[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
BRIDGING THE TECHNOLOGICAL GAP: INITIATIVES TO COMBAT THE DIGITAL
DIVIDE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON EMPOWERMENT
OF THE
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
WASHINGTON, DC, MARCH 28, 2000
__________
Serial No. 106-48
__________
Printed for the use of the Committee on Small Business
__________
U.S. GOVERNMENT PRINTING OFFICE
67-830 WASHINGTON : 2000
COMMITTEE ON SMALL BUSINESS
JAMES M. TALENT, Missouri, Chairman
LARRY COMBEST, Texas NYDIA M. VELAZQUEZ, New York
JOEL HEFLEY, Colorado JUANITA MILLENDER-McDONALD,
DONALD A. MANZULLO, Illinois California
ROSCOE G. BARTLETT, Maryland DANNY K. DAVIS, Illinois
FRANK A. LoBIONDO, New Jersey CAROLYN McCARTHY, New York
SUE W. KELLY, New York BILL PASCRELL, New Jersey
STEVEN J. CHABOT, Ohio RUBEN HINOJOSA, Texas
PHIL ENGLISH, Pennsylvania DONNA M. CHRISTIAN-CHRISTENSEN,
DAVID M. McINTOSH, Indiana Virgin Islands
RICK HILL, Montana ROBERT A. BRADY, Pennsylvania
JOSEPH R. PITTS, Pennsylvania TOM UDALL, New Mexico
JOHN E. SWEENEY, New York DENNIS MOORE, Kansas
PATRICK J. TOOMEY, Pennsylvania STEPHANIE TUBBS JONES, Ohio
JIM DeMINT, South Carolina CHARLES A. GONZALEZ, Texas
EDWARD PEASE, Indiana DAVID D. PHELPS, Illinois
JOHN THUNE, South Dakota GRACE F. NAPOLITANO, California
MARY BONO, California BRIAN BAIRD, Washington
MARK UDALL, Colorado
SHELLEY BERKLEY, Nevada
Harry Katrichis, Chief Counsel
Michael Day, Minority Staff Director
------
Subcommittee on Empowerment
JOSEPH R. PITTS, Pennsylvania, Chairman
PHIL ENGLISH, Pennsylvania JUANITA MILLENDER-McDONALD,
JIM DeMINT, South Carolina California
FRANK A. LoBIONDO, New Jersey DENNIS MOORE, Kansas
EDWARD PEASE, Indiana STEPHANIE TUBBS JONES, Ohio
TOM UDALL, New Mexico
Dwayne, Andrews, Professional Staff Member
C O N T E N T S
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Page
Hearing held on March 28, 2000................................... 1
WITNESSES
Mitchell, Dale, Executive Director, Delaware Valley Grantmakers,
Philadelphia, PA............................................... 3
Steen, Leslie, President, Community Preservation & Development
Corporation, Washington, DC.................................... 5
Mills, Scott, Executive Vice President and Chief Operating
Officer, BET.com, LLC, Washington, DC.......................... 8
Dash, Darien, CEO, DME Interactive Holdings, INC., Englewood
Cliffs, NJ..................................................... 10
Miller, Harris, President, Information Technology Association of
America, Arlington, VA......................................... 12
Bushkin, Katherine, Sr. Vice President & Chief Communications
Officer, America Online Inc., Dulles, VA....................... 14
APPENDIX
Opening statements:
Pitts, Hon. Joseph R......................................... 36
Prepared statements:
Mitchell, Dale............................................... 38
Steen, Leslie................................................ 41
Mills, Scott................................................. 72
Dash, Darien................................................. 75
Miller, Harris............................................... 77
Bushkin, Katherine........................................... 81
BRIDGING THE TECHNOLOGICAL GAP: INITIATIVES TO COMBAT THE DIGITAL
DIVIDE
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TUESDAY, MARCH 28, 2000
House of Representatives,
Subcommittee on Empowerment,
Committee on Small Business,
Washington, DC.
The Subcommittee met, pursuant to call, at 2:00 p.m., in
room 2361, Rayburn House Office Building, Hon. Joseph R. Pitts
(chairman of the Subcommittee) presiding.
Chairman Pitts. All right. Ladies and gentlemen, 2:00
having arrived we are going to call the hearing forward. Thank
you for joining me and the other members who will soon arrive
today to discuss private sector initiatives that are in place
to help bridge the digital divide, the disparity between use of
the Internet among the rich and the poor.
This is the second hearing that this subcommittee is
holding on this topic. The first hearing, held last July,
discussed the findings of the National Telecommunications and
Information Administration's report, entitled Falling Through
the Net, which defined the term the ``digital divide.'' Since
the release of this report there have been initiatives from the
private sector and government that have been proposed and
implemented to help combat the digital divide.
Indeed, the White House has proposed $2 billion in tax
incentives and $380 million in new spending in the fiscal year
2001 budget to expand use of computers and training for
teachers in computer-related skills. I believe that before this
Congress considers any new government spending or programs it
is imperative that we examine the methods that are already in
place to expand the technological reach of this Nation's
poorest citizens. To that end, this subcommittee has convened
this distinguished panel of witnesses to receive their wisdom
and to hear their experiences on achieving technological
awareness and access for all.
Since the vanquishing of the dreaded Y2K bug the digital
divide has become the new perilous buzz word in the information
technology sector. In fact, the term digital divide encompasses
more than a technology gap between Americans at the highest and
lowest income levels. The NTIA studies reveal that those living
in urban areas were more likely to be online than Americans
living in rural areas and that white households were more than
twice as likely to have Internet access as black or Hispanic
households.
The digital divide is not just an American phenomenon.
Italy recently announced a plan that would offer ninth grade
students computers at a 40 percent discount to encourage them
to use the Internet. Additionally Venezuela is considering the
introduction of prepaid cards to allow inexpensive Internet
access at special community centers as part of a campaign to
popularize the Web.
One of the overlooked issues in the national debate of the
digital divide is the state of disrepair of the schools that
are being targeted for new computers and upgraded technology.
Many students there who suffer from a lack of access to
technology also suffer from being exposed to under achieving
schools, poorly trained teachers, and neglect from school board
bureaucracies that become virtual economic black holes. Unless
teachers are properly trained, and schools are held accountable
for using their new found technologies in ways that advance the
academic progress of their students, the introduction of new
technology into these classrooms will not help solve most of
these students' underlying academic deficiencies.
Indeed, a recently released report by the Children's
Partnership pointed out that the Internet is virtually useless
for the estimated 44 million Americans who read below the
average literacy level.
The good news, though, is that there are many private
sector initiatives that are poised to close the digital divide.
Companies such as Microsoft, Raycom and Sun Microsystems are
donating software, hardware and Internet access to students in
underserved neighborhoods.
Today's panel represents a broad cross-section of the types
of programs that I believe will help narrow the digital divide.
Dale Mitchell, Executive Director of the Delaware Valley
Grantmakers, from my home State of Pennsylvania will testify
about her organization's efforts to partner nonprofit
organizations and philanthropic institutions. Leslie Steen,
President of the Community Preservation and Development
Corporation, will speak about her organization's community
technology center and its efforts to completely wire its 800-
unit housing development. Darien Dash, who is CEO of DME
Interactive Holdings, Inc., the first ever publicly traded
black-owned Internet company, will discuss his tenure as
technology chair for School District 5 in Harlem, New York.
Robert E. Knowling, Jr., President and CE0 of Covad
Communications, will testify about the Information Technology
Association of America's digital opportunity initiative, which
provides internship programs in the information technology for
minority students. And Katherine Bushkin, Senior Vice President
and Chief Communications Officer of America Online, will
testify about her company's efforts to bridge the digital
divide through the works of the AOL Foundation.
I look forward to the enlightening testimony of our panel.
Before I turn to--well, I guess the other members are not
here. I will turn now to the distinguished ranking member, Ms.
Millender-McDonald, for her opening statement.
Ms. Millender-McDonald. Thank you, Mr. Chairman. I would
like to again commend you on bringing this second hearing on
the digital divide hearing to us. I would like to say that it
was this subcommittee and its chair who brought the first
hearing about falling through the net, defining the digital
divide report coming out of the Department of Commerce. So I
commend you for your efforts in continuing to keep us front and
center on this.
I am indeed concerned about the digital divide given the
fact that I do represent the south central part of Los Angeles
all the way down to Long Beach in southern California, which
takesup not only Watts but Compton, Lynwoods. Some of the most
impoverished areas in southern California, as far as Wilmington, a
highly immigrated community. And we see that the ``falling through the
net'', report which defines the digital divide, speaks about the gap
between the haves and the have nots. It is clearly an important issue,
an issue that those of us in the Congressional Black Caucus as well as
those of us in the Women's Caucus are completely concerned about
because it is small businesses that will be bringing about the jobs,
the largest creation of jobs, and clearly small businesses need a work
force that is highly skilled and highly trained.
And so we welcome you here this morning as we continue the
dialogue on the digital divide. And again I thank the chairman
for his vision to continue to keep this before us. I do have a
statement that I will submit to the record, Mr. Chairman. Thank
you again.
Chairman Pitts. All right. Without objection. Thank you. We
will now go to our testimony. We will begin with Dale Mitchell,
Executive Director of the Delaware Valley Grantmakers,
Philadelphia. Welcome. You may proceed. We will use the light
system if you haven't been here before. You have 5 minutes and
after 4 minutes the yellow light will go on, at the end of 5
the red light. We will try to keep as close as we can to the
time schedule.
STATEMENT OF DALE MITCHELL, EXECUTIVE DIRECTOR, DELAWARE VALLEY
GRANTMAKERS, PHILADELPHIA, PA
Ms. Mitchell. Thank you very much. I will just start by
giving you a little bit of background about Delaware Valley
Grantmakers, known as the DVG. We are one of 29 regional
associations of grantmakers nationally. We are a membership
organization comprised of private and community foundations,
charitable trusts, grantmaking public charities, corporate
giving programs, and individual philanthropists in southeastern
Pennsylvania, southern New Jersey and Delaware.
Our mission is to promote effective and responsible
philanthropy, corporate social investment and community
involvement by acting as a clearing house of information,
strengthening cooperation among funders and grantees, informing
and educating grantmakers, recipients of grants, public policy
makers, and the broader community about social responsibility
and philanthropy. We develop and encourage community leadership
and work to foster the culture of giving and to increase
philanthropic resources. We take an active role in addressing a
range of issues, including community needs, effective decision
making, and public policies that concern philanthropy.
DVG leads one of 18 coalitions from around the country who
received funds from an organization known as New Ventures in
Philanthropy to launch and support strategies to increase
giving in their region. DVG's initiative is reaching out to the
region's entrepreneurs and rapidly emerging growth businesses,
particularly the information technology and e-commerce
industries, to inspire and engage them in giving back to their
communities through both long term financial support and
volunteer assistance. Rather than encouraging this constituency
to embrace philanthropy in general, the coalition is working to
engage them in solving a real problem and utilize the talents
that have made them successful in their businesses.
