Testimony of Acting Associate Administrator Levy on the Schools and Libraries Internet Access Act

September 30, 1999

STATEMENT OF KELLY KLEGAR LEVY
ACTING ASSOCIATE ADMINISTRATOR
OFFICE OF POLICY ANALYSIS AND DEVELOPMENT
NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION (NTIA)
U.S. DEPARTMENT OF COMMERCE

BEFORE THE SUBCOMMITTEE ON
TELECOMMUNICATIONS, TRADE, AND CONSUMER PROTECTION
COMMITTEE ON COMMERCE
U.S. HOUSE OF REPRESENTATIVES

SEPTEMBER 30, 1999


Mr. Chairman and Members of the Subcommittee:

Thank you for this opportunity to testify this morning, setting forth the views of the National Telecommunications and Information Administration (NTIA) with respect to H.R. 1746, the Schools and Libraries Internet Access Act. NTIA serves as a principal adviser to the President, Vice President, and Secretary of Commerce on domestic and international telecommunications and information policy issues and has been an active participant in the schools and libraries support process.

The Administration shares your goal of providing advanced telecommunications services to schools and libraries. Both President Clinton and Vice President Gore have made connecting schools and libraries to the nation's information infrastructure one of their highest priorities. The importance of enabling schools, including classrooms, and libraries to access the Internet, in conjunction with an integrated, well-developed curriculum, cannot be overstated. As the President stated: "Until every child has a computer in the classroom and the skills to use it . . . until every student can tap the enormous resources of the Internet . . . until every high-tech company can find skilled workers to fill its high-wage jobs . . . America will miss the full promise of the Information Age." Once viewed with curiosity, the information revolution has brought fundamental changes to the fabric of society and to the foundations of the emerging global economy.

In June 1999, the Department of Commerce released The Emerging Digital Economy II, a report that demonstrated the increasingly pivotal role that information technologies play in our economy and the dramatic growth of electronic commerce. In July 1999, the Department of Commerce released Falling Through the Net: Defining the Digital Divide, a report examining which American households have access to key information tools - telephones, computers, and the Internet - and which do not. Overall, we found that more Americans than ever before own computers and are online. At the end of 1998, over 40 percent of American households owned computers, and almost one-quarter of all households had Internet access.

Yet, Falling Through the Net also documented that there remains a significant digital divide separating American information "haves" and "have nots." Indeed, in many instances, the digital divide has widened in the last year. Certain minorities, low-income persons, the less educated, and children of single-parent households, particularly when they reside in rural areas or central cities, are among the groups that lack access to information resources. Because access to computers and the Internet is increasingly critical to successful participation in our digital economy, we need to ensure that everyone has access to these technologies.

One of the interesting findings of Falling Through the Net is that community access centers - such as schools, libraries, and other public access points - are particularly well used by those groups that lack access at home or at work. For example, Hispanics and American Indians/Eskimos/Aleuts are especially likely to use schools for access if they live in rural areas. Households with incomes less than $25,000, those with less than a high-school education, those in female-headed households, and American Indian/Eskimos, Aleuts, Blacks, and Hispanics who have low Internet access rates at home are relying with a great deal of frequency on public libraries for access to the Internet.

Thus, the Falling Through the Net data underscore the importance of efforts by Congress, as well as the Administration, to ensure that all schools and libraries have affordable access to the Internet on sustained basis. The Administration strongly supported Section 254(h) of the Telecommunications Act of 1996, which established the E-rate program as part of the overall Universal Service Fund. And the Administration has supported full funding of that program. Under the E-rate program, telecommunications carriers are providing eligible schools and libraries with a discounted rate for telecommunications services, internal connections among classrooms, and Internet access. As a result, the E-rate program is helping to connect schools and libraries at a very rapid pace. In the first year of the program, 640,000 classrooms were connected to the Internet. This year, $2.25 billion is available to connect an expected 528,000 additional classrooms. Eighty percent of public schools and fifty percent of public libraries participate in the E-rate program. Importantly, the E-rate program gives priority for funding to poor and rural schools and libraries.

Moreover, the E-rate monies are proving to be a catalyst for other efforts to connect schools and libraries to online resources. Many states and communities are combining the Federal E-rate funds with state and/or private sector money to address access problems. In Louisiana, for example, $500,000 in E-rate funding received by the State Library of Louisiana combined with $2 million in state funding and $7 million from the Gates Library Foundation will enable the state library to provide Internet access and computers for every library in the state. While just three years ago many parts of Louisiana were entirely cut off from the Internet, now every library in the state has computers and Internet access, which are available for free to all 4.3 million residents.

