```

[Senate Hearing 115-884]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 115-884

                       THERE'S AN APP FOR THAT: 
                     TRENDS IN MOBILE TECHNOLOGIES

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

                                HEARING

                               BEFORE THE

    SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, INNOVATION, AND THE 
                                INTERNET

                                 OF THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION
                               __________

                              MAY 15, 2018
                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
                             
                  [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                             

                Available online: http://www.govinfo.gov

                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
57-905 PDF                 WASHINGTON : 2025   

       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
TED CRUZ, Texas                      AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska                RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas                  BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska                 EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada                  TOM UDALL, New Mexico
JAMES INHOFE, Oklahoma               GARY PETERS, Michigan
MIKE LEE, Utah                       TAMMY BALDWIN, Wisconsin
RON JOHNSON, Wisconsin               TAMMY DUCKWORTH, Illinois
SHELLEY MOORE CAPITO, West Virginia  MAGGIE HASSAN, New Hampshire
CORY GARDNER, Colorado               CATHERINE CORTEZ MASTO, Nevada
TODD YOUNG, Indiana                  JON TESTER, Montana
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Jason Van Beek, General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
                      Renae Black, Senior Counsel
                                 ------                                

    SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, INNOVATION, AND THE 
                                INTERNET

ROGER F. WICKER, Mississippi,        BRIAN SCHATZ, Hawaii, Ranking
    Chairman                         MARIA CANTWELL, Washington
ROY BLUNT, Missouri                  AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                EDWARD MARKEY, Massachusetts
JERRY MORAN, Kansas                  TOM UDALL, New Mexico
DAN SULLIVAN, Alaska                 GARY PETERS, Michigan
DEAN HELLER, Nevada                  TAMMY BALDWIN, Wisconsin
JAMES INHOFE, Oklahoma               TAMMY DUCKWORTH, Illinois
MIKE LEE, Utah                       MAGGIE HASSAN, New Hampshire
RON JOHNSON, Wisconsin               CATHERINE CORTEZ MASTO, Nevada
SHELLEY MOORE CAPITO, West Virginia  JON TESTER, Montana
CORY GARDNER, Colorado
TODD YOUNG, Indiana
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 15, 2018.....................................     1
Statement of Senator Wicker......................................     1
    Report from ACT | The App Association........................    29
Statement of Senator Schatz......................................     2
Statement of Senator Nelson......................................     4
Statement of Senator Cantwell....................................   104
Statement of Senator Cortez Masto................................   105
Statement of Senator Blumenthal..................................   108
Statement of Senator Hassan......................................   109
Statement of Senator Markey......................................   111
Statement of Senator Udall.......................................   113

                               Witnesses

Mike Forster, Chairman, Innovative Mississippi; and Founder, 
  Mississippi Coding Academies...................................     5
    Prepared statement...........................................     7
Dr. Sarah Oh, Research Fellow, Technology Policy Institute.......    12
    Prepared statement...........................................    13
Morgan Reed, President, ACT | The App Association................    15
    Prepared statement...........................................    17
Roger Koch, Chief Executive Officer, Shield Group Technologies...    23
    Prepared statement...........................................    25

                                Appendix

Response to written question submitted by Hon. Amy Klobuchar to:
    Mike Forster.................................................   117
    Sarah Oh.....................................................   117

 
                       THERE'S AN APP FOR THAT: 
                     TRENDS IN MOBILE TECHNOLOGIES

                              ----------                              

                         TUESDAY, MAY 15, 2018

                               U.S. Senate,
       Subcommittee on Communications, Technology, 
                      Innovation, and the Internet,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:32 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Roger Wicker, 
Chairman of the Subcommittee, presiding.
    Present: Senators Wicker [presiding], Schatz, Nelson, 
Cantwell, Cortez Masto, Blumenthal, Hassan, Markey, and Udall.

            OPENING STATEMENT OF HON. ROGER WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Good afternoon and welcome to all of you.
    Today's Subcommittee meets to examine the state of the app 
economy and trends in mobile technologies.
    I'm glad to convene this hearing with my good friend and 
colleague, Ranking Member Schatz.
    Over the past several weeks, consumer interactions with 
mobile apps and the information these apps collect about 
Americans has dominated news reports.
    This hearing is an opportunity to take the broader look at 
the app industry and to understand its contributions to our 
economy in creating jobs, driving investment, and fostering 
innovation.
    It is also an opportunity to discuss emerging trends within 
apps, such as virtual reality and AI apps.
    In addition, I hope we will examine policy issues related 
to broadband infrastructure, data privacy, workforce 
development, and other considerations important to the 
continued growth of the app economy.
    Proliferation of smart phones, tablets, and other mobile 
devices has created an exciting market of mobile applications. 
Mobile apps allow consumers to access virtually anything at 
their fingertips.
    Consumers can watch TV, deposit checks at the bank, control 
the lighting and security within their homes, start their cars, 
or connect with a loved one face-to-face, all through the touch 
of an app.
    In a short period of time, a large economy has developed 
around the app industry. It has become a robust platform for 
job creation, investment, innovation, competition, and new 
opportunities for American enterprise.
    Increasingly, consumers and businesses are turning to apps 
not just for entertainment but also for efficiency, 
convenience, productivity, and cost savings.
    Mississippi farmers, for example, are using apps for 
precision agriculture technologies. Apps allow them to monitor 
the health of their crops and the welfare of their livestock 
remotely. This helps farmers accurately predict agricultural 
yields, cutting down costs and increasing productivity.
    Mississippians are also using apps to access tele-medicine 
services. Apps can provide patients with immediate access to 
medical professionals or other health-related services that are 
not readily available in their neighborhoods or communities. 
This technology helps improve patient outcomes and saves lives.
    At the foundation of the app industry success is a reliable 
broadband network. Significant investments in broadband 
networks have enabled many of the innovative apps consumers 
enjoy today.
    Next generation communication networks, such as 5G, promise 
even greater app capabilities. We need to ensure that reliable 
broadband networks are available to all Americans, whether that 
is through private investment or dedicated government programs, 
like Phase 2 of the Mobility Fund.
    Broadband offers immediate access to economic opportunities 
and other resources that have been shifting to the online 
marketplace.
    In addition to prioritizing the deployment of broadband 
infrastructure, workforce development is critical to growing 
the app economy. Maintaining a trained and skilled workforce 
will help meet industry needs and ensure that the United States 
remains a leader in the global digital economy.
    I'm grateful to have Mr. Forster here today representing 
Innovate Mississippi and the Mississippi Coding Academies. I 
look forward to hearing more about his work to train the next 
generation of workers in Mississippi and across the country.
    In the last decade, the app economy has clearly brought 
value to consumers and businesses. It promises to continue 
delivering this value as apps increase in personalization and 
utility for users while adequately safeguarding consumer data.
    To that end, I look forward to hearing from our witnesses 
today about how to preserve the many economic and societal 
benefits of mobile applications now and in the years to come.
    Before introducing the members of our panel, I'll now 
recognize my dear friend, Senator Schatz, to make whatever 
opening remarks he'd like to make.

                STATEMENT OF HON. BRIAN SCHATZ, 
                    U.S. SENATOR FROM HAWAII

    Senator Schatz. Thank you very much, Mr. Chairman, and 
thank you for holding this hearing on this important topic. I'm 
looking forward to the conversation.
    Before I get into my comments, I think I'd be remiss if I 
didn't address the issue that is hitting the Senate Floor 
tomorrow, which is Net Neutrality, and that's about the 
Internet itself, and it's hard for me to be in a hearing around 
apps or anything else about the Internet and not mention that 
this week we will have an opportunity in the Senate to take a 
stand on behalf of a free and open Internet.
    This vote will require every Senator to go on the record 
and I hope that my colleagues will join me and vote to reject 
the FCC's decision and restore net neutrality.
    Now back to apps, this hearing takes place during an 
important debate about whether technology is in fact bringing 
the positive changes that we hoped for. Apps in particular have 
created a lot of value. They entertain us. They make it easier 
for us to buy things and they help us to communicate better.
    They've also created an industry that employs millions of 
well-paid software engineers, designers, and marketers, but we 
haven't yet fully realized the potential of these technologies, 
and I personally worry that too many companies are focused on 
the wrong problems and the wrong questions.
    We already live in a time of unprecedented convenience but 
Silicon Valley continues to spend money and brainpower building 
apps to make things available and on demand and to make 
transactions friction-less.
    For example, an analysis said that at least $9 billion was 
poured into 125 on-demand delivery startups between 2006 and 
2016. As one technologist tweeted, San Francisco tech culture 
is focused on solving one problem. What is my mother no longer 
doing for me?
    But behind this sort of sassy comment is a more solemn 
truth, which is that we have the best tech available in the 
history of the world and it should rise to solve the serious 
problems that we face as a society, and a lack of convenience 
is just not one of those problems.
    If anything, the overwhelming options at our fingertips are 
sometimes becoming an inconvenience in and of themselves. 
Instead, we need tech to focus on the most important and 
impactful problems facing society.
    It's true that the disruptive business models we've seen 
from the app economy have provided tremendous benefits to 
consumers but they also have costs. It costs us jobs in certain 
industries, created possible new forms of addiction, and left 
behind an uneven distribution of wealth.
    Sometimes that balances out to new fortunes for a few but 
doesn't turn out well for society as a whole, and I understand 
the concept of creative destruction but surely this once-in-a-
century technological transformation should have an impact 
beyond improved efficiency and improved convenience.
    I don't believe tech will solve all of our problems, but in 
the United States, we pride ourselves on the idea that 
innovation is the real driver of progress and so I hope that we 
are at the cusp of some big, profound, and positive changes 
from the mobile revolution that will translate into meaningful 
progress for the whole country.
    I know that our witnesses and the organizations they 
represent share this hope and are working to make it a reality 
and I look forward to hearing from the witnesses.
    Senator Wicker. Thank you very much, Senator Schatz, and, 
of course, Senator Schatz and I will be canceling each other's 
vote out later this week on the issue of so-called net 
neutrality.
    For over two decades, the Internet has prospered and become 
this great engine of job creation and economic development 
because of the light touch regulatory framework that we've had.
    Only in the last few years did the FCC, under the Obama 
Administration, proceed to a heavier regulatory Title 2 utility 
style regulatory scheme which I'm pleased the current FCC has 
moved away from toward the more traditional type of light touch 
regulation, which has given us this great economy.
    We'll be debating that on the Floor later on but since my 
friend chose to bring it up, I thought I would put in my two 
cents worth.
    I'm also told that the Ranking Member of the Full 
Committee, Senator Nelson, who has joined us, would like to 
make an opening statement, also.
    So, Senator Nelson, you are recognized at this point.

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Thank you, Mr. Chairman, and there are 
those of us on the issue of Net Neutrality that are still 
ultimately trying to get a bipartisan solution in legislation 
to it so that we can stop this up 1 day and down the other kind 
of thing that we've been experiencing over time.
    But let's talk about apps, and I want to say my concern for 
the Senator from Hawaii and his state of what's happening out 
there. Is this thing really almost ready to blow?
    Senator Schatz. Thank you to the Ranking Member of the Full 
Committee for the question.
    People on the Big Island are resilient. There are 25 homes 
destroyed, 36 structures totally destroyed, and the truth is 
that even volcano scientists don't know what is going to happen 
next. It could subside completely tomorrow or this could go on 
for years but I certainly appreciate the concern of you and all 
the rest of our colleagues as we monitor and try to keep 
everybody safe. So thank you for that.
    Senator Nelson. Well, while as we've been discussing the 
apps, they contribute billions to the economy. It's important 
to recognize that developers are also tackling significant 
social issues in the country.
    Several companies are working on ways to address the issues 
surrounding climate change, sea level rise, which is especially 
affecting Southern Florida right now, and others have developed 
apps to help keep our children safe. This is especially 
important given the recent tragic spate of school shootings and 
the never-ending question of personally identifiable private 
information, including the geo-location and specifically geo-
location of our children.
    Joining us today is Roger Koch, the CEO of the Shield Group 
Technologies. Shield Group is headquartered in West Palm and 
has focused on the development of apps to improve communication 
between citizens and law enforcement.
    In particular, the company has developed Student Protect to 
allow students and faculty to contact law enforcement about 
threats, including providing precise information about the 
location of the threat.
    Given the Parkland tragedy, I'd like to learn more about 
Student Protect and how it can help law enforcement receive 
information about school threats.
    More broadly, we need to focus on making sure American 
workers have the right skills to participate in this part of 
the economy and push it forward.
    Colleges and universities throughout Florida have stepped 
up. From Florida Atlantic, with its tech runway, to Florida 
Polytechnic and the University of South Florida, our 
institutions of higher education are training the coders and 
entrepreneurs that will be designing the new wave of apps.
    Tomorrow, the Senate will vote on this resolution to 
restore strong Net Neutrality rules. I'll have more to say 
about this on the Floor, but it is going to be a continuing 
discussion and debate as we adjust to the ever-changing 
technology that we are using in our daily lives.
    Thank you, Mr. Chairman.
    Senator Wicker. And thank you, Senator Nelson.
    We're delighted to have our panelists with us today. They 
include Mr. Mike Forster, Chairman of Innovate Mississippi, and 
Founder of the Mississippi Coding Academies in Jackson; Dr. 
Sarah Oh, Research Fellow, Technology Policy Institute here in 
Washington, D.C.; Mr. Morgan Reed, President of ACT | The App 
Association here in Washington; and Mr. Roger Koch, who Senator 
Nelson already referred to, CEO of Shield Group Technologies of 
West Palm Beach.
    So we're delighted to have each and every one of you and 
we'll begin to my left with your opening statement of no more 
than 5 minutes.
    Mr. Forster.

              STATEMENT OF MIKE FORSTER, CHAIRMAN,

               INNOVATE MISSISSIPPI; AND FOUNDER,

                  MISSISSIPPI CODING ACADEMIES

    Mr. Forster. Thank you, Chairman Wicker, Ranking Member 
Schatz, and Members of the Subcommittee.
    On behalf of Innovate Mississippi and the Mississippi 
Coding Academies, I want to thank you for this opportunity to 
testify today on how we just might be helping bridge this 
enormous gap which exists between high-tech employer needs and 
for entry-level programmers and developers and the available 
resources that they have from our community colleges and four-
year colleges.
    Before I delve into that and I will be brief with my 
comments, I want to just say a little bit about Innovate 
Mississippi.
    Our mission is to accelerate technology and innovation 
startups in Mississippi by connecting them to mentors, to 
investment capital, to service providers. We've helped 
transform over 1,200 ideas into real companies and those 
companies have raised over $170 million in capital and they've 
produced about 6,000 jobs.
    All of that's very important and we're proud of the fact 
that we do that with a very small staff of six professionals. 
We've got a budget of a million dollars a year and half of it 
comes from private company sponsorships.
    Our board is made up of private company executives, 
entrepreneurs, representatives from our research universities, 
the Institute of Higher Learning, and the Mississippi Community 
College Board. I'm serving a two-year term as the Chairman.
    But we not only focus on connecting these entrepreneurs 
with capital and providing mentors, we focus on building an 
ecosystem that allows those startups to thrive and it was part 
of that charter that led us to form the Mississippi Coding 
Academies.
