Silicon Valley Speaker Series: Addressing the Digital Divide

The Digital Divide

A roundtable discussion among Bruce Brooks, David Eisner, Sally Jo Pfeiffer, and Senator Joe Vasconsellosr.

Mountain View, Calif., Oct. 30, 2000

MR. GOLDMAN: Good afternoon, everyone. I’m Phil Goldman. I’m Vice President of Advanced TV Services at Microsoft, and I want to thank the panelists for dressing up. I’m dressed for the digital divide, actually.

I’d like to welcome everyone here to our Silicon Valley Campus and to the speaker series. This is our third event in the speaker series, and we’ve had incredible feedback from you, both in terms of the number of people who are coming here, and also the feedback that we get from the audience. We want to thank you, and thank you in advance for attending and participating in this panel.

Today, our panelists will be addressing the implications of the digital divide, and some unique solutions-oriented approaches to bridging the divide. Following their remarks, we’ll open up the discussion to you to address the panelists.

I’m going to let our moderator introduce the other panelists, but let me tell you a little bit about him first. Al Hammond is a professor at Santa Clara University School of Law. Professor Hammond has held a variety of high-level positions in the private and the public sector. A substantial portion of Professor Hammond’s scholarship has addressed media services to, and portrayals of, the minority community in the United States. He has also maintained a strong scholarly interest in issues concerning individual access to mass media technology and information. Professor Hammond has spoken to various policymakers and groups regarding the potential impact of the information superhighway on the provision of education, the creation of economic opportunity, and the preservation of electronic speech opportunities at inner cities and rural communities.

Please welcome Al, and our panelists Bruce Brooks from MS Community Affairs; David Eisner from AOL, Sally Jo Pfeiffer from the Bay Area Video Coalition, and Senator Joe Vasconsellos. And I want to thank Senator Vasconsellos in advance for joining us. He has a prior commitment, so we’ll have him here for the beginning of the panel.

Professor Hammond.

MR. HAMMOND: Thank you, and good afternoon. We’re going to talk about the digital divide, its implications, and I’m going to start by asking, what is the divide? So, after years of concern in Washington amongst policy wonks, public interest advocates and academics, the divide has become a matter of national concern. But exactly what is it?

If you talk to the Vice President and the President, it is the disparity in access to computers and the Internet disproportionately experienced by rural, inner city and minority Americans. If you talk to the secretary of education, it’s the high probability that children without access to technology in their schools and homes will be less likely to possess the critical computer-based skills necessary to quality for 21st century employment opportunities. To the secretary of commerce, it’s the absence of a competitive edge and e-commerce entry suffered by businesses without access to advanced networks.

To rural inner city and near-suburban communities, it’s the absence of access to these advanced telecommunication networks that makes them less desirable locations for businesses seeking to compete in the growing information economy. To executives of the Valley, Silicon Valley, it is the growing dearth of Americans qualified to take those software engineering and programming jobs they desperately seek to fill. And if you go on with looking at the disability community, and they define the divide as the absence of accessible technology based on the principles of Universal Design 11 by the best practices of human computer interface.

Telecom and cable networks define it differently. It is the consequence of investment decisions, as well as technology in the market and regulatory forces, which force them to choose one community over another as the first to be wired with the advanced technology. To the states and cities, it’s the difference between those areas experiencing economic growth and prosperity, and those which will be forgotten.

So, what is the divide? It is all of these and more. Today, in an effort to expand and illuminate these definitions, we have a distinguished group of panelists. They will be talking about three major areas, but of course, sharing their experiences and observations on the divide with us as well.

They will be looking at the social and business implications of the divide, they will be looking at the continuum of learning via technology and the impact of the divide on that continuum, and ultimately and, lastly, unique approaches to bridge the digital divide.

I will introduce each panelist once, at the beginning, in the order in which they will speak, and then I will turn it over to them. The first panelist is Senator John Vasconsellos; he’s a Democrat from San Jose in the Senate District 13. He is serving his first term as a California State Senator representing the heart of Silicon Valley after 30 years in the State Assembly. He has been called a pragmatic idealist, the conscience of the legislature, and the Johnny Appleseed of self-esteem.

The next person to speak will be Sally Jo Pfeiffer; she is the executive director of the Bay Area Video Coalition, the nation’s largest nonprofit media arts center dedicated to providing access to media, education and technology.

After Ms. Pfeiffer, David Eisner will speak. Mr. Eisner is the vice president of both AOL’s corporate relations department and the AOL Foundation. Mr. Eisner focuses on enhancing the benefit of the emerging online medium to society. He manages the company’s engagement in social policy issues including online safety for children, education, e-philanthropy, Internet based democracy, and initiatives relating to the bridging of the digital divide. In overseeing the AOL Foundation, Mr. Eisner seeks to enhance the foundation’s efforts, which are to view themselves as having a mission, I should say, to ensure that the online medium lives up to its promise to benefit society.

Last, but by no means least, is someone you probably all know, Mr. Bruce Brooks who is the director of community affairs at Microsoft. The community affairs group is within the law and corporate affairs department at Microsoft, and Mr. Brooks oversees a staff of 13, and that group manages Microsoft’s community affairs activities, including corporate and employee giving and volunteer programs.

So, I would like for you to give a warm round of applause for the panel.

(Applause.)

MR. HAMMOND: Senator Vasconsellos.

SENATOR VASCONSELLOS: I’m in here for about a 45-minute period between a workshop all morning in San Jose, and racquetball at 2:30. I came because I wanted the invitation to come to Microsoft. And even as you welcome me here, you’re here 18 months; I’ve been here for something like 60 years. I was born in the area. So, I welcome you to Silicon Valley. Microsoft is a major player here from now on.

