street Scenes; it's a website, 
www.streetscenes.net. And these kids now from Venice are 
teaching kids over at Challengers in South L.A. how to use the 
camera, how to use the equipment, how to use their stories and 
write for on-line applications. So those are some of the areas 
that we're beginning to do the experimenting in.
    We've looked at other models that begin to be a win/win, 
and I think that's important given that we are business in 
the--in the business of trying to make a return on profit. It's 
important that in partnerships we look at win/win 
opportunities.
    I had the opportunity to visit a school district down in 
San Diego exploring this opportunity--this notion, and it's 
called Lemon Grove School District. The thing that's 
interesting about that school district is they've made some 
investments already in building servers at the school district 
site, and they're putting what they're calling thin server 
clients in student--in classrooms and in student's homes that 
limit somewhat the capability that you can access on the 
internet.
    But at their server they host those programs and that 
software that's used by teachers and give them some access to 
on-line portals and websites that are appropriate for 
education. And they're putting in the student's homes.
    What this allows is that teachers and parents to 
communicate, student to student communication, and what they 
are finding is that there is an increase in the average daily 
attendance which is bringing dollars to this poor school 
district in San Diego.
    Through the e-reg monies and through other subsidies, the 
system down there is offering the service at a discount rate, 
like nineteen dollars ($19) a month in a community that would 
be historically under penetrated in San Diego. And they're 
beginning to see a lift and rise in the penetration at nineteen 
dollars ($19) a month. So nineteen dollars ($19) a month isn't 
sixty dollars ($60) a month, but if you have the capital 
investment in the ground, some money is better than no money.
    So it begins to be a win/win for the company because 
they're beginning to see growth and penetration. They're 
educating a new generation of student who will be familiar with 
the technology which will make them a more likely purchaser of 
the technology in the future. The school district is getting 
increased attendance and education is improving.
    That seems to me to be the kind of models that we ought to 
be searching for in terms of deployment in our schools to 
support the closing of this particular gap.
    So with that, what I'd like to do is bring Brian Thatcher 
up so that we can give you a quick example of why we think high 
speed internet access is important and one of the roles it 
might play with the high speed applications in an e-commerce 
world.
    What we're going to attempt to do is show you first of all, 
a demonstration or example of the download speeds compared to 
the standard dial up modem. So as Brian begins to show that, 
what you'll see is that the standard dial up modem moves 
information very slowly.
    Ms. Millender-McDonald. That screen right there is in the 
way of our seeing it.
    Ms. Bono. Can you move that visual?
    Mr. Parks. Okay, so what was just demonstrated there is 
that the picture of the balloon on my right is up, the dial up 
modem is still trying to process the information. What this 
means essentially is people will not have the patience in an 
information age to sit there and wait for the information to 
upload. They're going to want in instantly and they're going to 
want it quickly. And so this--these are examples of the 
comparative speeds in terms of audio, photograph and video. It 
shows you the speed at which it can be accessed.
    If we go to the video, video is a lot more intensive 
application, so it downloads at a slower speed on the dial up 
and a little bit slower on our Media One Roadrunner. But again, 
it's quite dramatic in terms of the comparison.
    One of the other applications that we can use is the 
photographic scenes that will allow you to explore items, 
locations, materials, in a hundred and sixty degree kind of 
format. So if we can bring up, what it allows you to do from 
your home is to go to a particular location. See if we can get 
it up.
    [Pause.]
    Mr. Parks. Okay now, with your mouse then you can move that 
scene three hundred and sixty degrees to different views, 
perspectives on the location. Now where I think this begins to 
have a tie-in to e-commerce is that if small businesses are 
putting products on line, if you're selling a home, or whatever 
the product might be, you could put in on line and people get 
more than just a two dimensional view of that particular 
product.
    So with that particular capability you know, small 
businesses that can develop their own websites, the Cyber Cafe, 
is an example, could have both a camera internally so people 
could check out who's in the caf, at home, and they could see 
that Joe is down there and go down and say well I can meet Joe 
at the caf, because I can see he's there.
    Or, you might have some other product that you might want 
to use that you want to make available to the entire community. 
So what I'm saying I think here, is that the infrastructure, 
the capability is there. The 37th Congressional District is, 
from an infrastructure point of view, is up and ready to go.
