ASSISTANT SECRETARY FOR COMMUNICATIONS AND INFORMATION
NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION
U.S. DEPARTMENT OF COMMERCE
ON THE "DIGITAL DIVIDE" IN RURAL AMERICA AND
LOAN GUARANTEES AND RURAL TELEVISION SERVICE
BEFORE THE COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
FEBRUARY 3, 2000
Thank you Mr. Chairman for inviting me to testify before this Committee regarding the "Digital Divide" that exists in rural America and efforts to ensure that viewers in small and rural markets have access to local broadcast programming. Both of these issues are deserving of Congressional attention to prevent rural Americans from becoming increasingly part of the "information have-nots."
The "Digital Divide"
With respect to the Digital Divide, the Administration recognizes that despite incredible growth in personal computer ownership and Internet access in this country, there remains distinct disparities in such access, especially in rural areas. Last July, President Clinton and Secretary of Commerce William M. Daley released Falling Through the Net: Defining the Digital Divide. This is the third report authored by the National Telecommunications and Information Administration (NTIA) documenting household access to telephones, computers, and the Internet. This Falling through the Net report, which expands upon the previous two reports, is a key component of the Department of Commerce's efforts to understand, measure, and explain how the information revolution is affecting this nation. This study provides valuable new information on how people are gaining access to the Internet, how Americans choose to spend their time online, and why some people are not connected.
Access to new technologies, such as the computer and the Internet, will be crucial to the economic success of American businesses, communities, and individuals. The Internet is becoming an invaluable tool for personal success and professional advancement. Increasingly, Americans are using it to find jobs, contact colleagues, locate public information or take courses online. Familiarity with new technologies will also prepare more Americans for the high-tech workplace of the 21st century.
In the Falling through the Net report, we present some good news, which is that more Americans are connected today than ever before. Computer ownership has nearly doubled in four years, and Internet access has increased more than 40 percent in the last year alone. More than one-quarter of American households have Internet access at home and approximately one-third of Americans are going online from some point. Additionally, those traditionally less likely to have telephones, primarily young and minority households in rural areas, are now more likely to have phones at home.
Unfortunately, this report also presents some very troubling news. Data from this report reveals that Americans living in rural areas are lagging behind the national average in computer and Internet access, regardless of income level. This new data revealed growing disparities, including the following:
- At almost every income level, those households in rural areas are less likely to own computers than households in urban or central city areas.
- At almost every income level, households in rural areas are significantly less likely - sometimes half as likely - to have home Internet access than those in urban or central city areas.
- Black households in rural areas are more than 1/5th less likely to own a computer than the national average U.S. black household, and are almost 2/5ths less likely to access the Internet than the average U.S. Black household.
- Also for rural areas, the Kindergarten-12th grade school is a popular point of Internet access: 30 percent of rural persons use school for Internet access outside the home, as compared to the national average of 21.8 percent.
These statistics illustrate that a "digital divide" clearly exists among different demographic groups, and that rural areas are falling on the wrong side of this divide. The Administration is committed to working to closing this gap between the information "haves" and "have nots" and also recognizes that such an effort requires creative partnerships between government, industry, and non-profit organizations.
Government programs, such as NTIA's Technology Opportunities Program (TOP), (formerly known as the Telecommunications and Information Infrastructure Assistance Program (TIIAP)), are already working to expand access to technological resources in under served areas. TOP promotes the widespread use of advanced telecommunications and information technologies in the public and non-profit sectors. The program provides matching demonstration grants to state and local governments, health care providers, school districts, libraries, social service organizations, public safety services, and other non-profit entities to help them develop information infrastructures and services that are accessible to all citizens, in rural as well as urban areas. TOP has provided support to such programs as the Mountain Area Information Network in North Carolina, the Lincoln Trail TELEVILLAGE Project in Kentucky, the Telecommunications Solutions for Rural Revitalizations project in South Dakota, and the Vermont Telecommunications Application Center, all of which promote the development and deployment of technology resources to address the needs of rural residents in those states.
The assistance of non-profit organizations and private industries is also a necessary component in expanding access to new technologies. Companies are supporting the creation of community technology centers, helping schools through "NetDays," and donating computers and software to schools and neighborhood centers. The private sector's contribution is essential because these companies know what kind of skills Americans will need in order to find jobs in the future.
Community-based organizations can also help provide access to computers and the Internet where communities need it most. Each community knows best how to reach and connect residents, whether through traditional community centers, churches, senior centers, fire and police stations, or other centers.