Through focus groups conducted with these industry leaders
it was determined that many feel they have a moral obligation
to ensure that all individuals and communities have access to
technology and that they are provided with the tools and
knowledge to enable them to compete and share in the new
economy. These industry leaders also believe that developing
and implementing strategies to bridge the digital divide are in
their own best self-interests and they see social investment as
a way to apply their entrepreneurial skills in a different
arena.
The Eastern Technology Council, located just outside of
Philadelphia, has a data base that indicates that there are
more than 15,000 technology firms in the region, and that e-
commerce alone was responsible for the creation of more than
$14 billion of market capital in 1999. Obviously this region
has the potential to bridge the digital divide through both the
intellectual and financial capital of these industries.
Based on the theory held by many that the most effective
solutions to social ills must come from those closest to the
problem, DVG is developing and implementing strategies to
foster cooperation and partnerships between the region's
nonprofit organizations, philanthropic institutions,
corporations, the public sector at the Federal, state and local
level, and these rapidly emerging IT businesses to bridge the
digital divide.
We will encourage effective and creative new strategies,
leverage resources and work to strengthen and replicate the
many initiatives that are already under way in the region.
These initiatives include but are not limited to, the Free
Library of Philadelphia Bits and Bytes Project, funded by the
William Penn Foundation, which conducts computer clubs where
children and teens learn how a computer works, basic computer
vocabulary, keyboard skills, research on the World Wide Web, et
cetera. The project also helps children, teens, parents,
teachers and child care providers learn to use these new
technologies to access information and enhance learning.
A project with the School District of Lancaster,
Pennsylvania, funded by the recently created Lancaster
Osteopathic Health Foundation and another local foundation,
will provide school principals and administrators with access
to technology to keep them on the cutting edge of child health
and wellness development.
The Pennsylvania Department of Community and Economic
Development is seeking to match the State's $3 million
investment to continue the initiative to have Internet capacity
in licensed child care centers throughout the commonwealth.
Based on surveys of youth in selected neighborhoods of
Philadelphia which indicated that the activities of greatest
interest were computer clubs--I am going over my time here.
Chairman Pitts. That is all right. You can wrap it up.
Ms. Mitchell. Their interest was in computer clubs, a
collaboration of community groups, foundations, corporations,
the city's Department of Recreation, the school districts and
others are establishing technology resource and research
centers to provide resident youths, age 6 to 16, with access to
technology by collectively increasing the capacity of after
school projects that are existing and currently exposing
program participants to technology.
The CIGNA Corporation funded the computer learning centers
at elementary and high schoolsin Philadelphia and Hartford,
Connecticut, entitled Technology Training for Integrating Math and
Enhancing Science. The IBM Corporation's We Have Narrowed the Digital
Divide, You Can Too, which showcases the success of IBM and the United
Way Teaming for Technology and KidSmart initiative, which provides
early literacy tools to children 3 to 6 years of age. IBM's Global
Reinventing Education Initiative, where in Philadelphia the reinventing
education model for teachers focuses on effective use of technology
integrated into the curriculum and voice recognition technology for
special needs students and those who have English as a second language.
Through funding provided by the Howard Heinz Endowment, the
Pennsylvania Humanities Council will offer programs on
technology and community at 10 sites in southwestern
Pennsylvania. Programs will include both face to face and
virtual discussions on the ways that information technologies
are changing society.
And finally our Pennsylvania Education Secretary announced
5.2 million in grants awarded to 26 projects to strengthen
information technology training across the State. And this
morning's Philadelphia Inquirer noted that the newly created
Lendfest Foundation in Chester County provided $600,000 to
provide software, free software and training in Internet use
for elderly. And that grant was presented to an organization
called Generations On Line in Philadelphia. Thank you.
[Ms. Mitchell's statement may be found in appendix.]
Chairman Pitts. Thank you, Ms. Mitchell. We will have
questions to explore these a little bit more. I would like to
welcome Representative Mark Udall from Colorado. He is not a
member of the subcommittee, but he is a member of the full
committee and he has expressed a great deal of interest in
this--Tom Udall. I am sorry.
So we will go now to Leslie Steen, President of Community
Preservation Development Corporation, Washington, D.C.
STATEMENT OF LESLIE STEEN, PRESIDENT, COMMUNITY PRESERVATION
AND DEVELOPMENT CORPORATION, WASHINGTON, D.C.
Ms. Steen. Good afternoon, Mr. Chairman and subcommittee
members. I want to thank you for this opportunity to appear
before the subcommittee and offer the views of Community
Preservation and Development Corporation on the digital divide.
You are to be congratulated for having the forethought to
convene this hearing and investigate the issues.
Community Preservation and Development Corporation, known
as CPDC, has been actively bridging the digital divide for 4\1/
2\ years in seven low income communities. CPDC works to
revitalize communities by providing affordable housing and
connecting people with resources and with their neighbors to
enable communities to be strong, self-reliant and sustainable.
I don't have to tell you about the reports like the
Department of Commerce's Falling Through the Net, you are very
aware of this. But I do want to call to your attention how a
real community is embodying the power, speed, and what is
rapidly becoming a basic need of technology. What I do want to
emphasize is the need for all of us to make a conscious effort
to help prevent citizens from falling through the net, not
tomorrow but today.
Edgewood Terrace in Northeast Washington, D.C., offers a
prime example of how CPDC and a community work together to
implement the goal of revitalization. In 1995, CPDC received a
request for jobs from the residents of Edgewood Terrace, then a
development of 884 HUD subsidized apartments that were
seriously deteriorated and subject to significant criminal
activity and economic depression.
This is a picture of a community needing solutions. To find
that solution CPDC turned to technology. In 1995, it was clear
that the jobs of the future would be in technology so we set
out to bring that resource to Edgewood Terrace. When we
graduated our first job training class, we gained, for the
first time, a real appreciation of how powerful technology
could be as a redevelopment tool.
Our approach to revitalizing this community combined a
substantial rehabilitation of the physical structures with the
community building programs centered on the use of technology.
This produced both safe and attractive housing appealing to
people of all incomes and even engaged and civic minded
community.
With us today is Bridget McLaurin, a graduate of our first
class. Today after several jobs and promotions Bridget works
for National Geographic.com earning over $30,000 and she is a
junior at Catholic University. One after another her aunt and
cousin also have graduated to successful employment from our
classes. Bridget, her family, and her neighbors have recognized
what technology can do for them. Technology provides for them
the opportunity to leapfrog numerous obstacles and to join the
economic mainstream of the 21st century.
Today our average graduate earns $23,000 upon graduation
and is prepared to succeed with a career plan, hard skills, the
right attitude and appearance and an understanding of what it
takes to make it. The availability of technology has motivated
the residents of this community and its surrounding
neighborhood to overfill our four computer classrooms. The
technology is a drawing card like none we have ever seen. The
people know what it can do for them and they want it.
Edgewood terrace is being turned into an electronic
village. Our goal is to wire all of the apartments to access to
a community network, community Web site, and high speed access
to the Internet. Using a newer technology known as thin
clients, we have created a manageable and sustainable community
network giving all apartments use of a full range of Microsoft
software without the headaches of daily care and feeding of
computers in apartments.
CPDC has been able to make all of this technology available
through the efforts of numerous partnerships. This all started
when the Department of Housing and Urban Development gave us
the critical seed money and created the outstanding
Neighborhood Networks Program. Microsoft followed with a
meaningful relationship to help us access more resources and of
course its software for everyone. Netier donated thin clients.
Data General donated servers. Data Transit gave time and
expertise in integration and support.
Our educational partners include Catholic University of
America, which teaches part of ourcareer enhancement programs
and provides graduates with college scholarships; Bell Atlantic, which
sponsors one of our technology employment programs; George Washington
University, which provides interns in career assessment and evaluation;
Morino Institute, which is teaching us how to use the Internet to
effectively grow children's minds; and corporate leaders on our
advisory board such as Fannie Mae, Edelman Public Relations and Bell
Atlantic. And now the Department of Commerce's National
Telecommunication Information Administration's Technology Opportunities
Program is enabling the extension of the community network to the rest
of the apartments to serve the needs of the residents who are clamoring
for access to the resource.
Koenie Carter, who is also with us today, graduated from
our employment program and entered college after overcoming
many obstacles common to people in disadvantaged neighborhoods
and working at several menial jobs. She represents the win-win
relationship between CPDC and its business partners. She has
tripled her income and is working for a biomedical division of
Catholic University.
It is important to recognize that this technology is being
used as a community building tool. This is not just about
access. Access is a tool given to people. Strong, economically
vibrant communities are the result of what we can do with this
tool. Mr. Chairman, it has been a long road to bridging the
digital divide at Edgewood Terrace but we will continue to
expand this model. Why? Because as Jonathan Alter of Newsweek
put it, the computer is not a deus ex-machina, a god that can
fix every social injustice. Access to technology won't by
itself level the playing field. If you wire them, they won't
necessarily prosper. You have got to facilitate the
possibilities. CPDC is doing just that with the Edgewood
Residents Technology Advisory Board, e-Tab.
Also with us today is Patricia Fisher, an active member of
e-Tab and one of our newest graduates of the employment
program. She is a single mother with a 5-year-old son. She has
been on and off public assistance and her last job before
entering our employment program was at Starbucks. Pat
graduated, took a term contract job with a business and policy
research firm, and now has three job offers. And best of all,
Pat moved to Edgewood Terrace to be part of the electronic
village and join e-Tab.
To use the resource called access, e-Tab and CPDC are in
the process of building a Web site to serve the needs of the
community, a chat room for the teens to talk about self-esteem
and relationship issues, a community bulletin board for notices
of meetings, a portal to educational Web sites for the
children, health screening for the seniors, and whatever else
the community determines are worthwhile endeavors.
To make this happen, a governance structure is evolving
within the community. People come to meetings to discuss the
community network and how it should be deployed. They have
formed committees and have established rules of conduct for the
use of the network. They are teaching each other how to use the
technology. We do not have a help desk at Edgewood Terrace. The
residents are their own help desk. They are creating
relationships with their neighbors where none existed before.
In short, they are relying on each other, not on CPDC or the
government.
I urge you to be a catalyst to encourage the Silicon
Valleys of America to invest in our cities, our underserved
citizens, our community based organizations that can fill the
void and given the Nation a return on its investment that has
not been seen before. Technology is radically changing the
social landscape of Edgewood Terrace. If CPDC can find the
financial means, we intend to replicate this model to turn
other depressed communities into vibrant, self-reliant centers
of economic activity. In 3 years the electronic village at
Edgewood Terrace will be the click heard round the world.
Thank you.
[Ms. Steen's statement may be found in appendix.]
Chairman Pitts. Thank you. That is quite a story. Scott
Mills, Executive Vice President, Chief Operating Officer of
BET.com.
STATEMENT OF SCOTT MILLS, EXECUTIVE VICE PRESIDENT AND CHIEF
OPERATING OFFICER, BET.COM, LLC, WASHINGTON, DC
Mr. Mills. Good afternoon, and thank you for this
opportunity to share BET.com's efforts to address the digital
divide in the African American. BET.com is a joint venture
between BET Holdings, Microsoft Corporation, News Corporation,
USA Network and Liberty Digital. The company is majority owned
and controlled by BET Holdings and is based here in the
District of Columbia. The company's mission is to educate,
empower, enrich and entertain the African American online
population.
