TESTIMONY OF LARRY IRVING ASSISTANT SECRETARY FOR COMMUNICATIONS AND INFORMATION UNITED STATES DEPARTMENT OF COMMERCE ON REAUTHORIZATION OF THE NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION BEFORE THE SUBCOMMITTEE ON COMMUNICATIONS COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE MARCH 1, 1994 Mr. Chairman and Members of the Subcommittee: Introduction Thank you for the opportunity to testify on the reauthorization of the National Telecommunications and Information Administration (NTIA). Today I will discuss the need for NTIA's reauthorization for Fiscal Years 1994, 1995, and 1996, and update you on some of the current activities that we are undertaking in order to meet our mission during Fiscal Year 1994, particularly actions promoting the development of an advanced telecommunications infrastructure. Because of your leadership roles as members of this Subcommittee, you are familiar with the advances in the telecommunications and information infrastructure that are occurring daily. As you are well aware, information technologies are increasingly used in daily life in households and businesses. For example, the testimony I am now presenting will be promptly available for members of the public to access via computers. And advances much greater and more significant than this, using much more sophisticated technologies, will soon be within the reach of every American. The President's National Information Infrastructure (NII) initiative is at the forefront of these advances. This initiative, led by Vice President Gore and Secretary of Commerce Ronald Brown, is indeed a true private sector-public sector partnership. The private sector is building, operating, and improving the infrastructure. At the same time, the government is working to create a legal and regulatory environment, in consultation with industry and the public interest community, to promote efficient infrastructure investment and widespread availability of advanced services. The Department of Commerce, including in particular, NTIA, is playing an important role in facilitating the development of this advanced information infrastructure, both in terms of formulating policy and in funding targeted demonstration projects and research. The Administration, and NTIA in particular, are devoting special attention to bringing the benefits of the Information Age to traditionally unserved and underserved groups, including the poor, minorities, rural Americans and disabled individuals. The President announced in his State of the Union address that the Administration will also seek to extend access to these benefits to all classrooms, all libraries, and all hospitals and clinics in the United States by the year 2000. As Vice President Gore and Secretary Brown have repeatedly emphasized, instant access to information, which will be made possible by an advanced infrastructure, will increase productivity, create new jobs, help educate our children, and provide better medical care to all Americans. NTIA commends the Subcommittee and the Congress for your past support of those programs and initiatives at NTIA that enable us to execute our leadership role in the telecommunications field, and we encourage your continued support for our reauthorization. I would like to now update you briefly on our current programs, and then describe NTIA's new initiatives. Telecommunications Policy Activities NTIA serves as the principal Executive Branch adviser to the President on telecommunications and information policy, and develops and presents these policies before Congress, the Federal Communications Commission (FCC), other Federal agencies, and international bodies. This year the Commerce Department, with NTIA in a lead role, has been working closely with other Executive Branch agencies on an interagency Information Infrastructure Task Force (IITF), chaired by Secretary Brown. NTIA is serving as Secretariat to this task force, which has developed a policy framework for implementing the Administration's vision of an advanced telecommunications and information infrastructure. NTIA also has the leading role in the IITF's Telecommunications Policy Committee, which formulates Administration positions on key telecommunications issues. Legislative proposals for major regulatory reform in telecommunications have been a prominent aspect of the Committee's work. The Department has recently stated positions on legislative proposals now pending in Congress that would advance the development of the National Information Infrastructure in testimony before the Senate and House of Representatives. As Secretary Brown stated in testimony given last Wednesday before the Senate Commerce Committee, the development of the National Information Infrastructure will help to ensure that the United States maintains world leadership in the global information marketplace. NTIA and the Universal Service Working Group, another part of the Telecommunications Policy Committee, are conducting ongoing hearings on universal service and open access in locations around the country. NTIA seeks the input of industry and the public interest community in other ways, as well. For example, NTIA, in conjunction with the IITF's Telecommunications Policy Committee, solicited responses from more than 20 telecommunications and information policy experts to the Administration's "NII: Agenda for Action," issued last fall. These experts were asked to articulate their personal visions of the nation's