And I came because this issue, digital divide, is so critical to this valley and this district. My definition may be simpler than the ones that you articulated, Al. It began for me in terms of a formulation about four years back when I was, one Friday, in East San Jose at the La Raza Roundtable, which meets every month, the last Friday after work for an hour-and-a-half with the leadership of the Valley. And midway through, Victor Garza, the chair of the group, my compadre for 30 years, turned to me and he said, how come you’re creating all those great jobs on the west side

(inaudible)

— I said that’s this Valley’s biggest challenge, and we ought to deal with that. I came back the next day and talked with Becky Morgan, my former colleague in the Senate, who was then the CEO of Joint Venture Silicon Valley with enormous stature and capacity, I want you to come deal with this. And she came with Jay Haraff, the publishers of the Mercury African American, and we met at the roundtable to discuss how to fuse the needs of the west side for employees with the needs of the east side for opportunity. And it didn’t go anywhere; it wasn’t ripe. And I have learned, you’ve got to pick your time in politics when things are ripe, and then you have to take them clearly and move.

I’m on the board of directors of Silicon Valley. Becky Morgan is now retired. A year-and-a-half ago, we did a study by the Carney Company that says that the cost of high-tech is not having a local workforce prepared to keep your operations going. In this valley alone, that amounts to more than $3 billion a year. It then became clear to me at the bookends of my experience in my district, on the east side where kids can’t make it over here to get in the jobs, and the west side where you can’t find people to fill the jobs. There are about 60,000 unfilled high-tech jobs here in the valley. So, I think that digital divide is right here, right now, for all of us. With Microsoft fueling the prosperity, the east side kids continuing and opportunity at the same mix and match point that ought to be addressed and ought to be taken care of.

The social implications, they are profound. Business implications, they’re obvious. Socially, it’s as simple as this, in the year 2010 in California, the retirees, hopefully I’ll be around to be one of those, and not a Senator then, will be three-quarter Anglo, and the workforce will be two-thirds persons of color. Now, half the kids of color don’t finish high school in this valley and this state. So if two-thirds of our workforce are of color, and half don’t finish up, and a third miss them, we don’t have old age security for those of us who are old aged. So to bridge this divide here and now to me is really smart, common sense, and mutually beneficial.

How to go about it? Well, the first thing is a matter of awareness for all of us who have the privilege and the opportunity and the capacity and the wealth and the education to recognize that our future depends upon the kids who aren’t now joining us as full-fledged equal partners, and to then begin to put into place the kinds of programs that begin to bridge this gap.

Joint Venture has adopted, through a lot of board work and negotiation over the past year, to make our theme project in the next five years to bridge our digital divide, ours here in the valley, and to be sure that we have the workforce for the next century here in Silicon Valley. We’ve put together an elaborate plan, it’s being worked up now, but it’s going to require that everybody here recognize it, own it, address it, take responsibility for it, and put together the resources and the equipment that are involved. I would love to see every one of the top corporations, Microsoft and AOL and all the ones who are here

(inaudible)

— low achieving schools, adopt it with mentors, with equipment, with resources, with just teachers, and really own the problem, and then provide the basis for the solution.

If you get 50 of the top hotshot entrepreneurs who have made

one of my friends is worth a quarter of a billion dollars — being at the right being at the right place at the right time, have them adopt a neighborhood center for computers and access. It’s a couple hundred thousand dollars that you’d never miss, it would be the John B. Neighborhood Center, and those kids have in their neighborhood, close to their homes, accessibility, affordability, availability to use this.

The schools have got to be radically reformed. The community has got to be totally involved. It’s a matter of corporations, the community leaders, the Latino, Asian communities, and African Americans, and everybody to get at the table, to live in the center of the divide, and reach out and help bring it together. I think it’s what we need to do, and I think that even though the divide is enormous, and David talked about is it poverty and health, or is it technology? It’s all of it. And it’s always been a divide, but it’s more exacerbated now, more visible and graphic. And ironically within the context of the capacity technology, the capacity to heal it is more than it ever has been before. So we have a chance to really have this become one community of all of our people, of whatever race or color, ability, disability, being part of this throbbing social and economic experiment, in diversity, and technology, and the global economy, and hopefully we’re up to the task.

MS. PFEIFFER: (Off mike)

but first I thought it might be helpful to describe where I come from, which is an organization

(inaudible)

— a video coalition. And then I wanted to comment a little bit about the definition that we were talking about earlier, about the digital divide, and talk about our solution, some of the challenges of scaling up that solution that we’re finding, and then some of the suggestions we had for what’s making it successful, which has a lot to do with our linkages with industry.

A quick comment on BAYVAC, we actually are an advanced technology center, and the gist of our operations when we started 25 years ago was to help independent producers make public television programs. So as such as have a postproduction facility, broadcast video equipment. As the technology changed, so did we. And we now make videos, and Web sites, and CD-ROMS for non-profits across the country, small and large. But, we also run a really big training program. We have a contract with the state

with the employment-training panel, which allows us to take state funds and actually train folks who work in industry. And I have information on that if anybody is interested later. We do about 600 or 700 of those training workshops a year.

And the third thing that we do is a workforce development program called Job Links, which is probably why I’m here today. Job Links places low-income folks into high paying, high tech jobs in the Web area. It’s a 16 week boot camp type program, which basically is soft skills, hard skills, employer based, project based, and allows us to take it a low income adult with a less than high school education, or high school education, and put them into a job at a 95 percent placement rate, for an average salary of $30 an hour, which is pretty good for this area.

A quick comment on the digital divide. I’m with you and think that the digital divide is really more of a symptom of what is really an economic divide. And therefore, it belies the solution. The economic divide, just to make a comment on that, in California, the disparity between the highest fifth and the lowest fifth are growing at a faster rate than any other state in the country today. And what that means is, looking at some numbers, 41 percent of families in Los Angeles make less than $20,000 a year, that’s what that looks like, 65 new millionaires a day, supposedly, in the Bay area, and with the highest homeless per capita income.

We’ve got 28 percent of kids in California, and families of four making less than $16,000 a year, 46 percent of those kids are in families of four making less than $29,000 a year. That’s a big disparity, and that’s unacceptable. If we could solve that disparity we could solve the digital divide, because folks would be

does work permeate life. Folks with computers at home, they’d be working on them at work, and they’d actually have the money to get some of that access we’re talking about, which actually is getting a little bit better.

