Montana Telecommunications and Distance Learning Symposium sponsored by the Montana Telecommunications Advisory Council "The National Information Infrastructure Initiative: New Educational and Economic Opportunities" Remarks by Larry Irving Assistant Secretary for Communications and Information National Telecommunications and Information Administration Department of Commerce Billings, Montana October 2, 1995 [as prepared for delivery] I want to thank Senator Burns for inviting me to join you today. Senator Burns has played a critical role in ensuring that our country maintain its leadership role in the area of telecommunications and ensuring that rural communities share in the benefits. I've known Senator Burns since 1989. He has been a friend and advisor. My great grandfather once said that in D.C. a friend is a word that is overused and undermeant -- not in the case of Senator Burns. The Senator has also been a visionary, promoting concepts such as telemedicine, distance learning, and cable-telco competition when most people thought those were ideas out of Buck Rogers and Tom Swift. If he is not in a class by himself, whatever class he is in it doesn't take long to call the roll. I also want to commend the leadership of the Montana Public Service Commission, chaired by Nancy McCaffrey. And I want to thank Commissioner Bob Rowe of the Montana PSC for all the work he has done on the issue of universal service and for recognizing the importance of the advanced telecom and information services for rural communities. Information that Commissioner Rowe has sent me has served to educate me about rural issues and Montana. Today I want to talk about changes in our educational system and our economy that are being driven by telecommunications and information technologies. I want to talk about opportunities that the National Information Infrastructure (NII) can bring. And then I want to discuss some of the initiatives taking place in Washington to make this a reality. Educational Changes I recently read a book in which the author noted that if a businessperson fell asleep a century ago and woke up today, he could not function in a 1995 office -- computer, fax machine, even telephone -- pick it up and say hello?? Similarly, a doctor would be perplexed by all the new tools. Yet, a teacher in most classrooms would know exactly what to do -- although, now technology is beginning to change that . . . . Concepts such as distance learning, made possible through video conferencing technology and computers, now allows students to have access to advanced classes, particularly sciences and foreign languages. This is especially important for rural school districts, which have limited financial resources, or not enough students interested in a particularly subject to warrant a class. I am pleased that last month NTIA awarded a grant of $360,000 under our Public Telecommunications Facilities Program (PTFP) to establish a two-way, audio/video interactive, fiber optic distance learning network that will connect 10 schools in rural southeast Montana. The schools are located in Rosebud, Treasure, Powder River, and Yellowstone Counties and on the Northern Cheyenne Indian Reservation. This distance learning network will bring tremendous educational opportunities to school children in these communities. The new telecommunications and information technologies will also change the way we educate our children. When I was a kid, I used the World Book to write a report on Afghanistan. Today, parents and schools don't have to buy such encyclopedias, which cost about $700. Instead, with digital libraries, kids will have ever increasing access to encyclopedias and World Books by downloading the information over telephone lines -- and it will cost just pennies. CD-ROMs now provide students with an enormous amount of secondary sources and data at their fingertips. Gone are the scavenger hunts through library stacks and microfiche. And technology opens up new possibilities for higher education. For example, some people now talk about the "virtual college campus." With rising costs, the ability to have students attend your campus without having to provide the physical lecture rooms to hold everyone is appealing. And such virtual campuses could draw upon professors located around the world as their faculty. Students could take biology from a professor in Norway or a political science course from a professor in India, while sitting in a classroom in Billings, or even from one's home. An important element in bringing these educational opportunities to students is providing teaching training. That's why it is so important that initiatives like the one in Missoula is taking place, where the University of Montana and TCI Cablevision of Montana are transforming the old Target Range School into a technology training center for K-12 teachers called the Northern Rockies Educational Technology Learning Center. By the way, the new technology generation keeps getting younger. Last Monday I read in The New York Times how children as young as 1 year old are using computers! Many children's software experts agree that by the time children reach preschool age, most can benefit from using a computer, and most enjoy it. By the year 2000, 60 percent of the new jobs will require skills held by only 20 percent of the existing