future information infrastructure development and their views on how the Administration can best achieve its goals with regard to the NII. Their input will be compiled in a document entitled "20/20 Vision," which is expected to be released at a public conference this Friday, March 4, at the Department of Commerce. Through participation in the IITF, NTIA is extensively involved in a host of other issues, such as privacy, international concerns, intellectual property rights, and technical applications, that must be addressed in order to advance the nation's telecommunications and information infrastructure. Another recent accomplishment of NTIA is the formation of the National Information Infrastructure Advisory Council. This group of leaders from the telecommunications and information communities will provide valuable input to the Administration as it addresses further policies and activities to advance the NII. Furthermore, NTIA will continue to study other major telecommunications and information issues, file comments with the FCC, contribute to interagency policy development, present Administration telecommunications and information proposals to Congress, industry, and the public, and participate in key telecommunications industry conferences. One important item on NTIA's domestic policy agenda is the continuation of NTIA's Minority Telecommunications Development Program, a program that assists minority entrepreneurs in telecommunications businesses. Another significant NTIA initiative is our recent release of a Notice of Inquiry on telecommunications and information privacy, which is becoming increasingly important to users of facilities and services as they become more complex. International Activities NTIA will continue to provide leadership in developing policies and representing U.S. interests in international telecommunications and regulatory arenas. As coordinated by the State Department, NTIA, together with the FCC and other agencies, will continue to develop international communications policies for presentation at international conferences and meetings, and, with the State Department and the FCC, will maintain oversight of COMSAT as the U.S. signatory to INTELSAT and INMARSAT. This is particularly important as the roles of these entities are undergoing structural changes to introduce further competitive elements. NTIA will also maintain an active role representing U.S. interests in the International Telecommunication Union (ITU), which provides a forum to determine international rules for radio frequency usage and network performance, and to foster international cooperation in providing technical assistance to developing countries. We are currently in the midst of preparations for the ITU World Telecommunication Development Conference in Buenos Aires, Argentina, in late March. NTIA is also placing particular emphasis on the U.S. preparatory process for the ITU's 1995 World Radio Conference. NTIA's international efforts are also directed at helping to open overseas markets to U.S. products and services by participating in bilateral and multilateral policy discussions on telecommunications, and by providing expert telecommunications policy assistance in support of telecommunications trade negotiations. For example, at a Southeast Asian telecommunications conference that NTIA helped to organize in October 1993, eight governments agreed to a statement that recognized the role of the private sector in the development of the telecommunications sector, and expressed mutual hopes for further cooperation between governments with regard to telecommunications. A similar conference held in Venezuela last summer also was successful. At the Venezuelan conference, U.S. companies were made aware of opportunities to compete for approximately $1 billion in anticipated telecommunications contracts in Latin America. Spectrum Management and Planning One of NTIA's most important responsibilities is to license and to manage government use of the radio spectrum. NTIA will continue to participate in domestic and international radiocommunications arenas to help ensure the efficient, effective, and equitable distribution of the spectrum. We will process thousands of frequency assignment requests every month to sustain Federal agency missions such as defense, air traffic control, and law enforcement, and provide spectrum certification for billions of dollars of radiocommunications required by the Federal agencies. NTIA will continue to encourage the use of new and more spectrum-efficient technology in the land mobile radiocommunications area, including applications related to law enforcement radiocommunications centralization undertaken as part of the National Performance Review, and to efforts begun by the Federal Law Enforcement Wireless Users Group. In addition, NTIA will perform in-depth analysis of spectrum use to ensure its efficient and effective use. We are also constantly improving our spectrum openness program, which provides the public access to NTIA's spectrum management activities through a resource library and via computers. Furthermore, NTIA is in the early stages of implementing Title VI of the Omnibus Budget Reconciliation Act of 1993, which requires transfer of spectrum used by Federal government agencies to private sector use. As required under that Act, a Preliminary Spectrum Reallocation Report was recently completed and released by the Secretary to the President, the Congress, the