The latest net survey came out by the Department of Commerce, and access is getting better. We went from 31 percent of Internet access in the home, to 46 percent. Computers in the home went from 30-something percent, again, into the 40 percent. So it is getting better. And we think we can actually solve this at BAYVAC, if we focus on the solution of work force development. That is, getting people jobs.

Just looking at the demand side that Senator Vasconsellos says, the ITAA which is an IT industry association came out with a study saying that there are 1.6 million new jobs that are coming out, and 840,000 of those jobs are going to go empty, 40 percent of that 840,000 are jobs that are more or less entry level, that would not command a college education, you could have a high school education. The Department of Labor is saying that 60 percent of all jobs today require a computer. So not even talking about the IT industry, just jobs across all sectors, if we can train folks for those jobs, we can make a huge impact.

So the issue really is, there’s a big supply of people who need work, and a hot demand on the industry side. And as Senator Vasconsellos said, we’re losing revenues because we aren’t making that linkage. When BAYVAC started its program three years ago, we were kind of a pioneer in the effort of making that linkage, and we were ahead of the game, because we were a technology center in a non-profit sector, which is a bit of an anomaly. So we got a little bit of a jumpstart.

When we started asking philanthropic institutions, you know, could we get some help on this, they had two questions for us, and they weren’t dissimilar to the questions that industry was asking us when we were also asking for their support. Philanthropic folks said, what is the IT industry, what are the jobs and can low-income people actually get those jobs. Industry actually asked, who are low-income people, but they asked the same question, can low-income people work at technology jobs. The answer was a resounding yes, from our experience. So we actually went after some money to do a study, too, and with the help of the Ford Foundation took a nationwide scan at successful technology centers making this linkage. And what we found was not surprising to us, everybody doing what we’re doing with these kinds of best practices, of linking with industry, and doing a good job of training, are placing folks at an 85 percent placement rate or higher, at really high paying jobs.

So what is the problem? Well, the problem now, it’s right in front of us, it’s scaling up this kind of work. And we’ve got a couple of challenges. The challenges are we’ve got a history in workforce development that’s been sitting in a nonprofit sector which is undercapitalized in general, and we’ve got some policies that are in place. You all probably remember SETA which was from the ’70s through the ’80s, which gave people basic training in high school. And of course, we found out from that that didn’t really get people jobs.

The JPTA came in, which was a work first program, and the idea there was to put people in a fast track, and to work at low paying jobs and get them used to work. But, we found the same kind of retention

people were not staying in these jobs. So in 1998 we had the Workforce Investment Act, and now we’ve got a chance to customize, and actually work with the industry to try to make this work. We’ve got a couple of other issues, which are going to be resolved by, I think, the Workforce Investment Act. The nonprofit sector has been pretty fragmented in the way we tackle training, but we’re going to streamline that issue with this act, and I think do a much better job.

We’ve got $40 billion to work on this problem, probably $40 billion plus, actually if you count the Pell Grants, and all of the foundation money. We’ve got a nonprofit sector, which is professionalizing all the time. We’re 10 percent, actually, of the GNP. We’ve got 9 million workers working in the nonprofit sector, a lot of human capital, and a lot of people who care about the problem. And the problem is actually a really swell one to work on. We’ve got supply. We’ve got demand. We’ve got a huge return on investment, if we can make it work. On the industry side, more revenues for companies, solving their labor problem, more people able to buy computers. And of course, on the supply side, we need to get our kids out of poverty, no question about that.

So what can industry do to help? What have we found, mostly we think that if industry would take two years, and everybody in the IT industry would actually focus both their corporate and political leadership on this problem, as an employer focus on this problem, and focus philanthropically on this problem, we could probably beat this thing out.

What I mean by employers, I mean getting your employees involved in training programs, having your employees work on boards of directors of these training programs, having them work as mentors, as industry spokes people at those training programs, philanthropically it means instead of just having all of the programs giving just a little bit of this and a little bit of that, and spreading it out, let’s focus all of that money on workforce development just for a couple of years. And as a corporate political leader, it means actually doing something that we can’t in the nonprofit sector do, which is lobby government, you know, form industry alliances to press on government to actually make the workforce investment act work this time around.

And so, we’re envisioning a purist victory, as they say, but if not that make some great headway and we’ll look forward to the discussion of some sort.

Thanks.

MR. HAMMOND: Thank you.

David.

MR. EISNER: First of all, I want to thank you all. This is a terrific forum, and I’m delighted to be able to talk a little bit about the digital divide.

You know, at AOL, as Al mentioned, I focus on the impact of the Internet media on society. And if you take away the digital divide as a problem, we look at what is the true best opportunity that the Internet gives us as a society, it potentially could help us build a more just society, a society where people have an unprecedented opportunity for economic participation, even people who have traditionally not, and communities that have traditionally not had access to capital.

People have an unprecedented opportunity for political sophistication, even communities and people that have not traditionally had access to being able to express their points of view. And, likewise, people who have traditionally been separated from social participation through physical disability or geographic isolation, or income, or other reasons, the Internet, for the first time, makes it possible for us to find new ways to include these people.

And the Internet even gets some more underlying issues. It offers the opportunity to expand knowledge to promote greater understanding and passion among people to reduce bigotry and prejudice. These are pretty high-level things. But in a world where we begin to move toward everyone being part of an information society, and everyone having greater access to information, you make the world smaller and more familiar to everybody.

At AOL, we’ve been focused on these opportunities for a while. And in the late ’90s it became pretty apparent to us that these were great concepts, but they weren’t going to happen by themselves. That the sort of concept of technological determents among the Internet by itself making these things happen is not

it’s not automatic. If we’re not careful, we could see a completely different outcome. We could see the quality of political discourse lowered to a lowest common denominator, where rumor and innuendo drive discourse, and political lives are ruined by rumors. You could see free expression completely smothered by commercial shopping opportunities. You could see our kids threatened, their privacy threatened, their safety threatened, people trying to find ways to victimize them could us the medium to do that. And, worst of all, we could see this new resource of connectedness and information become another resource that the people that have traditionally been denied access are now denied access to another resource, only this is a resource they need even more. And so, by being denied access to this resource, the issues of literacy and poverty and healthcare become even worse. As a result, they’re also being denied this resource.

