at the Dialogue on Diversity's
1999 Spring Entrepreneurship Conference
May 20, 1999
I am so pleased to be here to kick-off what promises to be an exciting day focused on new information technologies. These technologies hold tremendous promise for small enterprises and those run by Hispanics and other minorities in particular. I'm glad I can be here as you gather to learn how to harness some of the potential they hold for you.
As a quick glance at today's agenda indicates, the future has truly arrived in the world of communications. Everything is changing -- from monopoly markets to competition, from analog signals to digital bit streams, from national markets to international competition. In part, this change has been spurred by the passage of the Telecommunications Act of 1996. The Act reversed the 60-year old notion that the nation was best served if regulators managed local telephone monopolies. The new law creates a new structure for local telephony competition. In addition, as I will discuss in a minute, the new law creates a framework for providing telecommunications services to the nation's schools and libraries, facilitating the provision of telecommunications services to all Americans.
In the three years since the Act passed, the FCC has worked hard to make local competition a reality. We've faced some roadblocks. In fact, most of our pro-competition orders have ended up in court, thereby delaying implementation of a final regulatory framework. But apparently enough of the benefits are in place to attract new competitors. And Wall Street is investing money in these new competing companies at incredible levels. The reason, in part, is the profit to be gained by providing basic and advanced telecommunications services to the business market -- to businesses like yours. While I am disappointed that most residential consumers don't yet have the option of several local carriers, I am pleased that businesses like yours are already seeing the benefits of competition. And I am hopeful that residential consumers will soon have the same sort of choice that you have.
At a minimum, the growth of competition should bring lower prices for telephone service. Clearly competition is more effective than regulation at forcing entrenched monopolists to treat their customers better and to lower their prices. In addition, competition is already producing innovation. In the last couple of years, the volume of information that your company can send and the speed at which that information can be transmitted have grown exponentially. Technology is changing rapidly, creating seemingly boundless opportunities for those in business like yourselves.
But this rapid technological change also carries tremendous risks. One of the risks that most concerns me is that some of our citizens will be left behind as we move further into the information age. I don't think we can afford to become a society of information have and have-nots in the 21st century. Because in this new age, access to advanced communications services -- and the ability to use those services -- is critical to success. As a Latina with New Mexican, Puerto Rican and Cuban roots, I'm especially determined that rural citizens and minorities are able to compete in this new world. And I'd like to talk today about a telecommunications issue that I think is particularly important to minority communities.
In telecommunications, ensuring access to technology for all Americans is a tremendous challenge. While middle-class Americans are rapidly approaching the next wave of new technology -- with high-speed digital connections to the Internet and advanced home computers -- the previous technology cycle may have already bypassed the inner city and low-income families. All too often, telephone and cable companies have moved quickly to wire wealthier suburbs with advanced systems, while poor, inner-city neighborhoods -- not to mention rural areas served by monopoly telephone providers like my own state of New Mexico -- aren't upgraded. This technological bypass limits individuals' -- frequently minorities' -- access to telecommunications services. In addition, lack of adequate telecommunications facilities and infrastructure makes these bypassed areas less attractive for businesses. You can see how this produces a spiral effect. Lack of investment at the community level leads to fewer economic opportunities for the people who live there. Poverty in a community makes it a less inviting target for investment, further aggravating the problem.
The technology gap is taking its toll on individuals, communities, and our society at large. Perhaps most obvious is the cost to individuals. According to one high-ranking official at the Department of Commerce, by the year 2000, 60 percent of jobs will require skills with technology. For some years now, the gap between wages for skilled and unskilled workers has been widening, driven largely by the rising demand for skilled workers as reliance on computer technology spreads. And as the Washington Post recently reported, students with limited or no access to computers are falling behind in skills that they will need in college and in the job market. Students that do not have access to computers in their homes or at their schools are not exposed to the wealth of facts and ideas available on-line to their computer-owning classmates.
I believe that education is the key to make sure that no one is left behind in this new technological age -- especially not our children. That's why one of the telecommunications issues that I care most strongly about is the schools and libraries program, better known as the "e-rate" or the "education rate." That is the discount that schools and libraries receive for telecommunications services used for educational purposes, for Internet connections, and for Internet service. The discounts are funded by contributions from all telecommunications carriers as a small percentage of their revenues.
As you may be aware, the e-rate program has drawn and continues to draw a lot of fire. Some opponents of the program have gone so far as to call it an "illegal tax." However, the D.C. Circuit Court of Appeals held several years ago that the universal service fund is not a tax. And extending universal service support to schools and libraries has not transformed a valid program into an illegal tax. Rather, the e-rate - as envisioned by Congress and implemented by the FCC - merely extends universal service to new beneficiaries. At a time when the Commission is about to set funding levels for its e-rate program for next year, critics are merely taking another opportunity to take shots at the program.
I support fully funding the schools and libraries program to its cap of $2.25 billion dollars for the next school year for two reasons. First, the e-rate is a sound investment for U.S. businesses. I am told that businesses seeking employees with technical skills can't find enough skilled workers to fill jobs. The e-rate is an important step in improving the quality of our work force. If American schools do not produce enough skilled workers to fill those jobs, companies will ship those jobs overseas. For many students, I am convinced that bringing the Internet directly to classrooms will change the way they learn. It may even change the way they see their own future. I believe that e-rate funding can contribute to creating a future American workforce capable of competing and winning in a global economy.
Second, the e-rate is an important tool for making sure that minority and low income children are able to participate in the telecommunications revolution, for bridging the digital divide. Last year, we approved $1.7 billion in e-rate discounts, and this year we committed the funding to over 11,000 rural schools and libraries and over 13,000 urban schools and libraries located in all 50 states, D.C. , Puerto Rico, American Samoa, and the Virgin Islands. So we know that the e-rate program is working. Despite last year's increase in Internet access, however, schools with the highest proportion of minority enrollments and schools with the highest proportion of students eligible for free or reduced-price lunch continue to have fewer instructional rooms with Internet access. And many of the classrooms still don't have Internet access at all.
Whatever the reason for the existing "technology gap," the important thing is that the e-rate will expose minority and low income children to computers and the Internet. As you well know, the Internet is already revolutionizing business. Businesses that don't adapt to the new environment will fall behind. The Internet has begun to revolutionize education as well. Students who have access to the Internet will flourish; those who don't will fall behind. That's why I support fully funding the e-rate. By fully funding the e-rate we can best address the demand from over 32,000 school districts, schools, and libraries from across the nation that have submitted requests for the next school year. And we can continue the good work that we've done this past year.
Of course telecommunications is not just a national issue. It's international. Today, telecommunications is a $600 billion global industry that is expected to double, or even triple, in the next ten years. This is good news for your business, and for our economy, because telecommunications is the backbone that supports other business sectors. The information networks that we are building today will fuel the global economy of the 21st century.
At the same time, however, we must ensure that everyone has the opportunity to participate and compete in this new world. One way we can do so is by providing access to all Americans, no matter where they live, what they earn, or what color skin they have. Everything is changing so fast, that it's easy to leave some people behind. But it is only by including all sections of America, by ensuring that all voices are heard and all talents utilized, that we will realize the possibilities offered by this information age.
Thank you again for the opportunity to be here with you today.