BET.com launched our Web site on February 7th, containing
over 20,000 pages of original and partner provided content,
robust online communities and leading edge communication
features, all tailored to the African American perspective.
African Americans currently underutilize the Internet
relative to other ethnic segments; however, African Americans
are projected to be the fastest growing online ethic population
in 2000. However, failure by any community to fully utilize the
Internet will adversely affect its effectiveness and ability to
compete in the 21st century. As a company dedicated to serving
the African American online population, BET.com has focused on
understanding and developing strategies to address the digital
divide.
We believe that market activity, including our own, will
eliminate the vast majority of the digital divide facing the
African American community. We also believe that the portion of
the digital divide that cannot be bridged by pure market forces
should be addressed through a combination of public and private
efforts. A great deal of focus has been appropriately placed on
the role economics play in the digital divide.
Cost and related issues are impediments for a portion of
the African American population that is not currently online.
However, changes in PC and ISP pricing models are making cost
less of an impediment. With the proliferation of free ISPs,
free Internet access is now widely available. And there are
many new moderately priced PC-ISP packages and a growing list
of low cost non-PC based Internet access devices available. As
a result consumers can now buy bundled PC-ISP packages for a monthly
fee that is less than the cost of basic cable service in many areas.
BET.com is planning to deploy two new services based on
these pricing models. The first service is a completely free
BET branded ISP. This free service will not require credit
approval nor require consumers to surrender excessive amounts
of personal data. The service will be available via software
download on the BET.com Web site and may be distributed via CD-
ROMs and BET Holdings' magazines, which have a circulation of
over 2 million African Americans. We believe this free ISP
offering will be very attractive to African Americans who
already own Internet access devices and are seeking a low cost
Internet access alternative.
Our second planned offering is a low cost bundled PC-ISP
package. This offering will provide consumers with a high
quality PC, a comprehensive software package, unlimited
Internet access and robust customer service for less than $30 a
month. Recognizing that credit may be an issue for some,
BET.com is evaluating credit facilities that will allow us to
provide a package to consumers with relatively low credit
scores. We plan to market this service throughout BET Holdings'
media properties and distribute directly to consumers. We
believe that both free Internet access and bundled low cost PC-
ISP offerings will significantly reduce the economic barriers
to Internet access.
Cost however is not a barrier for some portion of the
African American population that is currently off line.
Instead, weak consumer demand and alternative expenditure
priorities are responsible for this segment's underutilization
of the Internet. For example, according to the Target Market
News report on buying power of black Americans in 1999, African
Americans spent $3.5 billion on cable television subscriptions
and only $89 million on online computer services. This lagging
consumer demand in the African American community stems in part
from limited targeted marketing of the Internet to African
Americans and the relative paucity of online offerings tailored
to this community.
Over the past several years there has been a proliferation
of well-funded Web sites targeting various affinity groups,
including women, Hispanics, Asian Americans and the gay and
lesbian community. These sites were able to apply their capital
to develop compelling and comprehensive online destinations.
Until recently African American oriented Web sites and Internet
ventures had great difficulty attracting the capital required
to develop comparable online destinations. As a result, online
offerings tailored to African American community paled relative
to those of other affinity groups.
Of course the appeal to the Internet for African Americans
is not limited to culturally oriented Web sites. African
Americans visit a vast array of Web sites, many having nothing
to do with ethnicity. However, until very recently most
Internet companies, both general market and African American,
did not aggressively market their offerings to the African
American community. This is evidenced by the historic disparity
in advertisement for online services in African American media
properties versus general media properties.
Fortunately this is changing. A number of major well-funded
African American-oriented Web sites will be launched in 2000.
BET.com is the first of the new sites to enter the market. With
$35 million in initial capital and power strategic investors,
BET.com had the resources to build the comprehensive online
destination and aggressively market to the African American
community. By applying these resources BET.com was able to
become the largest and most heavily trafficked African American
portal during its first month.
Other similarly resourced sites tailored to African
Americans in urban communities are scheduled to launch this
year. We believe that the combined effect of the substantial
increase in online offerings tailored to African Americans and
the active marketing of these offerings to African Americans
will also significantly increase African American awareness of
and use of the Internet.
In conclusion, we believe that African American utilization
of the Net will increase substantially over the next 18 months
and the effects of, one, low cost Internet access devices, two,
the deployment of compelling African American oriented Web
sites and, three, the targeted marketing of the Internet to the
African American population are realized. However, there will
be a segment of the community for whom these forces will be
insufficient. This segment will be best served by combined
public and private sector initiatives to bridge the digital
divide.
[Mr. Mills' statement may be found in appendix.]
Chairman Pitts. Thank you, Scott. Next witness is Darien
Dash, CEO of DME Interactive Holdings from Englewood Cliffs,
New Jersey.
STATEMENT OF DARIEN DASH, CEO, DME INTERACTIVE HOLDINGS, INC.,
ENGLEWOOD CLIFFS, NJ
Mr. Dash. First, I would like to thank the subcommittee for
continuing to support this issue of the digital divide and
keeping it in front of everybody's minds because we all know
how important this is. I have come today without a speech
because I wanted to speak from my heart.
I founded my company 5\1/2\ years ago on the mission of
expanding the hardware and software infrastructure within
minority communities. After being in the cable industry for a
year and seeing the disparities that were going on between new
digital technologies that were being marketed in 1993 and 1994
in African American communities and Hispanic communities versus
majority communities, I decided to do something about it and I
quit my job the day after I was married and founded our company
in a one bedroom apartment. Last year we became, after self-
financing for the first 4\1/2\ years, the first African
American Internet company to be publicly traded in U.S.
history. For us that is a testament to one thing, and that is
that hard work and striving in any community can lead to
development and that African Americans as a consumer group,
like Scott has just eloquently said, are a true consumer group
that represents over $533 billion and there are business models
that need to be built.
Our company's whole agenda is to try to perceive a business
to people in the communities so they can be inspired to want to
participate in the digital revolution. African Americans and
Hispanics have not perceived the Internet as something that is
for them from a business perspective. They have not seen role
models that have represented this Internet generation in
themedia. Not only have PC manufacturers, ISPs as well as content
developers not marketed their e-commerce and content services towards
this community, the role models have not been represented in the Forbes
400. The role models have not been represented to African American and
Hispanic youth.
Our company's goal is to be able to build that sort of
perception in the marketplace. I am now the chairman of
District 5 for Technology Committee in Harlem. What we have
done is put together a consortium of public and private
partnerships to allow the children in that community to see
company names like Oracle involved in this community, company
names like Mouse, which is a very big nonprofit in New York
that goes in and wires schools, Eureka Broadband. They see
these companies' names and at a young age can start to identify
with the technology and the people who are providing these
technologies to them.
Our goal is also to be able to support the entrepreneur who
wants to put their business online. Our core business has
traditionally been in B to B where we go out and actually
support the Queen Latifahs and the Puff Daddies of the world
who are the big role models in the African American community
on putting their businesses online. We provide them with
backing solutions to help them do their e-commerce, content
development, strategic planning, and long term planning.
Well, the digital divide from a dial-up perspective has
been something that has passed these inner city communities
today. We have to look long term, we can't just look today and
we give dial-up ISP service and PC service and say, hey, we
solved the digital divide because that is not true. While these
communities are now just starting to catch up in the old school
model of Internet we are about to launch the new school model
of Internet, which is called I-2. And I-2 is based on broadband
and wireless deployment, network computers and wireless
devices. What we cannot fail to see is that broadband
deployment has to be pushed by the telecommunications companies
within these inner city communities, because we cannot put
people onto an old system while the whole new generation passes
them by, because we would have bridged the gap only to create a
new one.
Our company's goal is to continue to support the
perspective of these inner city communities as they look at
technology and helping them to understand and retain the
knowledge of technology, because that is really what needs to
happen to bridge in divide.
I applaud all of my peers' efforts in going into our
community, and we have recently announced a strategic
partnership with America Online to build a relevant branded
service called Places of Color, where we can go in and build on
a nucleus of training, distance learning, certification, job
placement, and relevant content for a price point that is
affordable. And we are also bundling with PC manufacturers so
that we can go in with both solutions. But we have to continue
to look outward and look on to the horizon as the rest of our
peer groups are doing in this Internet industry and see that
broadbands and wireless are the next generation. We also have
to go in and let these inner city kids realize that they too
can participate. It is the economic future of our country that
we have a generation of youth that understands technology,
embraces it, can deploy it, can be entrepreneurial with it.
Otherwise this country will fail. Our economy will fail and we
will continue to have to look outwardly instead of inwardly for
the next generation to support what we are doing.
Thank you.
[Mr. Dash's statement may be found in appendix.]
Chairman Pitts. Thank you very much. The next witness is
Harris Miller, President of the Information Technology
Association of America, Arlington, Virginia. Welcome.
STATEMENT OF HARRIS N. MILLER, PRESIDENT, INFORMATION
TECHNOLOGY ASSOCIATION OF AMERICA, ARLINGTON, VA
Mr. Miller. Thank you, Mr. Chairman. Bob Knowling, the CEO
of Covad, wanted to be with you today but he had a last minute
emergency. But he is the Chairman of ITAA's Digital Opportunity
Initiative, and so I am speaking for the entire committee. Just
a couple of small data points, Mr. Chairman.
Since I visited with you at your first hearing last year,
about 10 million more Americans have come online, about 80
million more people around the world, just to give you an idea
of how fast this industry and this Internet grows and how
rapidly it does.
I would also mention that the individual from the
administration who was here last year to speak about the
digital divide report, Mr. Larry Irving, is now himself out in
the private sector helping to create content to attract more
African Americans to the Internet. So obviously maybe you
helped convince him that was one of the obstacles.
I would also mentioned, I am sure, great minds think alike.
I mentioned that perhaps BET could create an idea of a Web
site, and I am very pleased that BET has come to fruition
though I have not been given any shares in the company. But I
do commend them for that opportunity.
The incredible growth of the Internet still convinces me,
Mr. Chairman, that we are still using the wrong phrase
``digital divide,'' so I encourage this committee to change its
terminology to ``digital opportunity.'' in fact, if you notice
President Clinton's recent announcement he headlined from
digital divide to digital opportunity. Now the head of the
World Bank is talking about the digital opportunity, the OECD,
the United Nations.
Because of this rapid growth you have heard from the
previous witnesses, the creation of new content, the creation
of new options, the creation of new incentives for people to
come to the Internet is what is making this so exciting.
As we discussed last summer, Mr. Chairman, no technology
has ever grown as rapidly to Main Street and even down into
lower income as has the Internet. Not television, not radio not
automobiles, not cable television, nothing has ever grown
faster as a technology and in terms of adoption as the
Internet.
As Mr. Mills pointed out, every indication is that the
fastest growing community now on the Internet is in fact the
African American community. So I think these are all very
positive signs. But we still have some major opportunities to
address.
One of the opportunities we must address is the absence of
minorities as IT workers. Theproblem is not, I would contend,
discrimination that we have had traditionally where some industries as
they grew up in the Industrial Age intentionally discriminated against
people of color. Really the issue is training and education. As an
example, in 1998 according to the Computer Research Association's
study, only 10 African Americans received Ph.D.'s in computer science.