population. We need to make sure that our children become adept with computers and new technologies. Our domestic and global economies will demand it. And a technology-literate workforce will be key to maintaining our global leadership role. Economic Opportunities Last night Senator Burns stressed the need to talk about commerce because that will be the key to get better networks built. He's right. Let's look at how information technology and computers are bringing new economic opportunities to American companies and American entrepreneurs. The telecommunications and information industries account for almost $1 out of every $10 spent in the U.S. -- an annual average of $2,000 for each household. Today, nearly one in every three households has a personal computer. And the real PC generation is in our elementary, junior high, and high schools. Almost half of the teenagers in this country have a home computer. Computers have become increasingly valuable tools through their ability to connect people to such networks as the Internet. By some estimates, the Internet is growing faster than any other telecommunications system ever built, including the telephone network. Via the Internet, a school child doing research on the Civil War can pull down battlefield photos from the collection at the Library of Congress, download President Lincoln's papers, download The Red Badge of Courage, and review maps of famous battlefields without leaving his or her desk. Also via the Internet, you can order brownies from Vermont (I've done that!) or shop for Navajo blankets made in New Mexico. You can find out futures prices or how the stock market is doing. Jewelry and compact disks are easily sold on- line. Intelligent agents can locate your desired product. Soon cars, clothing, and other goods will be sold the same way. The other night I was browsing on the Net and ventured into "Made in Montana" -- a listing of the state's Internet providers and commercial resources. Then, I couldn't resist "visiting" Glacier National Park and Montana's wilderness areas. The Internet enables small and large companies alike to attract customers nationwide and worldwide. The economic potential for rural communities is great, as people can physically be located anywhere so long as they have a modem and fax. As noted in an article in The Wall Street Journal just last Friday, telecommunications and software has led to greater freedom in choosing where to live and has enhanced the attraction of small towns. Senator Pressler recently related an interesting anecdote on how new technologies could revolutionize farming. It's called "site-specific" or "precision" farming. As he told it, "First, soil moisture and crop yield sensors are spotted in fields. These sensors can narrow acres and acres of land down to as little as 20 foot squares. These censors then interact with the new Global Positioning Satellite network. The system feeds information back to computers on the farm. This information gives farmers the kind of precise information they need to target fertilizer, irrigation, and other services. The approach radically reduces operating costs. It helps the environment by reducing leaching and stream run-off... [and] it is possible only because of the marriage of computers and communications." Impact on the U.S. Economy and Competitiveness The telecommunications and information markets are thriving and becoming a larger sector of the U.S. economy. The information marketplace, broadly defined, now constitutes about 10 percent of our domestic economy, and is expected to be 20 percent within a decade. These businesses support more than 3.6 million jobs in the United States. Secretary Brown has noted that "knowledge has replaced every other input as the driving force of our economic system. In the 21st century, the speed with which we create knowledge and the ease of our access to it will be the fundamental determinant of America's position in the international marketplace." There are enormous economic opportunities for American firms to do business abroad. Fifty percent of the world's population has never used a phone. Fifty percent of the people worldwide lives two hours from the nearest phone. Indeed, the ITU defines universal service as when everyone in a country lives within five kilometers of a phone. For example, let's look at the market opportunities in Latin America. Fewer than 9 out of 100 people in Latin America have a phone, compared to 60 out of 100 in the United States. In Sao Paulo, Brazil, there is a one million-person waiting list to get a cellular phone, and an even larger waiting list for a regular phone. Sales of telecommunications hardware in 1994 to Latin America was $2.78 billion. Because the standards and infrastructure is the same as in the U.S., the products that our companies make for our domestic market can also be sold throughout Latin America. Moreover, solutions we find in rural Montana can and will be applied in rural China, Africa, India, and throughout the world. In the report that I released yesterday at the Senator's hearing, Survey of Rural Information Infrastructure Technologies, NTIA puts forth a number a technological options for connecting rural communities. Policy Initiatives to Bring the NII to All Americans There is no doubt that the NII can bring tremendous benefits