Mr. Chairman and Members of the Committee:
Thank you for this opportunity to testify before you today
on the reauthorization of the Department of Commerce's National
Telecommunications and Information Administration (NTIA).
As the President's principal adviser on domestic and
international telecommunications and information policy, NTIA
develops and advocates Administration policies for
telecommunications and information-related industries, which are
expected to grow to 17 percent of our domestic economy by the
early 21st Century. Generating more than three-quarters of a
trillion dollars in annual revenues, the telecommunications and
information sectors represent the growth industries of today and
the next century. These sectors encompass a broad range of
services and products, including those offered by wired and
wireless telephony, broadcast and cable television, the Internet,
satellites, and other delivery systems.
Changes are taking place in our nation as a result of new
telecommunications and information technologies and their
applications. We are using these technologies to grow our
economy, to expand markets both domestically and internationally,
to generate new products and services. We are realizing the
power of technology to bring high-wage, high-skilled jobs to our
nation's workforce and new resources to our students.
The high-technology sector is increasingly becoming the
linchpin of our economic success in the 1990s and into the 21st
Century. Indeed, the high-technology sector has replaced the
traditional cyclical industries, such as autos and construction,
as the driving force for growth. For the past three years, high-tech companies have contributed 27 percent of the growth in our
gross domestic product, compared with 14 percent for residential
housing and only four percent for the automobile companies. Over
just this past year, 33 percent of GDP growth is the result of
information technology industries, which includes everything from
the Internet and its related products to direct broadcast
satellite television.
There are more than 9 million workers now in the high-tech
sector. And that is not accounting for any multiplier effect,
which is significant. For example, a study of Microsoft's impact
on the Washington State economy showed that each Microsoft job
created 6.7 new jobs in the state. Compare this with a 3.8
multiplier for Boeing Co. High-tech jobs have accounted for
roughly 20-25 percent of the real wage and salary growth over the
past year.
And Wall Street sees continued growth in America's high-tech
giants, as illustrated by the following statistic: The market
capitalization of Intel, Microsoft, and Cisco together is almost
three times that of Detroit's big three car companies, even
though the car companies' sales are more than ten times higher
than the high-tech firms.
The heightened importance of the telecommunications and
information sectors of the economy has engendered new and
pressing policy development and advocacy needs. NTIA's work in
developing pro-competitive, pro-consumer policies, managing the
Federal use of the radio spectrum, and opening foreign markets to
U.S. companies is key to maintaining U.S. competitiveness. We
are working hard to capitalize on American ingenuity and
innovation in the telecommunications and information industries,
and bring new opportunities to American businesses and workers.
NTIA will be drafting authorizing legislation for the
agency's programs, which we will submit to Congress when it is
completed. Today, I will highlight NTIA's key operations --
operations that are essential to promoting continued growth in
these critical areas. NTIA's programs focus on three major
priorities: (1) managing Federal spectrum use to improve
efficiency, increasing private sector access to spectrum
resources, and planning for future spectrum needs, including
those of the public safety community; (2) promoting competition
and opening markets, both domestic and global; and (3) promoting
universal access and affordable telecommunications services for
all Americans.
Improving Federal Spectrum Users' Efficiency, Increasing Private
Sector Access to Spectrum, and Planning for Future Spectrum Needs
Let me begin with one of NTIA's core functions -- spectrum
management. NTIA serves as a policy adviser to the President on
spectrum issues, in addition to managing the Federal Government's
use of the radio frequency spectrum. The fundamental goal of
spectrum management at NTIA, as it is around the globe, is to
avert potential interference between users and to ensure that
spectrum is available for existing and future needs through the
most efficient use of the spectrum. Because of the tremendous
demand for spectrum resources, however, we often must balance the
costs of displacing existing users with the potential benefits of
the new services.
Spectrum Efficiency
The Federal Government constantly seeks to modernize its
radiocommunications, decrease its channel bandwidths, and
increase its use of digital technology and private sector
radiocommunications. NTIA uses the following management tools to
improve Federal spectrum use:
Requiring Federal users to use commercial services where
possible
NTIA requires that every Federal Government user requesting
a frequency assignment must first determine that its need cannot
be met by a private or commercially available service provider.
This policy has resulted in increased use of commercial services
by Federal Government users, such as the Department of Defense.
Promoting the use of new spectrum efficient technologies
The Federal Government is a leader in developing new
spectrum-efficient techniques such as narrowbanding, digital
modulation, and spectrum sharing as well as in the use of the
highest quality spectrum-efficient equipment. These techniques
will lead to a doubling, and possibly quadrupling, of the number
of frequencies available for land mobile communications. NTIA
has required that all Federal users move to more efficient 12.5
KHz equipment for mobile communications by 2005. In another
example, the Federal Aviation Administration has increased their
use of certain frequency bands more than 33 times through more
advanced technology.
Engaging in spectrum planning
In 1993, the Secretary of Commerce submitted the Land Mobile
Spectrum Efficiency Plan to Congress, as required by the NTIA
Organization Act. The implementation of this plan resulted in:
(1) more usage of commercial and government-owned trunking
systems, (2) doubling the channels in three major Federal land
mobile bands through new narrowband technology, and (3) the
promotion of sharing with the private sector. Several years
later, the private sector adopted a similar narrowband channel
plan.
Collecting spectrum management fees
Pursuant to Congressional mandate, NTIA put forth a program
designed to collect fees from Federal agencies for spectrum
management services provided by NTIA. NTIA proposed that each
agency be charged in proportion to its use of the spectrum, and
that the fee system be implemented over a five year period
beginning in FY 1996.