    A bit of background. In our state alone, there are 1,200 
open jobs for coding professionals. Our colleges and 
universities produce 250 computer science graduates a year. 
About half of them leave the state. So enormous gap just in our 
state.
    At the national level, it's even more compelling. Code.org 
would tell you that there's a half a million open jobs in 
programming and development today and it's going to grow to one 
million by the year 2020 and there are 43,000 computer science 
graduates to meet the 500,000 today.
    So the demands of the digital economy are just going to 
continue to grow and things like the app economy that we're 
discussing here today are going to worsen that gap over time 
unless we do some things differently.
    Well, here's what's interesting. At the other end of the 
spectrum, there are a lot of highly motivated young people who, 
for various reasons, mostly socioeconomic, who are not able to 
attend a two-or 4-year college. Yet many of them have the basic 
analytical and the creative skills to become coders and those 
jobs will ensure them wages that are equivalent to what many 
college graduates are going to get and they are career-type 
positions, not just dead-end jobs.
    Now I know you'll find this hard to believe but I've had 
five decades in this information technology business and I'll 
tell you this. I have seen it time and time again. You cannot 
predict based on background, based on education, who is going 
to be a good developer, who's going to be a good programmer or 
coder.
    Some of the best I've ever known in my companies were music 
and arts majors. Certainly a good number of them have math and 
science backgrounds but you cannot predict who's going to be 
good at this because there's definitely a creative as well as 
an analytical component.
    So what are we doing? Well, in spring of last year, four of 
us, and I am one of the founders, Senator Wicker, four of us 
from Innovate Mississippi went up to the little town of Water 
Valley, Mississippi, where a very innovative program had been 
started by a couple of sea level executives who had been with a 
successful technology services company and they wanted to give 
something back.
    They established a base camp coding academy up there. They 
wanted to prove that a high school graduate could go through an 
intensive 11-month program and emerge as what we would call a 
full stack developer. That's a programmer who has the ability 
to see the big picture, the data base, the front end, the back 
end, the user interface, all the various components, not 
necessarily that they can do everything perfectly but they have 
the ability to see the big picture, and they have the ability 
to be productive.
    Well, all of the graduates of that first class were hired, 
hired by companies like C Spire, a regional telecom from 
Ridgeland, Mississippi, and also FedEx, and those kids have all 
now got new and exciting careers in information technology.
    Well, the founders didn't want to expand beyond the areas 
that they were in and so with their permission, we took their 
ideas and approached Mississippi Development Authority and with 
the wholehearted support of our Governor Phil Bryant, with 
Glenn McCullough, who is our Executive Director of the MDA, Dr. 
Andrea Mayfield, who's the President of the Community Colleges, 
and she has just been wonderful to work with. She was not 
territorial at all. She recognized that we were bringing a 
different spin to this problem and she's worked jointly with us 
to make it happen.
    Today, there are 25 students enrolled in two academies, two 
different locations in our state. We expect in those locations 
to add three more classes in June of this year, and we're 
actively discussing three other locations in the state for 
2019, down on the Gulf Coast in Biloxi, over in the Mississippi 
Delta in an impoverished area, as you all know, and actually a 
second location that's in the Delta, as we call it, and in 
Vicksburg. I'll talk a minute more about that in a few minutes.
    We already have a 130+ candidates for the 60 positions in 
the three classes that are starting in June. So we're feeling 
good about that.
    Senator Wicker. Well, perhaps we can expound more on that 
during the question and answer.
    Mr. Forster. Yes, sir, we could.
    [The prepared statement of Mr. Forster follows:]

   Prepared Statement of Mike Forster, Chairman, Innovate Mississippi
    Chairman Wicker, Ranking Member Schatz, and members of the 
Subcommittee, on behalf of Innovate Mississippi and the Mississippi 
Coding Academies (MCA), thank you for the opportunity to testify today 
on how we are bridging the enormous gap which exists between high tech 
employer needs for entry level programmers and coders and the available 
resources from our community colleges and universities.
    Allow me to tell you just a bit about Innovate Mississippi. Our 
mission is to accelerate technology and innovation start-ups in 
Mississippi by connecting them to mentors, service providers and 
capital. We've helped transform over 1200 ideas into companies that 
have raised over $170M and created in the neighborhood of 6000 jobs, 
significantly impacting the economy of our state. We do all of this 
with a small staff of 6 dedicated professionals and a budget of about 
$1M per year, half of which comes from private industry sponsorships. 
Our board is made up of private company executives, entrepreneurs, the 
presidents of our research universities, the Mississippi Community 
College Board and the Mississippi Institutions of Higher Learning. I am 
currently serving a 2-year term as chairman.
    In addition to working directly with entrepreneurs, we also focus 
on building an ecosystem in which innovation and technology-based 
startups can thrive. It was that part of our charter which lead to the 
creation of the Mississippi Coding Academies.
    In our state alone, there are approximately 1,200 open jobs for 
coding professionals; our colleges and universities produce 
approximately 250 computer science graduates a year and half of them 
leave the state for other opportunities. At the national level it is 
even more compelling. Code.org estimates there are 500,000 open 
computing jobs today and only 43,000 computer science graduates to fill 
them. They expect that number to grow to 1M by 2020. The demands of the 
digital economy and the burgeoning App industry will only worsen this 
gap over time.
    At the other end of the spectrum are many highly motivated young 
people who for various reasons, mostly socio-economic, are not able to 
attend a 2 or 4-year college program. Yet many of them have the basic 
analytical and creative skills to become coders, ensuring them 
positions at wages competitive with many college graduates. I've had 
over 5 decades in the technology business, and my own experience is 
that these core skills are not predictable based on education or 
background. Some of the finest coders I've ever known had backgrounds 
in music or the arts, and, of course, many of them were good at math 
and science.
    So what are we doing about this problem? In the spring of 2017, 
four board members from Innovate Mississippi became aware of an 
outstanding program begun by two former C-level executives of a 
technology services company. Base Camp Coding Academy had been 
established, cooperatively with private industry sponsors, in the 
little town of Water Valley, MS, to prove that high school graduates 
could complete an intensive 11-month program and emerge as full stack 
developers. The graduates of the entire first class were hired by 
companies like FedEx and C Spire (which is a large regional telecom 
company based in Ridgeland, Mississippi) and have begun new and 
exciting careers in information technology.
    With the permission of the Base Camp founders, we took their ideas 
and approached the Mississippi Development Authority with the idea of 
expanding the approach geographically within our state. With the whole-
hearted support of Governor Phil Bryant, Glenn McCullough, executive 
director of MDA and Dr. Andrea Mayfield, president of the Community 
College Board, necessary seed funding was allocated and two academies 
were launched in the fall of 2017. Today there are 25 students enrolled 
and we have firm plans in place to add 3 more classes in the summer of 
this year. Three other locations are being considered for a June, 2019 
launch.
    I should point out that the academies are tuition-free. The only 
cost to the student is the sweat equity associated with showing up for 
work each day, 5 days a week, for the 11-months that our program 
requires. We do not provide stipends, and our demographics are worth 
noting. 50 percent of our students are women, 80 percent are 
minorities; all have high school diplomas and came with excellent 
recommendations from public school teachers and administration. Only a 
few had any kind of coding experience before beginning. One of our 
coders is already employed in a part time job doing customer support in 
an IT firm and has a full time job waiting upon graduation.
    Of course, there are similar programs in other states, notably 
ZipCode in Wilmington, DE, and CodeCrew in Memphis, TN, and we've 
certainly gleaned valuable information from their experiences. What we 
have learned over the past 7-months is that there are certain key 
imperatives for success:

  1.  A tight partnership with private industry, the potential 
        employers of our graduate coders, and, ultimately, the 
        financial backers of future classes.

  2.  The academies should be run more like a workplace than a 
        classroom. We want our coders to be acclimated to the 
        workplace, to be team players, and self-motivated. We believe 
        in learning by doing, and 90 percent of instructional time is 
        spent coding.

  3.  We believe that ``soft skills'' are as important as the coding 
        skills. A significant portion of the curriculum is about 
        developing the personal skills and work habits necessary for 
        success.

  4.  Last but certainly not least, our programs have been successful 
        because of the determined effort of volunteer ``champions'' who 
        found the required facilities, hired top notch instructors, and 
        managed the entire start up process.

    Let me briefly expand on each of these 4 imperatives.
    Partnership with Private Industry is Imperative: Each Academy site 
must have fully engaged industry partners. These partners are the 
``secret sauce'' of our approach, as they assure that the skills being 
taught are those that are required in the workplace. Given the short 
life cycles of new techniques and methods in coding, continuous 
involvement of industry partners is a requirement. Specific roles for 
our partners include assistance in student coder selection, curriculum 
guidance, guest instructors from within their IT staff, and systematic 
interaction with the students to reinforce the ``real world'' aspect of 
our training.
    It is important to note that these interactions are supportive of 
our emphasis on soft skills. As the student coders mature, we 
anticipate short-term internships and job shadowing to be increasingly 
a part of the program. Both parties gain from this interaction: the 
employers can better assess the skill levels vis a vis their specific 
needs. The student coders gain a better awareness of the employer's 
needs.
    Group visits to company sites allow student coders to gain the big 
picture of the employer's business objectives and better understand how 
information technology supports those objectives. A recent visit by 
both academies to the U.S. Army's Engineering and Research Development 
Center (ERDC) in Vicksburg, MS, was an outstanding success for both 
parties. Students spent the better part of a day moving from one 
location to another in small groups, directly observing the work being 
done. It is significant to note that ERDC for the first time has the 
ability to hire non-college graduates into their entry-level jobs.
    The overall message is that our industry partners are a critical 
success factor to the coding academies. It is a distinguishing 
characteristic to our approach at preparing these young men and women 
for careers in information technology.
    Learning Should Occur in a Workplace Environment: We believe that 
the approach developed by Rich Sun, the champion of our Jackson, 
Mississippi Academy, is another distinguishing characteristic. Rich 
decided early on that the learning should take place in a workplace, 
not a classroom, type environment. We have equipped the students with 
laptops and furniture typical of what they will find when employed. 
Their hours and holidays are patterned on business hours and holidays. 
They are expected to show up for work on time, stay on task during the 
day and clean up after themselves before they leave. They work in small 
groups and are encouraged to help each other with their assigned 
projects.
    Soft Skills as Important as Coding Skills: Heavy emphasis is placed 
on working cooperatively in small teams, sharing of ideas, and peer 
level reviews. Soft skills (work habits, punctuality, interviewing 
skills, dress codes, etc.) are emphasized as much as technical coding 
skills. At course completion, the coders will have worked in a 
business-like setting for 11-months. Periodic corporate style 
performance reviews of each coder prepare them for the realities and 
pressures of being measured on consistent performance over time.
    The Need for a ``Champion'': In the early stages of a program like 
this, it is essential that each location has an executive who will act 
as the champion. It requires bringing together representatives from the 
school district, the local community college, as well as local 
employers. Our programs would not have been able to launch without this 
kind of active management; let me tell you a bit about the guy who got 
us started in Jackson. Richard Sun is a chartered financial analyst who 
runs his own investment firm. Sun and Company manages and advises early 
stage companies. Rich is a board member and former chairman of Innovate 
Mississippi, and he saw the potential of coding academies early on. He 
took the lead to develop the Jackson Academy and remains highly active 
in the program. He managed it like a start up and instilled that 
mentality into his instructors. He did all this as an unpaid volunteer, 
but we now have the blue print for what must be done to spin up other 
locations around the state.
    The bottom line is that we have the opportunity to take young 
people with little hope for anything other than dead end jobs, and 
provide the means to have a well-paying career. We are addressing the 
shortfall in programming and coding with highly tailored programs that 
are employer driven, and we have a model that works.
    Let me close by saying that I am not here looking for money today. 
The success of our Mississippi Coding Academies will be determined by 
our success in meeting the needs of our industry partners. If we do 
that well, the future will take care of itself. However, I do believe 
there is a broader need for programs of this sort to ensure our digital 
economy doesn't stall due to lack of talent. Strong consideration 
should be given to incentives, such as tax credits, which would 
encourage the private sector to invest in alternative types of 
workforce development, and there should be specific funding for public 
schools to support the development of programs which will allow young 
people to begin developing coding skills as early as middle school 
years. We've got a great example of that today in our Vicksburg-Warren 
County School District.
    Thank you for the opportunity to testify today, and I look forward 
to your questions.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Senator Wicker. Dr. Oh, you're recognized.

 STATEMENT OF DR. SARAH OH, RESEARCH FELLOW, TECHNOLOGY POLICY 
                           INSTITUTE

    Dr. Oh. Chairman Wicker, Ranking Member Schatz, and Members 
of the Subcommittee, thank you for the opportunity to testify 
today on the app economy and mobile technology trends.
    My name is Sarah Oh, and I'm a Research Fellow at the 
Technology Policy Institute, a nonprofit, nonpartisan think 
tank that studies the economics of innovation and technological 
change.
    The app economy is an important source of economic growth. 
As an economist, my primary concern is growth in new business 
formation, jobs, research and development, and economic 
opportunity.
    Apps create new markets and make existing markets more 
efficient, thereby promoting growth. However, some app 
innovation has raised questions related to privacy, 
connectivity, and artificial intelligence.
    The right policy responses require clearly identifying the 
problems we wish to solve and thinking carefully about the 
costs and benefits of any proposals. In short, we need to be 
careful about how to reduce or remedy bad effects of this new 
economy without discouraging the innovation that drives 
economic growth and makes us all better off.
    As easy as it is for us to click our app buttons, we should 
remember that apps call on a massive and deeply complex 
infrastructure to deliver goods and services. Server farms, 
cell towers, coders, math students, and labs dedicated to 
research and development all work behind the scenes to deliver 
the apps that are simple and easy to use.
    Apps deliver real-time data to billions of users not just 
here in our country but around the world. American companies 
reach a global market with apps. Apps make life easier and 
faster with AI and cloud services.
    At TPI, we use cloud services for big data analysis. I'm 
amazed by how much computing power we can access today. Our 
team of researchers can access world-class servers and only pay 
for the minutes that we use. Our big data projects would have 
been impossible just a few years ago without these advances.
    But these advances come with new policy challenges. 
Regarding privacy, the economists question whether firms under-
invest in data protection relative to some socially optimal 
level. If data breaches harm customers and firms aren't 
preventing those harms, then there may be room for 
intervention, but even if harms exist, regulators must be 
careful to do no harm themselves. Regulations have real costs 
and benefits to the economy.
    It's important to remember that with any new regulation, 
firms will still behave strategically around the rules. Firms 
will use regulation to benefit themselves and hurt competitors. 
Regulation can have unintended consequences, disadvantage new 
entrants over incumbent firms or vice versa.
    The European GDPR, which starts on May 25, will provide an 
important data point for scholars and regulators to measure the 
effects of privacy legislation on innovation and economic 
growth.
    Regarding connectivity, the app economy requires continued 
investment in broadband. This subcommittee knows about 
deployment and adoption challenges, the Universal Service Fund, 
and the economics of last mile of connections.
    For 5G, 80,000 municipalities can hold up or speed up the 
expansion of wireless networks for small cells. Policymakers 
need to stay focused on supporting investment to get everyone 
connected.