In addition, as the President's principle adviser on telecommunications and information policy matters, NTIA will continue to advocate policies that advance the goals of promoting competition and advancing universal service, consistent with the objectives of the Telecommunications Act of 1996. In particular, the Administration remains committed to the preservation and advancement of universal service reforms that will ensure that consumers living in rural and high cost areas can fully participate in the digital economy. To this end, we will work with the Federal Communications Commission and the states to implement universal service reforms that achieve the goals of the Telecommunications Act that "access to advanced telecommunications and information services should be provided in all regions of the Nation" and that rural consumers have comparable services at comparable rates.
All of these efforts are necessary if we hope to close the digital divide that exists between urban and rural America. I look forward, in my capacity as Administrator of NTIA, to promoting public and private programs designed to ensure that all Americans are able to fully participate and benefit from new technology.
Loan Guarantees and Rural Television Service
I also appreciate the opportunity to testify before this Committee on providing loan guarantees to providers to carry local broadcast signals to residents of small, rural local broadcast markets. The Administration believes that the question of how consumers in small and rural markets receive local news and information is very important and deserving of Congressional attention.
I can recall well the night that the Senate passed the Omnibus Appropriations Act and the Senate discussed a proposal to provide loan guarantees for carriers to provide local-into-local broadcast coverage to small and rural markets. I was struck by the fact that when this Administration took office in 1993, there were no operational direct broadcast satellites (DBS) providing service to viewers. In 1993, there never could have been a debate like that which embroiled the Senate last November over the question as to how small and rural markets would get local-into-local service over satellite systems. Today, there are more than 11 million DBS subscribers. DBS companies are providing local-into-local service in 24 markets and are currently negotiating for the rights to deliver local-into-local broadcasting in 20 more. The question remains, however, as to how viewers in the remaining 200 or more television markets obtain access to local-into-local service.
The Administration strongly supported the provisions in the Satellite Home Viewer Improvement Act (SHVIA) that provided authorization to satellite providers to carry local-into-local broadcast programming. The Administration believes that authorizing local-into-local service not only promotes greater access to local television signals for all Americans, but also strengthens DBS providers' ability to provide meaningful competition to cable with comparable program offerings. Unfortunately, markets in which local-into-local broadcasting over satellite systems is not offered will be less likely to enjoy the same competitive benefits. Moreover, in some rural areas, there is no multichannel video programming supplier offering local broadcast signals and many of these communities lay outside of the signal coverage area of their local broadcast stations.
For these reasons, the Administration believes that it is important to find ways to ensure that consumers in rural and small markets have access to local broadcast programming. The Administration is prepared to work closely with the Congress on any proposal to address this issue, including a loan guarantee proposal. We believe that these three principles should guide such legislation. First, the Administration believes that any new program should be technology neutral in recognition of the fact that different technologies may best be suited to deliver local broadcasting services to unserved areas in different parts of the country. Technology neutrality can spur innovation and the application of new technologies to address this problem. Second, the program should be crafted to ensure that it promotes competition in the multichannel video programming market and encourages future private investment in infrastructure. Third, the program should demonstrate fiscal responsibility by conforming to Federal credit program policies, which minimize Federal exposure to loss and ensure the least expensive, most efficient financing of Federally guaranteed loans.
The Administration also believes that the discussion over ensuring local-into-local broadcast programming in the digital era should not be limited to the loan guarantee approach. Thus, NTIA recently announced that it will publish a Federal Register Notice to solicit public comments and suggestions as to how viewers in small and rural markets can receive local broadcast signals. All comments will be posted on NTIA's web site (http://www.ntia.doc.gov). As part of this effort, I intend to host a roundtable discussion in early March with various stakeholders: consumers, industry representatives, policy makers, and technology experts, to explore ways in which small and rural markets can have access to local programming via satellite and other technologies. Our efforts in this area are intended to complement the Congressional action and efforts by the Federal Communications Commission to examine this question as required under SHVIA. Our intent is to help raise visibility on this issue and contribute to the debate.
Extending the reach of local broadcasting and its vital news and information has been a longstanding goal of NTIA. The agency administers the Public Telecommunications Facilities Program (PTFP), which provides grants to establish and extend the reach of local public television and radio stations into unserved areas. Since 1962, the program has been a major factor in the nation's success in bringing local public television stations to rural areas - - through the establishment of full power stations, as well as the construction of television translators and repeaters. PTFP estimates that approximately 94 percent of all Americans can receive at least one free, over-the-air public television signal from a local PBS member-station.
The preservation of local broadcasting in the digital era is vitally important and ensuring that viewers in small and rural markets are included in this new age is critical. The Administration pledges its support to advance the goal of extending the reach of local broadcasting to all Americans and looks forward to working with Congress on the loan guarantee proposal as well as exploring other approaches to this issue. We would appreciate the opportunity to provide comments on any specific legislative proposal.
Thank you for the opportunity to testify and I would be happy to respond to your questions.