Based on this report, Congress implemented legislation in
1996 (P.L. 104-134) directing NTIA to charge Federal agencies for
NTIA's cost of managing the radio frequency spectrum. At the
same time, Congress reduced the amount of direct appropriations
to NTIA by the amount of the fees.
Due to serious difficulties in collecting fees in FY 1996,
Congress passed a law (P.L. 104-208) that clearly specified that
Federal agencies shall pay the fees charged by NTIA for spectrum
management costs in FY 1997 and that, if they do not, they will
have to cease using the spectrum. The legislation also directed
that NTIA charge a total of $5 million in fees in FY 1997. NTIA
sent letters to 29 agencies requesting payment. NTIA has
received memorandums of understanding or equivalent from these
agencies for the full $5 million, and has received payments to
date of approximately $3.2 million.
To give the agencies as much notice as possible, NTIA
informed the agencies of their estimated costs for FY 1998 in
July 1996, so that their costs could be included in their
respective budget submissions to Congress. The Administration
plans to increase the fees in 1998 to $7.5 million.
Increasing private sector access to spectrum
NTIA continues to work with the FCC, the private sector, and
Federal agencies to promote sharing of spectrum with private
sector users. Since 1978, NTIA has coordinated the reallocation
of more than 5,000 MHz of spectrum to exclusive private use or
greater shared use with private sector entities. This is a
significant amount of spectrum -- today's entire cellular
telephone industry is allocated only 50 MHz.
Spectrum reallocation
Over the past several years, NTIA has begun to reallocate
235 MHz of spectrum from Federal Government use to the private
sector. The process for identifying spectrum for reallocation
was based on a two year study which took into account two major
factors: (1) the impact on the Federal agencies, in terms of
mission, costs, and potential reduction of services to the
public, and (2) the benefits expected to be realized by the
public. Based on the extensive planning and coordination with
the FCC, government agencies, and the public to produce this
report, NTIA also identified an additional 35 MHz of Federal
spectrum to transfer to private use. NTIA has already
reallocated 145 MHz. The remaining 90 MHz will be reallocated to
the FCC by the year 2004.
NTIA has also recently transferred spectrum to support
satellite systems. During the International Telecommunication
Union World Radiocommunication Conference (ITU/WRC) in October
1995, NTIA coordinated the release of 3 MHz of Federal Government
spectrum for exclusive use in mobile satellite systems (low earth
orbiting satellites, or LEOs). NTIA has also arranged for shared
use of 360 MHz of Federal Government spectrum for mobile
satellite links for big LEOs.
In addition, NTIA worked closely with the FCC to allocate
300 MHz of spectrum previously used primarily by the Federal
Government for shared use with unlicensed wireless networks.
Because these networks are unlicensed, they will be relatively
affordable, and thus will provide an important networking option
that will be attractive to schools, libraries, and others with
limited financial resources.
Reimbursing Federal users that move to accommodate private
users
To accelerate the transfer of spectrum from Federal to
private sector use, NTIA has proposed that winning bidders in
auctions for spectrum now used by Federal agencies reimburse
these Federal users for costs of relocating their operations
relocation costs. NTIA worked with the Congress on this proposal
last year. This important reform will be made part of the
Administration's submission for NTIA's authorizing legislation,
which NTIA plans to forward to Congress in May. The
Administration proposes that incumbent Federal users have the
same rights that incumbent private users have who are moved from
a band of spectrum that will be auctioned. The new users
reimburse the old users to move by purchasing equipment or paying
for other expenses.
When NTIA identified 235 MHZ for relocation in 1993, there
were many Federal users who could not be moved until after the
year 2000 because they had no immediate means to pay for such a
move. The total cost of moving operations and paying for new
equipment for these Federal users is estimated at $500 million.
This cost will be borne directly by taxpayers through the
appropriations process, unless we can find a way to have new
entrants pay for this relocation. If the Congress supports this
language, spectrum can be cleared more quickly to accommodate new
private sector users, and Federal operations -- including
national security and public safety activities -- can be
maintained.
Planning for Future Spectrum Needs
Reinventing the spectrum authorization process
NTIA began a program in 1993 to develop an automated Federal
spectrum management system to provide a standardized, automated
method for Federal agencies to submit applications for spectrum
support, select spectrum that is interference free, and validate
that the spectrum requested is within the rules and regulations
governing spectrum authorization. This system will allow NTIA to
make the spectrum process more efficient and responsive, more
accessible and less bureaucratic. NTIA introduced the Joint
Spectrum Management System for windows (JSMS) in March 1997.
Improvements will continue on JSMS to make it more effective and
to make use of spectrum more efficient. JSMS is providing tools
to spectrum managers in the field so that they can manage their
own use of the spectrum, use the spectrum more efficiently, and
more rapidly obtain spectrum to meet their needs.
Meeting Spectrum Needs for Future Public Safety Use
One of the most pressing Federal spectrum needs is that of public safety. Under Congressional leadership, NTIA and the FCC established the Public Safety Wireless Advisory Committee (PSWAC) in 1995. The Committee was composed of appointees from Federal, State, and local governments and private sector public safety organizations. The goals were to evaluate the wireless communications needs of these public safety agencies through the year 2010 and recommend possible solutions to the lack of available spectrum and interoperability problems. In September 1996, PSWAC submitted a report outlining public safety needs for additional spectrum, improved interoperability, more flexible licensing policies, and increased sharing of spectrum resources.