    Regarding radio spectrum, the government has a lot of 
spectrum and Federal agencies still use old inefficient 
equipment. If economic growth is a priority, then the Federal 
Government can help the app economy by clearing spectrum for 
connected devices.
    Regarding AI, we at TPI recently hosted a conference on the 
policy implications of AI. Scholars discussed AI's limitations 
and potential in fields like medicine, central banking, and 
traffic routing. We discussed whether AI is a general purpose 
technology. Our answer, we're not sure. And how much human 
judgment still matters? Our answer, it does a lot.
    In conclusion, the app economy drives economic growth, but 
we need to know what computers can and cannot do, how to 
measure harm, and whether rules are truly able to remedy these 
harms.
    We have more questions than we have answers and it'll take 
careful thought and conversations like the one we're having 
today before we have good policy solutions.
    Thank you for inviting me to testify today, and I look 
forward to answering your questions.
    [The prepared statement of Dr. Oh follows:]

         Prepared Statement of Dr. Sarah Oh, Research Fellow, 
                      Technology Policy Institute
    Chairman Wicker, Ranking Member Schatz, and members of the 
Subcommittee, thank you for the opportunity to testify today on the app 
economy and mobile technology trends. My name is Sarah Oh, and I am a 
Research Fellow at the Technology Policy Institute, a non-profit, non-
partisan think tank that studies the economics of innovation and 
technological change.
    The app economy is an important source of economic growth. As an 
economist, my primary concern is growth--in new business formation, 
jobs, research and development, and economic opportunity. Mobile 
connectivity and apps create new markets and make existing markets more 
efficient, thereby promoting growth. However, some app innovation has 
raised questions related to privacy, connectivity, and artificial 
intelligence. The right policy responses require clearly identifying 
the problems we wish to solve and thinking carefully about the costs 
and benefits of any proposals.
    In short, we need to be careful about how to reduce or remedy bad 
effects of this new economy without discouraging the innovation that 
drives economic growth and makes us all better off.
Apps and the Cloud
    Even though apps are an integral part of our lives now, we should 
remember that the app economy is new. The very first iPhone model, 
which was released just over ten years ago, didn't even have third-
party apps. The rate of growth of mobile technology and new business 
models has been staggering. People watch live sports, binge watch their 
favorite shows, order dinner, rent a house, hail a car, update their 
fantasy sports leagues, get the latest news, all at the press of a 
button.
    Yet, as easy as it is for us to click our app buttons, apps call on 
a massive and deeply complex infrastructure to deliver goods and 
services. Acres of server farms, forests of cell towers, cubicles of 
coders, classrooms of math students, and labs dedicated to research and 
development all work behind the scenes to deliver the apps that are 
simple and easy to use.
    Apps built on cloud services deliver real-time data to billions of 
users not just here in our country but around the world. American 
companies reach a global market through platforms that deliver video, 
music, e-mail, along with sophisticated business software, like mapping 
systems and vector graphics.
    Apps continue to make life easier and faster as they incorporate 
artificial intelligence, using deep learning to recommend nearby 
restaurants, suggest replies to e-mails, and transcribe and interpret 
natural language so we can work our devices by voice command.
    These tools are useful for policy research, too. At TPI, we use 
cloud services for big data analysis. I'm amazed by how much computing 
power we can access today. Our team of researchers can access world-
class servers and only pay for the minutes that we use. Our big data 
projects would have been impossible just a few years ago without these 
advances.
Policy Concerns
    But these advances come with new challenges. How do we balance 
privacy concerns with the data requirements necessary for continued 
advancement in AI? What types of Internet infrastructure investments 
are necessary to support the continued growth of the app economy? How 
do we continue to make valuable spectrum available? Finally, does the 
growth of apps and the mobile economy raise concerns about the digital 
divide? What is the role of policy in addressing any of these issues?
Privacy Regulation
    Data drives the economy, and there's no turning back. It's almost 
cliche to say that data is the currency of the digital economy. Firms 
must safeguard the data they collect and store. The economist's 
question is whether firms may under-invest in data protection relative 
to some socially optimal level of investment. A firm will base its 
investment in data security on the degree to which the firm would be 
harmed by a data breach. Depending on the amount of harm a company 
expects, this may be sufficient incentive. But if harm from a data 
breach affects those outside the firm--consumers, for example--in a way 
that does not affect the firm, then that would suggest the presence of 
a negative externality and a reason to consider government 
intervention. But even if harms exist, regulators must carefully 
estimate the costs and benefits of such intervention.
    For instance, after a regulation is passed, firms will immediately 
adjust to behave strategically around the rules. Firms will use 
regulation to benefit themselves and hurt competitors. Thus, 
legislation can have unintended consequences that Congress cannot 
predict. New laws can disadvantage new entrants over incumbent firms, 
or vice versa. Large firms can afford to pay for lawyers and compliance 
officers that small firms cannot afford.
    The European GDPR will provide an important data point for scholars 
to measure the effects of privacy legislation on innovation and 
economic growth. While companies may be dreading May 25, when the GDPR 
goes into effect, scholars are waiting in anticipation to study the 
costs and benefits of the new rule.
Broadband Infrastructure
    The app economy requires continued investment in broadband. 
Government actions can slow or accelerate this investment. This 
Subcommittee is knowledgeable about deployment and adoption challenges 
in broadband, along with the economics of last-mile connections, rural 
and urban buildout, and the digital divide. For the app economy to 
continue to flourish, continuing to invest in and expand the underlying 
delivery infrastructure is critical.
    Firms who build 5G wireless networks will have to work with local 
governments to place small cells on city streets and buildings. As many 
as 80,000 municipalities are involved in land use and zoning decisions 
for small cells, pole attachments, and new aerial and buried fiber 
lines. These governments can hold up or speed up efforts by the private 
sector to increase connectivity everywhere. Local governments often 
have legitimate concerns--it is their citizens who use those roads and 
live in those neighborhoods, after all--but hold up can cause 
frustrating delays to broadband deployment, especially when gridlock 
can occur in so many different jurisdictions.
Universal Service Fund
    The app economy also depends on more people getting online. More 
people online means more people who benefit from the app economy and 
more incentive, via a bigger potential market, for developers to build 
new apps. Adoption of broadband, and not just deployment, is an 
important policy concern for this Subcommittee. The digital divide 
between users who are online and those who aren't is a puzzle for 
scholars and an active area of empirical study.
    The Universal Service Fund (USF) includes a collection of programs 
intended to subsidize connectivity for the unconnected and unserved. 
This Subcommittee should continue to urge the Federal Communications 
Commission to get the most bang for our buck from the Fund.
    The USF collects $10 billion per year from telecom revenues and 
redistributes the funds, nearly $2.6 billion to schools and libraries, 
$4.7 billion to infrastructure, $1.3 billion for broadband to 10 
million low-income households, and $300 million to rural health 
programs. The USF pays telecom bills and funds new infrastructure, but 
USF has real opportunity costs--every dollar spent on USF is a dollar a 
consumer could have used for something else. These funds are collected 
through a 19 percent contribution fee from consumer phone bills, 
including those of low-income Americans.
    Billions of these dollars flow to private vendors every month, and 
it's frustrating to continue to read report after report demonstrating 
the ineffectiveness of the program and its general lack of attention to 
cost-effectiveness. I urge this Subcommittee to stay vigilant to 
monitor and track USF funds so that we can get services to actual 
people, and not just vendors.
Spectrum
    Mobile technology requires radio spectrum, much of which is used--
inefficiently--by the government. To be sure, the government has a 
legitimate need for dedicated spectrum, but it is not required to use 
it so poorly. If economic growth is a national objective, then Federal 
agencies should get moving and replace old equipment. Unused spectrum 
time is lost forever.
    The Spectrum Relocation Fund (SRF) has given agencies the 
opportunity to clear spectrum and replace old radio systems. I hope to 
see more joint efforts by agencies working together to upgrade their 
equipment. For example, the FAA, DOD, DHS, and NOAA are currently 
working together to replace radar equipment and auction spectrum to the 
private sector by 2024. Those agencies are using funds from the SRF, 
authorized by the Spectrum Pipeline Act of 2015, to clear 30 MHz of 
Federal spectrum for non-federal use.
    Mobile phones and connected devices will continue to use plenty of 
spectrum at low, mid, and high-band frequencies. We need to ensure a 
steady supply of licensed and unlicensed spectrum for innovators and 
investors for these devices.
Artificial Intelligence
    We at TPI recently hosted an academic conference on the policy 
implications of AI. Scholars discussed AI's limitations and potential. 
Research papers addressed use cases of AI in various fields like 
medicine, central banking, and traffic routing. We discussed whether AI 
is a general-purpose technology (answer: ``we're not sure'') and how 
much human judgment still matters (answer: ``it does, a lot'').
    One of our findings was that informed policy discussion on AI 
happens through peer review. Are researchers reviewing each other's 
work? Are experts talking to each other and documenting potential harms 
of their new inventions? Research communities need to inform 
policymakers and the general public with robust research, analysis, and 
education on the policy implications of AI.
Conclusion
    In technology policy, old things are often new again. Policy 
concerns about privacy, connectivity, and algorithms have been raised 
for many years. We need to continue to study what computers can and 
can't do, how to measure harm, and whether rules are truly able to 
remedy these harms. Most importantly, we should recognize that we have 
more questions than we have answers, and that it will take careful 
thought and conversations like the one we are having today before we 
have good answers. Thank you for inviting me to testify today. I look 
forward to answering your questions.

    Senator Wicker. Thank you very much, Dr. Oh.
    Mr. Reed, you're now recognized.

             STATEMENT OF MORGAN REED, PRESIDENT, 
                   ACT | THE APP ASSOCIATION

    Mr. Reed. Thank you, Chairman Wicker, Ranking Member 
Schatz, and Distinguished Members of the Subcommittee.
    My name is Morgan Reed, and I'm the President of the App 
Association, which represents more than 5,000 app makers, 
connected device companies, and B2B software developers. We 
have members in all 50 states and, importantly, in all 435 
congressional districts.
    In our 2018 App Economy Report, we put the value of the app 
economy at roughly $950 billion, employing 4.7 million people 
throughout the U.S. The average salary for an app economy job 
is nearly double the median income at $86,000. Our biggest 
single roadblock for growth is talent, with more than 500,000 
open unfilled jobs in America today.
    How did we get here? Well, smart phones have become the 
single most rapidly adopted technology in human history, 
outpacing innovations like the printing press, the wheel, fire, 
or even the microwave.
    In less than a decade, we have put 10,000 years of 
collected human knowledge into the hands of 3.4 billion people. 
From ancient scrolls to crop reports to diagrams of distant 
galaxies and cat videos, the smart phone brings the entire 
world to our fingertips and apps enable us to engage with it.
    Gone are the days when developers created a piece of 
software, signed their work over to a publisher who placed it 
on a CD, shipped it in a box to a retail store and hoped that 
consumers would notice it on the shelf of a CompUSA.
    Today, software developers can reach a global market 
instantaneously through trusted platforms, from a swipe, a 
click, or even a spoken command.
    The modern app economy is based on four major tenets: 
connectivity to the network. We need continued 5G rollout and, 
importantly, TV White Spaces technology to help grow all 
aspects of our industry. Customer trust, consumer trust in 
mobile software, products and services is inextricably linked 
to security, and encryption is a fundamental part of that.
    Offloading overhead. Because my members can offload 
overhead on to platforms like Apple and cloud providers, like 
Microsoft, getting an application to market has moved from $10 
million to $100,000 and from months or years to a matter of 
weeks.
    Finally, access to the global marketplace. The global 
digital economy makes my smallest member an equal player in the 
eyes of consumers. While some think of apps as colorful icons 
on their smart phone, apps are also revolutionizing business 
operations and efficiency in America.
    In fact, two out of three businesses use mobile enterprise 
apps for communication, company training, and other activities. 
Our companies develop the apps that connect the cash register 
to the sales department, integrate product inventories in the 
shipping department, and link all the way to the line 
supervisor at the manufacturing plant.
    For American businesses, mobile is no longer a luxury or a 
value add, it's a necessity to have a reliable platform and 
constant mobile connectivity.
    It's no surprise that the app economy is one of our 
nation's leading employers, creating well-paying jobs now and 
in the future. For example, by 2024, computing jobs are 
expected to grow by 12.4 percent in Mississippi and 6.4 percent 
in Hawaii. These are the jobs of today harnessing analytics, 
artificial intelligence, and IoT to create better products and 
services for all industries in the future.
    Healthcare is a particularly telling example. Mobile 
software has revolutionized the way providers reach patients 
across the country. The University of Mississippi Medical 
Center is a steering committee member of our Connected Health 
Initiative and residents in 53 of Mississippi's 82 counties 
live more than 40-minute drive from specialty care but UMC's 
telehealth services bring remote monitoring to patients in 
their homes without sacrificing quality of care.
    And if we can see passage of Senator Schatz's bill, The 
Connect for Health Act, new opportunities would arise for UMMC 
as well as Honolulu-based health tech apps, a company helping 
war-fighters recover from traumatic brain injuries through 
cognitive exercises on their mobile phone.
    Senator Cantwell, Seattle-based trucking services app, 
Convoy, provides access to more than 10,000 trucking companies 
and matches freights with effective routes to reduce the carbon 
footprint.
    Senator Masto, based in Carson City, we have Resgrid, which 
provides communications management and logistics support for 
first responders.
    Senator Hassan is right here. We have Portsmouth-based B2W 
software which does construction sites and help maintain 
machinery fleets and captures project data to ensure projects 
run safely, efficiently, and cost-effectively.
    At the end of the day, I have stories for every single 
member of your committee, and I want you to know that right 
now, there's a product going online today that will change the 
lives of your constituents and the way that they do business 
and the way that they interact with their families and I'm 
happy to spend all day talking about those stories, but I look 
forward to your questions and the way that we can continue the 
growth.
    Thank you.
    [The prepared statement of Mr. Reed follows:]

Prepared Statement of Morgan Reed, President, ACT | The App Association
Executive Summary
    Chairman Wicker, Ranking Member Schatz, and distinguished members 
of the Subcommittee, thank you for the opportunity to share our views 
in this important hearing. My name is Morgan Reed and I am President of 
ACT | The App Association, a trade association representing more than 
5,000 app makers and connected device companies in a $950 billion 
industry. This testimony represents an abbreviated review of our 2018 
State of the App Economy report.
    Smartphones have become the single most rapidly adopted technology 
in human history, outpacing innovations like the printing press and the 
steam engine. In just ten years, apps have changed the phones, devices, 
and ``things'' we use every day. Mobile is quite literally everywhere 
in your life. Your doctor, your bank, and even your church, can reach 
you where you are through mobile tech and access to the cloud.
    In less than a decade, the marriage of mobile and cloud has opened 
a new world for 3.4 billion people. By providing access to 10,000 years 
of human creativity--from ancient scrolls to crop reports to diagrams 
of distant galaxies and cat videos--the smartphone brings the entire 
world to our fingertips, and apps enable us to engage with it.
(A) How it Works
    Before outlining a few examples of the benefits the app economy 
brings, I want to give an overview of how the modern app economy works. 