Only 6 Hispanic Americans did likewise. Other 2 percent of
undergraduate computer science degrees went to African Americans or
Hispanic Americans.
The IT work force data we have examined similarly is
somewhat disheartening. African Americans represent only 5.4
percent of all computer programmers, yet they are over 10
percent of the U.S. working population. Hispanic Americans only
4.6 percent of all computer programming jobs and native
Americans only .2 percent of the total science and engineering
labor force. Clearly, many minority groups are severely
underrepresented in the IT work force. And again I do not
believe it is a case of employer discrimination, rather a case
of education and training.
So ITAA is focusing on what we call the digital opportunity
initiatives intended to create new opportunities, to create a
more diverse cross-section of Americans into the IT community,
primarily through comprehensive internship programs and a broad
based commitment from our member companies and targeted
education and outreach. As I mentioned, Robert Knowling, the
President and CEO of Covad Communications, is chairing the
initiative and is working hard to recruit companies to
participate in this activity.
We have already created, for example, a Web based
internship program located at WWW.digitaljobs.com, which is
targeted to attract underrepresented groups. Companies that
have already signed on to offer internships include Covad,
Lucent Technologies and Cyborg Systems. This opportunity is for
minority students who are in 2-year or 4-year accredited
institutions and have at least a 3.0 or better to apply online
for internships working in high tech companies, and the high
tech companies in turn will post online their job
opportunities.
Now, the only challenge we have here then is to use the
technology itself to link the prospective minority interns with
the companies who are actively looking to recruit these people
into their companies. We will then track the progress of these
students to try to make sure that they continue with their
education and training, and we hope become part of the work
force so that when I come back to you next year or the year
after we can report a much higher percentage of minority
students in these programs.
We are also working with various groups such as
Blackvoices.com, the Black Data Processors Association and the
Society for Hispanic Professional Engineers to work on programs
to create awareness of these kind of opportunities. We are also
partnering with the Tech World Public Charter School in
Washington, D.C., which prepares students for careers in
information technology. I have been very impressed, for
example, by the president of the sophomore class who last year
did an internship, an IT internship at a local company here and
made more money than his family had ever made in 1 year in just
2 months.
We are also creating a digital opportunity think tank to
bring together people of all walks of life to figure out ways
to create even more opportunities to bring people who have not
been in the IT industry previously into the IT industry.
Admittedly this is selfish to some extent, Mr. Chairman,
because the IT industry has a well-documented shortage of
skilled IT workers. To solve the problem we have to reach out
to women and minorities to bring them in. We believe that this
initiative, these internship programs, working with the charter
schools and others will bring more underrepresented groups into
the IT industry and help make the digital opportunity even more
of a reality.
Thank you very much, Mr. Chairman.
[Mr. Miller's statement may be found in appendix.]
Chairman Pitts. Thank you very much for your testimony this
year as well and for reminding us to use the term ``digital
opportunity.'' I will try to remember that.
Our last witness is Katherine Bushkin, Senior Vice
President, Chief Communications Officer of America Online.
STATEMENT OF KATHERINE BUSHKIN, SENIOR VICE PRESIDENT AND CHIEF
COMMUNICATIONS OFFICER, AMERICA ONLINE, INC., DULLES, VA
Ms. Bushkin. Thank you, Chairman Pitts and other members of
the subcommittee. On behalf of America Online and the AOL
Foundation, I appreciate the opportunity to appear before you
today and discuss the digital opportunity.
America Online, as most of you know, is an Internet
services company. It is based in northern Virginia. And just as
committed as we are to building a company that serves now 22
million consumers, we are equally committed to ensuring that
the medium we are building is one that can serve all Americans
regardless of their station in life. Clearly in order to
fulfill that potential all communities and all people must be
able to participate in the new digital economy regardless of
income, race, geography, or disability. So we salute the
subcommittee for focusing today on the importance of ensuring
digital opportunity for all.
Our assessment is that progress is being made in closing
the digital technology gap. Yet it is also the case that there
are still significant disparities in access to and use of the
Internet. The bottom line is that this medium won't have
fulfilled its full potential if people with disabilities don't
have access to its rich content, if kids in inner cities never
experience the magic of interactivity and if entire rural
communities are isolated from this revolution.
We believe, as another witness said today, that we have a
moral responsibility to make sure that every person has the
chance to succeed and to be part of the digital economy. And it
is an economic challenge as well because in a networked economy
people who are already connected benefit each time more people
are connected. So beyond the statistics that are well known now
about the gap in demographics, there is also another issue that
is critical to our future economic health.
Although the United States is the birthplace of the
information revolution, the American work force is not yet
ready fully to reap its benefits. The Department of Commerce
estimates that in just 2 years some 60 percent of jobs will
require high tech skills. By 2005 there will be a growthof 70
percent in technology related jobs. Yet according to a recent study
more than 340,000 high tech jobs in the U.S. computer industry remain
unfilled, and we are not training students for the skills they will
need.
AOL believes that the online medium holds extraordinary
promise for low income and underserved communities to join the
economic, political and social mainstream. That is why we
believe it is so critical to find ways to turn the digital
divide into digital opportunity and use it to close the gap. We
think there are four elements necessary to achieve meaningful
access to information technology.
The first is that we must ensure that all people have
physical, structural access to information technology on the
Internet. This includes hardware, software and affordable
connectivity. Second, we must ensure that people have
sufficient skills and training. Not only is it necessary to
have the skills to use the equipment, but analytical skills are
also critical to being able to use it effectively to
participate in today's high tech workplace.
Third, as several witnesses have noted, we must provide
content that is useful and relevant to traditionally
underserved communities, including low literacy content,
content with diverse cultural perspectives, content in many
different languages and content reflecting the unique needs of
individual underserved communities.
And fourth, we must undertake the necessary public
education to ensure the communities appreciate the need to
adopt and integrate the new medium so that communities can
participate in the digital economy and their children can be
successful. These four elements are the underpinnings of what
AOL and the AOL Foundation has tried to achieve in the last few
years as we have worked in partnership with other companies and
governments and nonprofits to find ways to bridge the digital
divide. We focus first on schools because we think schools are
where the skills are most important to be established and built
from the top down. We don't think this is a matter simply of
hand me down computers or continuing the debate whether
technology matters in education. We must make every attempt to
ensure that those who need support in schools can have it.
Two years ago we established an Education Initiatives Grant
Program that awards seed money to teams of educators, parents
and school administrators with innovative ideas for using
interactive technology. We have done over 110 of those grants
and we have learned a lot already about what works and what
doesn't. But we know schools aren't the only source of
solutions for the digital divide in that it will take a lot
more to get past it.
So this past November we initiated a program called
PowerUp, comprised of more than a dozen nonprofit organizations
major corporations and Federal agencies. The idea behind power
up is quite simple. It is not enough to give people access to
the computers and the Internet we have to teach them the skills
to make the most of that technology and the guidance they need
to make the most of their lives. Based in schools and community
centers around the country, PowerUp not only will provide young
people with access to a wide range of content and information
on the Internet, it will also help them develop the additional
skills they will need in the 21st century. We think PowerUp can
be scaled quickly and we intend to have centers in 250
locations by the end of this year.
We are also working with the Leadership Conference on Civil
Rights to help bring participation into the 180 organizations
that are involved in the leadership conference and we are
working with a number of other organizations to build nonprofit
capacity as people are starting to use the Internet more in
other ways.
I want to close with four things that I think the
subcommittee needs to keep in mind as you follow this issue.
The first is that we are just at the very beginning of this
evolution of information society. We are going to see much more
innovation and growth. And now is the time to help shape it.
Second, it is critical to remember that the new medium
offers as much opportunity to bridge the gap as it does to
widen it. The paradox of this medium is that with very little
money and a Web site anyone can have the skills to reach a
market that was previously unheard. Communities that have not
had access to traditional investment capital can use it for
economic development. Underserved populations that have been
marginalized politically can use to have their voices heard.
Third, keep in mind that the role of intermediary
organizations, nonprofits and others can be critical in
bridging the digital divide. We cannot see underserved and
remote communities fully embracing the opportunities and
benefits of the Internet unless those organizations are fully
prepared to help their constituents.
And finally, we believe it is important to make sure that
entrepreneurs from all walks of life, racial and socioeconomic
backgrounds are given the same opportunity that Steve Case had
15 years ago when he was able to start AOL. We think we have a
golden opportunity to make the Internet a medium that serves
and empowers all segments of our economy so its transformative
success is truly integrated throughout our society. We think we
can meet this challenge if we work together to ensure that the
21st century is about digital opportunity for all and a new
opportunity for all Americans to come into the economic and
political mainstream.
Thank you.
[Ms. Bushkin's statement may be found in appendix.]
Chairman Pitts. We will now go to questioning by the
members of the subcommittee. I am pleased to note that the
gentleman from Kansas, Dennis Moore, has joined us. First, we
would like to do one round for Dale Mitchell. Dale has to leave
to catch a train at 3:15. So if I can ask the members in the
first round to just ask Dale questions. I will start.
Dale, could you provide the subcommittee with a little bit
more information regarding the project you mentioned, the
School District of Lancaster and the Lancaster Osteopathic
Health Foundation? Can you tell us more about that?
Ms. Mitchell. I cannot tell you a great deal more about it.
I believe it is being announced publicly today. Bob Haig, who
is head of the Lancaster Osteopathic Health Foundation, just
gave me this information late last week but they are very
excited about it and hope to work with all the schools and the
principals in the Lancaster County area.
I think there is a news release that is going to come out
on it today. I will ensure that youroffice gets it.
Chairman Pitts. In your testimony you mentioned several
Delaware Valley Grantmaker partnerships that involve programs
for young children. How important do you believe it is for
children to be exposed to information technology at an early
age and what is the key to closing the gap with these
partnerships?
Ms. Mitchell. Well, it is critically important. Before
joining DVG as its executive director 5 years ago, I spent 30
years of my career with the IBM Corporation. So I learned early
on what a critical tool technology is for people to succeed.
And as was mentioned by other panelists here today, there is a
growing need in the information technology industry itself for
employees as many of you I am sure know we are bringing in
employees from other countries because there aren't enough
people in this country who have been trained and educated in
information technology. And that is why it is so important if
we want to remain competitive.
Chairman Pitts. How receptive have information technology
firms in your region been towards the Delaware Valley
Grantmaker initiatives to bridge the gap?
Ms. Mitchell. We are starting to see a great deal more
receptivity to it. In working with the Eastern Technology
Council, and these firms are all members of that council, I
will say that I felt for a while over the past 2 years that we
have been working on this initiative that I wasn't getting
anywhere. And just in the past few months and I certainly think
all the national attention that is being paid to it by not only
the Clinton administration but certainly others and seeing
organizations like Microsoft and AOL becoming so involved in
it, they are now starting to express a great deal of interest
and want to know what is going on out there and how they can be
of help and partner with our more traditional philanthropists
and the nonprofit organizations. I think what we need to ensure
is that we not only keep having discussions like this but that
incentives are put in place to encourage these businesses to
get involved, tax incentives being one of them.