To meet the immediate and future needs of the public safety
community, the Committee made the following observations and
recommendations:
* More spectrum is required. 2.5 MHz of spectrum should be
identified for interoperability among Federal, State, and
local public safety agencies from new or existing
allocations as soon as possible. In the short term (within
5 years), approximately 25 MHz of new Public Safety
allocations are needed, and over the next 15 years, as much
as an additional 70 MHz of spectrum will be required.
* Improved interoperability is required. Today's
interoperability needs can be addressed by establishing
bands of frequencies for interoperability purposes,
encouraging the development and use of shared systems, and
building gateways between technically incompatible systems.
* More flexible licensing policies are desirable. Policies
should encourage the use of the most spectrally efficient
approaches while remaining technology neutral.
* More sharing and joint use should be encouraged. Some
states and regions are experiencing considerable success in
pooling spectral and other resources.
* Commercial services should be used wherever possible.
* Consultative processes should be established.
* Funding limitations remain an obstacle. At a time when
government budgets are tight, alternative methods of funding
future public safety communications systems must be
identified. To address this issue, NTIA recommends adoption
of our proposed reimbursement language.
NTIA and the FCC are evaluating these recommendations and
using other mechanisms to address the longer range
recommendations. The President's FY 1998 budget proposes that
four channels between existing broadcast channels 60 to 69 be
allocated for public safety use. Six other channels will be
auctioned by the FCC for other services. NTIA advocated
allocation of these channels for public safety in an FCC
proceeding that was examining potential uses for these channels.
NTIA is continuing to ensure that spectrum is available to
meet the needs of the Federal Government and the public safety
community in providing the public with law enforcement, national
security, safe airways, disaster and environmental control, and
safe living conditions. At the same time, NTIA is continuing to
work to make the Federal Government's use of the spectrum more
effective and efficient.
Promoting Competition and Opening Markets
NTIA actively promotes competition and open markets through domestic and international telecommunications policy development and advocacy, efficient spectrum management and reallocation of spectrum to private sector users, and telecommunications research. NTIA continues to work diligently to eliminate barriers to competition in the telecommunications industry while protecting consumers. NTIA is advocating policies that spur innovation, encourage competition, and create jobs. NTIA is leading Administration efforts to provide rural, inner city, and underserved areas with access to educational opportunities, job training, and better medical care through advanced telecommunications services. NTIA is also performing cutting-edge research and analysis, such as finding ways to use higher frequency spectrum for new wireless services, and developing positions on a wide array of policy issues, such as universal service, spectrum auctions, and privacy on electronic networks.
Domestic Policy Issues
The goal of NTIA's domestic policy activities, which are
part of NTIA's role as principal adviser to the President on
telecommunications and information policies, is to enhance the
public interest by generating, articulating, and advocating
creative and influential policies and programs in the
telecommunications and information sectors that enhance service
competition, consumer welfare, and economic and social
opportunities for all, and that remove impediments to the growth
and vitality of these sectors.
NTIA's domestic policy recommendations have made substantial
contributions to major governmental actions regarding
broadcasting, cable, and telephone issues. The range of domestic
telecommunications policy issues is broad and increasingly
complex, reflecting the rapid changes in telecommunications
technology, its application to the marketplace, and a broadening
of the number and types of players. Issues include traditional
common carrier telephony and cable television, as well as their
convergence with computer services; the improvement of radio
spectrum management (e.g., spectrum auctions); rules limiting
mass media (radio - television) ownership; development of
advanced television (ATV); implications of Internet growth; and
content oriented issues such as privacy, hate crimes, or free
speech, using telecommunications. For example, NTIA issued a
report recommending a voluntary framework to ensure privacy with
regard to telecommunications-related personal information. NTIA
is now promoting means of achieving industry self-regulation and
will be issuing a report on self-regulation and privacy in the
near future.
NTIA made substantial contributions to the recently enacted
Telecommunications Act of 1996. Many of the Act's provisions
require FCC rulemakings for implementation, and NTIA, on behalf
of the Administration, is working hard to ensure that the spirit
and letter of the law is reflected in the requirements. We have
filed formal comments on important issues, including
interconnection and universal service. For example, as the
definition of universal service is updated for the next century,
NTIA is working to ensure that the Administration's priorities
for connecting rural Americans to advanced networks and ensuring
that telecommunications rates for services are comparable between
rural and urban areas.
Apart from the Telecommunications Act, NTIA intends to
articulate policies on a host of issues surrounding new, better
and lower priced communications products and services, in order
to increase the availability of affordable access to
telecommunications and information services for all Americans and
to encourage technology neutral domestic telecommunications and
mass media development. NTIA will suggest ways to encourage the
availability of these services to rural and underserved
communities and will identify impediments to the growth and
vitality of industry sectors. Foremost among these issues are
those related to the growth of the Internet, the transition to
digital television, and the widespread availability of wireless
communications devices.
Moreover, NTIA will continue to examine policies that affect
the ability of existing and future U.S. mass media services to
promote the free flow of information and diversity of voices in
electronic media. NTIA will participate in the effort to reform
the regulation of existing mass media services, thereby enabling
them to be effective competitors in an increasingly competitive
video marketplace without limiting the number of voices available
to the American public.
NTIA's examination of the mass media extends to new
services, such as the upcoming transition to advanced television.
Many issues remain to be resolved, particularly concerning the
public interest obligations of broadcasters in the new digital
era. As Secretariat to the President's Committee on the Public
Interest Obligations for Digital Television Broadcasters, NTIA
will facilitate the examination of these important issues by
private sector representatives.