FCC, Department Secretaries, and the public. Based on public and FCC comments, and other considerations, a final report on this matter will be released in February 1995. The transfer of spectrum will enable the private sector to realize the potential of new, emerging technologies. Moreover, some or most of this spectrum will be assigned by the FCC by auction, under authority granted to the FCC last year, thus producing significant revenues for the U.S. Treasury. Telecommunications Research NTIA's world-class laboratory, the Institute for Telecommunication Sciences (ITS) in Boulder, Colorado, is the central U.S. government facility for telecommunications research and engineering. ITS' work, which has an outstanding reputation in the scientific community, meets Federal needs for telecommunications research and provides technical analyses that support NTIA policy positions. ITS will continue to conduct analyses of the characteristics of radio wave transmission that will enhance the efficient utilization of the radio spectrum and the performance of radiocommunications systems. This year, ITS activities included participation in international technical standards conferences. ITS is also conducting research in timely and significant areas of communications, including Integrated Services Digital Networks (ISDN), Personal Communications Services (PCS), and Intelligent Vehicle Highway Systems (IVHS). Also, ITS will continue to evaluate performance specifications and operational characteristics of government and private sector telecommunications networks. Telecommunications Applications NTIA is currently implementing an important new program that will help demonstrate to Americans at the local level the advantages of having access to a modern, interactive information infrastructure. In Fiscal Year 1994, NTIA received an appropriation of $26 million for a new program that will fund NII planning grants and demonstration projects. This program will provide matching grants to state and local governments, health care providers, school districts, libraries, universities, public safety services, and other non-profit entities. The program will do more than merely provide connections to networks, communication systems, computers, and data bases. It will provide the capability for school-age children to reach the outside world from communities so isolated that for three or four generations past, individuals have not ventured more than 30 to 40 miles away from their places of birth -- and death. It will provide opportunities for educating children and adults in ways that, until this point in time, have been unheard of in parts of our nation. It will enable individuals in rural America to gain access to routine medical diagnostics and simple care without having to travel 300-400 miles to interact with a primary care provider. Activities to implement the infrastructure grant program are well under way now, and NTIA soon expects to release a public notice announcing the availability of grant funds. Because the program is currently operating pursuant to an appropriation, and not authorization, it is a high priority of the Administration to have this program authorized and expanded quickly. NTIA will continue to administer three other important programs that help meet public telecommunications needs. First, NTIA continues its commitment to the principles of the Public Telecommunications Facilities Program (PTFP). PTFP is operating with an appropriation of $24 million for Fiscal Year 1994. Through this program, NTIA will fund grants to support the extension of public broadcast signals to unserved areas, expand the variety and reach of public broadcasting services and facilities serving educational and cultural needs, increase the number of public broadcasting services and facilities operated or controlled by minorities and women, and increase public broadcasting services for visually and hearing impaired citizens. Second, the Pan-Pacific Education and Cultural Experiments by Satellite (PEACESAT) program will continue to bring educational, medical, and cultural telecommunications services to isolated areas in the Pacific Ocean region. Third, with an appropriation of $1 million for Fiscal Year 1994, NTIA's National Endowment for Children's Educational Television (NECET) will fund grants to increase quality programming aimed at children. 1995 Initiatives NTIA has requested a Fiscal Year 1995 budget of $133.957 million. We are now seeking authorization of our programs at that level. The proposed authority will fund the new infrastructure grant program at $100 million, Salaries and Expenses at $22.203 million, the Public Broadcasting Facilities Program at $10.748 million, and the NECET at $1.006 million. This authorization is essential for NTIA to help expand and improve the nation's telecommunications infrastructure, both wireless and wireline, and to maintain NTIA's current programs. This proposed Fiscal Year 1995 authorization includes several program changes, as follows: Telecommunications and Information Infrastructure Grants. NTIA seeks an authorization of $100 million for the new infrastructure grant program in Fiscal Year 1995. This increased level of funding is critically important. Targeted government support of projects to help schools, hospitals, libraries, public safety and public information providers access telecommunications technologies will help improve the delivery of social services as we move into the 21st