    Ms. Millender-McDonald. Schools and all?
    Mr. Parks. Well it passes the schools. Like I said before, 
I think the issue here is being able to work through the 
educational bureaucracy to make sure that we can get those 
products into the schools, and we're working that every day. 
Right now, our commitment this year is to wire at least sixty 
schools in the southern California area so that they are high 
speed internet capable. And we have a commitment to do 100%, 
you know, over time.
    Ms. Millender-McDonald. Let me just ask you, I've got to 
ask this question. Sixty schools you want to wire. How are you 
going to do that? What technology are you going to use wire 
those sixty schools? What would be the criteria?
    Mr. Parks. I think that the criteria is first come, first 
served. I mean, what we've done as I said before, is that we 
have mailed out letters introducing and letting schools know 
that we are--our plan is passing their school, that we have a 
commitment to providing them the drop and the access at no 
cost, and the cable modem at no cost, and we're waiting on 
responses back. So it will be on a first come, first served 
basis that we will do that.
    Ms. Millender-McDonald. In the K-12 or the--colleges?
    Mr. Parks. K through 12, and including private parochial 
schools as well.
    Ms. Millender-McDonald. So then you're talking about an 
abundance of requests coming in for sixty schools.
    Mr. Parks. Well you would think so. But what I have so far 
out of the fourteen thousand--fourteen hundred that we've 
mailed out so far we've had two hundred that have responded and 
we started these--the mailing in October of 1997.
    Ms. Millender-McDonald. So apparently you're saying 
fourteen hundred that you've mailed out. So you've already 
narrowed that universe. Fourteen hundred. Who are the fourteen 
hundred?
    Mr. Parks. The fourteen hundred schools are the schools 
that are--I misspoke there. I said--there are fourteen hundred 
schools that are in the Media One service area. Those are the 
schools that we pass and that would be eligible for and have 
access to the services that I'm talking about.
    So we've mailed letters and made calls to the fourteen 
hundred schools introducing and letting them know that this 
service is available at no charge. We started that in October 
of '97. To date, we've had two hundred and fifty that have 
responded to the letters. And we have eighteen of those that 
have been installed.
    So part of that process is working through the school's 
bureaucracy to get installed, and I think the other part of it 
is that some schools, or a lot of schools aren't quite up to 
speed on how to address it or what they need to do internally. 
So I think that that's where the problem lies.
    Ms. Millender-McDonald. So the more--their inability to 
have the capability of knowing how to respond to you as opposed 
to bureaucracy?
    Mr. Parks. Yeah. I think it's a number of things. I think 
that part of it is--is internal--it could be internal wiring 
issues. The other factor is that some of the schools have 
already been wired by Pac Bell on their service. So there's 
that--so you eliminate some there. And then some of it, I 
think, has to do with just a lack of familiarity with the 
technology and how to address it and how to use it.
    Ms. Millender-McDonald. I would like to think it's the 
latter as opposed to bureaucracy because that's when I would 
have to come in and see what's going on, folks not wanting to 
move an agenda of tomorrow for students today. And so with 
that, that's why I wanted to know if it's more one thing than 
the other.
    Congresswoman, I just had to ask the question.
    Ms. Bono. Well, if you'd like to go ahead and start your 
formal questioning, perhaps you can do that. But just to remind 
everybody, if we could try to wrap up by 12:45. The staff and 
everybody has a long way to go to get to Mecca this afternoon 
before traffic. So 12:45 is a realistic goal, I would 
appreciate that. Thank you.
    Ms. Millender-McDonald. And you have me traveling too, 
Madame Chair.
    Let me just continue with you then Mr. Parks, Perry. Let me 
ask you a question. We're talking about e-commerce, and we're 
talking about that being really the most--it's really an issue 
that has not tapped into my community in a big way or in my 
understanding of the businesses I've talked with.
    They're not provided this or do not have the capabilities 
of even running an e-commerce component, if you will. What 
would you say, how many small businesses have you come across 
who is using broadband capabilities, if any?
    Mr. Parks. Well, speaking from the Media One experience 
right now, we're primarily a residential service and we----
    Ms. Millender-McDonald. You don't need to answer that.
    Mr. Parks. Well I'm going to tell you, I think that--no, I 
don't know of any at this juncture.