NTIA will also continue to promote reform of the current
system of managing and licensing private sector spectrum use, so
that the process of spectrum allocation and assignment is
efficient and fair, so that licensees may offer all kinds of
voice and data services to the public. A fully developed
wireless communications industry is an essential element to the
development of competition in such markets as local phone
service. NTIA has a role in developing wireless and spectrum
policies. It was instrumental in the development of spectrum
auctions and the use of bidding for licenses by computer, which
compared to alternative assignment mechanisms available to the
FCC, are a transparent mechanism that can award licensees to the
parties that value them most highly and within a relatively short
period of time -- not to mention while capturing a portion of the
value of the spectrum for the American public. NTIA will
continue to use its expertise to help refine that system, while
also exploring the many other issues associated with the
development of wireless voice and data systems.
NTIA will also continue to search for ways to enhance
minority participation in telecommunications. Specific efforts
that will continue include: (1) directing ComTrain, a training
program to assist new minority commercial broadcast owners; (2)
disseminating information and conducting seminars on ownership
opportunities in telecommunications (for example, NTIA recently
published a report identifying financial barriers faced by
minority entrepreneurs and small businesses seeking to compete in
the telecommunications industries and suggesting possible
financing strategies); (3) developing and commenting on
legislative and regulatory proposals that promote minority
ownership in telecommunications; (4) working with industry, and
other government agencies on initiatives to increase
public/private sector assistance to minorities interested in
ownership of telecommunications businesses and services; (5)
promoting TELECAP, a study of capital development strategies for
minority investment in telecommunications; and (6) tracking
minority ownership in broadcasting. NTIA will also continue to
analyze policies that affect minority participation in
telecommunications.
NTIA's domestic policy efforts not only use technical and
policy expertise to ensure that the public benefits from any
changes in telecommunications policies and laws. In addition,
the Administration's telecommunications and information policies
developed and advocated by NTIA for domestic markets serve as an
important model for international efforts to open global markets
to competition. This liberalization, in turn, provides U.S.
firms with greater opportunities to be successful participants in
those markets.
International Policy Issues
NTIA is playing a leading role in promoting and building
international consensus for the core principles underlying the
development of the Global Information Infrastructure (GII). The
adoption of these key principles by the world community is
helping to increase competition and open markets for U.S.
companies.
Our nation's economic success depends on our being able to
compete around the world. We cannot do so if other countries
continue to protect their monopoly telecommunications providers,
but we will be tremendously successful if they open their markets
to competition.
In my capacity as Assistant Secretary for Communications and
Information, I have spent nearly four years working to convince
other countries to dramatically change the way they operate their
telecommunications networks to encourage more openness, which
offers an opportunity for U.S. businesses to compete. I am
spending a great deal of time with my counterparts around the
world discussing, debating, and persuading them of the benefits
of competition and the technical and policy changes necessary to
get there.
Every nation in which I have participated in meetings has a
ministerial level officer for telecommunications. In most
countries, the government owns the telecommunications system. My
official government position enables me to discuss with officials
from these governments the fundamental structural, technical, and
policy changes that will be necessary to their telecommunications
infrastructure and help bring about a competitive global
marketplace in telecommunications.
NTIA's efforts as a strong advocate for competitive markets
globally in bilateral, multilateral and regional negotiations
have been successful. For example, last year NTIA coordinated
the U.S. Government's participation in the Information Society
and Development Conference (ISAD) in South Africa. This
Ministerial Conference continued to build on the success of the
G-7 Ministerial Conference that took place in February 1995 in
Brussels, Belgium, which resulted in an agreement among seven of
the world's economic leaders on principles necessary for the
development of a global information infrastructure. The ISAD
Conference expanded the consensus reached at the G-7 Ministerial
on the pro-competitive policies necessary for building the global
information society.
NTIA also cosponsored, with the Telecommunications Industry
Association, the third Latin American Telecommunications Summit
(LATS) in Mexico last fall and played a key role in promoting
U.S. interests at the Asia Pacific Economic Cooperation (APEC)
Telecommunications and Information Ministerial meeting last fall.
NTIA was an active participant in negotiating the World Trade
Organization (WTO) agreement on basic telecommunications, which
will open nearly all of the world's top telecommunications
markets to competition. NTIA is also playing a key role in
implementing the WTO agreement. In addition, NTIA is playing a
central role in telecommunications talks focused on select
foreign countries in Europe, Latin America, Asia, and Africa with
significant market opportunities for U.S. providers of
telecommunications goods and services.
NTIA is continuing its active advocacy for reform and
restructuring within the Intelsat and Inmarsat global satellite
organizations. Introducing market incentives enhances
competitive opportunities for a large number of U.S. firms
seeking fair market access to provide services, and that
generally use U.S. equipment providers.
In addition, NTIA is working with other Federal agencies and
industry on several other critical international policy matters,
including but not limited to international privacy, electronic
commerce, and accounting rate reform. For example, NTIA is
playing a lead role in the Administration's efforts to address a
European Union privacy directive that could significantly affect
transborder data flows. We are also making significant
contributions to the Administration's working group on electronic
commerce. In addition, NTIA's efforts to advocate pro-competitive accounting rate reform include participation in
meetings of multilateral organizations and bilateral meetings
with individual foreign governments, as well as participating in
regulatory proceedings.
It is also important to mention NTIA's work in the standards
arena. NTIA is continuing to promote high quality U.S. standards
for data, voice and video communications in international fora.
Through its role in international standards-setting, NTIA is
promoting U.S. business entry into foreign markets.