Gone are the days when developers created a piece of software, placed 
it on a CD, shipped it in a box to a retail store, and hoped consumers 
would notice it on the shelf at a CompUSA. Today, with access to 
broadband and the cloud, software developers can reach a global market 
instantaneously through trusted platforms. The app economy is based on 
four major tenets:

  (1)  Access to the global marketplace. The global digital economy 
        gives app companies access to more potential clients or 
        customers than just those in their immediate neighborhood, 
        which helps keep prices low. To maintain access to this global 
        marketplace, we encourage the Subcommittee to continue to 
        promote digital trade and the cross-border flows of data.

  (2)  Customer trust. Consumers' trust in a mobile software company's 
        products and services is inextricably linked to the company's 
        ability to protect proprietary information and data. Encryption 
        and other technical measures are important pieces of the 
        security puzzle. Our member companies are dedicated to building 
        the strongest protection mechanisms possible. But mandating a 
        backdoor into an app requires the company to build a known 
        vulnerability into its product. Any of our small app companies 
        will tell you that if a vulnerability is known to exist, 
        hackers and other motivated parties will attack until they find 
        it. It's that simple.

  (3)  Overhead offload to platforms and cloud providers. Access to the 
        cloud has drastically reduced startup costs. One App 
        Association member recently recounted that in the late `90s, a 
        software company had to spend about $10 million just to get up 
        and running. Now, the advent of free or inexpensive cloud 
        services, Internet connectivity, and software tools enables 
        startups to be initially funded with just a $100,000 check. 
        Moreover, the many cloud and platform companies shoulder the 
        costs of privacy measures, security, and intellectual property 
        protections for their users, freeing up large amounts of 
        capital that startups and small firms need to build and grow 
        their business.

  (4)  Connectivity to the network. Without this fundamental necessity, 
        none of the three pillars of the app economy described above 
        are possible. The benefits of the ``mobile plus cloud''-driven 
        ecosystem would never exist. Our companies now rely heavily on 
        the always-on reliability of mobile Internet connections to 
        access the cloud and reach their customers.
(B) Apps Support Businesses and Create Jobs
    While the apps that live as colorful icons on your smartphone 
continue to thrive, they are also revolutionizing business operations 
and efficiency in America in our ``mobile plus cloud''-driven world. In 
fact, two out of three businesses use mobile enterprise apps for 
communication, company training, and other activities. Our companies 
develop the apps that connect the cash register to the sales 
department, to the shipping department, and all the way to the line 
supervisor at the manufacturing plant. For American businesses, mobile 
is no longer a luxury or a ``value add,'' it is a necessity for them to 
have constant, reliable mobile connectivity.
    It's no surprise that the app economy is one of our Nation's 
leading employers, creating well-paying jobs in your states. The app 
economy employs 4.7 million workers with an average salary of $86,000--
nearly double the national average--and is poised to create another 
440,000 jobs for the U.S. workforce by 2024. Over this period, 
computing jobs are expected to grow by 12.4 percent in Mississippi and 
6.4 percent in Hawai'i. These are the jobs of today and the ones that 
will harness analytics, artificial intelligence, and blockchain to 
create better products and services for American industries in the 
future.
    Healthcare is a particularly telling example. Mobile software has 
completely revolutionized the way providers reach patients in 
Mississippi and across the country. The University of Mississippi 
Medical Center is a steering committee member of the App Association's 
Connected Health Initiative and was recently named a Telehealth Center 
of Excellence by HHS. As their executive director Michael Adcock 
testified in this Subcommittee last year, UMMC had recorded more than 
500,000 patient visits since the Telehealth Center's establishment in 
2003. Residents in 53 of Mississippi's 82 counties live more than a 40-
minute drive from specialty care, but UMMC's telehealth services bring 
healthcare services patients in their homes, without sacrificing 
quality of care. Healthcare providers were able to reach more patients 
than ever in a program that has the potential to save the state $189 
million in Medicaid dollars.
(C) Connectivity is Essential
    The UMMC example illustrates why broadband connectivity is so 
important for all Americans. Without a broadband connection, many are 
closed off from the world of opportunity and efficiency provided by the 
app economy. Being a ``have-not'' in today's mobile economy is an 
increasingly significant disadvantage but shockingly, almost 20 million 
rural Americans still lack access to broadband internet. That's 
equivalent to the entire population of New York.
    Local and Federal policies that streamline the approval and siting 
of 5G equipment are essential to putting higher-speed connections at 
Americans' fingertips. The App Association applauds the work this 
Subcommittee has done to create an environment that promotes 5G 
deployment and mobile broadband competition, from the Spectrum Act in 
2012 to the MOBILE NOW Act passed this year. The uses of such a 
powerful network are still making themselves known, but they will add 
to the 28 billion app-enabled Internet of things (IoT) devices already 
on the network.
    Yet as we surge ahead in more densely populated areas where small-
cell deployments are feasible, we must use a mix of models including 
licensed and unlicensed spectrum deployments to reach unconnected 
Americans in more rural areas. We encourage this Subcommittee to urge 
the Federal Communications Commission (FCC) to make good on its plans 
to carve out broadband uses among the repacked broadcast channels. This 
unused spectrum, referred to as ``TV white spaces,'' is even more 
important as broadband connectivity is increasingly integral to every 
facet of our lives--from participation in the workforce, access to 
education, or reaching our healthcare providers.
(D) Apps in Action
    Just as mobile software has improved and extended healthcare 
services, it has empowered first responders to be in the right place at 
the right time with the right equipment. The volcano eruptions and 
earthquakes that have devastated Hawai'i have posed a dangerous 
challenge to local first responders, who risk their own safety to 
protect others. But mobile software helps first responders be more 
effective and safe when responding to these life-threatening events. In 
fact, our member company DroneSense provides a software platform for 
drones to assist public safety officials and first responders in a 
variety of situations, including natural disasters.
    A growing number of mobile software makers are using artificial 
intelligence (AI) to streamline their products and services. For 
example, member company RevTwo, based in Boston, Massachusetts, uses AI 
to automate customer support for a diverse client list spanning from e-
commerce companies to industrial machines. For small companies, AI can 
be a valuable and accessible tool, but only when they can access 
powerful processors, reliable broadband connections, and big data sets. 
Policies that overly restrict the beneficial uses of data or slow down 
network deployment are detrimental to the growth of small businesses in 
a sector of our economy that is so integral to the future of our 
workforce.
    These are only a handful of the considerations I hope this 
Subcommittee covers in this hearing and I look forward to a thoughtful 
discussion about how Federal policies can preserve the vibrancy and 
growth of the app economy.
I. Apps: Disrupting Industries, and Providing New Value to Old Things
    The consumer-focused app economy has evolved into a $950 billion 
ecosystem that has revolutionized how our businesses and industries 
operate. Apps continue to provide value to the more than 3.4 billion 
smartphone owners around the world. Today, they bring new opportunities 
to thousands of businesses and millions of everyday objects that drive 
the IoT revolution.
    Last year alone, consumers were responsible for 175 billion app 
downloads i on the Apple App Store, Google Play, and other 
third-party platforms. Importantly, these applications have grown to 
include casual uses and serve as the front-end interface for businesses 
incorporating enterprise apps to increase productivity, optimize 
output, and support customer engagement.
---------------------------------------------------------------------------
    \i\ ``Global App Downloads Surpassed 175 Billion in 2017.'' App 
Annie, 31 Jan. 2018, www.appannie.com/en/insights/market-data/global-
app-downloads-2017/.
---------------------------------------------------------------------------
    According to a 2016 Adobe report, more than two-thirds of 
businesses use enterprise apps for communication, employee training, 
and other purposes.ii Going forward, the demand for the 
efficiencies and competitive edge enterprise apps provide will outpace 
companies' internal ability to develop them by five to 
one.iii
---------------------------------------------------------------------------
    \ii\ ``Driving Competitive Advantage with Enterprise Mobile Apps.'' 
Adobe, 2016, http://the.report/assets/
Driving%20competitive%20advantage%20with%20apps.pdf.
    \iii\ ``Gartner Says Demand for Enterprise Mobile Apps Will 
Outstrip Available Development Capacity Five to One.'' Gartner, 16 June 
2015, www.gartner.com/newsroom/id/3076817.
---------------------------------------------------------------------------
    By providing mobile access to data in the cloud, manufacturing, 
farming, and medical sectors across the country are increasingly 
incorporating app-enabled IoT technologies into their systems and 
operations. With 28.4 billion networked sensors iv already 
embedded in devices and machinery around the globe, we expect this 
sector to grow exponentially. Through machine learning and artificial 
intelligence, the use of data will increase industrial output, predict 
agricultural yields, and improve patient outcomes. We believe BCG's 
prediction that companies will spend upwards of $276 billion 
v on app-enabled IoT technologies by 2020 to be a modest 
estimate, with growth over the next ten years likely to hockey-stick.
---------------------------------------------------------------------------
    \iv\ Afshar, Vala. ``Cisco: Enterprises Are Leading the Internet of 
Things Innovation.'' The Huffington Post, TheHuffingtonPost.com, 28 
Aug. 2017, www.huffingtonpost.com/entry/cisco-enterprises-are-leading-
the-internet-of-things_us_59a41fcee4b0a62d0987b0c6.
    \v\ ``Winning in IoT: It's All About the Business Processes.'' 
Boston Consulting Group, 5 Jan. 2017, www.bcg.com/publications/2017/
hardware-software-energy-environment-winning-in-iot-all-about-winning-
processes.aspx. 
---------------------------------------------------------------------------
II. Overview
    The app economy drives job creation, growth, and new opportunities.

   $950.6 billion value--The value of the app economy is 
        derived from a thriving consumer market and a burgeoning number 
        of enterprise applications and IoT innovations.

   4.7 million employed--The app economy employs more than 4.7 
        million Americans as developers, software engineers, systems 
        managers, and teachers.

   $86,000 average salary--With the Nation's most competitive 
        salaries, the average app economy job pays nearly double the 
        national average ($48,000).

   444,000 new computing jobs will be created--At its current 
        rate, the app economy will add 440,000 new jobs to the American 
        workforce by 2024.

   Businesses add new value to the app economy--Two out of 
        three businesses utilize enterprise apps, complementing the 175 
        billion consumer downloads last year.vi
---------------------------------------------------------------------------
    \vi\ ``Global App Downloads Surpassed 175 Billion in 2017.'' App 
Annie, 31 Jan. 2018, www.appannie.com/en/insights/market-data/global-
app-downloads-2017/.

   28 billion app-enabled IoT devices--As the intermediary 
        between IoT devices and their users, apps will play a key role 
        in the IoT market and its growth.
III. Challenges
    The app economy has made some incredible leaps, but a few worrisome 
trends risk holding it back.

   For every eight available computing jobs, there's only one 
        computer science graduate to fill it--Just 59,000 U.S. college 
        graduates earned computer science degrees last year. That 
        represents only a fraction of the 503,000 unfilled computing 
        jobs nationwide.

   Cybercrime poses serious risks to the app economy--A lack of 
        security protocols and a shortage of 285,000 cybersecurity 
        professionals could threaten the app economy's future.

   24 million Americans cannot benefit from the app economy--
        More than 24 million Americans cannot access, benefit from, or 
        contribute to the app economy because they lack access to 
        broadband.
IV. What is Congress' Role?
    With the right resources, the app economy will reach new heights.

   Clear the way for 5G deployment and unlicensed use of the 
        airwaves--5G and technologies like Airband will support greater 
        employment and add more than $200 billion in new value to the 
        app economy.

   Take a cautious approach to privacy--The United States is 
        the envy of the world in tech because our approach to privacy 
        allows companies to innovate with data while targeting 
        sensitive types of data. The App Association has been a leader 
        in developing small business compliance guides for complex 
        regimes and creating industry-led best practices.

   Apprenticeships hold the key to a new app economy 
        workforce--Apprenticeships' on-the-job training could 
        complement vocational training and academic efforts to equip 
        Americans with the skills to meet the app economy's computing 
        and cybersecurity needs.

   End-to-end encryption will be a key security method for 
        data--Support for strong data protection measures like 
        encryption will help preserve the benefits of the app economy 
        from security threats.
V. Driving Employment
    The explosive growth of the app economy has created new job 
opportunities across the country. In fact, the app economy employs more 
than 4.7 million Americans vii as the developers, software 
engineers, systems managers, teachers, and technical support who create 
and provide the apps that drive the app ecosystem.
---------------------------------------------------------------------------
    \vii\ This number is derived from U.S. Bureau of Labor Statistics 
data on the number of computer and information systems managers and 
research scientists, computer systems analysts, computer programmers, 
software developers, web developers, database administrators, network 
system administrators, computer network architects, computer network 
specialists, computer hardware engineers, computer occupations, and 
computer science teachers.
---------------------------------------------------------------------------
    The growing need for consumer, enterprise, and IoT apps has placed 
the app economy on track to add 440,000 new computing jobs to the 
American workforce by 2024. These job opportunities are not just for 
coders and developers. Network managers ensure an app's benefits are 
delivered. IT support ensures customers receive the greatest utility 
from their products. And educators teach the skills current and future 
app economy contributors need. Together, these Americans make the app 
economy what it is today.

        ``Our company began with four developers working around a 
        dining room table in Millbrook, Alabama. In just two years, 
        we've doubled our size and expect to grow our staff to 16 by 
        this summer. Just this spring, we moved into an office in 
        downtown Birmingham to better serve the growing local tech 
        community.''
                                                Chris Sims, Founder
                                             Sigao Studios, Alabama

    Not only does the app ecosystem deliver job opportunities, but it 
also provides a clear path to economic advancement. With average 
salaries upwards of $86,000, the app economy offers the Nation's most 
competitive wages. In fact, developer and computing jobs represent the 
top drivers of new wages in the United States.viii
---------------------------------------------------------------------------
    \viii\ ``Blurbs and Useful Stats.'' Computer Science Education 
Week, 3 Jan. 2018, https://csedweek.org/resource_kit/blurbs.
---------------------------------------------------------------------------
    The app economy drives employment around the country. States like 
Colorado, Virginia, and New Jersey offer the Nation's highest computing 
salaries, and Kentucky, Utah, and Nevada are expected to see the 
greatest job growth from our dynamic app ecosystem.
    Wyoming is laying the groundwork to become an unexpected haven for 
blockchain and cryptocurrency opportunities. Legislation around 
telehealth has created new avenues for the app economy in Vermont. And 
Louisiana's supportive business environment will make it possible to 
grow their computing workforce by 21 percent by 2024. With competitive 
wages and available computing jobs in all corners of the country, our 
Nation's app economy is overflowing with opportunities waiting to be 
met.
    Over the next six years, the app economy will drive job growth in 
all corners of the United States.

------------------------------------------------------------------------
                           State                                Growth
------------------------------------------------------------------------
Mississippi                                                       12.14%
Hawai'i                                                            6.36%
Washington                                                         9.73%
Montana                                                            18.6%
Texas                                                             15.61%
Florida                                                            8.16%
------------------------------------------------------------------------

VI. Securing the Advantage
    Cybercrime costs consumers more than $3 trillion ix 
worldwide. Our projections for the future of the app economy will 
depend on the ability to keep users' data safe. To date, app developers 
and tech companies have made a commitment to uphold privacy and 
security, but risks remain.