So, in many ways, it’s up to us and the Internet industry, all of us in the high-tech community, to get it right. We see pretty clearly the two sides, and we should be building an opportunity for everyone to be participating in this new society. Clearly, the most important

there’s a lot of things that need to be done. We need to build the tools. You know, there’s a lot of talk about how the Internet can play in helping people develop their political voice. Well, those tools haven’t really been developed fully yet. And all of us need to focus on building those tools. We need to make sure that the Internet does become a tool for low-income people having access to healthcare. And those tools aren’t really there yet. We need to make the Internet a tool so that low-income people can better use their finances, and right now financial services are targeting pretty much into the middle class.

So there’s a lot we need to do, but there’s probably nothing more fundamental than ensuring that the underlying access goes everywhere. Because if we don’t make the underlying access to the Internet fit all these communities, then all of the other tools don’t matter quite as much. When we focus on what do we mean by access, we think of providing connectedness to the Internet as four pieces.

The first is the one that we’re always talking about, it’s structural, and that’s basically getting the boxes and the wires and the connectivity. And that’s tough and it’s expensive. But, frankly, it’s not the real battle. The cost of the equipment is coming down. Wiring is becoming more prolific. There may be a discussion about who has broadband and who has narrowband, but being able to participate in the Internet medium, the structural issues are not core. It’s the other three issues that are becoming core.

And those are, training and education, and by training and education that includes computer literacy, analytical skills to be able to use the information and to understand what piece of the information is relevant, and ongoing training so that you’re training trainers, so that in any community the skills stay in the community. So, first is structural, second is the training issue.

Third issue is community education, we’ve seen in a lot of cases where you put community technology centers, including full-time trainers, and they’re not taken advantage of. And the reason is because the community itself doesn’t understand the priority that being connected has for the success of their kids, and for the economic success of their communities. So this community education becomes critically important.

And the fourth area is contact, because if you take an African-American 15-year-old kid in an inner city and put him online, and basically, without looking really hard, all he finds is middle class shopping opportunities, we haven’t made the Internet something that’s relevant to his life. And it’s critical that we do find ways, as we’re trying to reach out to bring more people on the Internet, that we find things on the Internet that are relevant to their lives, and that help them make something of themselves through the Internet.

There’s one additional piece that’s important. It’s not just individuals that are affected by the digital divide. This also gets to organization, in particular nonprofit organizations. If nonprofits are now the organizations that provide services to, advocate on behalf of, and represent most of the communities that we’re trying to reach and that we think are on the wrong side of the digital divide, if those organizations are themselves not wired, are themselves not prioritizing bridging the digital divide at a high enough priority, then our chances of being able to wire the communities they serve is almost nonexistent. Which is why, I think one of the terrific ways that AOL and Microsoft has been working together is on a series of initiatives relating to empower and build capacity in the nonprofit sector.

So, if I can just spend another minute or so, I want to just list a couple of the

— some of the activities that I think are out there that offer great promise. One is called the Digital Divide Network. If you haven’t visited it, you should. Microsoft is a sponsor, and AOL is a sponsor, it’s the first effort to begin to capture all the knowledge about the digital divide so we can start not reinventing the wheel in every community. Up until now, we’ve seen literally thousands of community access centers spring up, and not one of them was learning from what other community access centers were doing. So the Digital Divide Network is a critical step towards beginning this sort of education cycle.

Another one that we’re excited about is Power Up. With Power Up committed this year that it would launch 250-community technology centers, and they met the goal. Microsoft is a partner, and AOL, it’s partnered with America’s Promise, and the YMCAs and the Boys and Girls Clubs, Sun Microsystems, Gateway, many other partners, and it’s a fascinating concept. Most community activists tell you that you can’t franchise community activities, because every community is individual. Well, the problem that Sally Jo mentioned is, how do you deal with scalability then? And what Power Up has is a new model where it literally shrink wraps community technology centers, and gives them into communities, but sets the goal that the community itself has to build its relationships, and its own idiosyncratic community center. So it gives them the capacity, but they have to make it work for their individual community.

That’s all I’ll say for now, but I think there are a couple of programs that are beginning to move. The bottom line is that the digital divide is not a matter of who gets left behind as the rest of us move forward. It’s a matter that the strongest opportunities that we have for our technology and our medium to benefit society are those opportunities we have if we can reach the people that have been on the wrong side of the have and have not problem.

MR. HAMMOND: Thank you, David.

Bruce.

MR. BROOKS: I can make it really short, just say ditto, because each of the prior three speakers have touched on pieces that both illuminate the problem and the opportunities that are there.

I guess what I would say from our perspective at Microsoft is, one of the ways that you have to, I think, as we talk about trying to define what the digital divide is, and then what you would think about your solutions in terms of what you can do as part of the solution, is sort of have to go back, in some sense, to the core values. And, as a company, Microsoft has, I think, several core values that are directly applicable to this issue of the digital divide. Maybe first and foremost is community. Out of nine corporate values, community is one of them, another is diversity, a third is people, I want to talk about partnerships, and lastly sort of innovation as a piece of this.

One of the ways that we sort of start thinking about digital divide is, what are we trying to achieve? We may be able to define it, but to what end is the sort of solution directed? And part of what our principle or our thinking is, we want to make sure we find ways to strengthen community and, more importantly, have people be empowered to make their own choices, to find success as they define success. So that’s part of it, so it’s the why.