International Spectrum Allocation
I would like to note that the United States is forcefully and in many cases, successfully, promoting the concept of independent regulation of private sector telecommunications around the world. We view the independence of the FCC as an essential pillar of our competitive communications marketplace. We have tried very hard to convince other governments to create independent regulatory authorities governing private use of the spectrum. Such a separation provides U.S. companies operating overseas with the level playing field they need to compete for licenses and permits. In those countries where commercial spectrum allocation decisions are combined with government spectrum allocation decisions in one agency or department, we see a very negative affect on the openness and competitive fairness of the marketplace.
Internationally, NTIA prepares and coordinates Federal
Government proposals for the International Telecommunication
Union World Radio Conferences and related technical meetings.
Major issues include spectrum management reform, negotiations
regarding the integration and interference protection for
satellite systems that will support the evolving Global
Navigation Satellite system for air traffic control, and
addressing the public safety spectrum requirements through the
year 2010 through the Public Safety Wireless Advisory Committee.
NTIA's work in the international arena also involves securing radio spectrum for new, emerging telecommunications technologies. NTIA is working through international organizations to make sure that there is enough space set aside for new innovative satellite services such as Globalstar, Iridium, Teledesic, and Odyssey. This is the next generation of communications technology, promising consumers more choice and lower prices, while providing U.S. companies with leadership positions in the development and implementation of such systems.
Mr. Chairman, these new systems will not be developed unless
we secure spectrum and coordination agreements for their
satellites, and that requires agreements with other governments.
In addition, in these international arenas, NTIA secures
necessary spectrum for important government uses including those
affecting national security and public safety. The need to
coordinate with and obtain approval from other governments will
become even more important as we move into an era with greater
reliance on international communications and satellite-based
systems.
Telecommunications Research
NTIA's research laboratory in Boulder, Colorado, the
Institute for Telecommunication Sciences (ITS), conducts applied
research and engineering to develop new spectrum and networking
technologies and to foster improved spectrum management
techniques. For example, research on advanced broadband networks
transmission standards, such as Integrated Services Digital
Networks, as well as pioneering research in radio frequency
characteristics, directly assist U.S. companies competing
domestically and in international markets in their efforts to
introduce and implement advanced telecommunications products and
services. Long term research at ITS includes experimentation to
find ways to use higher frequency spectrum that is not now viable
for many services, thus increasing the total amount of useable
spectrum as well as work to develop measurement methods to more
effectively assess the performance of data, audio, video and
multimedia communication services.
Some have suggested privatization of NTIA's research
laboratory. This would be a serious mistake. This is not the
first time that the issue of privatization of the Institute has
been examined, resulting in a conclusion that the Institute
performs critical public functions and should remain part of the
Federal Government. Over the years, there have been various
external and internal reviews of NTIA's laboratory, focused on
the appropriateness of our telecommunications research and
engineering work relative to that which could or should be
provided by the private sector. In all these reviews, there
emerges a common theme -- that there is a compelling need for a
centralized Federal telecommunications laboratory that serves the
public interest by undertaking uniquely governmental research
functions in a cost-effective fashion.
These functions cut across Federal, industry, and national
needs and cannot be maintained or nurtured in a privatized
environment where economic incentive, not the public interest, is
paramount. Indeed, the private sector is profit-motivated, and
rightly seeks to maximize wealth for owners. In fact, most
companies, because of competition, are forced to focus their
research on the highest-payoff options, to realize near-term
return on investment. A privatized Institute would thus not be
able to invest in the kind of essential telecommunications
research that today provides broad, cost-effective, benefits to
government, industry, and the public at large. If ITS were
privatize, the following benefits are amount those the Nation can
expect to lose in due time:
Radio propagation characteristics database
ITS maintains the Nation's database of radio propagation
characteristics across the entire radio spectrum, which are
highly dependent upon natural and man-made environmental
parameters, along with the associated computer-based radio system
performance predictions based upon these data. This database and
related information is peer-reviewed and accepted by both
national and international individuals and organizations as a
definitive resource used (a) for developing International
Telecommunication Union radio agreements and standards, (b) to
develop U.S. positions for International Radio Conferences, (c)
by domestic standards developing organizations (e.g.,
ANSI-accredited T-1 Telecommunication Standardization Committee
or the TIA) as definitive models in preparing radio interface
standards and spectrum sharing agreements, (d) by NTIA and the
FCC in national spectrum management activities, and (e) by a
broad community of private sector and government engineers for
planning, designing, and implementing radio telecommunication
systems. This database facilitates work on advances in
telecommunications technology -- such as personal communications
services and high definition television -- to benefit all
citizens.
A private organization would be unlikely to have the same
image of historical reputation, integrity, and objectivity in
maintaining the database, and is unlikely to allow openness of
use and sharing of this information equally with all.
Unbiased review of telecommunications systems
ITS currently has the neutral and impartial ability to
advise many government agencies with regard to telecommunication
systems planning and implementation to provide cost-effective
results dedicated to their missions. For example, ITS recently
provided advice on a national plan for upgrading
telecommunications requirements in National Forests, which will
provide for services such as public safety, fire protection and
fighting, and forest management; planning for the Department of
Transportion in developing a national Intelligent Transportation
System to aid in traffic control and guidance, and general public
transportation safety; consultation to the Federal Railway
Administration concerning telecommunication requirements for rail
safety and positive train control systems; for the Federal
Aviation Administration, evaluating and designing augmented
Global Positioning System capabilities for air traffic control as
well as ship navigation and other uses; and, for the National
Telecommunications System, carrying out studies to assure
interoperability and continuity of operations, and development of
Federal standards to assure the systems' ability to operate in
national emergencies.