---------------------------------------------------------------------------
    \ix\ Morgan, Steve. ``2017 Cybercrime Report.'' Cybersecurity 
Ventures, 2017, https://cybersecurityventures.com/2015-wp/wp-content/
uploads/2017/10/2017-Cybercrime-Report.pdf
---------------------------------------------------------------------------
    Innovations in the app economy are providing new avenues for users 
to interact with their doctors, make financial transactions, manage 
employee contracts, and even secure parking permits. With these new 
opportunities, patients will need secure channels to share health data 
with their doctors and insurance companies. Businesses will want to 
protect proprietary information shared through an enterprise app. And 
consumers will expect the financial information they access through 
their favorite banking app is kept private and secure.
    Strong privacy and security protections are paramount to the app 
economy and will be vital to keep consumers safe from identity theft, 
medical fraud, financial loss, and other crimes. End-to-end encryption 
remains one of the strongest methods to secure data, and developers of 
consumer apps, enterprise software, and IoT devices are increasingly 
building encryption technology into their products. In fact, most 
encryption keys would take hackers billions of years to decode.

        ``Encryption, robust security penetration testing, and cyber-
        hygiene controls are necessary to be a successful contributor 
        to the app economy. As developers, we depend on our customers 
        to drive our business, and they expect us to keep their 
        valuable information safe. Ensuring protection of consumers' 
        data will make or break players in this ecosystem.''
                                        Joe Bonell, Founder and CEO
                                         Alchemy Security, Colorado

    Regulations that weaken data protection, prohibit encryption, or 
require backdoor encryption keys will put consumer information in 
jeopardy and increase the potential for data loss. Without strong data 
privacy protections, the drivers and contributors to the app economy 
risk being overcome by privacy challenges--or worse, a loss of consumer 
trust.
    As the app economy evolves, its ability to protect the privacy and 
security of the data shared throughout the mobile-and cloud-driven 
ecosystem will determine its path forward.
VII. Minding the Gaps
    The United States continues to direct the app economy in meaningful 
ways by its leadership in cloud, computing resources, and advancements 
in machine learning and artificial intelligence. However, the current 
shortage of workers may prevent the United States from continuing in 
its influential role.
    Coding, programming, and software development remain the foundation 
for app economy jobs, but only 40 percent of American K-12 
schools,x and just one in five high schools, teach the 
computer science skills the app economy needs. Of our Nation's science, 
technology, engineering, and math college graduates, only 8 percent 
earn degrees in computer science.xi
---------------------------------------------------------------------------
    \x\ Gallup, Inc. ``Pioneering Results in the Blueprint of U.S. K-12 
Computer Science Education.'' Gallup, 2016, https://csedu.gallup.com/
home.aspx.
    \xi\ This data is derived from the National Center for Education 
Statistics (NCES) by calculating the number of computer science degrees 
awarded among the STEM bachelors degrees earned in 2015. https://
ncsesdata.nsf.gov/webcaspar/OlapBuilder
---------------------------------------------------------------------------
    The United States is home to 503,000 unfilled computing jobs. 
That's eight available jobs for every computer science graduate across 
the country. Computer science graduates have the second highest paying 
college degrees,xii earning upwards of $1.67 million in 
their lifetimes,xiii but we do not have enough graduates to 
meet our country's app economy needs.
---------------------------------------------------------------------------
    \xii\ ``The Top-Paid Majors for the Class of 2018.'' National 
Association of Colleges and Employers, 8 Jan. 2018, www.naceweb.org/
job-market/compensation/the-top-paid-majors-for-the-class-of-2018/.
    \xiii\ ``Blurbs and Useful Stats.'' Computer Science Education 
Week, 3 Jan. 2018, https://csedweek.org/resource_kit/blurbs.
---------------------------------------------------------------------------
    Filling these jobs will be vital to driving the app economy and 
ensuring each application has the proper security and encryption to 
keep app users safe. As a result, app developers and tech companies 
have taken on the added responsibility of innovator and educator. 
Companies around the country, from software developers in steel-driven 
Pennsylvania to coal-heavy Kentucky, tech entrepreneurs in Oklahoma to 
startups in New York, have developed apprenticeship programs to meet 
their workforce needs.
    These programs require a lot of added resources, but they deliver 
success. On average, nine out of 10 apprentices immediately find jobs 
in their field.xiv Because traditional schools are not 
supplying enough computer science graduates to meet the app economy's 
needs, we will need to look to apprenticeships, vocational education 
opportunities, community colleges, and training programs to create a 
skilled workforce that will drive this thriving ecosystem.
---------------------------------------------------------------------------
    \xiv\ ``Tech Companies Try Apprenticeships To Fill The Tech Skills 
Gap.'' Slashdot, 18 Nov. 2017, https://it.slashdot.org/story/17/11/18/
210210/tech-companies-try-apprenticeships-to-fill-the-tech-skills-gap
---------------------------------------------------------------------------
VIII. Making the Connection
    Mobile apps have grown rapidly to provide high-quality content for 
consumer and enterprise use. It is imperative that the infrastructure 
to support the cloud-driven, mobile economy continues to improve. With 
stronger Internet connectivity and faster speeds, the app economy has 
the potential to be worth more--hundreds of billions of dollars more--
by making apps available to Americans in industries across the country.
    We see this happening in two ways. First, we must connect the more 
than 24 million Americans xv who lack access to the 
internet. Specifically, 20 million rural Americans lack Internet access 
because they live in areas where it is not cost effective to provide 
current, wired broadband technology. Deployment of technologies like 
Airband, which utilizes spectrum between existing broadcast television 
channels, would deliver high-speed broadband over greater distance and 
reduce the cost of bringing the app economy to rural communities.
---------------------------------------------------------------------------
    \xv\ ``2018 Broadband Deployment Report.'' Federal Communications 
Commission, 2 Feb. 2018,  https://www.fcc.gov/reports-research/reports/
broadband-progress-reports/2018-broadband-deployment-report
---------------------------------------------------------------------------
    Second, the roll out of 5G technology will provide a paradigm shift 
in the understanding of broadband versus wireless connections in terms 
of throughput and latency. If the proposed roll out of 5G is 
successful, we believe its deployment alone would bring 3 million new 
jobs and $501 billion in economic growth.xvi
---------------------------------------------------------------------------
    \xvi\ ``How 5G Can Help Municipalities Become Vibrant Smart 
Cities.'' Accenture, 2017, www.accenture.com/t20170222T202102__w__/us-
en/_acnmedia/PDF-43/Accenture-5G-Municipalities-Become-Smart-
Cities.pdf.

        ``5G and broadband can deliver entertaining apps, but also 
        crucial access to healthcare. Rural Americans 
        disproportionately experience chronic conditions like diabetes, 
        but only 10 percent of U.S. doctors serve rural communities. 
        Seeing a primary care doctor could require a two-hour drive and 
        visiting a specialist often means an entire day off work. 
        Internet connectivity can build a vital bridge to bring 
        telehealth to rural Americans where and when they need it.''
                                            --Lucienne Ide, Founder
                                                    Rimidi, Georgia

    The potential of the 5G revolution and expanded use of unlicensed 
spectrum is more significant than merely providing access. It will also 
increase Internet speeds, add bandwidth, and lower latency in a way 
that benefits business-to-business interactions and IoT-driven machine-
to-machine communications.
    Once we make this connection, we can bring the app economy to the 
next level. Leadership in 5G deployment could create at least $200 
billion in economic opportunity in the app economy and in industries 
around the country.
IX. Conclusion
    Behind the impressive statistics--the $950 billion value, the 4.7 
million-strong workforce, the $86,000 average salary, and the prospect 
of 440,000 new jobs--are the stories of real Americans who make the 
cloud-driven app economy what it is today and will drive its future 
growth.
    The $46 billion remote patient monitoring industry is supported by 
Massachusetts developers who created a life-saving ulcer-tracking 
device for diabetes patients.
    Apprenticeship programs led by software developers in rural 
Kentucky are doing their part to prepare workers to fill the available 
developer and computing jobs across America.
    A Texas company's IoT device has put forth new solutions to help 
the livestock industry recover some of the $10 billion lost annually 
from animal illness.
    The app economy is more than the numbers--the innovators, 
implementers, and developers give it value. By solving the pervasive 
challenges of broadband connectivity, workforce development, privacy, 
and encryption, American app developers will lead the app economy and 
grow its impact in the years to come.

    Senator Wicker. Thank you very much, Mr. Reed.
    Mr. Koch, you're recognized.

STATEMENT OF ROGER KOCH, CHIEF EXECUTIVE OFFICER, SHIELD GROUP 
                          TECHNOLOGIES

    Mr. Koch. Thank you, Mr. Chairman, Ranking Member Schatz, 
Senator Nelson, and Members of the Committee.
    Thank you for the opportunity to appear before you today 
and to talk briefly with you about how Shield Group 
Technologies views the future of mobile technology.
    While it may not command headlines and attention that other 
issues do at the moment, your work can have a very real, very 
long-term impact on the lives and the futures of the American 
people.
    We are in the midst of a period in our technological 
history when there are profound questions about the impact that 
certain technologies have on our lives. Intrusions on our 
privacy, technology's effect on our children's growth and 
development, and its ability to be used by hostile powers and 
individuals are a few among numerous concerns that Americans 
rightly have.
    But equal to these legitimate concerns is the extent to 
which mobile technology, apps for short, are not being utilized 
to anywhere near their potential to positively impact our daily 
lives.
    While there are excellent apps for banking, shopping, 
booking reservations, and media, the utilization of mobile 
technology has barely scratched the surface in its overall 
ability to positively impact us all.
    The simple truth is that for many Americans, apps are used 
mostly for personal entertainment. If you have any question 
about this, take a look sometime when you are flying home at 
what the person next to you is doing with their mobile device. 
Chances are they are furiously trying to set players or check 
results on their fantasy team or swapping colored candies in 
some type of game.
    Now that's OK. I use apps for entertainment, also, but 
there is so much more potential in mobile technology.
    What we've done at Shield Group Technologies is to develop 
ways for law enforcement and government to better use mobile 
and connected technologies to keep us safer and communicate 
better.
    Our Student Protect app is the most powerful app technology 
available today for students, parents, teachers, and staff to 
provide threat and security tips and information to school 
administrators and law enforcement for its real-time use by law 
enforcement. It's not just a simple tip-forwarding app that 
simply sends an e-mail somewhere.
    It's a powerful technology that provides law enforcement 
and school administrators with information and intelligence 
that allows them to use it quickly and efficiently to prevent 
violence in our schools.
    Information and intelligence before a threat becomes a 
reality is critically important in the prevention of school 
shootings and other acts of violence. With Student Protect, 
students and other users can provide intelligence and 
information that is routed and assessed by multiple law 
enforcement agencies and school officials simultaneously.
    It has powerful GPS functionality that tags where the 
intelligence originates from and it allows school 
administrators and law enforcement to send out security 
information based on a wide variety of parameters, including by 
a specific geographic area.
    This technology has led to the apprehension of multiple 
perpetrators of threats as well as the ability for school 
administrators and law enforcement to intervene with behavioral 
and mental health assistance.
    There's much more about Student Protect that I don't have 
time to go over right now but obviously any information you 
want, we can pass on to you all.
    Our other app technologies include Connect Protect, which 
unites residents directly with law enforcement for two-way geo-
targeted communication, information, and crime reporting, and 
our state-of-the-art Secure Share mobile technology, which 
provides law enforcement with a secure and encrypted means of 
distributing sensitive intelligence to law enforcement officers 
in the field without the use of e-mail, which, when I turn on 
the news every day now, I hear something about how it is not a 
secure means of communicating sensitive information.
    Mr. Chairman, America's ability to use mobile technology is 
accelerating at an amazing pace. The public sector, which is 
the area we operate in, is its fastest-growing sphere. It's 
more than just entertainment. The adoption of mobile 
technologies by law enforcement and Federal, state, and local 
government will allow them to share information and save 
taxpayers money by vastly increasing the efficiency and 
effectiveness of the services delivered.
    I want to end by thanking you, Mr. Chairman, and the 
members of the Committee for this opportunity as well as the 
local government and law enforcement professionals that serve 
Americans every day.
    We are proud to work with these men and women around the 
country and particularly in our and Senator Nelson's home state 
of Florida. There, I especially want to acknowledge Sheriff Ric 
Bradshaw of Palm Beach County. His constant challenges for 
innovative solutions for better law enforcement has been a 
constant source of ideas and challenges that have helped us to 
meet the demands of law enforcement agencies everywhere.
    Thank you again.
    [The prepared statement of Mr. Koch follows:]

      Prepared Statement of Roger Koch, Chief Executive Officer, 
                       Shield Group Technologies
    Mr. Chairman, Ranking Member Schatz, Senator Nelson, and Members of 
the Committee, thank for the opportunity to appear before you today and 
to talk briefly with you about how Shield Group Technologies views the 
future of mobile technology. While it may not command the headlines and 
attention that other issues do at the moment, your work can have a very 
real, very long-term impact on the lives and futures of the American 
people.
    We are in the midst of a period in our technological history when 
there are profound questions about the impact that certain technologies 
have on our lives: Intrusions on our privacy, technology's effect on 
our children's growth and development, and its ability to be used by 
hostile powers and individuals, are a few among numerous concerns that 
Americans rightly have.
    But equal to these legitimate concerns is the extent to which 
mobile technology--apps for short--are not being utilized to anywhere 
near their potential to positively impact our daily lives. While there 
are excellent apps for banking, shopping, booking reservations and 
media,--the utilization of mobile technology has barely scratched the 
surface in its overall ability to positively impact us all. The simple 
truth is, that for many Americans apps are used mostly for personal 
entertainment. If you have any question about this, take a look 
sometime when you are flying home at what the person next to you is 
doing with their mobile device. Chances are good they are furiously 
trying to set players or check results of their fantasy team or 
swapping colored candies in some type of game. Now, that's OK, I use 
apps for entertainment also- but there is so much more potential for 
mobile technology.
    What we've done at Shield Group Technologies is to develop ways for 
law enforcement and government to better use mobile and connected 
technologies to keep us safer and communicate better.
    Our StudentProtect app is the most powerful app technology 
available today for students, parents, teachers and staff to provide 
threat and security tips and information to school administrators and 
law enforcement for its real time use by law enforcement. It is not 
just a simple tip-forwarding app that simply sends an e-mail somewhere. 
It's a powerful technology that provides law enforcement and school 
administrators with information and intelligence that allows them to 
use it quickly and efficiently to prevent violence in our schools. 
Information and intelligence before a threat becomes a reality, is 
critically important in the prevention of school shootings and other 
acts of violence. With StudentProtect students and other users can 
provide intelligence and information that is routed and assessed by 
multiple law enforcement agencies and school officials simultaneously. 
It has powerful GPS functionality that tags where the intelligence 
originates from; and, it also allows school administrators and law 
enforcement to send out security information based on a wide variety of 
parameters including by a specific geo-graphic area. This technology 
has led to the apprehension of multiple perpetrators of threats as well 
as the ability for school administrators and law enforcement to 
intervene with behavioral and mental health assistance.
    There is much more about StudentProtect than I have time for in 
this opening statement, so for those of you that do not have enough 
reading material in your daily lives, we've provided committee staff 
with a PDF of a Power Point presentation for you.
