U.S. GOVERNMENT PUBLISHING OFFICE

57–905 PDF WASHINGTON : 2025

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 

( 

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

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

JOHN THUNE, South Dakota, Chairman 

ROGER F. WICKER, Mississippi 

ROY BLUNT, Missouri 

TED CRUZ, Texas 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

DAN SULLIVAN, Alaska 

DEAN HELLER, Nevada 

JAMES INHOFE, Oklahoma 

MIKE LEE, Utah 

RON JOHNSON, Wisconsin 

SHELLEY MOORE CAPITO, West Virginia 

CORY GARDNER, Colorado 

TODD YOUNG, Indiana 

BILL NELSON, Florida, Ranking 

MARIA CANTWELL, Washington 

AMY KLOBUCHAR, Minnesota 

RICHARD BLUMENTHAL, Connecticut 

BRIAN SCHATZ, Hawaii 

EDWARD MARKEY, Massachusetts 

TOM UDALL, New Mexico 

GARY PETERS, Michigan 

TAMMY BALDWIN, Wisconsin 

TAMMY DUCKWORTH, Illinois 

MAGGIE HASSAN, New Hampshire 

CATHERINE CORTEZ MASTO, Nevada 

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, Chairman 

ROY BLUNT, Missouri 

TED CRUZ, Texas 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

DAN SULLIVAN, Alaska 

DEAN HELLER, Nevada 

JAMES INHOFE, Oklahoma 

MIKE LEE, Utah 

RON JOHNSON, Wisconsin 

SHELLEY MOORE CAPITO, West Virginia 

CORY GARDNER, Colorado 

TODD YOUNG, Indiana 

BRIAN SCHATZ, Hawaii, Ranking 

MARIA CANTWELL, Washington 

AMY KLOBUCHAR, Minnesota 

RICHARD BLUMENTHAL, Connecticut 

EDWARD MARKEY, Massachusetts 

TOM UDALL, New Mexico 

GARY PETERS, Michigan 

TAMMY BALDWIN, Wisconsin 

TAMMY DUCKWORTH, Illinois 

MAGGIE HASSAN, New Hampshire 

CATHERINE CORTEZ MASTO, Nevada 

JON TESTER, Montana 

(III) 

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 

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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. 

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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 opporVerDate Nov 24 2008 06:41 Jan 07, 2025 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\57905.TXT JACKIE
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tunity 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 wellpaid 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. 

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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. 

5 

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. 

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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 twoor 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. 

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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 

8 

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 

9 

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 wellpaying 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. 

10 


515MCA1.eps
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515MCA2.eps
12 

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. 

13 

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 marVerDate Nov 24 2008 06:41 Jan 07, 2025 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\57905.TXT JACKIE
14 

ket 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 emails, 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 

15 

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. 

16 

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. 

17 

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: 

18 

(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 

19 

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/. 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. 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. 

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. 

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

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 upVerDate Nov 24 2008 06:41 Jan 07, 2025 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\57905.TXT JACKIE
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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-iotall-about-winning-processes.aspx. 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/. viiThis 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. 

wards 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. 

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 aver- age 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

• 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

21 

viii ‘‘Blurbs and Useful Stats.’’ Computer Science Education Week, 3 Jan. 2018, https:// 

csedweek.org/resource_kit/blurbs. ixMorgan, Steve. ‘‘2017 Cybercrime Report.’’ Cybersecurity Ventures, 2017, https:// 

cybersecurityventures.com/2015-wp/wp-content/uploads/2017/10/2017-Cybercrime-Report.pdf 

as the developers, software engineers, systems managers, teachers, and technical 

support who create and provide the apps that drive the app ecosystem. 

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

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. 

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. 

22 

xGallup, Inc. ‘‘Pioneering Results in the Blueprint of U.S. K–12 Computer Science Education.’’ 

Gallup, 2016, https://csedu.gallup.com/home.aspx. xiThis 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 xii ‘‘The Top-Paid Majors for the Class of 2018.’’ National Association of Colleges and Employ- ers, 8 Jan. 2018, www.naceweb.org/job-market/compensation/the-top-paid-majors-for-the-classof-2018/. xiii ‘‘Blurbs and Useful Stats.’’ Computer Science Education Week, 3 Jan. 2018, https:// 

csedweek.org/resource_kit/blurbs. 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-fillthe-tech-skills-gap 

‘‘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

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. 

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. 

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. 

23 

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 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. 

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. 

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

‘‘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 

24 

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. 

25 

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-ofthe-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 inforVerDate Nov 24 2008 06:41 Jan 07, 2025 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\57905.TXT JACKIE
26 

mation 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 

27 

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 

28 

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:] 

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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 

102 

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. 

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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 nonalloyed 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. 

104 

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. 

105 

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 

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grate 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 AIbased 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. 

107 

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. 

108 

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. 

109 

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. 

110 

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 

111 

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 

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gress 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. 

113 

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 

114 

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. 

115 

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.] 

(117) 

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. 

Æ