These agencies have all indicated that they do not know
where they could turn to get such neutral, competent advice if
ITS did not exist.
Centralized Federal research
ITS provides select technological contributions and
knowledge through a centralized Federal telecommunications
research activity.
These contributions and knowledge have brought new concepts
or capabilities useful to the telecommunications industry (some
patented and moving into commercialization) and provided neutral
leadership and coordination in domestic and international
standards organizations, which help to provide a level playing
field for and obtain desired objectives for U.S. industry in
international marketplaces.
Some examples are: the development and industry acceptance of objective performance measurement techniques for data, video, digital audio, and multimedia information systems. U.S. industry found it difficult to reach successful agreements in these areas because of protecting information valuable to them in a competitive environment but, with the new concepts provided by ITS were able to rather quickly contribute to and agree upon standard methods, in both international and domestic fora, based upon the methods and data provided by ITS. Leadership and coordination roles that are provided by ITS staff in domestic and international fora (which are desired and requested by U.S. industry) provide an effective way of working out agreement between highly competitive companies and creating a forceful U.S. position to be carried forward.
Promoting Universal Access and Affordable Telecommunications
Services for All Americans
Ensuring Access for the Underserved
NTIA works to ensure access for all Americans to
communications and information networks. On the policy front,
NTIA has been leading efforts to redefine universal service to
telecommunications services to ensure that rural Americans have
access to the same new services being offered in urban and
suburban America. Over the past 40 years, rural Americans have
gone from about 60 percent having basic phone service to 94
percent today. This is due in large part to our commitment as a
nation to universal service policies. In the 1995 report,
"Falling Through the Net: A Survey of the `Have Nots' in Rural
and Urban America", NTIA documented the relatively low
penetration of telephone connections and computer and modem
ownership in rural and inner city communities.
In a 1996 filing with the FCC, we recommended that the
Commission set a national subscribership goal for the year 2000
to ensure that the telephone penetration level for all segments
of society will be at least equal to the national average
existing as of November 1996. In addition, we believe that
schools, libraries, and other "community access centers" should
be expeditiously connected to the NII as an integral part of
making access to advanced telecommunications and information
services more readily available. As the Telecommunications Act
of 1996 continues to be implemented, NTIA will continue to be a
strong advocate for rural and underserved Americans, undertaking
research, filing comments with the FCC, and participating in a
variety of fora to ensure that these communities have access to
these services, and the opportunities they provide, at reasonable
rates.
For example, on behalf of the Departments of Commerce,
Education, and Agriculture, NTIA filed the Administration's
"education rate," or "e-rate" plan with the Federal-State Joint
Board on Universal Service. The Joint Board adopted many
Administration-recommended features in its own plan, such as a
procurement approach that uses competitive bidding and special
tiered discounts for economically disadvantaged schools or
libraries.
In addition, as directed by the Telecommunications Act of
1996, NTIA, in conjunction with the Department of Health and
Human Services, recently issued a Report to the Congress on
Telemedicine. The report examines questions relating to patient
safety, the efficacy and quality of telemedicine service
providers, as well as other legal, medical and economic issues
which might act as barriers, or help promote, the development and
expansion of telemedicine. The report highlights how
telemedicine can mean the difference between life and death when
fast medical response time and specialty care are needed. In
addition, the report illustrates the adaptability of telemedicine
to isolated rural areas and urban centers.
NTIA has pursued universal access policies through many
other means as well. Among other things, NTIA has held public
field hearings throughout the nation on universal service, issued
a notice of inquiry and subsequent report on the subject, holding
an electronic "virtual" conference on the subject, and working on
"Net Day" activities, in which volunteers are found to help wire
schools that cannot afford professional information system
installation.
Serving Rural and Underserved America
Children today need the best education in the world to be
ready for the Information Age. As the President has clearly
stated, it is important to prepare the country for the 21st
Century, and in order to give our children the best education we
must help them to harness the powerful forces of technology.
Technology is going to be central to the new mission of schools
in our country. Study after study is beginning to demonstrate
that students who use technology learn better and learn
differently from children who do not. Study after study is
showing that there is a demand for skilled workers in this
country, for employees who understand how computers work. We
have to train our children for the jobs they are going to be
walking into when they finish school. NTIA's Telecommunications
and Information Infrastructure Assistance Program (TIIAP) is
helping bridge this gap for thousands of Americans.
TIIAP provides matching grants to schools, libraries,
hospitals, State and local governments and other non-profit
entities. Since its inception in 1994, TIIAP has awarded 277
grants in all 50 states, the District of Columbia and the U.S.
Virgin Islands. Approximately $79 million in Federal grants have
been matched by more than $133 million in non-Federal funds. In
1996 alone, TIIAP leveraged $18.6 million in Federal funds
matched by $30 million in private, State and local funding and
awarded 67 grants (from over 800 applicants) to projects in 42
states and the District of Columbia. TIIAP projects funded in
previous years are providing innovations in education; helping
create more responsive public institutions; enhancing economic
development in rural and disadvantaged areas; and increasing
access to health care. Almost 90 percent of the funding went to
serve rural Americans or traditionally under served Americans
living in urban areas.
For example, in Sacramento, California, the NET at Two Rivers is using a TIIAP grant to establish a 15-county regional computer network. The network will include 50 public access sites in schools, community center, libraries and resource centers. Citizens will benefit by using the free, on-line literacy instructional materials in a on-on-one coaching situation providing Internet skills. The training sessions and computer tutorials are tailored to people looking for new jobs or re-training. The project demonstrates how information infrastructure can level the playing field by bringing new educational opportunities to a traditionally under served population.