    Our other app technologies include ConnectProtect which unites 
residents directly with law enforcement for 2-way, geo-targeted 
communication, information and crime-reporting; and our state-of-the-
art SecureShare mobile technology, which provides law enforcement with 
a secure and encrypted means of distributing sensitive intelligence to 
law enforcement officers in the field without the use of e-mail--which 
when I turn on the news every day now I hear something about it not a 
safe or secure means of communicating sensitive information.
    Mr. Chairman, America's ability to use mobile technology is 
accelerating at an amazing pace. The public sector, which is the area 
we operate in, is its fastest growing sphere. It's more than just 
entertainment. The adoption of mobile technologies by law enforcement 
and Federal, State and local government can serve to save effectively 
share information and save taxpayers money by vastly increasing the 
efficiency and effectiveness of the services delivered.
    I wanted to end by thanking you, Mr. Chairman, and the members of 
the Committee for this opportunity, as well as the local government and 
law enforcement professionals that serve Americans every day. We are 
proud to work with these men and women around the country, and 
particularly in our and Senator Nelson's home state of Florida. There, 
I especially want to acknowledge Sheriff Ric Bradshaw of Palm Beach 
County. His constant challenges for innovative solutions for better law 
enforcement has been a constant source of ideas and challenges that 
have helped us to meet the demands of law enforcement agencies 
everywhere.
    Thank you, again.

    Senator Wicker. Well, thanks to all four of you for some 
very, very intriguing testimony.
    Let's see. Mr. Reed mentioned annual average salary of 
$86,000, nearly double the national average, in this field of 
app technology, and apparently there's such great demand that 
we're nowhere near filling those slots.
    So perhaps we need to talk about apprenticeships and while 
you're thinking about that, Mr. Reed, let me ask Mr. Forster 
along those lines.
    What is it about your academies that frees you from 
government red tape and allows you to respond more quickly to 
the needs of industry? What do you think about the statistics 
of $86,000 salaries and 440,000 additional jobs? Does it seem 
like he's in the ballpark there?
    Mr. Forster. Oh, yes, sir. I have every confidence that 
those numbers are real.
    In our state, our average starting salaries are in the 
$50,000 to $60,000 range, but they quickly move up into the 
mid-$80s to $100,000 range for more experienced developers.
    What is the key, though, and the thing that eliminates this 
bureaucratic issue, if you will? We must start with private 
industry or industry because we do have a great partner that's 
a public entity, as well, but we must start with the employer. 
They must be engaged with us. They must set the curriculum.
    We don't want to be teaching what the technologies were 10 
years ago or even five or even 2 years ago. This industry 
reinvents itself in terms of programming technologies, 
development technologies, continuously. So only through a very 
tight relationship with industry are we able to quickly respond 
to those needs.
    So they help to set the curriculum. They provide guest 
instructors. We go out and visit them onsite. Our students get 
to see what it's like to be in the work place. Those are the 
kind of things that make us different. Those are our 
distinguishing characteristics. It starts with that.
    Senator Wicker. Mr. Reed, what do you have to add to that?
    Mr. Reed. Well, I want to echo everything he pretty much 
said, but I think there's an important thing for the state of 
Mississippi that's worthwhile noting.
    Right now, you have 27.8 percent of the population without 
broadband, but more importantly, 50.2 percent of the population 
is in rural areas.
    Senator Wicker. Where do you get those statistics?
    Mr. Reed. This is based off of a study we did with the 
FCC's information as well as others within the state, and 
here's why that concerns me.
    Right now, he's training great Mississippians to be great 
coders. We recently had over 50 CEOs in town and we did a poll 
of the room and I asked how many of you employ people who don't 
work at your home location or even in your state. I had 100 
percent of my 50 CEOs said they're willing to work with people 
and do right now hire people who aren't in their state.
    The problem we have with a state like Mississippi, when he 
trains a great coder, if they go home and they don't have 
broadband, then how are my people going to hire them, and so 
that's why we look at solutions like TV White Spaces and 5G 
rollout because, frankly, I'll hire your people if they can do 
the job and he's trained them well. They've just got to have 
broadband.
    Senator Wicker. Where's TV White Space working, sir?
    Mr. Reed. There are several pilot projects around the 
country right now that you're seeing in place and what you're 
seeing right now is its primary use is in rural.
    As you know and this Committee knows better than anyone, 
the difficulty with last mile, if you've got a rural population 
that's nine miles from the nearest trunk, it's incredibly 
expensive to pull a line down for five or six families, but if 
we can use TV White Spaces, those are the gaps in between, to 
try to get broadband connectivity to rural populations, then we 
can change their future in terms of their ability to live where 
they're from and still compete in the job market in a global 
environment.
    Senator Wicker. Which companies are actually delivering or, 
don't name the names of the companies, but what type of entity 
actually takes this TV White Space and actually makes an 
agreement with the household and gets it there?
    Mr. Reed. That's exactly right. So the TV White Spaces is 
being pioneered by a company based out of Senator Cantwell's 
home state. They have been on the front edge of this and what 
they've been doing is partnering with local ISPs and WSPs and 
others in order for them to----
    Senator Wicker. So the local ISP is a part of this?
    Mr. Reed. That is exactly right. The TV White Spaces is 
essentially like your Wi-Fi, but how do we get Wi-Fi to go a 
lot further than we can on the current 2.4 giga hertz? We need 
better spectrum.
    Senator Wicker. Now back to the statistic you gave about 
Mississippi. I assume you have similar statistics about all of 
the other states represented around the dais.
    Mr. Reed. Why, yes, Senator, for every member of your 
committee.
    Senator Wicker. And is that in a form that you could enter 
into the record at this point?
    Mr. Reed. Absolutely, Senator.
    Senator Wicker. OK. Well, then without objection, that will 
be entered into the record at this point.
    [The information referred to follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    Senator Wicker. You know we're having a debate, Mr. Reed, 
with the FCC about the reliability of their maps on this very 
topic.
    Are you telling me you've done a study, your group has done 
a study that is different and uses different information?
    Mr. Reed. We've done some combinations of studies but you 
point out to one of the major problems.
    At the root of almost all of these trees, it's still the 
FCC's data and we would love to have more accurate data. In 
fact, we had meetings with all the commissioners on the forum 
from both parties to talk about getting us better data so that 
we can make a better analysis of exactly the question you're 
raising.
    So right now, we find almost everyone's source of data, if 
you dig deep enough, it all goes back to the FCC.
    Senator Wicker. Pardon me, my fellow subcommittee members. 
How do we get better data, Mr. Reed?
    You have suggestions for us, Dr. Oh?
    Dr. Oh. I can pipe in. Yes, so we use FCC data, as well, 
and what we find is it's often delayed by two or three years, 
2014-2016 data.
    I'm not part of that conversation about getting better 
data, but I'd be interested to know how expensive it is to 
update those datasets faster and whether money allocated for 
other things can be put toward maps.
    Senator Wicker. Well,----
    Dr. Oh. So there are a lot of other things that the FCC is 
spending on and that could--just prioritizing maps could be one 
way.
    Senator Wicker. Well, I'll simply add, going back to Mr. 
Reed and then I'm way over my time, but nobody's really happy 
with these maps and you----
    Mr. Reed. That's correct.
    Senator Wicker.--seem to suggest that there is a better set 
of data.
    Mr. Reed. There are, but given our time constraints right 
now, I'm happy to sit down with your committee staff and talk 
about the ways that some of our data scientists as well as 
folks that you know, Dr. Oh, on ways that we can pull the data 
from existing sources as well as, frankly, the fact that most 
Americans are carrying a smart phone in their pocket, how do we 
use and pull the information of access on the wireless side 
right from the phones themselves.
    Senator Wicker. Senator Schatz.
    Senator Schatz. Thank you, Mr. Chairman.
    Just to follow up on the maps question, this is something 
that there's bipartisan concern about in terms of the FCC's 
initial cut at the maps, and it seems to me that the basic 
problem is that they're switching the onus of responsibility on 
to states and individual communities to disprove that their 
maps are incorrect when in fact everyone knows that their maps 
are not accurate, and I think we're going to have to shift that 
conversation.
    I know Chairman Pai has said, look, you've got data points, 
we'll be happy to assimilate it, as if this is sort of an open 
docket question, but, listen, what we want is the most accurate 
map and if an individual state or community is unable for 
resource reasons to marshal the data to disprove their maps, 
that shouldn't penalize them.
    This is literally the FCC's job to get this right and 
they're getting it wrong and even though the Chairman and I, 
this Chairman and I are disagreeing on Net Neutrality as it 
relates to the FCC, we could not agree more strongly on this 
issue.
    You know, it seems to me when it comes to the app economy, 
you have the kind of infrastructure piece, you've got a 
workforce problem, and then you've got everything related to 
connectivity, from broadband, Wi-Fi, you know, potential 
solutions, TV White Space, and 5G, and everything else.
    So we kind of know that and that's relatively fleshed out, 
although I think it's always important to get the technical 
pieces right.
    The question I want to ask is is the bigger picture 
question. We have the best tech in history and although we're 
talking in this instance about telehealth and some other really 
exciting technology that can transform society in a positive 
way, I would like to be reassured from you, and I'll start on 
my right and go down, that we are not simply providing 
infrastructure to allow people to purchase what they want, a 
good or a service, just a little faster because it seems to me 
that a lot of the tech money is in that space, and I think it's 
not a coincidence that 80 percent to 85 percent of VCs are 
white males and the problems that they have are a different 
problem set than the rest of society and so when they are think 
about what is the killer app, they often think about something 
that is related to their own personal convenience and that's 
where the capital flows.
    So can you reassure me that we're solving big problems with 
this big tech, and I'll start with Mr. Koch.
    Mr. Koch. Yes, thank you. I agree with you that there is 
bigger problems with this. We do have a connectivity problem.
    I mean, when you can go to places and people cannot use 
their smart phones, we have huge problems. So you see it every 
day. I mean, my partner just yesterday had to buy a new phone 
because he was in a place in Virginia that he could not use his 
phone. He had to buy a different phone from a different 
service.
    Senator Schatz. Right. But, listen, we have these 
conversations about connectivity every time we have a Commerce 
Subcommittee hearing.
    My question is what big problem are we going to solve, not 
just that I'd like a slurpee now and how quickly and how 
cheaply can I have one?
    So tell me, Mr. Reed, since you're the App Association 
person, what big problem are we going to solve? We're kind of 
short on time. So I'd like to move along.
    Mr. Reed. Well, it's funny that you bring that up because 
you did talk about telehealth and you have the bill that would 
make one of the largest changes possible.
    Last year, CMS spent $1 trillion reimbursing for 
healthcare. Of that, hopefully everyone in the room here knows, 
do you know how much they reimbursed for tele-medicine? $14 
million. That's an embarrassment.
    So when you talk about the way that we can make changes, 
I'll give you the biggest life-changing change you can have.
    If you see a doctor at the top of his game, at the top of 
her game, more importantly since more physicians are now women, 
she's likely to have seen about 29,000 patients by the time she 
sees you, but a patient with your condition, your co-morbidity, 
your history, your genotype, you're lucky if she's seen 500 
people. She's going to make the determination about how to 
treat you based on what she learned in school, what she took in 
some continuing education classes, and 500 data points.
    What we're looking to do through mobile applications and 
access to data is the ability to arm that physician with 
augmented intelligence, so when they walk in to treat you, they 
know you respond better to this medication. This gentleman 
responds better to that. She responds better to treatment along 
these lines.
    That's about the most important problem I think we can 
solve and that's saving lives that are there to be saved and so 
I'd say we are able to make that difference.
    Senator Schatz. Dr. Oh with a final comment.
    Dr. Oh. For AI, so one of the hopes of AI is that we could 
have robots that can do complex tasks. So something I didn't 
put in my comment, if we have robots that can fold laundry, 
that's millions of hours of manual labor done mostly by women 
that can be used for something else and folding laundry for a 
robot is a complex task. It's not easy and that's what AI 
scientists are doing.
    Robotics are going to be able to do those manual tasks that 
people don't have to do anymore. So is AI Jetsons or 
Terminators? There are many, many things that if we could get a 
robot to do it, it would save a lot of time.
    Senator Schatz. My final comment before going on to the 
next member is that it is not obvious to me that every time you 
can have something done by a computer or by a robot that it is 
an non-alloyed good. I think there are some instances in which, 
especially as it relates to safety, that it is a clear moral 
choice, but it is not obvious to me that the purpose of the app 
economy is to eviscerate employment along the way and create 
some friction-less future where very few people are paid to do 
anything.
    Thank you.
    Mr. Forster. May I add a quick comment, too, please?
    Senator Schatz. With the permission of the Chairman, and 
I'm sure he will say so because he's from your state.
    Mr. Forster. If you visit our classes, you'll see that 
they're 50 percent women, 80 percent minority. Three of our 
four instructors are minority. Several of those--so we don't 
exactly have white male-dominated academies, and several of 
those students have already expressed that they've got a stated 
interest in building their own apps and being entrepreneurial 
in that standpoint.
    So it's just another aspect of bringing that portion of our 
citizenry and our young people into really, really productive 
jobs, and those demographics, I think, are compelling.
    Senator Schatz. Thank you.
    Senator Wicker. I might note that Senator Schatz's Connect 
For Health Act has four original co-sponsors, including 
myself,----
    Senator Schatz. That's correct.
    Senator Wicker.--Cardin, Thune, and Warner, and he's to be 
congratulated for now having 23 co-sponsors.
    Senator Cantwell.

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman, and thank you to 
the witnesses.
    Mr. Forster, thank you for mentioning code.org and for your 
work in your home state.
    I've always said we need to be more aggressive about our 
coding education. Unfortunately, the Federal role is so much 
more minimal than the states' role in this aspect, but I always 
refer to my own experience of having to take typing and Latin 
and that having a mandatory language requirement that today our 
mandatory language requirement should be one year of coding in 
our schools and that would give everybody access to your point 
about the diversity of never being able to predict what student 
is going to be really good at coding.
    So it's something that everybody should be exposed to. So I 
invite you to come to Seattle and visit code.org or visit any 
of our other institutions on this subject because we're working 
very hard at it.
    Mr. Reed, I wanted to talk to you about the app economy 
since you represent the association and your comments about 
efficiency and constant mobile connectivity.
    I thought you hit it right on the head about this issue, 
which is exactly what the app economy needs and what the 
businesses who rely on the app economy need. So whether 
that's--I can't tell you the list of farming applications I 
have seen that are everything from managing livestock to 
predictability about weather to all sorts of things. It's a 
very science-based sector that needs that kind of connectivity.
    I see that you are for Net Neutrality or for an open 
Internet and codifying that information so that we can have 
that.
    What does it mean if we don't have that kind of rule of the 
road for efficiency and connectivity of those devices and you 
don't have to talk just about the farm economy but writ large, 
what are people looking for?
    Mr. Reed. I think that's why I started the comment about 
the fact that it's worth remembering that we've connected 3.4 
billion people with the world's collected information, and I 
think what you're getting to is, is that people seek knowledge 
about what they want to do, if it's farming, if it's anything 
else.
    I think to Senator Schatz's point about, well, it shouldn't 
all be fun and games, but what we see is continually people 
chafing and saying I want to do more. I want to do something 
different. I want to reach a different group of people than I 
can in my hometown.