What is it Microsoft can kind of bring, if there’s a need, the need being defined as people not having sufficient opportunity to find success for themselves, what’s the opportunity that Microsoft brings to bring a solution to that? Well, one of the things that clearly pops into our mind is technology. Well, technology is wonderful in some senses, but let us all remember that it is but a tool. And, we believe that people can do amazing things if they have the tools. So, one of the problems is, as we’ve defined the digital divide, at least in part on this access spectrum but as David mentioned, and others have mentioned, it’s not just getting people in front of whatever the device is. Oftentimes it’s been lately sort of the PC, but there may be, as we talk about other devices and get involved, there may be other ways that you want to put people in front of devices. But that’s not enough. We want access to be meaningful.

What does that mean? That is that people can actually figure out ways and have the talent, and then be able to expand on those talents to integrate those into every aspect of their lives. We all I think probably that are here appreciate in some way how pervasive technology is, and there’s no indication that it’s going to stop, much less reverse and get less pervasive. So as it touches more and more aspects of people’s lives, we’ve got to make sure that people have an understanding and a way to use that tool.

So, how do we try to go about doing that? One of the ways we tried to go about doing that is just making sure that we reach people where they are. We cannot just say, yes, there is a divide and now it is incumbent upon communities and individuals to leap over this chasm, and come to where we are. We need to go where people are.

So whether it’s through support of community technology centers, or libraries or Boys and Girls’ Clubs, Microsoft is trying to find a way to work in partnership with nonprofit organizations, as well as industry partners to make sure that we go where people are, and then take it another step. That is to say, how do we think about, now that you’ve got that access, what are some of the ways in which we broaden that thinking, the opportunities.

One of the ways is clearly on the educational front. Ways in which we have tried to do that is reach institutions that are serving diverse populations, whether it’s historically black colleges and universities, Hispanic serving institutions, reaching to tribal colleges. We believe that education is going to be a critical part of expanding those opportunities, expanding individual’s horizons.

And again, you have to go where people are. I’ll give you one example. We have got some project in which we work in Indian country, on reservation property, and tribal colleges. People think of reservations, historically, as extremely isolated communities. Technology is a way to reach across that isolation. But, as other speakers have mentioned here, there’s also an issue of it has to be culturally relevant. Can Microsoft find that for a community? By no means. The community has to define that for themselves. And, in fact, take that another step, some of this technology has been used within Indian country to reach out and find relatives, to learn about their indigenous language more, and get a richness there that is not sort of saying, get off the reservation, and do something different. It is, learn more about your culture. That will enrich people’s lives, and I think make them qualitatively better able to define, as I said, that success for themselves.

A third area that Microsoft focuses on is the area that Sally and Joe were talking about, which is workforce development. You’ve got educational opportunities, but you’ve also got to have economic opportunities. And again, focus back on this issue of why do we care? I think we want to make sure people have a fair chance. And a fair chance includes being able to sustain yourself, your family and your community. So one of the things that we try to do is work with community colleges, because we believe that that is a juncture at which you can, again, reach a number of people. The GED person, the person graduating from high school, the person going back for retraining, all of those people find themselves in community colleges.

Community colleges in turn can help train that workforce for the future, and reach a number of people that but for that we may miss, or that somehow have gotten —

maybe I won’t use brainwashed, but at least think that only four year degrees, or only graduate degrees are going to get you into high tech. High tech is everywhere. High tech does not require in every instance a four year degree. So those are some of the ways in which we try to reach out and make sure that we do so in ways that are thoughtful, creative, and the last thing I would touch on is trying to make sure that we find lasting solutions.

From the standpoint of someone sitting here in community affairs, and essentially being the philanthropic arm for a company, it is very difficult to both prioritize the number of needs and requests that come, but it’s also difficult if, for example, what you’re doing is you’re providing technology, you think you’re providing success, and then that same organization is back in some sense, either not able to use the technology, or hasn’t used, sort of, the technology in the first place that was provided. What we sometimes in our group euphemistically call
“dump and run.”
It makes no sense for us to provide software, work on these partnerships, have a big launch event and say, isn’t this wonderful, and then find out that materials are in a closet not being used.

How do we avoid that? We work with, in association with the partners, and particularly with nonprofit organizations, to figure out how they best come up to speed. So one of the things that we’re very pleased with, and it goes to the scalability issue as well, is just last month we announced a new initiative, 25 million in cash and software for an organization called NPower. And NPower is itself a nonprofit organization. And we’re going to try to replicate that in 12 to 15 cities over the course of 5 years.

What do they do? They’re going to provide technology assistance to other nonprofits, because as David said earlier, and I heartily agree with, the nonprofit community is in many respects serving the people that we all try to think we’re reaching by virtue of talking about the digital divide. If we can find ways to take the efficiencies and productivity that we talk about in the business world when they use technology, translate that effectively into the nonprofit world, think of the resources that will get freed up for those nonprofits to deliver on their principal mission, serving people in the community. So we hope that that will be another innovative and successful way to reach a diverse population and enable people to define success for themselves.

MR. HAMMOND: Thank you, Bruce.

At this point we’d like to take some time to open up the panel discussion to the audience, and encourage questions from you, or observations from you on the divide, or questions you’d like more information on from panel members.

Yes?

QUESTION: (Off mike.)

MR. EISNER: Really, it’s a fascinating question; actually it’s two questions. And you’re right; the international issue is by a lot of measures a tougher issue. From AOL’s point of view, we’re trying to take as much learning as we can from our domestic experience. We’re looking at pushing it international, we just announced a partnership with the Peace Corps, we’re now in 60 countries with the help of the Peace Corps volunteers in those countries, training NGOs, non-governmental organizations, to use technology. But, there are so many issues, really, to telecommunications competitiveness, and openness, the policy issues.

But, let me get to the interesting question you asked, which was how the philanthropic initiatives work with the corporate side. That’s something that at AOL we’ve wrestled with a lot. And it’s why I actually have two hats. I’m the vice president of the company, and vice president of the AOL Foundation, because we’re trying very hard to get that cross-pollination begins to bring some of what we think of as philanthropic issues into the company. And gets to a lot of the issues I mentioned earlier, somebody has got to be building services around politics, services around healthcare, services around financial management for less wealthy people. That’s not likely to be built out of philanthropic dollars that has to be built out of the company.