Chairman Pitts. Ms. Millender-McDonald.
Ms. Millender-McDonald. Thank you, Mr. Chairman, and thank
you, Ms. Mitchell, for your great testimony this morning along
with all the others. You were very insightful and certainly
encouraging. But I want to ask you this, Delaware Valley
Grantmakers group, how many folks do you have, how many
corporations and charitable trusts make up that group?
Ms. Mitchell. It is 154 organizational members and within
those organizations we have close to 700 people who are members
of the organizations because--of our association because they
are either staff or trustees of those organizations. About a
third of them are corporate, either corporate giving programs
or corporate foundations.
Ms. Millender-McDonald. A lot of the groups conducted with
this industry leadership determined that they felt a moral
obligation, which I think is so critical. What do you think
made them get to that point of seeing this as a moral
obligation?
Ms. Mitchell. Well, I think as many business people in this
country, certainly not all of them, but we have a rich history
and tradition of corporations being socially responsible. And
those that are in this particular industry I think are
beginning to see that if we leave people behind and don't
provide them with this digital opportunity, then they are not
holding up to their moral responsibility. And it is in their
own self-interest. It is their future employees, their future
clients, so that is certainly a big piece of it.
Ms. Millender-McDonald. This is the one thing that we try
to convey to businesses when we meet with them, that it is in
your best interest, it is your future workers. And clearly if
they do not see it as a moral obligation, given the fact that I
think you stated or some of the others, that we are having to
go outside of this country to bring in skilled workers because
of a lack of persons being eligible to go to these jobs in
Silicon Valley and all over the country, that too should say a
lot. That speaks volumes to the need for our business folks to
look at this and the educational institutions too, as coming
from an administrative position in education, we were worlds
apart in business and education until all of a sudden they see
that we must bridge and become partners.
I really applaud you and all the others who are part of
your group in trying to bring about this digital divide. I will
not continue to move from that, Mr. Miller, until I have seen
this divide or this gap closed.
The other thing that I wanted to ask you, Ms. Mitchell, and
I am pulling it from your statement, that is why I am
underscoring all of what you have--obviously the region has the
potential to bridge the digital divide through both the
intellectual and financial capital of these industries.
Explain, expound on that just a little bit more.
Ms. Mitchell. I want to take the opportunity since the AOL
Corporation and Foundation is represented here today, I had the
opportunity to hear David Eisner speak from AOL a couple of
months ago and he was the first I heard who said we have a
moral responsibility. And then I started to talk to folks in my
own region and they agreed with him. And one of the things in
talking to these folks, and also David said it, many of them in
the early stages of their business don't feel that they can
give a lot of money to this cause at this point but they can
certainly provide the intellectual capital to it and----
Ms. Millender-McDonald. That is, intellectual capital.
Ms. Mitchell. They have the knowledge since they are in the
information technology industry to go into schools, community
centers, et cetera, as volunteers and share their knowledge.
Ms. Millender-McDonald. Okay. And that is very true. But in
my area of Watts, we certainly could, and would applaud anyone
who comes in, albeit BET, to give that intellectual knowledge
base and mentorship if you will. But there is also a critical
need for funding to go into the hardware-software part of it.
Because you can mentor for days and years and yet if you don't
have that tangible product on which you transfer that knowledge
it is not as worthwhile.
Ms. Mitchell. We are hoping to tap both of that, the
intellectual as well as the financial. I think in any type of
charitable giving in this country research reflects that those
that go there and volunteer first then grow into the biggest
givers in this country. So we are hoping and that is why we
also want to partner some of these rapidly emerging growth
businesses with our more traditionally philanthropies like the
William Penn Foundation in Philadelphia, the Microsofts,
theAOLs, who are higher in the curve in their success, and leverage the
resources.
Ms. Millender-McDonald. I know my light is on, Mr.
Chairman. I want to mention though that is true. I think the
intellectual part of it is so critical for those in the
business industry to go and speak with the top level
administration in schools and educational institutions because
they too need that type of mentorship and training, and who
best to give that but those who are the top brass on both ends.
Just concluding, the IBM Corporation We Have Narrowed the
Digital Divide, You Can Too. How many other groups are working
with them on that outside of the United Way?
Ms. Mitchell. They are holding a conference later this week
to get other nonprofits to team with them on this. They are
hoping that this just begins to be replicated all over the
country.
Ms. Millender-McDonald. Thank you, Ms. Mitchell. Thank you,
Mr. Chairman.
Chairman Pitts. Thank you, Ms. Mitchell, for your
testimony. I think we are getting you out of here in time to
catch the train.
Ms. Mitchell. Thank you very much.
Chairman Pitts.We appreciate you coming in today.
Ms. Mitchell. I will leave some of our just off the press
newsletters that came out yesterday that talks all about ``now
I will call it the digital opportunity, we unfortunately call
it the digital divide.''.
Ms. Millender-McDonald. You keep going, Ms. Mitchell, on
that with me.
Chairman Pitts. All right. We will begin our second round
of questioning. I will start with Darien Dash. Your testimony,
Mr. Dash, was very, very interesting. You mention in your
position as technology chair of School Board Number 5 in Harlem
what has been the response to the technology that has been
provided to the schools. And you also mentioned I think a
public-private partnership. If you could explain that a little
bit more as far as the schools.
Mr. Dash. In Harlem it was a unique situation because I
came into a district after the superintendent had changed that
traditionally had been the worst district in Harlem. They
probably were the furthest behind on technology than any other
school district or area in Harlem. What we had to do was to
figure out a way creatively to get machines and access
broadband access into the schools and also to provide content
that the kids could relate to and could embrace.
So as chair what I did was put together a board of public-
private sector partners that I knew could bring value added to
the table. So Oracle has come to the table with network
computers as well as the Beehive, which is a networked based,
Internet based community. Eureka Broadband came and wired the
schools and Mouse, a nonprofit organization, helped to bring
Compaq and Alta Vista to donate some 750 machines to the
district so we can have at least 30 to 40 machines in each
school. We launched the Secretary of Commerce Daley's digital
divide tour in the district and he actually came and did a
brief tour of one of the schools and had an opportunity to see
how the kids had embraced the technology and what a difference
it was actually starting to make in the school.
The children often don't have access outside of the school,
and they don't go to the public libraries after school because
that is what they call corny. So they don't want to go to the
public library after school. So therefore when they are in the
class they have, you know, very brief opportunities to really
interact with the computer. There are so many kids and there
are so many other problems that exist in the school the few
moments that they have with the technology has made a
difference for them.
Chairman Pitts. You mentioned a new school model that you
were developing. Are you talking about a virtual classroom?
Mr. Dash. The Internet, they say every year is a dog year,
7 years in the regular industry. So when I said old school I
was talking about traditional dial-up. I was talking about what
we call the ISP model where people are getting traditional 56K
Internet service to the household, not broadband, not wireless.
When I said new school I was making reference to the next
generation I-2, which is the cable modem, broadband wireless
access where the Internet will start to be delivered in real
time and the capacity for content and the capacity for new
applications in the entire model on how applications are
delivered and stored and how consumers participate with those
applications will change.
It will revolutionize once again. So when I made that
reference that is what I was talking about.
Chairman Pitts. Do you envision a classroom that is
conducted virtually?
Mr. Dash. Absolutely. Next generation educational system is
going to be built on distance learning. And we have already
started to see that today. More and more people are getting
certified online and are participating online to get distance
learning. I think that it really makes a lot of sense given the
inner city communities' perspective in education. Kids don't
always think, are not always comfortable being smart in school
or being in that classroom and being the person who is getting
good grades whereas on a one-on-one environment it is
different. They have a different sort of relationship and
interaction with education and technology is the great enabler
to be able to do that. And the next generation of Internet is
certainly going to be the platform to do it.
Chairman Pitts. Since you also have ties to the record
industry can you compare the entrepreneurial opportunities for
young African American students in that industry as to those in
the IT sector?
Mr. Dash. Well, you know it is interesting that you should
mention that that it seems more and more record executives are
fleeing the record industry to try to get involved in the
Internet. I actually had a very prominent record industry
executive who runs a big label come to me the other day and say
I want to be your ambassador to the entertainment industry and
I want to come and help build your entertainment division in
your company. They certainly know the next generation returns
as entrepreneurs is going to be in the Internet and the
opportunities are greater. And I do see that because African
Americans are growing at such a rapid rate there will be a lot
of saturation from a proliferation of just general Web sites
that are not funded well enough to survive.
Funding is an important piece of surviving as an
entrepreneur. You can't just have the goodidea nowadays, you
have to have the financing to be able to survive it. And the record
industry executives have traditionally been successful because they
have been able to self-finance their businesses or their albums to the
point where if it is a quality product it is successful. It is not
quite that easy in the Internet business.
Chairman Pitts. The red light is on. I wanted to ask you
about the strategic partnership that you mentioned but I will
wait.
Ms. Millender-McDonald. That tells me, Mr. Chairman, you
want me to be careful too about the light. Listen, Mr. Dash,
you have a cousin who is in hip-hop?
Mr. Dash. Damon.
Ms. Millender-McDonald. How do you think perhaps that tool
can be used to enhance the interest of high technology among
those in urban areas?
Mr. Dash. We are using it now. The rappers and the
entertainers, the ballplayers, they are the ones really today
who are driving urban culture and they are driving urban
businesses. So we are starting to use that now in putting those
faces like BET has done as well in putting those faces in front
of the medium. Technology's perception in the community has to
change, and the ones to do it are the, quote-unquote, market
makers. Those market makers are the JayZ's and the Puff Daddies
of the world.
Ms. Millender-McDonald. You have lost me completely with
this, young man, but it is an age culture that we are talking
about. But if you are in front of them are you actually talking
in this rap, they are saying get on the Internet whatever,
whatever?
Mr. Dash. There is a rapper named Nas actually who is a
very popular rapper I guess. He sold 2\1/2\ million on his last
release. In one of his songs he starts to make reference to
people getting involved in the Internet and more and more
rappers are using the dot com in their rap. He even made
reference to being a public company or taking companies public.
I think that is really going to be the next generation.
Entrepreneurs are going to have more and more public companies
because they have seen how quickly things can change when you
have a public vehicle behind you. I think our company has been
a good exam of that.
Ms. Millender-McDonald. I had last year in my CBC annual
legislative conference weekends, I was talking about going
public. So I need to connect with Noz, is it?
Mr. Dash. Noz.
Ms. Millender-McDonald. I have to connect with that. All
right. You know, our kids, inner city kids and even rural kids,
really the two of them are very much behind in terms of getting
connected. And you are right they have few computers in
schools. I mean it is about 18 to 1, in some of my schools in
the districts of Watts. But they connect every so often when
they get on this computer, but it really doesn't give them that
feel and this energy and motivation, but then it is not in the
libraries, it is not in the homes. That is where the divide
comes in, Mr. Miller, that we are talking about, this inability
for these children and students to really get excited about
this.