    So the door that's opened is amazing. It's knowledge. It's 
access. It's interactivity. The thing that you point out is 
without the Internet access, without certainty about the rules 
of the road and, more importantly, how do we get to those rural 
communities--your state's fascinating. We've got one side that 
everybody's connected and the other side still has blank spots 
in it.
    We've got to figure out how to make sure that the people on 
all parts of the state have that access to connectivity and 
that the rules of the road are well established and that there 
are codified rules for how we get there.
    So, again, I think you're right on point and figuring out 
how the Senate codifies that is an important next step.
    Senator Cantwell. Well, I think having just visited Spokane 
and seen how a startup incubator is saying we use these apps 
every day to manage our business and to manage it on behalf of 
our customers and if somebody starts artificially slowing that 
down today, then I'm going to be less efficient in delivering 
services and so that, I think, is the concern for us.
    The fact that in Vancouver, Washington, a cable company is 
saying, well, I'll give you a higher speed broadband today but 
only if you take our expensive bundle and so they will give you 
less expensive higher speed but only if you take our expensive 
bundle.
    So I think what consumers are worried about is that the app 
economy is going to get hijacked and that they're going to be 
so dependent as small businesses on these applications that if 
somehow they're artificially slowed down or throttled that 
that's going to be a problem for them.
    So I guess I'm with our colleague from Hawaii. I'm very 
much in support of clarifying this now, that we're protected, 
but I just I think to your point, whether you're in Seattle, as 
you said, one of the most connected places in the country, or 
on the other side of the state, you still want the same thing. 
You want the efficiency that comes from all these applications 
and if that is information in the cloud, you don't want to be 
slowed down from getting access to it because otherwise you're 
not going to be running an efficient business, and isn't that 
what so many of the apps are based on?
    Mr. Reed. We are certainly based on greater efficiency, but 
as Senator Schatz said, we're not only about efficiency. We're 
about solving problems.
    But I take your points to heart and it's something that our 
community obviously is very aware of and engaged on.
    Senator Cantwell. Thank you. Well, I hope our colleagues 
will take time to really deeply understand how much this Act 
says. It's about small businesses starting something new and 
being competitive and that's why we need to have Net 
Neutrality.
    Thank you.
    Senator Wicker. Thank you, Senator Cantwell.
    Senator Cortez Masto is next.

           STATEMENT OF HON. CATHERINE CORTEZ MASTO, 
                    U.S. SENATOR FROM NEVADA

    Senator Cortez Masto. Thank you, Mr. Chair.
    Good afternoon. Welcome. So I want to touch on an area that 
I'm really interested in coming from Nevada and it kind of 
touches on what Senator Schatz is saying. We should be 
developing these apps for more than just ordering a slurpee and 
what is happening in Nevada right now is very exciting.
    I call it the innovation state because we are actually 
utilizing the smart technology and transportation apps to 
seamlessly really integrate the user's experience in the 
community and I think that addresses safety, right, efficiency, 
and accessibility.
    What we've seen in Northern Nevada is the app token transit 
which our Regional Transportation Commission put together in 
Marshall County. What we've seen in Southern Nevada, which is 
our Southern Nevada Regional Transportation Commission put 
together, is the Ride RTC App, and there's so much more and so 
much potential.
    So my question, I'm going to open it up to the panel, and I 
know, Mr. Reed, you've talked a little bit about this, is can 
you talk a little bit more about how you envision these apps, 
particularly when it comes to the transfer of the intersection 
between smart technology and smart communities, how you 
envision or how these will be transforming the future in our 
communities?
    Mr. Reed. Well, I think it's a great point you've raised 
because really you used the keyword there ``community,'' and if 
you think about what makes a community, it's about the bonds 
that you have with people either of common interests or 
locality, and functionally the way that we go about our lives, 
where we go to church, what we do, where we to go eat, and what 
you're looking at the way that people use mobile apps to 
connect is exactly that. It's about how they build their 
community, the web of interaction they have with other people.
    What you're seeing right now with states and localities is 
how do we have those people who've been outside the community, 
who don't have access to transportation, who have a hard time 
with emergency care? One of the members that we have has built 
an AI-based chatbot app to deal with language barriers for 
emergency personnel.
    You don't use the community health center. You don't use 
the community emergency room if you're worried that they won't 
even understand you at the front door.
    So what we're looking at is how do you take the brilliance 
of applications and the back-end power of an application and 
turn it into something small in the right way and that is small 
meaning that it makes it part of your community and so if we 
can help with language, with access to facilities, with 
transportation, then you've gained what you want, which is an 
improved community.
    Senator Cortez Masto. And that's it, right? It's about the 
individuals living in that community and impact on them.
    Mr. Reed. That's correct.
    Senator Cortez Masto. Yes, and it's the Internet of things 
and it's bringing that connectivity and utilizing it in these 
smart--you want to call them smart communities, whatever, 
whatever you want to call it.
    Mr. Reed. Yes.
    Senator Cortez Masto. It's that interaction.
    Mr. Reed. So we've had the pleasure of working with the 
National League of Cities on some of the smart cities issues 
and I recently did a panel with them on this exact topic and 
the real lesson to learn that I found from the mayors and 
others as part of the National League of Cities was that idea 
of community-building blocks and it was very simple.
    What I heard was transportation. How do you get to and from 
your house and to and from work and to and from your place of 
worship or other activities? How do you engage with the 
services that the city needs to provide? And then, frankly, how 
do you enjoy yourself? I thought one of the most profound 
things that I heard from the leaders at National League of 
Cities is a smart city is also a fun city. It's not boring. 
It's not just gray buildings.
    It has got to be a city that gives you something vibrant to 
interact with and so I think that you're right on point and the 
question is, how do we use IoT, unconnected cities, and how do 
cities become enablers of a better community?
    Senator Cortez Masto. That's right. And so part of what I 
also see happening as I work with our Regional Transportation 
Commission on transportation in Nevada and across the country 
in this new technology and the internet of things, as we build 
this infrastructure, we better be building the guard rails for 
privacy and security, cyber security.
    It's the easiest time for us to incorporate those into this 
new infrastructure.
    So, Mr. Forster, let me ask you this. We've talked about 
coding and the need to ensure that we are teaching the next 
generation, younger generation in the schools coding, but how 
do we get the talent on the security side? How do we ensure 
we're incorporating the security piece of that?
    That has been my biggest challenge, particularly for 
somebody who's a former Attorney General of Nevada and focused 
on that cyber security piece, and let me just open it to the 
panel. This has been part of our discussion, as well.
    Mr. Forster. Well, you put your finger on what is clearly 
going to be an increasingly important part of, let's just say, 
the development community's responsibilities and that we are 
working right now with Dr. Mayfield, who I mentioned, in the 
community colleges to perhaps co-partner with them to put in a 
cyber curriculum, if you will, that might be a next level of 
coursework for our people or to provide it more generally to 
our existing IT professionals to get us all more aware, more 
capable, what have you.
    It's certainly like all the other techniques and 
technologies that we need to use. It's going to have to be 
developed. It's going to have to be given a lot of emphasis and 
investment because it's ultimately an Achilles heel.
    Mr. Koch. And I would agree with that, also, and what we 
see constantly is there are older technologies that just don't 
talk to each other. People are still using the things that were 
written 15-20 years ago that they now say, OK, we want to share 
this information between--if we're talking about law 
enforcement and local government, they're trying to talk to 
each other and share information. Well, they can't right now 
because their systems don't talk to each other.
    So we're having to write code to be able to have those 
systems be able to be integrated and get one database so you 
can actually have de-confliction and be able to share 
information and be able to cross-reference things.
    Mr. Reed. We're short 270,000 jobs in the cyber security 
area. So anything that you can do to help make more Nevadans 
potential people that I can hire, I'm looking forward to that.
    Senator Cortez Masto. Thank you.
    Senator Wicker. Senator Blumenthal.

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you, Mr. Chairman.
    I want to talk about privacy. Mr. Reed, your organization 
stated after the FTC's enforcement action four years ago, 
``When the punishment rarely changes and never seems to fit the 
offense, the likeliest outcome is that emerging tech companies 
will approach FTC enforcement as nothing more than the cost of 
doing business.''
    You were commenting on the penalties against Snapchat over 
security abuses as nothing more than the cost of doing 
business. Apparently the same was true of Facebook, as we now 
learn from the recent revelations about Cambridge Analytica.
    Aren't there models of privacy rules or enforcement that 
Congress should impose at this point? Haven't we learned our 
lesson, and shouldn't we begin in fact with the new European 
rules, the General Data Protection Regulation, that everybody 
in Europe is now going to have to follow? Why should Americans 
be guaranteed less privacy than Europeans?
    Mr. Reed. Well, a couple of quick things. I think that that 
comment from 4 years ago, boy, it made me sound smart because 
it's still true today.
    I think one of the things that Congress can do, this 
committee in particular, the Full Committee in general, I think 
more pressure needs to be put on the FTC to do a better job.
    I think that we now are about to have a full slate of FTC 
commissioners. The group over there needs to look at 
enforcement from two lenses. One, which is how do you fix a 
problem, and, two, how do you use the bully pulpit to make a 
difference?
    And then on the GDPR question, the problem that we 
currently have with GDPR is we don't know which GDPR it is. 
Less than 4 weeks ago, we had a series of letters come out of 
the Article 29 Working Party that radically changed most 
interpretations of GDPR.
    So on GDPR writ large, I think that there's still a lot to 
be seen. What does it mean? How do we implement it? My members 
are in fact taking it seriously. We have a whole series of 
blogs on how do small businesses comply with GDPR.
    Because you may have missed my earlier testimony, what's 
worth noting is every single one of my members, the one-man 
shops to the largest, they're part of the global economy and 
they have EU citizens.
    So we are taking GDPR seriously. Unfortunately, with 27 
nations, we're not quite sure what it means in all places yet.
    Senator Blumenthal. Well, we may not be sure what it means 
in all places, but we know about the general principles. 
Minimizing data, providing for consent, enabling transparency, 
that is, consumers should know what data has been collected.
    There are some basic principles here that the FTC is 
nowhere near adopting, correct?
    Mr. Reed. So it's great that it's coming from you with your 
legal background.
    One of the problems we have are the basic principles and 
how we want to communicate them to our customers and our users 
and then the legal requirements that avoid liability, which you 
brought up earlier.
    So how do we--for example, on machine learning, data 
minimization is great in concept and is something that we help 
to build and something we're really proud of. The Know What's 
Inside Program with 500+ developers with thousands of apps for 
kids, all of which comply with COPPA, but one of the problems 
when we move into machine learning is, OK, how do I do data 
minimization but also provide tools for healthcare?
    On the point about transparency, that's great, but I spent 
a year working with NTIA and others to try to develop the short 
form privacy notice. When we field tested that with users, they 
wanted something very different.
    So it's a work in progress. The best results I've seen so 
far were what we saw out of Apple, Microsoft, and eventually 
Google on what we call Just In Time Notification. Meet the 
customer where they are, tell them how the data is being used, 
when it's being grabbed or taken, and then tell them how you're 
going to use it later, and then, finally, provide another 
interface, if they want to say, hey, I want that back.
    But all the points you raise and the key principles you're 
outlining are important. How we get there and deal with the 
liability that you raised on the beginning is the part that 
we're still working on.
    Senator Blumenthal. I know that it's a complex area, but my 
feeling is that the absence of some line in the sand, some 
bright lines, even though in practice there may have to be 
complexity in all the subheadings of those principles as 
applied to different apps and so forth, that that absence will 
mean nothing is done, and 5 years from now we'll be having the 
same conversation and I just fear that your prediction that the 
punishment really changing and never fitting the offense, 
meaning that it's just the cost of doing business, will mean 
that these app developers will just keep pushing the envelope 
against privacy interests.
    So my time has expired. I'm sorry to end on a pessimistic 
note.
    Thank you, Mr. Chairman.
    Senator Wicker. Thank you, Senator Blumenthal.
    I need to apologize to Senator Hassan. She should have been 
recognized before Senator Blumenthal and----
    Senator Blumenthal. You can blame it on me, Mr. Chairman.
    Senator Wicker. OK. And so Senator Hassan is now 
recognized.

               STATEMENT OF HON. MAGGIE HASSAN, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Hassan. Thank you, Chairman Wicker, and Ranking 
Member Schatz, and I am having an afternoon where I would like 
to have roller skates. So sitting still for a couple of minutes 
was a good thing.
    To all of the panelists, thank you so much for being here. 
It's excellent to hear from all of you about what the future 
holds for the mobile economy.
    From jobs to new efficiencies to medical uses, our mobile 
capabilities really do hold great promise and that's why I 
worked with Senator Gardner and we are working with others. We 
introduced the AIRWAVES Act legislation that creates a pipeline 
for the valuable limited resource the mobile economy depends 
on, spectrum, and, Dr. Oh, you mentioned it, I think, just 
before I left to go to my other hearing.
    The AIRWAVES Act will make major investments in rural 
broadband, promote innovation, and incentivize ongoing 
investment in this space. The AIRWAVES Act will also help 
ensure that the United States is prepared to engage in the 
global race to 5G.
    So to each of you just briefly, do you agree that 
additional spectrum is necessary to promote the mobile economy 
of the future and, if you do, do you agree that the steps like 
those outlined in the AIRWAVES Act are necessary for the mobile 
economy to thrive and for us to remain a leader in the global 
5G?
    Dr. Oh. Yes, absolutely. I think Congress is one of the 
only bodies that can actually push Federal spectrum out to the 
private sector and I think every legislative act that does so 
is really good for the economy and 20 years from now, the app 
economy is going to be devices and internet of things and so 
any way that you can release spectrum now with a 10-year time-
frame is a good thing.
    Senator Hassan. Thank you. Anyone else want to comment? I'm 
getting thumbs up. Well, thank you for that answer.
    Another reason I am glad to be working with Senator Gardner 
on the AIRWAVES Act is that we developed a mechanism within the 
Act to really focus on rural economies and communities.
    New Hampshire has significant rural areas that lack the 
kind of connectivity that we take for granted in urban markets 
and I expect that that's true in some of the other states 
represented at this table, as well.
    The AIRWAVES Act would set aside 10 percent of proceeds 
from the auction it requires to deploy wireless in underserved 
areas. This won't be immediate but it is a real down payment on 
the mobile future of America's rural consumers. It could mean 
billions of dollars for rural deployment, which is serious 
money even in Washington, D.C.
    Do you have thoughts on what other steps we might take to 
bring the mobile economy to rural areas in New Hampshire and 
throughout the country, and again anybody who wants to answer?
    Mr. Reed. I'll end up passing this to Mr. Forster quickly, 
but I'm from an even larger state of Alaska. So we know about 
the distance that----
    Senator Hassan. Right.
    Mr. Reed.--ends up being, and I'll tell you from your 
state, one of the areas earlier I discussed was the need to 
look at how to expand TV White Spaces to make it possible to do 
broadband for rural communities.
    I think that the area that's really important to hit on 
that is empowering rural communities with broadband isn't 
merely about giving them something to look at or play with. It 
empowers them to stay there and get a job and in Mr. Forster's 
case, they're training people in rural areas that then my 
members can then hire and they don't have to leave Mississippi 
or your great state to work for my companies.
    So that's exactly right. Empowering rural broadband is not 
something to make people happy. It's to make people employed.