to Montana. The question before us today is how can we help ensure that all Americans have access to the NII and its benefits, especially those living in rural areas. The Clinton Administration believes that we need to take three primary steps. First, we need to reform our regulatory structure to promote competition in the telecommunications marketplace. Second, we need to preserve and enhance the concept of universal service. Third, we need to promote public-private partnerships. Promoting Competition and Diversity of Voices At the center of our NII initiative is the need to reform regulations to bring competition to telecom markets, for this is how we can best accelerate deployment of the NII. As a nation and in each state, we must remove unnecessary, artificial restrictions that prevent natural competition. As you know, the Administration is working with Congress on updating our 60-year-old federal communications law. The Administration wants a telecom reform bill -- but we want a good bill, one that promotes competition, not monopoly power; one that brings consumers lower prices, better quality, and greater choices in their telephone and cable services. And we want Americans to continue to benefit from a diversity of voices and viewpoints in radio, television, and print media. Even in rural areas, competition can exist and thereby bring consumers lower prices and greater choice of services. We should not write legislation that assumes it cannot exist. Cable and telcos should compete, not consolidate. We're also concerned about increased media concentration, which will harm diversity and localism. A recent survey found that over half of Americans do not want media megamergers, believing that the mergers will result in higher prices in telephone, cable, and broadcast services. And over half of the consumers surveyed do not want companies to be able to own more than one television station in a local market or to own radio stations and newspapers in the same markets as they own TV stations. Yet, the current provisions of the telecom reform legislation would allow these combinations. We are optimistic that we can work with Members of Congress as the bills move to conference in order to improve the legislation. Preserving and Enhancing Universal Service Universal service remains a top priority for the Administration. We must develop a new concept of universal service to serve the information needs of Americans in the 21st century. The Administration believes that any universal service policy must take into account the unique attributes of rural communities and ensure that they are not bypassed by the NII. As I noted during the Senator's hearing yesterday, rural residents face infrastructure barriers. Many rural communities do not have the underlying support structure or the equipment to take advantage of new technologies. While almost 79 percent of libraries that serve cities of 250,000 people or more have a connection to the Internet, only 17 percent of rural libraries do. Without computers, modems, microwave towers, satellite dishes, or cable connections, it is difficult for communities to get connected to the NII. And, as you know, private industry often finds commercial pressures favor building out telecom and information infrastructure in smaller, more densely-populated areas. Let's take a minute to look at the impact of universal service policies. In 1949, only 60 percent of households in rural areas had basic telephone service; today, over 94 percent do. This is a result of our country making a commitment to ensuring that all rural communities have access to basic telecommunications services. In July, NTIA released a white paper entitled, Falling Through the Net: A Survey of the `Have Nots' in Rural and Urban America. This paper is the first of a series of papers that NTIA will release on the issue of universal service. Falling Through the Net presents an expansive profile of universal service in America. This gives us new insights into who are the "have nots" of the Information Age. The central finding is that information "have nots" are disproportionately found in this country's rural areas and its central cities. At almost every level of income, the lowest telephone penetration exists in central cities. And personal computer penetration and modem ownership are the lowest in rural areas. An examination by race reveals that Native Americans, including American Indians, Aleuts, and Eskimos, in rural areas proportionally possess the fewest telephones, followed by rural Hispanics and rural African Americans. Now, you may think that the information "have nots" do not want or do not use computers, modems, and concomitant services. Our data found just the opposite. In fact, many of the groups that are most disadvantaged in terms of absolute computer and modem penetration are the most enthusiastic users of on-line services that facilitate economic uplift and empowerment when they have access to the technology. We must formulate public policy to ensure affordable access to those who desire it. The Clinton Administration is committed to connecting the have nots to the NII. And we look forward to working with Senator Burns on that issue. We recognize that funding solutions will take time. Because access to information is becoming vital to individual's economic