    Ms. Millender-McDonald. Okay LynneJoy, how many you come in 
contact with your small business--position of serving small 
businesses? How many have broadband capabilities?
    Ms. Rogers. Very few have broadband. Very few.
    Ms. Millender-McDonald. How many of them really have 
internet capabilities?
    Ms. Rogers. Very few.
    Ms. Millender-McDonald. That's right.
    Ms. Rogers. DSL has emerged, however the majority of the 
businesses that we work with are still using dial up access 
which is why become an e-commerce shop primarily.
    Ms. Millender-McDonald. Uh huh.
    Ms. Rogers. Those that can afford DSL, they are using DSL 
but it's a very small number of businesses.
    Ms. Millender-McDonald. So there is a need, Lynne I'll 
stick with you, business development centers is a critical need 
for small businesses?
    Ms. Rogers. It's a very critical need. We're one of, I 
think it's sixty-five minority businesses funded by the 
Minority Business Development Agency. We are the only minority 
business development center in that network that has a focus on 
information technology and e-commerce.
    Ms. Millender-McDonald. The only one?
    Ms. Rogers. Only one. We do training for entrepreneurs. We 
had been doing that even before we had the minority business 
development site.
    Ms. Millender-McDonald. Are you going to get any funding 
from SBA?
    Ms. Rogers. No. No, we seek no funding from SBA.
    Ms. Millender-McDonald. All right, so you're the only one 
who provides this technology?
    Ms. Rogers. From the perspective of consultation and 
training, yes. We're business consultants and we actually go 
into the businesses and we look at the operations. We make 
determinations of what they're software applications would be 
based on their operations and their current infrastructure.
    We look at their employees and make determinations as to 
what their current skill levels are, and what training would be 
necessary in order to bring those employees' skills up to par 
in order to be able to operate some of the software 
applications. But the reason we offer those services is that, 
you know, our primary base of businesses are mostly African 
American, primarily African American, but Latino and Asian as 
well have the least access to technology infrastructure.
    And that's essentially what I was referring to in my 
comments. Small business, and here in California you have a 
disproportionate number of minority businesses. There are--in 
fact, we have the largest population of minority businesses 
located in California and more specifically----
    Ms. Millender-McDonald. So if they're not internet capable, 
how can they then do e-commerce?
    Ms. Rogers. That's the issue. I mean, it's--when you talk 
about being internet capable, you know, anybody can acquire it. 
Sure, small business can be nineteen ninety five ($19.95) a 
month. You get dial up access and you get on the internet. And 
I think we need to be clear when we talk about a digital 
divide. It's not just gaining access to the internet.
    It's not just having the ability to be able to surf the 
internet. That's why I made the comments that I made earlier. 
It's the ability to be able to afford the technological 
infrastructure that helps to really create the competitiveness 
that is necessary in order to be efficient and effective in any 
kind of business today. And that's what is difficult for small 
business, and it's continuing to be difficult.
    Ms. Millender-McDonald. Let's see, here. We are running 
on--the creation of manufacturing jobs in our urban communities 
is still top priority, although trends show differently. 
Manufacturing jobs, many of them are gone for the most part.
    Ms. Rogers. I know. They are gone. But you'd be amazed at 
the number of well meaning developers that still continue to 
look at manufacturing even in the City of Los Angeles as 
opportunities for neighborhoods and communities to be able to 
participate in those--it's still labor, it's unrealistic, but 
that's what's happening. There is less emphasis, if you will, 
on technology training. There is not as much emphasis as there 
needs to be in the world today. And it's not just for----
    Ms. Millender-McDonald. I just want to know, emphasis on 
the what? On technology training? Just basic in your adult, job 
training centers, or where?
    Ms. Rogers. You have it in the adult schools. I think you 
have some programs. The question becomes, once you go through 
those programs do you have enough--do you have enough training 
to be able to compete for the jobs that are available today? If 
that were the case, then we certainly would not be importing as 
many technologists as we are.
    There's a reason why, you know, we're going through the 
same thing right now that this country went through a hundred 
years ago. When we were going from the agricultural society to 
the industrial society, there was a great immigration, greater 
immigration. And of course there was no need for people that 
looked like us, because you know, slave labor was obsolete as a 
result of automation. Now in Jeremy Rifkin's book, The End of 
Work, it talks very much about the technological evolution and 
the impact that it's had on African Americans.