    Senator Hassan. Thank you. Mr. Forster, do you have 
anything to add?
    Mr. Forster. You know, in the near term, we're highly 
focused on employment opportunities that exist with traditional 
employers who are hiring, but I can tell you that we must 
provide this capability broadly across states like yours and 
mine because so many of these people will be in areas that are 
not serviced well otherwise and they can't realize the 
potential of what they might wish to do.
    I could see a time when if we are doing a good enough job 
we not only meet Mississippi's requirements but perhaps we're 
providing resources to other states. Well, as soon as we're in 
that position, guess what? We're limited unless we can provide 
the very, very high broadband access that they're going to need 
to be working in Austin but living in Mississippi.
    Senator Hassan. Right. Well, thank you. I know others have 
mentioned this, but I just wanted to touch on the whole issue 
of our mapping.
    The FCC, as you know, is currently working to implement a 
program called Mobility Fund Phase 2, which would provide 
qualifying communities with resources to build out our mobile 
networks.
    Unfortunately, the FCC's Map of Eligible Areas is 
inaccurate and leaves rural communities in my state, in Kansas, 
in Senator Wicker's state of Mississippi, and elsewhere without 
much recourse.
    Senators Moran, Wicker and I are working to get these maps 
updated. However, in the meantime, what additional advice do 
you all have for rural communities that hope to keep pace with 
innovation and what more can we do here at the Federal 
Government, states, localities, and the private sector to 
assist our rural communities?
    Dr. Oh. I'd just like to note that the Universal Service 
Fund, the Mobility Fund, and that portion of High Cost Fund is 
$4 billion every year. So what this group can do is take a 
closer look at where's the money going? Are we getting the best 
bang for our buck? It really is a constant stream of money.
    There was an additional $500 million for rural broadband 
recently. Where's the money going? So I think more studies and 
just more inquiries to the FCC, status updates, and studies.
    Senator Hassan. Well, thank you, and I see I'm overtime.
    Thank you, Mr. Chair.
    Senator Wicker. Thank you, Senator Hassan.
    Senator Markey.

               STATEMENT OF HON. EDWARD MARKEY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Markey. Thank you, Mr. Chairman, very much.
    I love hearings on mobile technologies. Back in--
unbelievably, back in the early 1980s, the Chairman of AT&T was 
asked how many people will have a wireless device that they can 
carry around by the year 2000 and the Chairman of AT&T 
testifying before Congress said one million people in America 
will be carrying around a wireless device and we had given them 
the spectrum for free and that was their vision, AT&T, so that 
wasn't good, and we had given another company all their 
spectrum for free. So I felt a little discouraged at that 
vision of AT&T.
    So in 1993, I was able to move over 200 megahertz of 
spectrum for the third, fourth, fifth, sixth, seventh licenses 
but not allow the first two companies to bid because they were 
charging 50 cents a minute and the phone was the size of a 
brick, you know.
    You saw it in Gordon Gecko and Wall Street and so by 1995-
96, everyone had one of these phones in their pocket, flip 
phone, another 10 cents a minute. It was digital, not analog, 
which is all AT&T could figure out up until 1993.
    But then 10 years later, along comes Steve Jobs and we're 
moving this way. So we just keep moving and moving, you know, 
in the right direction, but, you know, one of the key 
ingredients is going to be having Net Neutrality on the books 
for wireless devices, as well, because everything is moving 
over to wireless and we know the history and the history is not 
good. OK.
    It's a rich long history that informs everything that we're 
doing here and Net Neutrality is something that, by necessity, 
has to be on the books. In 2005, a North Carolina-based 
provider named Madison River Communication blocked the online 
voice service of Vonage to favor their own service.
    In 2007, AP found that Comcast was blocking or severely 
slowing down BitTorrent, a website that offered consumers to 
share video, music, video game files, but Comcast wasn't happy 
with that.
    2007 and 2009, AT&T forced Apple to block Skype and offer 
other competing VoIP, voice over Internet protocol services. So 
that they would just use their power network controllers to 
push people, you know, toward their own services and so the 
long rich history is that the innovation comes from the 
competitors but when you're in control of the network, your 
innovation is really in how do you block, how do you stop, how 
do you push around those who are seeking to innovate in the 
space, and it just went on and on year after year.
    I can just go through all of the different examples of why 
Net Neutrality is needed. So as we move deeper and deeper into 
this wireless world, can we just go down the line and just ask 
each of you? Did you support the Obama-era Net Neutrality rules 
when they were put on the books? Did you support that, Mr. 
Forster?
    Mr. Forster. I'm probably not a really good source for 
comment there.
    Senator Markey. If you don't have a view, you don't have a 
view on it?
    Mr. Forster. I have a personal view.
    Senator Markey. What's your personal view?
    Mr. Forster. The Internet should be as free and open as it 
can be and it's going to drive continued growth of our 
economies as a result of that.
    Senator Markey. Dr. Oh.
    Dr. Oh. My view is that Title 1 was the regime for the last 
10-12 years and so I would say Title 1.
    Senator Markey. OK. Mr. Reed.
    Mr. Reed. We support the four principles of Net Neutrality 
and are looking forward to having a solution that holds up over 
the length of time.
    Senator Markey. So you would not put the existing rules 
back on the books, is that what you're saying, if you had your 
druthers?
    Mr. Reed. We don't have a position on which versions of the 
rules of the books that go on with more than 5,000 members.
    Senator Markey. I just wondered if you wanted a stronger 
version. That's the version we're going to vote on tomorrow, 
the strongest version.
    Mr. Koch.
    Mr. Koch. It's Mr. Koch, but us being a small company, we, 
of course, want equal representation and we want to have the 
same speed and access that everybody else, including the large 
and the small companies.
    Senator Markey. Yes. Thank you. And as you know, Dr. Oh, 
the courts struck down the rules when they were in Title 1 and 
the courts instructed the FCC to use Title 2. So I know what 
your preference is, but, you know, the courts actually struck 
them down when they moved in that direction.
    So this is a big historic vote that we're going to have 
tomorrow and, again, in the wireless world, it's going to be 
absolutely imperative that you can't be discriminated against, 
you can't be blocked, you can't be, you know, told what you can 
do and can't do because this is like oxygen, you know, to young 
people, but to people who aren't so young, as well. It's now an 
indispensable part of living in the 21st Century.
    I think if we want to preach openness around the rest of 
the world, that we shouldn't be trying to teach temperance from 
a bar stool. We should stand up for it ourselves and that's why 
this vote tomorrow is historic, the most important vote we're 
going to have, you know, on keeping the Internet as open and 
free as it could be.
    Thank you, Mr. Chairman.
    Senator Wicker. Thank you, Senator Markey.
    I'm not sure you got the answers you were hoping for, but 
thank you for the questions.
    Senator Udall.

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you, Chairman Wicker.
    All of you've pointed out that the app economy is an 
innovative part of the economy and has revolutionized how we 
navigate our lives and we heard Senator Markey talk a little 
bit about that history and overview.
    However, these innovations raise questions about children 
growing up in a digital world. As a result, parents are being 
forced to make difficult choices between their children's 
privacy and allowing their kids to engage in an increasingly 
online world.
    I, along with my colleagues, Senator Hassan and Senator 
Cortez Masto, have written to YouTube about YouTube Kids app 
directing children to conspiracy theory videos and about the 
need to respect the privacy of children and I also plan on 
contacting other major app developers and platforms as part of 
the effort to ensure that children's privacy is protected.
    Mr. Reed, last month the Washington Post reported on a 
study by the International Computer Science Institute at the 
University of California at Berkeley finding that thousands of 
children's apps on Google Play Store may be violating the 
Children's Online Privacy Protection Act.
    The article identified popular apps, such as Disney's 
``Where's My Water'' and the ``Game Loft's Minion Rush''.
    What does your association believe that the Federal Trade 
Commission should and can do to help prevent violations of 
COPPA?
    Mr. Reed. Well, first of all, it has been one of my most 
interesting exercises over the more than 10 years, 15 years 
I've been working on this to try to figure out the breadth and 
scope of COPPA.
    I actually testified before Senator Markey when he was 
Congressman Markey on COPPA and one of the things that's been 
fascinating about the problem is, is that we have to figure out 
how to meet parents where they are.
    When it comes to developers abiding by COPPA, that's the 
law and they need to do it. We built a network called the Know 
What's Inside Program with more than 500--it started out, it 
was called ``Moms With Apps'' but then dads were involved, as 
well, and it became the Know What's Inside Program, 500 
developers all putting apps out that were fully COPPA-
compliant.
    But here was the interesting part that we ran into. The 
parents found the friction difficult and the parents were the 
ones that we had to figure out how do you engage better and 
that's when you saw platforms and others starting to take what 
we call a Just In Time notification.
    How do we get the parent's attention when it matters, not 
at the front end when I load them up with a bunch of consent 
mechanisms and then have them move forward?
    So we're looking at a world under COPPA where how do we 
comply with COPPA's rigors, which, by the way, there are 150 
items on the FAQ at this point, and yet also meet parents with 
the way they behave and that has been one of the most difficult 
challenges on making COPPA work, both from a financial 
perspective from our members who abide by COPPA and also from a 
parental perspective, which is, well, they want to make sure 
the kid sees what they kid wants to see.
    So enforcement is really critical. To get to your main 
thing, the FTC needs to do more and, frankly, I think they need 
to do more publicly.
    I personally and our association brought examples of COPPA 
violations to them and they were solved but they were solved 
quietly. The company fixed their terms of service or made the 
correction and there was no visible flurry in the water and we 
think ultimately that hurts the ecosystem and the FTC needs to 
use its bully pulpit to take the most obvious offenders and 
make something out of it so that people understand this is 
what's allowed, this is what's not, but keeping in mind that 
it's really the parents that we have to make sure that we 
educate.
    Senator Udall. Yes. Focusing a little bit and drilling down 
on the FTC enforcement, in the past two years, how often has 
the FTC enforced COPPA violations with app developers?
    Mr. Reed. So this is the FTC, the reality of the situation, 
which is the FTC has been active behind the scenes in meeting 
with hundreds and maybe thousands of developers, but in terms 
of big public enforcements, I think we're at a pretty small 
number at this point in time.
    Senator Udall. Just a handful, you would say?
    Mr. Reed. Yes, but that's not to say that they haven't been 
doing meetings and haven't been bringing people in and haven't 
been making corrections.
    My point to you, which I think supports where you're 
headed, is we need to do some of these publicly so that there 
can be some understanding by both my community and the parental 
community what's expected of them, what's expected of us, and 
how do we meet in the middle.
    Senator Udall. Yes. And many of the app developers 
identified in the study are based in Lithuania and China.
    Do you think most app developers, including ones located 
overseas, are fully aware of the requirements of COPPA and that 
what you're saying would help is the FTC being aggressive?
    Mr. Reed. Yes. The FTC----
    Senator Udall. Do you think they're aware?
    Mr. Reed. Well, it's fascinating because the worlds are 
converging. Everybody is global and now with GDPR, it's 
creating a whole new series of regimes.
    Yes, RB has done a great job on verifiable parent consent 
in the United States but they can't do it in Europe. So you 
talked about Lithuania and some of the European actors in that 
place.
    I'm having those people come to me and say how do I meet 
with GDPR and COPPA at the same time when one country says 15 
and one country says 13? So I actually think weirdly enough 
where we are right now with GDPR is going to help and I would 
like the FTC to use some of its extra-territorial powers to go 
after specific companies to make people more aware of their 
requirements.
    Senator Udall. Great. Thank you very much.
    I know I'm over time, Mr. Chairman, and I'll submit a 
couple of additional questions for the record. Thank you for 
the courtesies, Chairman Wicker.
    Senator Wicker. Well, many of us went over time today 
because it's such a good topic.
    I want to thank the members of the Subcommittee and the 
members of the panel for a very, very fine hearing today.
    My staff has told me I have to close with a statement that 
the hearing record will remain open for two weeks. During this 
time, Senators are asked to submit any questions for the 
record. Upon receipt, the witnesses are requested to submit 
their written answers to the Committee as soon as possible and 
that's about as flexible as I've ever heard.
    So thank you very much, Ranking Member Schatz, and other 
Members of the Subcommittee, and thank you to our panelists.
    This hearing is adjourned.
    [Whereupon, at 3:58 p.m., the hearing was adjourned.]

                            A P P E N D I X

    Response to Written Question Submitted by Hon. Amy Klobuchar to 
                              Mike Forster
    Question. To address the skills gap, we need to increase access to 
community and technical colleges. In September, I introduced 
legislation to expand the eligible uses of the `529' tax advantaged 
education savings program to allow workers to use these accounts to pay 
for training or credentialing programs recognized by a state, the 
Federal government, or industry, in addition to currently allowable 
uses for colleges, universities, vocational schools or other post-
secondary educational institutions. Mr. Forster, what role to training 
or credentialing programs play in fast-paced industries like coding?
    Answer. Senator Klobuchar, if I understand the question properly, 
there is a very definite connections between credentialing programs 
like the Mississippi Coding Academies and the ability to use all 
available sources of ``workforce development'' funding available. In 
Mississippi, our first year of operation was funded primarily through 
the MS Development Authority's State Workforce Investment Board funds 
and similar funding available via our Community Colleges. Going forward 
we are seeking (and have obtained) significant grants form private 
foundations and corporate sponsors. I should point out that our 
academies are tuition free, requiring only the ``sweat equity'' 
commitment from the student once they have met our entrance 
requirements. However, having the ability to qualify programs such as 
ours for 529 type plans would certainly be of benefit and might expand 
the population of available coding students.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Amy Klobuchar to 
                                Sarah Oh
    Question. A provision based on my Rural Spectrum Accessibility 
Act--that I introduced last Congress with Senator Fischer--was recently 
signed into law as part of the MOBILE NOW Act. This provision would 
require the Federal Communications Commission (FCC) to explore ways to 
provide incentives for wireless carriers to lease unused spectrum to 
rural or smaller carriers. Dr. Oh, with mobile app usage on the rise, 
do expect an increased need for currently underutilized spectrum?
    Answer. Thank you for the question. Yes, the app economy needs more 
spectrum, and I expect an increased need for currently underutilized 
spectrum. The provision (P.L. 115-141, Section 616) directs the Federal 
Communications Commission to initiate a rulemaking proceeding to assess 
whether to establish a program, or modify existing programs, to allow 
licensees to partition or disaggregate licenses for sale or long-term 
lease to small or rural carriers.
    In its notice of proposed rulemaking, the Commission should seek 
economic analysis on the question of whether such a program would 
likely increase broadband availability. The Commission would do well to 
rationalize any new program with recent reforms to the Universal 
Service Fund, and, if possible, results from Rural Utilities Service 
loan programs. Increasing deployment to unserved areas is a challenge 
of economics and cost-effective subsidies. Understanding incentives of 
incumbent, small, and rural carriers that depend on wireless 
subscriptions, subsidies, or both, is important for discussions on how 
to cost-effectively connect unserved households with wireless 
broadband.
    Partitioned or disaggregated licenses may or may not likely result 
in increased availability of advanced telecommunications services built 
by small or rural carriers. This discussion is timely, and I look 
forward to reading comments generated by your provision in the MOBILE 
NOW Act.

                                  [all]
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