So you try to incense, and motivate, and push

(inaudible)

— tougher issue is, as you deploy new technology, things like satellites, Internet television, mobile devices, palm devices, the opportunity that these things have for penetrating the markets we’re talking about is enormous. However, it’s very difficult to go to these folks who are basically looking at how is Wall Street going to be reacting to our introduction of new products, which require enormous capital investment, and trying to tell them, well, you really should take AOL TV and target it at the indigent. It’s a problem.

However, the dialogue and creating sort of compromises, where the people developing the new technology in that part of the business really are focused on the financial, on the technology, on making the thing work for the consumers that they’re targeting. At the same time, as long as they’re talking to us, they’re also focused on making sure that it’s accessible by people with disabilities, that there may be ways to do some of their pilot programs on Indian reservations, that there may be ways to include in their testing how do folks that might not be part of the traditional consumer base respond to something like AOL TV. So I think it’s a tough question that all of corporate America, as we make this transition into the information age, need to figure out. How do you begin to remarry your philanthropic arms with your business arms, because as you’re reinventing business you also want to reinvent society.

MR. BROOKS: If I could follow up on that just briefly. One of the things that of the things that has been suggested, at least in the telecommunication arena, is to

when you create these community technology centers to identify things which the community, or services which the community actually already consumes.

For instance, financial services, you have banks closing in many communities. Is it possible to place an ATM there, or to encourage some sort of a consumer investment cooperative there through the use of the technology itself? Is it possible to provide medical services, some of which are for a fee, but which are distributed by the network, as opposed to distributed by hospitals, which are oftentimes too far away anyway. Long distance services, telecommuting services, there are all kinds of things which a community through a technology center could provide, and could provide for a fee, a minor fee, but which people would consume, thereby creating a demand for services in the first instance, and the development of capital now flowing, or staying in that community over time.

The same kinds of explorations could be made internationally, but I think this is an area that requires a partnership not just with the community, and with the high technology businesses, but also with the banks, and the hospitals, and some of the other service providers.

MR. BROOKS: If I may just quickly jump in, it is a challenging bridge between the business side and the philanthropic side. But what I would say in the international arena is that we’re probably

— we’re looking at kind of a couple steps removed from the business side. We’ve got projects in about 67 countries around the world. Some of those projects involve trying to make sure, on the technology side, that, in fact, we’re still doing this workforce issue that I spoke to you about a little bit earlier. We do that in an international forum as well. We’ve done that in China, we’ve done it in Latin America, as well as in significant parts of Europe as well, trying to think about, again, creating an IT workforce that’s not just going to redound to the benefit of Microsoft, but will redound to the benefit of sort of the industries that are actually using information technology workers. So that’s what I mean by sort of several steps removed, not directly sort of a business play, if you will, from our standpoint, but we think that it will ultimately yield benefits for us and for everyone.

There are other activities, I think, that we do on an international front that are even, in some sense, farther removed. So, let me, for example, working with kids in orphanages, and at least getting them experience with computers, those kinds of activities. If you look to the business side, I think one of the things you would see is both trying to make sure that their local languages are available in the software, so that people actually have less of a bridge to jump, so that we’re not just English-centric on that front. And I think the other piece would be to say, trying to make sure that we actually work in-country with partners, again, to make sure that there is and understand what are the needs for that community, and not bringing sort of a U.S. solution to bear that may not fit that community.

So, it is a very hard piece, and it is one that I think if we’re frank about it, it is one that will continue to, in some sense, bedevil us a little bit because of this tension between what should be a philanthropic effort and whether or not people think that’s sufficiently pure to do well, or is it a business opportunity. So, I don’t know how David wrestles with it, but I know we wrestle with it too in terms of thinking about how those philanthropic efforts are actually going to both help the business, but not be so business focused that they become just marketing efforts, if you will. So that’s a challenge we see in international growth.

MS. : We have a question up here.

QUESTION: (Off mike.)

MR. : DigitalDivideNetwork.org, and it’s managed by the Benson Foundation, and it’s really sort of a first information

— sort of a learning circle among about 20 of the major technology companies, and about 20 foundations, Ford, Kellogg, Markel, Benson, Rockefeller, a lot of those are also part of the Digital Divide Network.

One of the new things that’s going to be launching in February is a database where anyone will be able to go in to see where is public access in any city. So the community leader that’s trying to work in their community on bridging the digital divide will be able to plug in their community and get, here’s all the places that offer public access in our community, and here’s who they focus on, whether it’s kids or retraining. And that will be accompanied by a Kaiser Family Foundation ESA campaign that will be encouraging kids to get online. And then there will be an 800-number for kids to call, or parents to call, and the operators will be using the database inside the Digital Divide Network, so the kids will know where they can go to get access online.

MR. HAMMOND: There’s a question here.

QUESTION: (Off mike.)

SENATOR VASCONSELLOS: Well, the incentive ought to be just wanting to be a good teacher and help your kids be prepared. That I’m a little bit querulous about. We ought to provide more time for, more money for adequate training for teachers to be competent to give their kids access. The education committee made an incentive last month, so I’ll be working with that.

MR. BROOKS: Microsoft is supporting the Intel Teach program, which is really 400,000 teachers over

— I think it’s a three-year period

will go to a 40-hour boot camp on that. Programs like that, I think, are the only ones that are scalable.

MS. PFEIFFER: That was actually the first thing that hit us was that in starting our programs we couldn’t find the trainers, because anybody who is a trainer could make triple their salary working in the industry. So what we ended up doing to solve that problem was our own train-the-trainers program with the home room teacher that has X level of skills, and then we bring in industry folks to do some power courses for three days on Flash, or HTML, or whatever they’re working on, and that’s how we resolved the problem.

But in the City of San Francisco, they’re dying because the public schools don’t have the trainers, and the community-based organizations are ready and they want to do these programs, the DLL is sending pretty big money our way to do this, we don’t have the trainers. It’s really a core issue.