    Ms. Millender-McDonald. Let me ask you this. I know that 
time is low, but I'm going to throw a phrase out there and I 
want you to end it. Small businesses need what to survive?
    Ms. Rogers. Small businesses need information technology, 
affordable information technology, infrastructure development. 
Right now, for a small business to be able to do what most 
businesses do very naturally, establishes networks, what they 
call extranets and intranets, it would be almost very difficult 
for small businesses to be able to afford that right now.
    We're also talking about the distribution network. When I 
talk about the phone systems, and it's not picking on one phone 
system against the other, phone systems right now, I'm not 
talking cable, but even any distribution system as it relates 
to getting access to the internet or getting access to a direct 
line of commerce, is becoming increasingly more expensive.
    And that's an issue. Deregulation has made telephones more 
expensive. I got a bill yesterday from AT&T saying we're 
getting ready to change our calling card rates from twenty-five 
cents ($.25) a minute to ninety-nine cents ($.99) a minute.
    Ms. Millender-McDonald. And the deregulation was supposed 
to bring about competition.
    Ms. Rogers. Absolutely, and so the idea affordability is 
really one of the issues that we really need to deal with when 
we start talking about access to technology. What are we 
talking about and what are the affordable aspects as it relates 
to access. If it's not affordable, you're not going to be able 
to access it.
    Ms. Millender-McDonald. California has, or Los Angeles has 
more small businesses than any other state, did you say? Or 
what was that comment?
    Ms. Rogers. We have more small businesses more specifically 
in southern California as a whole. Small business plays more of 
a role in the economy than anyplace else because southern 
California as you know, there are very few corporations 
headquartered here. You have a lot of corporations that have a 
presence, but they are not headquartered here.
    Ms. Millender-McDonald. That's correct.
    Ms. Rogers. So small business is really the engine that is 
driving our economy.
    Ms. Millender-McDonald. There is no doubt about it, and 
also has been and continues, I'm sure, to be the ones who 
provide the job. We understand that.
    Ms. Rogers. That's correct.
    Ms. Millender-McDonald. Mr.--okay, Mr. Covington, you said 
competition to business is evil? Can you please explain, or as 
my grandchildren would say, would you 'splain that to me?
    Mr. Covington. Yes, it's really interesting. It's evil 
because it costs a lot of money to compete, and then so 
businesses don't want to compete. Let's say a company has a 
bunch of sub-contracts and they want to find the best contract 
for them. It's easier to go with the contract base you already 
have than to go out and compete, you know, against several 
other----
    Ms. Millender-McDonald. You cannot sit on your laurels Mr. 
Covington. You have got to be competitive in this world of 
competition, for heaven's sake.
    Mr. Covington. I would say----
    Ms. Millender-McDonald. You cannot just continue to say, I 
have this product. It's a good product. I have these few people 
who are going to buy this product, so I am happy in my own 
little place. Competition is real. Competition is growth, is it 
not?
    Mr. Covington. It absolutely is, and that's one of the 
reasons why we really believe that more competition should be 
instituted, especially in private business. I think the 
government----
    Ms. Millender-McDonald. So it's not evil then?
    Mr. Covington. Oh no, it's not really evil.
    Ms. Millender-McDonald. Okay.
    Mr. Covington. No, it's really good. But it's not practiced 
in business, and you know, sometimes I sit back and I sort of 
put myself in their position, and you wonder, you know, would I 
do the same thing? And you know, it would be hard to put 
another cost into your system when you have other competitors 
out there that are doing the same thing you're doing. So it's 
the system more than----
    Ms. Millender-McDonald. I suppose I agree with you to some 
degree, but let's say this. You used the metaphor of the 
basketball or some sports figure, but that sports person, 
albeit basketball, baseball, or whatever, golf or whatever, 
they come with their product. They come with a skill to sell 
and so they do come with something that provides them the 
opportunity to go into this arena of competitiveness.
    Mr. Covington. Absolutely, but one of the things that I----
    Ms. Millender-McDonald. Is that not the same as business?
    Mr. Covington. In a way, but not the same. I used to work 
at a company called TRW. It's a great company.
    Ms. Millender-McDonald. I have it in my district.
    Mr. Covington. Yes, and one of the things that you'll 
notice, I mean, they went out and found all of us engineers 
from all over the country. Their requirements are that you have 
to have a 4.0 GPA. Well everybody walks in with a 4.0. 
