U.S. GOVERNMENT PRINTING OFFICE

67–350 WASHINGTON : 2001

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

(

For sale by the U.S. Government Printing Office

Superintendent of Documents, Congressional Sale Office, Washington, DC 20402

(II)

COMMITTEE ON SMALL BUSINESS

JAMES M. TALENT, Missouri, Chairman

LARRY COMBEST, Texas

JOEL HEFLEY, Colorado

DONALD A. MANZULLO, Illinois

ROSCOE G. BARTLETT, Maryland

FRANK A. LOBIONDO, New Jersey

SUE W. KELLY, New York

STEVEN J. CHABOT, Ohio

PHIL ENGLISH, Pennsylvania

DAVID M. MCINTOSH, Indiana

RICK HILL, Montana

JOSEPH R. PITTS, Pennsylvania

JOHN E. SWEENEY, New York

PATRICK J. TOOMEY, Pennsylvania

JIM DEMINT, South Carolina

EDWARD PEASE, Indiana

JOHN THUNE, South Dakota

MARY BONO, California

NYDIA M. VELA ́ ZQUEZ, New York

JUANITA MILLENDER-MCDONALD,

California

DANNY K. DAVIS, Illinois

CAROLYN MCCARTHY, New York

BILL PASCRELL, New Jersey

RUBE ́ N HINOJOSA, Texas

DONNA M. CHRISTIAN-CHRISTENSEN,

Virgin Islands

ROBERT A. BRADY, Pennsylvania

TOM UDALL, New Mexico

DENNIS MOORE, Kansas

STEPHANIE TUBBS JONES, Ohio

CHARLES A. GONZALEZ, Texas

DAVID D. PHELPS, Illinois

GRACE F. NAPOLITANO, California

BRIAN BAIRD, Washington

MARK UDALL, Colorado

SHELLEY BERKLEY, Nevada

HARRY KATRICHIS, Chief Counsel

MICHAEL DAY, Minority Staff Director

SUBCOMMITTEE ON EMPOWERMENT

JOSEPH R. PITTS, Pennsylvania, Chairman

PHIL ENGLISH, Pennsylvania

JIM DEMINT, South Carolina

FRANK A. LOBIONDO, New Jersey

EDWARD PEASE, Indiana

JUANITA MILLENDER-MCDONALD,

California

DENNIS MOORE, Kansas

STEPHANIE TUBBS JONES, Ohio

TOM UDALL, New Mexico

DWAYNE ANDREWS, Professional Staff Member

(III)

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

(1)

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 nongovernmental 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 busiVerDate 11-MAY-2000 09:56 Feb 22, 2001 Jkt 070374 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 E:\HEARINGS\67350 pfrm01 PsN: 67350
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ness 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 ecommerce. 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.

3

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

4

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

5

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.

6

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 adver- tised 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

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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.

8

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

9

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.

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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.

11

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

12

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 erate is not needed because some of us are trying to implement erate 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

13

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

14

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

15

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.

16

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——

17

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.

18

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 partnerVerDate 11-MAY-2000 09:56 Feb 22, 2001 Jkt 070374 PO 00000 Frm 00022 Fmt 6633 Sfmt 6602 E:\HEARINGS\67350 pfrm01 PsN: 67350
19

ship 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 regVerDate 11-MAY-2000 09:56 Feb 22, 2001 Jkt 070374 PO 00000 Frm 00023 Fmt 6633 Sfmt 6602 E:\HEARINGS\67350 pfrm01 PsN: 67350
20

ular 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 gogranny@webtv.com.

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

21

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 twentyfive 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.

22

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.

23

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.

24

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

25

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.

26

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.

27

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.

28

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.

29

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 monopVerDate 11-MAY-2000 09:56 Feb 22, 2001 Jkt 070374 PO 00000 Frm 00033 Fmt 6633 Sfmt 6602 E:\HEARINGS\67350 pfrm01 PsN: 67350
30

oly 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.

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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 re- sults. 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

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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.

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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.

34

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 eightynine 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 dol- lars ($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 inVerDate 11-MAY-2000 09:56 Feb 22, 2001 Jkt 070374 PO 00000 Frm 00038 Fmt 6633 Sfmt 6602 E:\HEARINGS\67350 pfrm01 PsN: 67350
35

vestment. 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.

36

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 tiein 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.

37

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?

38

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

39

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

40

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

41

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

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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

43

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

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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 fortyfive 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

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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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