The American public joins us in strongly supporting the E-rate program. As information technology becomes increasingly important in our global economy, Americans have come to overwhelmingly support the need for computers in our nation's classrooms and libraries. A non-partisan poll commissioned by EdLiNC found that 87 percent of respondents support the mission of the E-rate program. The public's support of the E-rate program is echoed by parent and teacher groups, library organizations, high-tech companies, many telecommunications providers, and civil rights groups.

On July 30, 1999, the Fifth Circuit Court upheld the structure of the E-rate program, including coverage for Internet access and connections to the classroom as well as telecommunications services, and upheld the Federal Communications Commission's authority to target discount levels to the schools and libraries with greatest needs. Now with the court case behind us, we hope that this program can achieve its full potential.

Mr. Chairman, NTIA shares your concern that the schools and libraries program be administered expertly, efficiently, and impartially. However, we see no need for new legislation to change the E-rate program in order to bring the full promise of the Information Age to our children. Congressional oversight, including input from the House Commerce Committee, and a two-tiered auditing process have helped to ensure that the Universal Service Administrative Company (USAC) is running the E-rate program efficiently, and that schools and libraries are using E-rate money to fund only eligible services. Moreover, the E-rate program is part of Universal Service - a program that, for the vast majority of Americans, has worked well for over 60 years.

H.R. 1746, the Schools and Libraries Internet Access Act, would establish NTIA as the administrator of the universal service program for schools and libraries as well as rural health care providers. NTIA believes that it is premature to consider such a drastic measure. First, we believe that third-party, non-governmental entities have a commendable performance record in this regard. While the USAC may have experienced some start-up difficulties, we believe that they have taken the appropriate corrective actions. More time is needed to allow the system to work. Second, in the new competitive environment, many believe that the fund administrator must not advocate telecommunications policy positions, a role that would be totally antithetical to, and incongruous with, NTIA's existing statutory mandate. Third, as fund administrator, NTIA would incur large start-up costs - costs that have already been incurred by the USAC. In its current operating mode, NTIA does not possess the resources or infrastructure to run the proposed E-rate grant program. While we feel confident that we could administer the fund on an impartial basis and do so in an accountable manner, these factors would not offset the above disadvantages. In addition, the Administration, through a letter from the Office of Management and Budget to Chairman Tauzin, as well as to Senator Burns, also raised significant budget issues on similar legislation before this subcommittee last year.

Aside from these issues, our greatest concern is that any fundamental change in the administration of the E-rate program will delay and forfeit opportunities for our children. Delay denies students and teachers access to information and telecommunications technologies and their benefits. Research shows that technology can enhance learning opportunity and achievement, increase student motivation to learn, help students acquire essential workplace skills, improve professional development for teachers, and enable students to access high-quality education regardless of time or place. As Vice President Gore has noted, "[f]or the very first time in our history, it is now possible for a child in the most isolated inner-city neighborhood or rural community to have access to the same world of knowledge at the same instant as the child in the most affluent suburb."

Another recent Commerce Department report, The Digital Work Force: Building Infotech Skills at the Speed of Innovation, stresses the importance of expeditiously meeting the burgeoning demand for a highly-skilled labor force. In testimony before the Congressional Joint Economic Committee, such notables as Federal Reserve Board Chairman Alan Greenspan, Bill Gates, and many other leaders from the technology industry have testified not only that technology has played a leading role in building and strengthening our economy but also that the foundation for this growth is a quality education for every student. If students - and others - cannot obtain the high-tech skills and ready access to information that is critical for success in the emerging digital economy, then our nation's ability to compete and prosper will be put at risk. Particularly hard hit would be students at the disadvantaged schools and libraries - those in low-income, rural, or inner-city areas who likely would have to do without Internet access unless universal service support is made available.

As Secretary of Commerce William Daley has noted, "[t]omorrow's economy will demand technological literacy - the E-rate is an important step to ensure that our economy grows strongly and that in the future no one is left behind." During its evolution, the E-rate program has already demonstrated its value, and the Administration continues its strong support for the existing program and its goals. Thank you again for the opportunity to testify.