Everybody is capable. When it comes time to promote somebody, 
they don't promote the best guy. You only have to be in the 
average, somewhere in the middle somewhere. So it's sort of 
nebulous. It's not like in sports where you can go out there 
and slam dunk.
    Ms. Millender-McDonald. We don't call that competitiveness, 
we call that bias.
    Mr. Covington. Well it's called----
    Ms. Millender-McDonald. Is that not true?
    Mr. Covington. Well it's called grading on the curve. If 
everybody is as good, then the curve is somewhere in the 
middle. So, you know, you don't really always get the best guy.
    Ms. Millender-McDonald. In politics we certainly understand 
that. It's not always the best guy or girl that wins.
    Mr. Covington. You guys have a more competitive environment 
in that you have to go out and fight every four or six years, 
and then they get you back here. But nobody else has to do 
that, and in a lot of situations they typically pick--you know, 
the easiest route is to find someone they're already working 
with. Every--every large manufacturer today is reducing their 
contractor role, not increasing them. They want to reduce them. 
They want to go through--if they had their way, they really 
want to go through one person and let them worry about all the 
other ones.
    Ms. Millender-McDonald. We understand that. We're looking 
at contract bundling, and we're looking at all those things 
that seem to be sometimes, seemingly adverse to small 
businesses.
    Mr. Covington. Well the real danger is that, you know, and 
I know you guys are politicians, but I may be as crazy as a 
road lizard when you take my taxes, but please give them back 
to me when you start looking at these contracts. You know, a 
lot of these companies that exist were funded by the 
government, and as inept as people say the government is, I 
mean it's producing----
    Ms. Millender-McDonald. Be careful young man.
    Mr. Covington. It's producing all this economic growth. I 
mean, there are two factors that produce everything we have----
    Ms. Millender-McDonald. I hear what you're saying.
    Mr. Covington. Semi conductors and the internet both 
created by the government.
    Ms. Millender-McDonald. Yes, yes, yes. We hear you. So when 
big businesses no longer need all the contracts. They should 
provide the tax credits, is what you're saying.
    Mr. Covington. Well let's be sure we can get our money 
back. To the extent that they get their money back, we'd like 
to get ours back too. I don't know how many seats in Congress 
we paid for, but----
    Ms. Millender-McDonald. You're wanting what, getting your 
money back?
    Mr. Covington. Exactly, our tax money.
    Ms. Millender-McDonald. Okay.
    Mr. Covington. That percentage that everyone else gets, our 
percentage goes----
    Ms. Millender-McDonald. Well we're working on that. This is 
one democrat who has told the President himself and Gene 
Sperling, his advisor, that we need to do tax credits. That we 
need to do some, you know, tax credits, in other words. I did 
tell him that. It may not be as onerous as my friend to my 
left, oh to my left. Hey that's pretty good.
    Ms. Bono. How did that happen?
    Ms. Millender-McDonald. Anyway, I do feel that there should 
be some tax credits, and so we're looking at that and I'm 
trying to push that with the President. We need them.
    Mr. Covington. I'm more referring to when you--when the 
government lets contracts, that they're giving them all to 
someone else. They aren't giving--I mean, I don't care if it's 
a janitorial job. Give them all janitorial jobs. But just give 
back the money so it comes back to the community. We don't get 
back.
    Ms. Millender-McDonald. Let me ask you, both of you, what 
would be most helpful for getting small businesses into the e-
commerce world. One liners, can't give you a lot of them 
because I want to go to John for the Cyber Cafe. So what will 
be most helpful to getting small business into the e-commerce?
    Mr. Covington. I agree that, I really believe that LynneJoy 
Rogers and people like her need to train them, because we build 
them and we have more trouble when we build----
    Ms. Millender-McDonald. Build them. Build what?
    Mr. Covington. Build corporate intranets and internets and 
extranets. We build those sites for----
    Ms. Millender-McDonald. Engineers and all?
    Mr. Covington. Yeah, we build them so that people can--can 
maximize the way they do business inside their business and 
maximize the way they sell their products to the external 
companies. And we build those things, but it's difficult when 
you don't understand what's possible.