What can you tell me, outside of the rap groups, and that
is very important too for young folks these days, what else can
we do to start this avalanche of interest on the part of the
Internet with our kids and then speak to the new schools,
distance learning is absolutely critical, especially with adult
students going back to school, and if they are, piped in or
tuned into the Internet they could do this distance learning
far more effectively as well as wireless and the broadband.
So just your summation of that, tell us how we can get them
more energized, motivated and get going on the Internet.
Mr. Dash. Interestingly enough, I think that there is
already intent. The intent in the communities are there. People
want technology. It is not that they don't want it. It is it
hasn't been accessible, it hasn't been marketed and it hasn't
been made to feel sexy. It hasn't been made to be something
that they can touch, feel and understand.
In fact, to go back to your reference, Mr. Chairman, our
venture with America Online is built to do just that, to bring
tangibility to the Internet and to bring access with a bundles
PC to the price point so that people can understand it, touch
it and feel it. I think that as much as the young generation--
because the kids gets it. They get it more than I get it
sometimes and the younger kids, they are already there.
Generation Y and generation X, we are the ones who are pushing
this thing. It is really about the baby boomer, our parents'
generations that are intimidated by technology.
Ms. Millender-McDonald. Indeed they are.
Mr. Dash. It comes from being not being able to grow up
with it. And so I think that the barrier to entry is really
there. What we have tried to do is to go out into the faith
based community and really reach out there and let the parents
feel the power of technology and let the parents really be able
to embrace the technology in a one-on-one environment. Because
the kids get it. And even kids who are what we call lost in our
communities, you know, the gang members, they really don't want
to be doing that. They are looking for the new hustle. For them
technology has to become the new hustle. Drugs and guns and
things of that nature, that has kind of played out, as they
say, in our communities because they are tired--kids don't want
to go in jail.
Ms. Millender-McDonald. I will be speaking this Friday on
the new image of Watts, because it was once perceived that it
was gang and drug ridden but not that way anymore. And people
are anxious to move out of that mode into a different mode but
they need to have the tools by which to do this. And I tell
you, you had just an outstanding presentation.
Thank you, Mr. Chairman.
Chairman Pitts. Just one more question, Mr. Dash. What is
the strategic partnership that you referred to?
Mr. Dash. The partnership is with American Online and
CompuServe. What we have done is developed an urban brand of
ISP called Places of Color. The goal of the new service which
is built on top of the American Online infrastructure is to be
able to create core tendencies, which are training, distance
learning, certification, job placement and to surround that
nucleus with the relevant content that African Americans,
Hispanic, Native Americans, rural whites, the urban culture
that transcends color can sort of embrace the youth and bring
the relevance at a price point that they will feel comfortable
with.
Chairman Pitts. Mr. Miller, you mentioned that Web based
internship program that you have started. What has been the
level of response to this? How many students have been placed
in the internship?
Mr. Miller. We haven't placed any because we literally just
rolled it out two weeks ago. We have commitments from companies
to hire over 60 interns. We expect that number is going to
grow. We are getting calls from potential applicants from
potential employers and from colleges and universities all over
the country. So we expect to have this fully ready to roll out
in about three to four weeks, and we expect to start placing
interns this summer and into the fall. And again, these are all
going to be opportunities for students to work in high tech
companies, real jobs, not make work jobs, which we hope will
encourage them to then become IT professionals and enter the IT
work force.
Chairman Pitts. All right. And what role do you see
Congress playing with this whole thing, like programs for
digital opportunity initiative to continue to provide students
with opportunities in the IT sector?
Mr. Miller. I think the key is some of the legislation that
has been considered to provide IT tax credit training for
companies to provide training for workers is one thing that
this committee could look at. Because many times companies,
particularly smaller or medium size companies when they are
looking whether they are going to spend their next dollar on IT
training or not, particularly when you are talking about people
who may not be ready to join the work force in three for four
weeks but you are talking about a year or two or three they are
reluctant. So, for example, there have been bills introduced in
the House and Senate to provide IT tax credit training.
I also commend to you the bill that Congresswoman
Millender-McDonald referred to before, the H-1B bill because as
part of that bill employers will pay a fee of $1,000 per
employee which will generate about $180 million in new
nontaxpayer-funded training dollars which would go into
regional skills training alliances. Again, much of that money
can be focused on training minority students and others who
have not traditionally been part of the work force. I think on
the Senate version of the bill Senator Biden added an amendment
which would direct some of the money into boys and girls clubs
in inner cities, particularly for training, reaching out to
minority youth.
Ms. Millender-McDonald. That is our amendment for us there.
Mr. Miller. So I think the high tech community sees this H-
1B bill, the House and Senate version. There are differences
but it is a win-win. Because we need temporarily the short term
workers that this is going to provide the real training
dollars. The key that I urge the subcommittee and the
frustration we have had is that the money that has been going
into the H-1B program for years frankly we think the Department
of Labor has been very slow getting that money out there. It
has been very unfortunate because we in the employer community
naively hope by now we can come back to Congress and say look
at all these minority workers that have been trained.
Unfortunately, the Department of Labor has only given out about
$12 million worth of grants in little dribs and drabs instead
of pumping that money out there quickly because there are
plenty of training opportunities out there and these students
and the small and medium size employers frequently need tax
breaks or subsidies to do that training.
Chairman Pitts. All right. Ms. Steen, what kind of follow
up does CPDC provide its students once they graduate from
technology programs?
Ms. Steen. We follow them for a period of time as long as
we are able to. Following them long term is not always possible
because people move and change jobs. But there is successful
long term employment and to the extent that they are residents
of Edgewood Terrace we definitely follow them. We provide them
ongoing support. We have a club, an alumni club that people can
work with. Our job training now has expanded. We have worked
through many of the people that needed job opportunities at
Edgewood Terrace and now 80 percent of our students who are
from the surrounding community, it is a little more difficult
to keep track of those folks on an ongoing basis.
Chairman Pitts. Could you give us a little bit more detail
on the educational partnership between CDC and Catholic and
George Washington Universities?
Ms. Steen. Catholic we have been partners with for a number
of years. They are a nearby neighbor. We have reached out to
them and worked with them in a number of their departments. The
Metropolitan College, which is the college that provides
something akin to continuing education, has been very
aggressive with working with us. They have provided
scholarships for anyone that graduates from our employment
training classes. And they also teach at Edgewood Terrace in a
program we call At Home on Campus in an effort to break down
some of the barriers for people to go to college. We have
introduced college level courses at Edgewood Terrace that
people will take the first class in that course and then go on
and take the rest of classes at Catholic University.
Georgetown--George Washington I think you asked about, I will
tell you about both. George Washington has a department that
has expertise in assessment that we found to be an extremely
valuable tool in helping students identify the correct career
path, to help students find out what their strengths are, how
we should hone our curriculum to make it relevant so that we
can improve skills and get them placed in jobs that are
meaningful to them, get their interest and that they can
succeed at.
Georgetown University is our newest partner and they will
be studying Edgewood Terrace to document what has happened
there. I am not sure I am going to get the name right, Culture
Communication and Technology I think is the name of the
department. And they are interested to know what the impact of
technology is on this community. And they will be assisting us
with various parts of our Web site development as well.
Chairman Pitts. Thank you very much. I see my time is up.
Ms. Millender-McDonald.
Ms. Millender-McDonald. Thank you, Mr. Chairman. Ms. Steen,
let's see where do I get started here with all of these lines I
have crossed over here. Let me first commend you and all of the
young women who have come with you today who have excelled in
your program and are now in jobs that are really not only
creating their self-esteem but also paying them a livable wage.
So I commend all three of you young ladies who are out there in
the audience today and keep pushing on.
You talked about the thin clients. I think it is thin
clients I saw here that I wanted you to expound a little bit
more. ``using a newer technology known as thin clients.''
explain that to me.
Ms. Steen. When we embarked on creating an electronic
village, one of the issues that we grappled with was how were
we going to be able to sustain this technology in 800
apartments. Desktop computers take a lot of care and feeding.
And you can't be knocking on someone's door to go and correct
something on the desktop. Children have access, unsupervised
access to a computer and they can very quickly do some things
to it that nobody knows what happened. And so we were if we
were going to be successful in having this technology continue
and not just have a bunch of abandoned equipment in apartments,
we needed to find a technology that we could manage remotely.
And the thin client is the term that the industry uses for what
I call back to the future. It is like an old dumb terminal. It
looks like an individual pizza box. There are more varieties of
it coming out right now. There are all kinds of things that are
coming out every day with different levels of use built. The
particular one that we have allows us to--it has an embedded NT
chip in it. And it--basically you log on, it is a little box
you log on at your desktop, you have a monitor keyboard in this
little pizza box. You log on and it sends signals to a server
farm like the old mainframes but a server farm in a server room
at Edgewood and then all of the software is loaded on that
server farm in this remote location and it is administered, all
the care and feeding of it happens in the server room. If we
need to upgrade software, if we need to add a log on account,
if we need to do any kind of administration for this system, we
can do it remotely. So it is only when we have a hardware, a
real hardware problem that we need to deal with anyone in their
apartments. And by minimizing what that hardware can do in the
apartments, we minimize how much we have to go back and forth.
We had to look at the cost of operating the system. We are
getting donations. We have Federal funding for various parts of
this. The reality is we won't survive more than a year unless
we create a sustainable environment. And all of that investment
will disappear because there will be no one there to take care
of it. And so this is aimed at being an interim step to bring
technology into the home, to give people access and a way that
they can use it for the first time, understand it, deal with
it.
Ms. Millender-McDonald. But it is not going to be
sustainable.
Ms. Steen. That is what the thin client is meant to be.
Mr. Miller. That is the point. The thick client is not
sustainable because it costs so much money to maintain.
Ms. Steen. The total cost of ownership in a thick client in
a corporation, there are numbers anywhere from----
Ms. Millender-McDonald. The thin client will be
sustainable.
Ms. Steen. It is much, much more sustainable. Then the hope
is that residents once they start using this technology will go
on and buy their own computer. They will want to have more
software than we will put on the network. They will want to
customize things. They will have learned enough that they will
want more.
Ms. Millender-McDonald. So if they want to expand to
broadband or distance learning.
Ms. Steen. Broadband is the pipeline coming in. At Edgewood
Terrace we have a T-1 line coming in and any of the committee's
other sources could be the broadband. The thin client is just--
it is the hardware.
Ms. Millender-McDonald. Okay, fine. Mr. Miller, you wanted
to add to that.
Mr. Miller. Just to point it out there is also a tremendous
potential savings for schools. Even wealthy suburban schools
end up with plenty of expensive PCs sitting in boxes because
they don't have the budget to buy--they have the budget to buy
the PC but not to maintain it. Thin client, where most of the
brains are based in one place then, it is more like your
telephone or the brains are somewhere else and your telephone
is just sitting there. You are depending on someone else to fix
the software. It is the same idea. You have access to the
information but you don't maintain your own system. If you have
a thick pipe you can watch television, you can do records, you
could do anything you want. It is just you don't have to worry
about that PC.
Ms. Millender-McDonald. So why haven't we introduced this
to the educational world?
Mr. Miller. Some companies are trying real hard.
Mr. Dash. That is the next generation.
Ms. Mitchell. It is----
Ms. Steen. It is new.