MR. HAMMOND: There’s a question in the back.

QUESTION: (Off mike.)

MR. BROOKS: I’ll start on that one. I guess I would say, first of all, that we have done that in some of our locations better than others. And, let me give you an example from our Redmond Campus. We have a core group of 70 to 80 employees that every Saturday go and train individuals who are making the transition from welfare to work in a job training program, train them on Office skills, Office applications. They are taking that another step further, and after completing that program, we’ve got an employee volunteering to train folks on Web site design.

So employees, either through their own initiative, and through some efforts on our part to help support that, are, in fact, making those calls, if you will, in terms of how they’re going to decide to use their time, their talent, to further invest in the community. Could we get the word out better to more of our workforce across the country and around the world? Yes, we can, and one of the things that we will be doing and have already started doing is taking steps in that direction. I think that’s a critical piece because I mentioned the talent piece. It is beyond sort of money and software, it really is

— there’s a tremendous amount of talent in these workforces. I think there’s a tremendous amount of passion and energy. And if we can find ways to bring those elements together in which we’ve got the support of the corporate contribution, the corporate product, as well as the employees, I could give you a couple of examples if you want later, but I think those are some of our strongest endeavors. And so, we will continue to sort of work to ramp up that visibility, sense of awareness, and hope, support for people taking advantage of those opportunities.

MR. EISNER: I think there’s two sets of answers to your question. First, at AOL we have a program called the Giving Free Service. Giving Free Service provides all sorts of opportunities for employees to volunteer, as well as contribute. Our dissipated giving circle, and the company matches their volunteer efforts with sub-contributions to the organizations that they volunteer at.

We also do
“barn raising”
kinds of activities, where one day, usually twice a year, we’ll get hundreds and sometimes thousands of employees in 10-15 different cities helping build Power Up Centers, or Connect Kids, and then there’s a lot of other kinds of programs where you have teams of employees sort of adopting nonprofits, and helping

— by nonprofit, helping that nonprofit sort of get online, build the technology plan, figure out what it needs, train its board, train its managers, so that ultimately it can get up to speed.

And I think we’re doing pretty well at that. Microsoft is doing well at that. Sun is beginning to do well at that. IBM and AT & T have some great programs. So, I think a lot of companies beginning to do that. But more than that, I think we’re actually seeing a rejuvenation of the whole concept of volunteering in the country. I think partly as a result of the Internet. I don’t know if anyone here knows Impact Online. Impact Online places 2,000 volunteers a week online through just making the volunteer opportunities available, and getting people to sign on. We’re seeing more and more online giving circles, we’re seeing more and more online health groups, we’re beginning to see a phenomenon of e-mentoring, beginning to sort of take off where mentoring stopped.

So I think that there’s a whole series of initiatives that we’re seeing the new medium helping in sort of driving a greater level of participation. And the reason is because people can do it more on their own timetables, if they’re able to do it online as opposed to having to show up somewhere.

MR. HAMMOND: There’s a question here, and then a question over there.

QUESTION: (Off mike.)

MR. BROOKS: I can’t speak to, for example, Cisco’s project or what others are doing. Somebody will probably correct me so I’ll do a rough one. In the last several months, I can’t remember exactly the date, you mentioned bank investment for example, Microsoft has invested portions of its funds in an African American owned bank in, I believe, it’s Atlanta, and another more recently in Chicago. On the supplier side, we’ve been trying to sort of do a better job, and I think it doesn’t come out of our group, so I can’t give you sort of details, but do a better job of actually trying to identify women and minority owned businesses for supplier activities. And those opportunities are

they’re fairly narrow or specialized, given sort of the nature of our particular business.

I just don’t know on the construction front. I mean, we have construction going on, but I’m not sure. Oftentimes, as you probably may know, some of those construction activities are driven, or utilization is driven though the general contractor as opposed to from the owner. So I’m not sure exactly on the construction front. But, one of the things we have been looking for are ways to both diversify our own workforce, as well as the opportunity to interact and contract with women and minority owned businesses.

MR. EISNER: Just quickly, I think this is an area where high tech, Internet companies have not done very well, mostly because they’ve been growing so fast recently. I thought we were doing great through some of our purchasing requests, making sure that we had indexes of all the various women owned and minority owned firms, so that whenever we purchased something they would at least be able to bid on stuff, until I started looking at what Time-Warner is doing.

As we’re doing the merger, and I was blown away by the sophistication that they have and some of the issues that they

it’s not just making the names available, it’s making sure that you size the orders appropriately. If we’re ordering on the scale that AOL buys, well, all of a sudden we’re making sure that minority contractors can’t bid on it, because they can’t handle the volume. Whereas, if we cut it in thirds and made it three contracts, we could bring it

Time-Warner has done it, and frankly they’ve done it because when their growth curve began to plateau more, they started building a lot of internal processes that made sense.

AOL, and I’m sure Microsoft, has been in just a sprint. And it’s very hard to convince the business people that jobs really depend on getting the order, making it quality that it makes sense for them to take time to diversify the vendors. But, I think it’s something that you’re going to see high tech firms focus a lot more on. I think they’re getting justly criticized by the leadership conference on civil rights, and Rainbow Coalition, and I think a lot of us are taking that criticism to heart. And I think you’ll see a lot more in the future.

MS. PFEIFFER: It’s another great reason why industry should connect up with training programs, which are really out there, focusing on this. In fact, BAYVAC, as a media organization, one of the reasons we got so excited about doing this workforce development program was because we though we wanted to change the face of the media, and what better way than to infiltrate these Internet companies, and the new media, which is going to show up on everybody’s computers and digital television, by peopling that with more women and people of color. And if we can kind of press for industry to see the advantages of working with these training programs, we can make that happen. If you have a sensitized workforce working within the company everything changes.

MR. HAMMOND: Question here?

QUESTION: (Off mike.)