century. By helping such entities take advantage of increasingly sophisticated telecommunications and information technologies through a matching grant program, we will spur more private sector investment in the field and enhance the economic competitiveness of the nation. Moreover, this program will help promote important universal service goals. Unless the government demonstrates its commitment that all citizens, regardless of economic, educational, and social standing have the right to access the National Information Infrastructure, there is a danger that information networks will evolve in a disjointed manner, targeting only selected clients and customers. Without government leadership and direction, particularly through the information infrastructure grant program, pockets of "information haves and have nots" could develop. The requested authorization levels for the new infrastructure grant program demonstrate the government's deep commitment to the development of an NII that is accessible to all Americans. Salaries and Expenses. NTIA requests an authorization of $22.2 million for Fiscal Year 1995 for salaries and expenses, to permit our ongoing programs to continue, and add two new spectrum-related initiatives. The Federal government must modernize and improve its spectrum management process to deliver rapidly necessary information and uniform analytical capability to NTIA and the Federal agency spectrum managers. NTIA, therefore, requests an increase of $810,000 for information infrastructure development for the Federal government's spectrum management program. This funding is necessary to obtain new equipment and staff necessary to make major improvements in the Federal spectrum management process. This complex system currently involves over 200 interagency meetings annually, the exchange and distribution of thousands of documents, and continuous computer usage. NTIA is responsible for processing over 8,000 frequency assignment requests monthly, issuing spectrum certifications of $3 to 4 billion annually in radiocommunications needs for Federal agencies, updating a data base of 441,000 frequency assignment records, and updating regulations, among other things. Modernizing this system will help the United States demonstrate to other countries that it is possible to use the spectrum more efficiently by automating spectrum management processes. NTIA has a fundamental interest in promoting effective spectrum management throughout the world, in order to advance international agreements that are favorable to U.S. interests, particularly with regard to emerging technologies. NTIA is also requesting an additional $656,000 to aid in relocating government spectrum users to other parts of the spectrum. As mentioned earlier, the Omnibus Budget Reconciliation Act of 1993 requires the Secretary of Commerce to identify and recommend bands of frequencies currently allocated for Federal government use that can be made available to the private sector to realize the potential of new, emerging technologies. To aid Federal spectrum users in transitioning to different frequencies, NTIA seeks to award a contract to establish a "command center" of highly-skilled electromagnetic compatibility engineers using the latest, most sophisticated techniques to provide assistance in the selection of frequencies for new users of reallocated frequency bands and for displaced government users. Public Telecommunications Facilities Program. NTIA requests an authorization of $10.748 million for Fiscal Year 1995 activities under the PTFP. With the advent of the new infrastructure grant program, which will fund pilot projects using a vast array of technologies, NTIA anticipates that grants for infrastructure development traditionally funded under PTFP will now be funded by the new program. Thus, NTIA supports changing the title of PTFP to PBFP -- the Public Broadcasting Facilities Program -- and focusing the program on public telecommunications needs that use broadcasting technologies. Through the years, PTFP has been able to make substantial contributions toward the extension of public broadcasting coverage in the United States and has offered assistance toward maintenance of the public broadcasting infrastructure. Supporting the extension of public broadcasting signals to reach unserved Americans remains PTFP's highest funding priority. PTFP will also continue to support grants for minority service and for services for the visually and hearing impaired. There are significant Native American, Asian-American, African- American and Hispanic communities that could be, but are not now, served by local public broadcasting facilities. PTFP will continue to provide funding for the establishment of radio read- ing services, to improve the captioning of public television programs, and to add Second Audio Program capability to television stations so that they can provide reading and descriptive video services. Conclusion NTIA is in a unique position to influence significantly the ability of U.S. companies to compete in the global marketplace and to enhance the benefits to the public of a strong telecommunications sector. We appreciate your past support for NTIA's programs, and we look forward to working with you as we continue to strive to provide the benefits of advanced telecommunications to all Americans. Thank you again for this opportunity to share NTIA's views with you. I would be pleased to respond to any questions you may have.