Ms. Millender-McDonald. This is why I had to get some more
explanation because it was a new concept that I had not heard
of either.
Mr. Miller. We would be glad to arrange a demonstration for
you.
Chairman Pitts. Continue. Please respond.
Mr. Dash. There is a little bit of precaution that needs to
be taken when you talk about the thin client machine. I have a
7-year-old--I actually have 3 children but the 7-year-old uses
the PC every day when he comes home from school and uses the
CD-ROM quite a bit to learn from and also likes to sit down and
mess around with the word processor and store his information
to the PC in our house. When you are in a thin client
environment and you are in what we call an ASP, which is the
application service provider, instead of the ISP, which is kind
of the evolution of the ASP, when you are in an ASP environment
they are giving you the information, you give it back to them
and they are storing it for you in what they call a digital
closet. Well, unfortunately if they didn't pay my 19-dollar
bill that month my son couldn't get his information out of the
closet because the closet would be locked because the bill
wasn't paid.
But those are some of the potential downsides of what needs
to be looked at. I think local storage is an important issue in
the household. But certainly in the school and as a next
generation second, third, fourth machine in the household
network computers and home based networks are definitely great
ideas but I do think that local storage and local processing
power is an important issue.
Ms. Steen. Local storage is possible depending on the
equipment that you purchased. Ourequipment you can attach a
hard drive. We have local storage at Edgewood Terrace. It is an issue.
Also an issue is the operating system. We are using NT. And NT is not
terribly compatible. It is built for an office environment. It is not
terribly compatible with children's software. And so we won't be able
to put on this network what we have in our computer learning center
that are serving youth until a future generation of Windows comes out.
Chairman Pitts. Ms. Bushkin, did you want to add.
Ms. Bushkin. I think what you are going to see next is a
leap-frogging to devices that are freed from and untethered
from the PC. It will range from the television which will
change dramatically the notion of using the Internet when it is
in your home to the Palm Pilot or other handheld devices to
having the ability to use the Internet or get messages or find
information on your cell phone. I think we are going to see all
of that change the way it will be important to make sure that
no one is left behind again as the technology becomes so
critical to the functioning of the economy, and it will be
easier to vote and do everything else. The imperative for
making sure that we bring everybody along will become even
stronger.
Mr. Dash. Can I make one more point. We are none of us
rocket scientists. So.
Ms. Millender-McDonald. Really.
Mr. Dash. So while the technology is so impressive it is
not complex. And I think that it is important that we start to
teach the younger generations the underlying technology that is
actually there and how this all works so that they can figure
out for themselves how to take advantage not just being a work
force for but actually take advantage of and participate from
an ownership perspective in the next generation of technology.
Ms. Millender-McDonald. I would like to propose to the
chairman and this committee that we perhaps convene a type of
demonstration for perhaps some of the superintendents, whoever,
around the country, however you see fit to do this, to bring
forth this new technology and this new concept. Because after
all we do want to continue to be on the cutting edge.
Chairman Pitts. That sounds like an excellent idea. We will
talk to our staff about doing that. Let's continue now with
questioning, Ms. Tubbs Jones.
Ms. Jones. First of all, I want to apologize to the panel
for not having the opportunity to hear your testimony. I was a
speaker at a Community Development Corporation conference that
kind of ran behind schedule. So I had to get back here. But I
am interested in the issues that you have raised and impressed
with what I have heard in the last 5 to 7 minutes.
I just want to raise with you that I am currently
sponsoring--I know my staff person mentioned to me that you
have been talking about distance education before I came in.
And I am actually sponsoring a piece of legislation called
Greater Access to Distance Education. And the bill will
establish orientation programs as part of funded distance
education demonstration projects. And the reason I am
sponsoring this piece of legislation is that many adults fail
to complete a distance education course due to a lack of proper
orientation in the package. They will get it, they will sit
there and they will go oh, well, can't complete this and go
onto something else. In light of the fact that currently
orientation programs are not required, I am proposing that that
be a requirement if someone chooses to go through a distance
education program.
And I put that out there just to say I am not a rocket
scientist either. I am not even close to knowing some of these
things. My 17-year-old is a lot better at it than I am. But I
know that in order to bridge this digital divide we do have to
provide opportunities for people to--even once they access it
to figure out how they maneuver through the process.
The other thing, the question I would ask and I am going to
ask Mr. Dash only because I want to hear him talk and I don't
have anything written from him and I missed--to the reporter,
is it possible I could get Mr. Dash's testimony typed up for
me, please? Thank you.
My question is, what do you propose in areas for--for
example, I come from Ohio and a friend of mine just started--
just ran for the Senate in Ohio. And he was in southern Ohio in
an area where they don't even have lines, their telephone lines
are not such that they can even, even if they bought a computer
hook themselves up to a line to access information. What do you
see as happening in the future to be able if the telephone
lines don't get hooked up, what do we do for those folks?
Mr. Dash. We were speaking about the next generation that
is going on now, we were talking about things like AOL TV or
the next generation broadband. Cable will become what they call
a thick pipe for the Internet and for access and broadband
environment through cable modems and wireless technology. There
is a Palm Pilot that is sitting here now that is untethered.
Ms. Jones. I still have a 5. I haven't gotten to 7.
Mr. Dash. So everything will become actually untethered. So
they have a great opportunity of talking about the digital
opportunity, they have a great opportunity to propel themselves
ahead of the curve.
Ms. Jones. How would you suggest that we get that message
to the folks that you know that aren't even at this level that
don't--forget the infrastructure for the old method and get
ready for the new one.
Mr. Dash. I certainly don't say forget the old
infrastructure but in a situation like that, getting the
message out was what we were talking about before was about
creating relevance. I think that is the challenge from the
business community. Therein lies the opportunity. Whoever gets
there first with the best messages wins. Whoever gets there
first with the most marketing dollars, chances are is going to
win because nobody else is there now. So it is a great
opportunity in doing that. So it is about creating relevance
and putting faces on it that people can relate to and putting
it in a common sense perspective. Because I think technology,
there has been a veil that has been placed on technology. And
it is time for it to be lifted and for somebody to come out
with a common sense approach on how to use it and access it.
Mr. Miller. It seems to me that one of the great groups of
communicators in the United States are our legislators, you and
your 434 colleagues here and the 100 members across the way.
Ms. Jones. We are trying.
Mr. Miller. You have the respect of your community. You are
well known in your community. I assure you if you said you were
going to go to your community, you wanted to do a series of
town meetings and you wanted IT companies and people like Mr.
Dash and Mr. Mills and others to come along and talk about the
products and services they could offer they would bethere in a
heart beat because it would be a time for them to talk about the good
things they can do without wearing their pure marketing hat. Not that
these companies don't like to market too, but that is the opportunity.
That is why I keep using the phrase, Congresswoman Millender-McDonald,
because it is an opportunity.
I just did a major event with our companies in Japan with
the Internet wireless access in Asia. Now we are talking about
China, 1.2 billion people, India 1 billion people. They are
talking about wireless. They are not talking about phone lines.
It is too late for the plain old copper or fiber. So these
companies are excited about talking to these communities that
you are referring to. But they could use your help in getting
the message out. This is real stuff. It isn't science fiction.
This isn't particularly expensive. We need to lift the veil, as
Mr. Dash was suggesting.
Ms. Bushkin. I also think the faster you can drive
government services online and things that are compelling so
that people feel that they are missing something if they are
not online. So it is as valuable to them to have an Internet
connection, whether it is on a PC or any other way as it is to
have cable service or anything else in their home, that we need
to make that a critical part of everyday life so that people
feel it is critical to their success and their children's
future success.
I also want to come back to I think the long term goal for
everyone is that there should be Internet access in every home.
I mean that would be the vision that we would all share. I
think the first step has got to be in every community and we
make sure there is access for every child. If the homework
assignment is given that requires use of the Internet not every
child can go home and find a computer or do the homework but
there certainly needs to be one at the community center, at the
library, at the boys and girls club or the school needs to be
kept open late so kids can use it. Once kids are learning how
to use the technology they will drag the parents in. This is
the experience we are seeing in all the PowerUp centers, the
kids get turned on. It lowers the fear factor of the parents
and they are coming along and learning it as well. So we are
getting the intergenerational benefits. But I think we need to
see this as a two-phase process. We have to go for community
access first with the goal as all the technologies change of
putting this in every single home.
Ms. Jones. I want to give Mr. Mills an opportunity to
respond.
Mr. Mills. I would like to add when we launched BET.com one
of our marketing efforts in addition to all the online and off-
line marketing was actually to go out and interface with people
directly, do all the people expos, do all the events and really
reach out grass roots. What we found was there was a tremendous
response among the African American population. If you go to a
people's expo you really meet the people. You have parents and
you would have children and they would interact with the large
displays that we had and all the computers that we had up and
the parents would respond we really want this, we really like
the product, but we are a little mystified about how we go from
zero to having this product in our house. We are not sure
exactly which ISP we should use. We don't necessarily have a
good friend to call who can recommend this. Help me understand
how I should approach this process.
That is part of what drove BET.com to decide that what we
should do is build a bundled PC-ISP, BET brand of package and
sell it directly to our consumers. Because what we have
discovered is that our brand, given the strength of it and
particularly the residence of our brand with an urban audience,
gives us the ability to communicate to this audience that we
built a package just for you. We understand you, you understand
us. We have been here for 20 years. We built something
specifically for you. We will get into your home and help you
get online. Not just for us but help you access all the things
you find valuable in the Internet space.
Ms. Jones. Thank you very much. Now Mr. Dash, one last
request. You have to give me an autograph to take to my 17-
year-old. He knows about you. All right.
Thanks.
Ms. Millender-McDonald. I have missed something here. Show
you how far behind I am.
Chairman Pitts. We are going to do one more round. All the
witnesses have to leave by 4:00, I understand, so we will do
one more round.
Mr. Mills, in your testimony you mentioned a dearth of
information technology advertisements aimed at minority groups.
What has BET.com taken, what steps have you taken to publicize
your services and what does your Web site provide that has been
missing from the Internet before its launch?
Mr. Mills. When I say dearth it is not just with respect to
the African American Web sites that are online, but if you look
back 6 months ago very few Internet companies, whether African
American or general marketed Internet companies, were
specifically buying African American media to communicate the
value proposition of their online services to our community. At
the end of the day advertising is about generating awareness,
generating trial. If you don't market to our community in a way
that is relevant to our community you won't achieve the
awareness and trial required to get overall adoption of these
services.
When we announced the creation of BET.com we noticed
virtually no targeted marketing of online service to African
Americans. Six months went by. You now have all of the national
radio shows, whether it is the Tom Joyner show or the Donny
Simpson show, all of those shows now have dot com sponsors. You
have now--even on our cable network we have a proliferation of
dot com advertisers actively buying our media to provide
culturally relevant messages to our audience about the value
proposition of the Internet.
So it is not so much that it is a moral responsibility of
these companies to communicate the value proposition to our
audience but instead that they now have kind of an enlightened
self-interest which is positive, and enlightened self-interest
recognizing African Americans are projected to be such an
incredibly fast growing population that there really is an
opportunity to serve that community online.