    Ms. Millender-McDonald. As we look at people now on line 
from using the internet for buying food, clothing, cars, 
Christmas cards, other things, we had better look to see what 
we need for small businesses----
    Mr. Covington. Absolutely.
    Ms. Millender-McDonald [continuing]. Because e-commerce is 
real and people will find it will become a very biased system 
in the long run because you have folks who don't surf that 
internet who are going to your mainstream malls and all getting 
these products.
    And they're paying the taxes for the folks who are 
internetting--internetting, oh good word, people on the 
internet are not paying basically for those things that they're 
buying. So you know, it becomes an issue of they have not been 
having to pay for the haves who don't have to pay. So it's 
indeed an issue.
    John.
    Mr. Bryant. Yes ma'am.
    Ms. Millender-McDonald. Cyber Cafe. I'm happy that you're 
providing one in my district soon. Will it provide jobs in the 
long run?
    Mr. Bryant. I think that if it succeeds in its mission of 
educating people, educating business entrepreneurs enough to 
give them the kind of self esteem and what I call education 
affluence, to go out and have--what Lynne referred to is an 
integrated perspective. An integrated perspective mean they 
will create small business and the will create jobs. If they 
are not successful in doing that, they will not. And make it 
clear, I want to be judged mostly based on results.
    So you know, the jury is still out on that. I would like 
the Congresswoman to answer very quickly the question of what's 
that one thing you mentioned that is important. Federal Reserve 
Chairman Greenspan said at the White House Conference on the 
New Economy two weeks ago with the President, he said that 
there are two irreversible assets in America and we all just 
sat on the edge of our seats.
    My God, everything's a reversible asset. You look at a dot 
com today, they're a dot gone tomorrow. Everything a reversible 
asset. And he said, no there are two irreversible assets, and 
we were all waited for a moment and the pause came. He said 
it's education or information and access. Once you got them, 
you don't ever not have them.
    And so I think that it really comes down to what I think 
everybody saying is that education is liberation. No matter 
what you're talking about. It first and foremost has to be 
about education. That give you kind of comfort and self-esteem 
to deal with the confidence, technology or anything else, 
competition. Whatever else is out there. And then after I'd say 
that small business ought to be savvy and partner.
    Ms. Millender-McDonald. Okay, I just want to introduce some 
folks who are in the audience. We have board of trustee members 
of Compton College. I see Mr. Carl Robinson and I see Mr. 
Ignacio Pena. Those two are there. And then I see Councilwoman 
Marcine Shaw from the City of Compton as well. We have with us 
visiting from Ghana, Cape Coast of Ghana, Chief Nana Gyepi, the 
III. So I'm so happy to have you travel so far.
    Madam Chair, thank you so much.
    Ms. Bono. Thank you. Actually, on that note I am going to 
just let you all know that usually in Congress we as Members on 
the dais are allowed five minutes to ask the whole collection 
of panelists, but I note that this hearing was important to my 
colleague and was happy to defer as much time as I possibly 
could to her.
    Ms. Millender-McDonald. Thank you so much.
    Ms. Bono. Oh, you're welcome.
    Ms. Millender-McDonald. Tomorrow, I will say nothing.
    Ms. Bono. No, no, no. I will need your help equally 
tomorrow. So thank you. But I do also--I will not bring 
questions forward because I do have to be on the other side of 
L.A. actually in forty-five minutes. So I'm going to run. So I 
want to thank this group of panelists as well, and one thing 
that was missing that I would have loved to have the 
opportunity to have and it's just an informal request, is your 
biographies because I'm very impressed with each and every one 
of you, and I would love to know who you are and where you come 
from other than what I see in my notes here.
    Ms. Millender-McDonald. You cannot steal them. They belong 
to me.
    Ms. Bono. But I would like to, if that's possible, you know 
not a formal request of the Committee, but just to my staff at 
some point in time or my office. Because I will steal you at 
some point in time. So I want to thank you all and thank those 
of you who stayed with us through the morning for being here as 
well. And that concludes the hearing.
    Ms. Millender-McDonald. Madame Chair, I'm sure you want to 
join me in thanking all of our staff who's been absolutely 
brilliant helping us to this today.
    Ms. Bono. Yes, thank you. I do thank the staff. Thank each 
and every one of you as well.
    [Whereupon, at 12:16 p.m., the Subcommittee was adjourned.]

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