TIIAP provided a grant to the Borough of Munhall in
Pennsylvania to work with seven police departments to ensure the
safety of their citizens by striving to have a more visible
police presence. The seven police agencies are using information
technology to share mug shots, check aliases, note identifying
characteristics, and communicate other crucial information that
might not otherwise find its way across jurisdictional
boundaries. In a recent incident, the Munhall Police Chief
credits the TIIAP-supported system with helping quickly identify
a suspect in an apparent gang warfare-related murder of a two-year-old child. In January of this year, a family had stopped
for gas when a group of individuals began shooting at one
another. The child, strapped in a car seat, was fatally wounded
in the crossfire. Police were able to identify the alleged
assailant from eyewitnesses. Using the TIIAP-supported
information system, they learned his aliases, and retrieved a mug
shot, which they circulated to hundreds of police. Within a
week, the shooter was apprehended.
The City of Crete, Nebraska, received funding to keep this
small rural town a viable community. The grant funds the
purchase of computers to build an access center where adults can
be taught computer skills, find jobs, and build the town's
economy. The project has an integrated family resource center
that houses organizations such as Head Start, day care, and
health services. Plans are underway for the human services
clients to do computer outsource work. The family resource
center will also begin to provide information technology training
for their clients. The project also focuses on having children
in school teach senior citizens how to use computers and the
Internet at home. This grant explores inter-generational
learning as a way to keep the community together. In the long
term, that sense of community may determine whether young adults
leave the town to seek better opportunities.
The State of Colorado and six partners, including the Colorado Rural Telecommunications Project, the Colorado Department of Agriculture, the U.S. Environmental Protection Agency, the Yampa Valley Economic Development Council and the Adams State College have developed a database that summarizes the potential of information on land use data, such as natural resources, wildlife, soil, and infrastructure. Prior to this project, the information was not shared across agencies, and sat relatively unused because a special software package was needed to manipulate the information. This made analysis difficult, if not impossible. With computer technology, it is now possible for any user on the Internet to assess tradeoffs on land use, and reduce conflict concerning land management.
The New York State Office for the Aging (SOFA) in Albany,
New York, is developing the Aging Services Network (ASNet), to
demonstrate new ways of applying computing, telecommunications,
and information infrastructure to the human services industry.
Over $17 billion in Medicaid expenditures are made each year in
New York State alone. Of that amount, over $5 billion is spent
annually on long term care for the elderly. The resources
available to cover these costs are already unable to keep pace
and, given the demographic projections, dramatic changes in how
our society responds to the needs of the elderly seem inevitable.
The ASNet project is using information systems to address the
practical problems of information management and delivery of
services to the elderly. The project focuses on reducing costs
while increasing the quality and coordination of services so that
provider agencies can meet the increasing demands of this growing
population.
The White Mountain Apache Tribe in Whiteriver, Arizona, is
using a TIIAP grant to gain access to the Internet for the first
time. There are few areas in the country that have the same
geographic isolation and none that combine that isolation with
the high incidence of economic deprivation that is found on the
Fort Apache Indian Reservation. Once the project is underway, it
will provide community-wide networking to assist in economic
development, lifelong learning, and improved delivery of health
services and information to the Tribe and residents of the
region. The Tribe is working with the Arizona Public Services
Corporation and the local Internet Service Provider to secure a
toll-free local connection to the Internet. It is important to
note that more and more tribes are looking to NTIA for assistance
with access to telecommunications. NTIA's longstanding history
of promoting tribal access places NTIA in a unique position --
with adequate resources -- to meet the telecommunications needs
of tribes.
At-risk students are earning high school credits in rural
West Virginia thanks to a TIIAP grant using video
teleconferencing. The award provides funds to connect advanced
computers in as many as 20 homes. Teachers from the Regional
Alternative Learning Center will be able to work with students
who are unable to attend school. The Regional Alternative
Learning Center will utilize a two-way, interactive video
telecommunications system to provide home-based instruction to
high school juniors and seniors who are unable to attend a
traditional school environment. The project grew out of the need
for schools to comply with new state legislation to provide
service to students who are unable to attend school for
disciplinary reasons. The project will provide instructional and
counseling services for pregnant teens and other students who are
unable to attend school for medical reasons.
TIIAP provides critical seed money, without which many
innovative and vital applications would not take root and grow in
these communities. In every project that NTIA has funded, TIIAP
has brought together members of the community to form new
partnerships. Without such partnerships, individual players
would be unable to build networks or purchase computer and video
equipment in order to train teachers, students, doctors, nurses,
and librarians. While NTIA provides seed money, the vision of
each of these projects springs up from local communities. The
projects and their goals are what local residents feel they need,
not what the Federal Government thinks is good for them.
Last year, NTIA released the "Lessons Learned from TIIAP"
report, which presents the initial experiences of the projects
funded in 1994 and 1995. "Lessons Learned" was the product of
NTIA discussions with focus groups of current grantees to learn
about their experiences and share their lessons. The report
offers a snapshot look at the community impacts of TIIAP
projects, and presents examples of how specific projects are
using advanced telecommunications and information technologies to
provide better services, to strengthen community ties, and to
provide increased access to information for thousands of
Americans.