What we have done is say let's put the most marketing money
that has ever been applied against an African American product
for the African American audience. We spend between $8\1/2\ to
$10 million to market BET.com. We do that using our own cable
networks. We use other people's cable networks. We buy general
market media. We bought radio all over the country, we bought
prints and we bought the full universe of African American
print. We own five magazines ourselves but in addition we
bought everybody else's. We bought Ebony, Essence,Jet, XXL,
Vibe, Source, Spin, Blaze, so we are basically--our mantra is that we
are the African American Visa. We are everywhere African Americans want
to be. We think that is important but we have gone one step further and
said it is not just about communicating a very self-serving message
about the value proposition of BET.com. We really have a broader
perspective, which is about communicating the value and the importance
of the Internet to the African American community.
So our Chairman Bob Johnson has actually reached out to a
number of celebrities in the African American space and said I
am willing to dedicate time on my cable network to generate a
message to communicate the importance of this medium to the
African American community. And we think by doing that, by
having individuals who have stature in our community and who
are considered school or sexy in our community say that that is
an important place for everyone to be, the Internet overall,
that will really substantially affect the amount of traffic and
utilization.
Mr. Miller. Just another piece of jargon is called a
vertical portal. The whole idea of people coming to the
Internet and of course 22 million subscribers go to AOL. That
is the biggest by far. But this whole question of whether
people want to go to a generic Web site where there is lots of
information or whether they want to go to something that is
more specific to them, however they identify themselves if they
identify themselves as New Yorkers, if they identified
themselves as African Americans, if they identified themselves
as Southerners, so what you have seen created are these
vertical portals where they are specialized in one particular
segment of society and they hope that they attract people who
just identify with that group. They might identify themselves
as bridge players. So as that happens then the whole marketing
model changes too. Because you can't just market to generic
magazines if you are going to say my target market is only
Hispanic Americans, or primarily Hispanic Americans or
primarily black Americans.
I think what Mr. Mills is reflecting in particular in the
African American community is in fact happening with a lot more
communities because you are develop a lot more of these
vertical portals and they have to reach out through these other
mass market publications, cable, television, others to
advertise to get people to come to their vertical portals.
Chairman Pitts. Ms. Bushkin, we have heard the lack of
Internet content geared towards minority users. What level of
minority participation do you have within AOL's communities?
Ms. Bushkin. We don't keep track of that information about
our subscribers or our members. But I can tell you that we have
some African American communities that are very active on AOL.
We have an organization called Black Voices. We are very
excited with the new partnership with DME, Places of Color,
which we think will not just reach out to the communities of
African Americans online but help bring new members online as
well.
I think what everybody has said already about this as this
being the fastest growing market is absolutely true, and that
we need to be creative about the way we reach out to finding
those people and giving people of different backgrounds,
different interests and different educational abilities new
reasons to come online. I think that is going to be the focus
going forward as everyone reaches out to provide more
compelling reasons to use the Internet medium.
The first, if you look at the way the Internet adoption
rates have progressed over the past 10 years and it has been
truly phenomenal, as Harris pointed out, it started with the
hobbyists and the people for whom this was a tool and then we
moved into people who were excited about using this perhaps for
a business or a job and we are just now beginning to touch and
tap the mainstream. But we have only begun. Only about 35
percent of the country now is online. But when we study the
people who have been online for say 3 years versus 1 year what
we are seeing is phenomenal integration into their lives in
that they move very quickly from using it one hour a month to
one hour a week to one hour a day. It becomes critical to the
way that they do everything from shopping to school to
communication.
The biggest gap in the digital divide right now is
interestingly single mothers. I can't think of a group that
needs the Internet more in terms of being able to shop 24 hours
a day at home. We think it will offer tremendous benefits to
people who are disabled. So we think we are just at the point
where we are beginning to reach that group. And an organization
like AOL is as committed to reaching out to them as we are
bringing that first wave of mainstream consumers online.
Chairman Pitts. Finally, we have had a suggestion for a
demonstration here. I saw, Mr. Miller, you pull out a Palm
Pilot. Did that have an antenna on it? Can you access the
Internet with that?
Mr. Miller. I can send e-mail messages from this. I can
download news clips from this. I can download stock quotes from
this. I can tell you where Starbucks is. I can order from
Amazon.com online from this little itty-bitty thing. That is
all available. I can find the names of my local elected
officials using this.
Ms. Millender-McDonald. Uh-oh.
Mr. Miller. I can trade stocks using this online without
going anywhere near my PC. I keep my schedule and phone
numbers. All these other things I can do online.
Chairman Pitts. We will pursue having a demonstration for
the members.
Ms. Millender-McDonald.
Ms. Millender-McDonald. Thank you, Mr. Chairman. Let me
first go back to Mr. Mills and, Mr. Mills, I am so happy that
BET has been a pioneer in reaching out to the African American
community in bringing these types of programs and this type of
innovation to our community. Just want you to continue to reach
out and do what you must do. However, I must say that e-
commerce is one that you didn't mention. I would like to
suggest to you that you do look into e-commerce. Especially Ms.
Bushkin who spoke of the fact that single parents, which are
number one and leading up heads of households do have this type
of access to the Internet. And everyone looks to BET for doing
all of those things that must be done, especially African
Americans. I certainly would like to suggest that to you.
I would like your people expo. I would suggest that you do
that in some of the major metropolitan areas and come to my
district first. I have suggested it, so come first. It doesn't
have to be in a large venue because a people's expo is just
what we are talking about is getting people interested in this.
So I like that concept. So do connect with me on that.
Ms. Bushkin, your presentation was very thought provoking.
I applaud AOL for the work that they do. PowerUp, we had a
meeting among groups of high tech folks just last week. I was
privy to hearing more about PowerUp. We applaud you on your
efforts. What I want to know is whether you have 250 centers in
various locations. I don't think you have one in my district.
Ms. Bushkin. Not yet.
Ms. Millender-McDonald. She is a very astute woman. She
said not yet; she didn't say no but not yet. How do you
identify these centers and what is the criteria for those
centers being placed wherever they are?
Ms. Bushkin. We actually have four up and running but we
are aiming to have 250 by the end of the year.
Ms. Millender-McDonald. So I am still in the running. Okay.
Fine.
Ms. Bushkin. What makes a success--where is the other one?
Cleveland. There are a couple things that would make a very
successful center. We have tried not to reinvent the wheel or
start from scratch. So where there is a boys and girls club or
YMCA or another center in the community, this could be the
public housing project where already we think that there is a
nucleus of people gathering that is number one for us. And we
like to partner with organizations that are already serving the
community that way.
Second, another key part for us is having some local
sponsors who are committed to helping the community and who
will help us bring in Vista volunteers, because we don't think
a center that just has computers alone is enough. It is very
important to have caring adults teaching the kids how to use
the Internet, guiding them to find the right information and
teaching them to find the information online that will give
them the skills that they need.
Third, we are working with Gateway and a number of other
providers to make sure that we can bring computers into centers
that don't have them as well as some telecommunications
companies to do the wiring.
Fourth, we simply look for communities that have the
greatest need. So we are broadly and widely looking around. We
have three centers in this area and we would be happy to show
you what is working with them. Steve Case just visited Blue
High School with President Clinton three weeks ago where a new
center is going on. We have one in Southern Ridge in Anacostia,
one in Gum Springs in Alexandria. We are learning each time
about what would be a successful one. But certainly Watts would
be a good place for us to locate.
Ms. Millender-McDonald. We certainly look forward to your
coming there the next time.
Mr. Miller, you were so energetic in your presentation so I
will tell you although I don't want to--I am not going to scold
you as much as I would like you're telling us to forget this
digital divide and go to digital opportunity. I do agree with
you we will say in order to change from the digital divide we
must look at it in digital opportunity fashion.
The IT workers, we have need education. Bottom line. I
mean, you cannot have IT workers, you cannot have interns in
all of this unless you educate folks and you cannot educate
them if you don't have access to these computers in the schools
that will engage them in the training to be skillful enough to
move on into the internship program that you speak about.
Am I correct on that?
Mr. Miller. At least students who don't have algebra
through their K through 12 education, the chances of them
becoming a successful computer programmer are not very good. So
there are other jobs they can do as IT workers, but if they
can't at least get through those basic math and science courses
in their K through 12 education then the chances of their post-
education leading them to become an IT worker and doing the
wonderful things that these people back here behind us have
done, gets to be very difficult, not impossible but much more
difficult.
Ms. Millender-McDonald. I agree with you. To finish up my
questions--rather, just a comment. I talk with a lot of the
HBCU presidents and indeed the Ph.D. Programs are really
falling behind in those schools. And you speak of the very
minuscule fewer people who are into the Ph.D. Programs in
computer science. That is something that hopefully you can talk
to me later about or whatever your suggestion is as to how we
get folks in tune with that. Because if they don't have the
training at all from the K-12 and don't have it in an
internship program mode then they are not apt to go to a Ph.D.
Program in computer science.
Mr. Miller. One of the things that is absolutely critical
as to what Congress can do, funding fully or maybe even going
beyond the administration's request for additional research and
development money in the IT field, the Congress has committed
the last few years a lot more money to medical research but
there is a huge role based on the President's Information
Technology Advisory Committee for more Federal funding to
universities for IT research. Even that has a spillover effect.
Because when you fund those university faculty then they need
graduate students, which means they create fellowships so then
they attract more students to then stay on. So a lot of it is a
spill-down effect.
So I would commend to you what is in the President
Clinton's budget to look at that for additional funding for IT
research. It will create the new technologies that will make
access simpler. As Ms. Bushkin said in her opening statement,
we are just at the dawn of this Internet age. We are still in
the earliest days of this Internet age, and this reach and
development, a lot of which is being done by private industry
but a lot of it can be done by academic institutions by
government also.
Ms. Millender-McDonald. Let me again commend you for this
hearing. It has been most informative and you have really just
outlined a great group of outstanding experts. I also want to
say I regret that Politicallyblack.com could not be here so
they have a statement for the record they would like to submit
for the record.
Chairman Pitts. Ms. Tubbs Jones.
Ms. Jones. In light of the time I am going to forego any
further questioning. I do have a statement that I would like to
submit for the record personally. I want to thank each and
every one of you for coming to our Empowerment Subcommittee and
commend to you as part of the President's proposed budget the
new market initiatives that you would consider the new markets
that he is trying to go into and perhaps we can take this as a
digital opportunity, Mr. Miller, and use the new market
initiatives. Because it would be a great opportunity to go into
underserved communities with dollars to be able to go in there
in terms of equity. It would be just an exciting thing for many
of you to take up that opportunity and go into some of these
neighborhoods. Again I would like to commend you for your
presentations. Apologize for not being here at the beginning.
Chairman Pitts. Thank you. Without objection, we will end
your comments. We will leave the record open for 5 legislative
days for anyone who would like to add statements or any
responses from our witnesses. I would like to say this has been
an excellence panel today. We received some wonderful
information, excellent recommendations, and the subcommittee
will act accordingly.
The time of 4:00 having arrived, the hearing is adjourned.
Thank you.
[Whereupon, at 4:02 p.m., the subcommittee was adjourned.]
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