and social well-being, we need to have an interim strategy. The Administration believes that "community access centers" (CACs) can enable us in the short term to achieve greater universal service, especially in terms of computer penetration. By connecting CACs, specifically schools and public libraries, to the NII, we can increase the information "haves" across the country. Promoting Public-Private Partnerships That's why we are working to promote public-private partnerships that will provide needed infrastructure and affordable access and the resulting services to residents. Many Americans will access the information superhighway not from their homes, but from their schools, public libraries, community centers, and other public institutions. Yet, public institutions face financial and technical obstacles. Take schools, for example. A recent study by the Milken Family Foundation calculates it would take $31.5 billion in additional funds to wire schools, buy software, train teachers, and put four to six computers in each classroom in the nation's public schools. So scarce are CD-ROM players that they average less than one per school across the country. To promote development of NII applications by public institutions, the Department of Commerce has a grant program, administered by NTIA, called the Telecommunications Information Infrastructure Assistance Program (TIIAP). TIIAP grants are available to state and local governments, schools and school districts, hospitals and clinics, libraries, community centers, and other public institutions. TIIAP grants require at least a 50 percent matching grant, which has led to community partnerships, often between the public and private sectors. On Friday, we survived an effort to zero out TIIAP. Senator Burns was a leader in the fight to save the program. Last year NTIA awarded $24 million to TIIAP projects in 46 states. Here in Montana, TIIAP funds are being used to provide rural school children and residents in Hall with the town's first Internet connection. The Senator announced earlier today that this year Montana has 2 TIIAP recipients. First, in the city of Hardin, the Big Horn Telecommunications Project will develop local and wide area networks and provide computer access to the Internet for Big Horn county residents. Among other things, the project will allow students from kindergarten to college to have access to a "virtual library collection," by linking existing Big Horn county libraries with those at universities in Billings. Second, in Havre, Montana State University-Northern will use existing telecommunications networks to deliver coursework to 30 extremely rural communities. The numerous beneficiaries of this project are rural adults needing access to higher education, Native Americans, small business owners, students and teachers at local schools, and people in remote areas in need of medical consultations. Hall, Hardin, Havre -- 3 H's. Now, if only Helena would apply for a TIIAP grant, Montana could have another 4-H Club! Because of this federal seed money, private companies and public players have come together to form community partnerships and support these projects. I challenge those of you in this room today to form similar partnerships, which will enrich your lives and your community. Conclusion Can we really accomplish this? I say yes -- we can and we will. But we need to all work together -- at a national, state, and local level. If we are to connect our entire nation, we all need to make the commitment -- all levels of government, all sectors of industry, all providers and users of the information superhighway. Otherwise, for many Americans, the information superhighway will be as real as the yellow brick road to Oz. Recently, I received an e-mail that really brings home the importance of what we are doing. The e-mail reads: Dear Mr. Irving, My students and I are participants in the GMU project funded from the Department of Commerce. We are at Mount Vernon Community Center School in Alexandria, Virginia. The students have ties to many countries with 75% minority and 80% on free or reduced lunch. Although we are at-risk, they have embraced the technology with enthusiasm . . . [I]t is a powerful tool to inspire students with the immediacy of learning. I believe strongly in the African proverb: "It takes a whole village to educate a child." For example, as I was setting up some internet screens for my second graders, an exciting door opened up. I called up the (ART)WORLD TREASURES which is located in Switzerland. Included in the program are treasures from Thailand. A 7 year old girl became very excited. She said that was "her country." Amanda has been a reluctant visitor to our country and often has been upset when her grandmother returns to Thailand. I sensed a "teachable moment" and called up the treasures from Thailand. She eagerly identified the ones from Thailand. Other students asked about treasures from their other countries. We are now eagerly waiting for equipment and account numbers so that we can send e-mail to their countries and expand our "village" to include the "world." Americans want to be connected to one another; they want to be ready to meet the challenges of the 21st century. The NII is a way for us to come together to do great things. Please join with us in connecting the nation.