This year, TIIAP staff will begin a formal, independent
evaluation on the effects of the first few years of grants and
will develop a sophisticated reporting system that will allow
TIIAP to evaluate grant impacts on an ongoing basis. Now that
the program is in its fourth year, NTIA will be increasing the
emphasis on evaluation and dissemination for the grants that have
been awarded.
For FY 1997, TIIAP has received 922 applications seeking
over $350 million in grant funds. These applications represent
more than fifteen times what NTIA can fund, making TIIAP one of
the most competitive Federal grant programs. NTIA has held a
series of regional Outreach Workshops to discuss the Program, and
in so doing discuss the program funding priorities and
application requirements. These workshops have been well
attended and well received. The workshops provide a key
opportunity for interested parties to understand the TIIAP goals
and process and meet representatives of other organizations
interested in the Program.
Fiscal Year 1998 Budget Request
NTIA is seeking $54,074,000 for Fiscal Year 1998 for salaries and expenses (S&E) and agency programs. For S&E, NTIA seeks $18,074,000. This includes an increase to conduct work necessary for the United States to host the International Telecommunication Union Plenipotentiary Conference in Minnesota in 1998. NTIA seeks $36,000,000 to fund TIIAP.
Operating Framework
Beginning in 1990, Congress passed several major pieces of
legislation governing the operations and management of Federal
departments and agencies, specifically:
-- the Chief Financial Officers Act of 1990, as amended by the Government Management Reform Act of 1994;
-- the Government Performance and Results Act of 1993; and
-- the Clinger-Cohen Act of 1996.
The Chief Financial Officers Act requires Federal
departments and agencies to prepare annual financial statements
and have those statements audited in accordance with generally
accepted auditing standards. The Department of Commerce is
committed to improving financial information and financial
management capabilities. NTIA was one of the first Commerce
agencies to receive an unqualified opinion on its financial
statements for 1993, and continued to receive unqualified
opinions on the 1994, 1995 and 1996 statements. In 1995 and
1996, the audits conducted were formal full scope audits. The
unqualified opinion confirms that NTIA's financial statements
fairly present the financial position of the agency.
Under the Government Performance and Results Act (GPRA),
NTIA has initiated a comprehensive strategic planning process,
which will provide a framework for our employees and stakeholders
to work together to define agency priorities and establish
performance measures. NTIA managers have embraced the planning
process as a way to improve our management and maximize the
return to the public from the agency resources available. An
NTIA team, including all senior managers and several staff
members from across the agency, have been meeting since January
1997 to define the strategic plan elements. At this point, the
formal agency plan is being drafted and individual office heads
are working with their staff to define appropriate performance
measurements for the agency's goals. NTIA expects to submit the
initial plan to the Department in June and work with the
Department and the Congress on refining the NTIA strategic plan
over the summer.
NTIA is also working closely with the Department to properly
implement the philosophy of the Clinger-Cohen Act, which will
improve our management of the information technology investments
necessary to enable us to fulfil our missions. The agency
strategic plan will be directly supported by strategic and
operational information technology plans. A process is being
designed to ensure that all major information technology
investments are evaluated in terms of the overall value to the
organization.
Telecommunications and information issues are dynamic,
multi-disciplinary, and complex. NTIA is the only Executive
Branch agency focused exclusively on telecommunications and
information. Other agencies, such as the Department of State,
International Trade Administration, and the U.S. Trade
Representative, depend on and use NTIA's telecommunications
expertise to support the accomplishment of their missions. The
agency's high quality reputation is built on a foundation that
maximizes the synergistic benefits of telecommunications experts
in domestic policy, international policy, spectrum management,
spectrum planning, spectrum analysis, radio wave characteristics,
voice and video quality assessment, national and international
standards development, and International Telecommunication Union
activities, as well as practical applications through
demonstration, pilot and other community projects. Many
countries look to the United States as an example of how to
support and nurture a viable, competitive, rich
telecommunications and information industry. The Nation needs
the expertise of NTIA to continue its role as a leader in global
telecommunications and remain competitive worldwide.
With less than 300 employees and limited resources, NTIA
provides a significant return on the taxpayers' investment. Over
the last year, NTIA's cost-cutting and streamlining of operations
have had a dramatic impact on the agency's ability to retain key
policy and engineering staff needed to deal with the sweeping
technological changes in the telecommunications and information
sectors. In July 1994, NTIA had 361 employees. Today, we have
278 -- a loss of 83 people, a staff cut of almost 25 percent.
Unfortunately, we have lost many first-rate technology and
computer experts, as well as engineers from our spectrum
management shop and our research lab, both of which contribute
immensely to the development of more efficient, technologically
advanced telecommunications technologies. These cuts have had an
impact. NTIA's leadership and expertise in the dynamic
telecommunications and information arena will be greatly
compromised without adequate resources.
NTIA serves a vital role. All organizations should be
subject to continued scrutiny to ensure that they are operating
efficiently and effectively. Unnecessary functions and
activities should be eliminated and privatization should be
utilized where appropriate. But we should not -- must not --
eliminate programs and responsibilities that are critical to our
economic future. NTIA works very hard to spur innovation and job
creation and promote a competitive marketplace that will result
in more choices and lower prices. The American people are being
well-served by NTIA. As NTIA Assistant Secretary for almost four
years now, I continue to be proud of what NTIA is accomplishing
and the differences we have made in the lives of all Americans.
In short, NTIA is in a unique position to influence significantly the ability of U.S. companies to compete in the global marketplace of the 21st century and to enhance the benefits to the public of a strong, competitive telecommunications industry and infrastructure. We would appreciate the support of this Committee so that NTIA may continue to achieve these important ends, and we look forward to working with you in the future.