MR. : Well, there was a recent survey which did ask people who are in essence in the group of those left out what they think about technology. The vast majority of them actually acknowledged that technology is important, that it’s important to their children, that it’s important to their jobs. They often don’t know how to get involved with the technology. They’re a little big leery of the technology, or they can’t afford the technology, those are the answers given on the other side. But, when I’ve spoken to various groups across the country over time about these issues, I start with what’s relevant to them. I ask how many people have a bank branch open within six blocks of their house, how many have an ATM that’s available to them within six blocks of their house, or a working telephone, or I’ve asked have you seen the commercials that require or suggest that you bank by computer.

And you start to ask those kinds of questions of people, you start to survey them in that way, they start to think about what they now get or don’t get, and what’s now transferring over to online, over to the network. And that’s when the connection starts to be made. It doesn’t matter what group you talk to, if you speak to them about the things that are relevant to them on a day to day basis, and point out the connection between the technology and what they’re doing, they get it immediately.

MS. PFEIFFER: I think for us one of the issues actually you both mentioned is that it doesn’t help just to put computers in a community center. And even in the technology centers, they’re sitting empty, because there are no programs in those computers. And that was true actually at BAYVAC. We got a lab, and we didn’t know much about workforce development, we’d always been media makers. And it sat there, and sat there, and it wasn’t until we put in place a bona fide program that was well funded, that was workforce development, recruitment, the boot camp, the whole kit and caboodle. That was when that computer lab was buzzing. And it’s busy from 6:00 a.m. to 12:00 midnight now.

And that’s what’s not happening, is we’ve got to move the philanthropic institutions to work with technology, this would be a great place to invest. And we’ve got to get that linkage with industry, your idea, bringing employees and moving them into the PCCs and making that linkage happen. And we’ve got to do it, because the nonprofit sector has been sitting funded by government for years and years, and they’re off over here, and industry is off over here, and we’re suffering in the nonprofit sector, because our government funding has gotten away from us. We’re expected to do a whole lot more, we’ve got to professionalize, and we’ve got to sort of have our own earned income programs and so on, and we’re not going to do a good job at making a civil society if we don’t link up in a positive and a really strong, forceful way with industry.

QUESTION: (Off mike.)

MR. : You know, what’s interesting is, that’s not always true. Some of the most amazing research that I’ve seen is around healthcare, particularly women’s healthcare. And you ask women in any demographic group today, where do you get your information about reproductive healthcare, and the vast majority will say online. Then you break it up, you go to the low income who don’t have computers in their home, and they’re living in communities where they don’t have it, and they say, I get it online. You say, well, how is that? And they know that’s where the information is, and they find ways to get it. So, there are some

— healthcare is really one of those issues where it’s become very clear that in order for people to get the kind of personally empowering information they want, they need to get online. And people, universally, from all racial and from all economic backgrounds, find ways to get online to get the information.

At the same time, there’s one other interesting thing

— you were asking, you really need to know what the community values. One of the things that’s most interesting and we’re trying to do research on other ways that communities pay for connectivity is to look at those homes where people don’t have telephone service, but do have cable service. It’s very easy to sort of dismiss that as, well, they must be screwing up somewhere. But when you ask them, do surveys of those homes, you realize it’s very deliberate. It’s generally the women of the household making the decisions, and for them the telephone is a threatening, dispersing instrument. They get calls from bill collectors, people call their kids to go out and do things, people call their husbands about things that they don’t feel that they have control over. And as a result of the phone, their family is dispersed. As a result of cable what happens, the whole family comes together in the evening, and they can entertain their family and have them together at one time.

They really need to dig into what’s going on in the culture, and what does the culture really need, what does that community really need from something like Internet service, because it’s usually not going to be the same as you might think without having done the research.

MS. PFEIFFER: I have a question. And the question is, to you guys, because one of the interesting things that people aren’t talking about right now, but about the digital divide, if it’s true that more people watch television this year than they did last year, which is now seven hours and 24 minutes, eight minutes more than last year, and the television is going to be sort of tomorrow’s

— digital television is going to be interactive, and really be the central focus of where to get this information, and we make that transition, how is that going to play out with broadband issues, with television sets, if the policy still requires that television set manufactures put smart chips in the television sets, how will that digital divide play out if companies have some access to some programming, but if you pay a whole lot more there’s proprietary harm of information you can’t get to. Do you think that’s going to be an issue?

MR. : I have to start with the supposition that numbers are obviously always suspect. But, the numbers I saw were that the average Internet user is now spending 50 minutes to 65 minutes a day online, and that two-thirds of that time actually comes from television viewership. So that the average television viewership I heard was actually going down as a result, and that that’s where the time for online use was coming from. Unfortunately, the second most common place that people get their time is from sleeping and eating. So we don’t think about that.

QUESTION: Do you see that the digital television, will there be a new divide with that, or is that going to be as universal as the television set now?

MR. : My guess is that you’re not going to see different kinds of TV. What you’re likely to see is convergence means that it’s going to be interoperability between television and online. So you’ll be able to do some online things while you’re watching TV, and you’ll be able to sort of scan TV while you’re doing online stuff. But, I don’t imagine that the convergence means that you sort of replace TV with some sort of hybrid online/TV.

QUESTION: What worries me is that if you have a little bit more money you can have a lot more access to featured programs. For example, my sister is a librarian, and I’m constantly frustrated within finding information on the Internet. Whenever I really, really want to know something she’s got almost more than a half a million-dollar budget for proprietary information that you can get online, and really get to the concise, good information. And will that be true with television programs, because that’s our universal box that up to now has been funded by advertising. But, it’s basically the same experience for everybody.

MR. : It’s going to be very interesting to see how the two advertising streams

QUESTION: How it works out.

MR. : Yes.

MR. GOLDMAN: I want to thank Professor Hammond and all the other panelists for joining us today. I think this

we’ve had a number of very interesting conversations during this speaker series, but I think this was really had a lot more weight than anything we’ve done up to this point. And in a sense it was an experiment to find out if these are the types of issues that you like to hear. I, for one, was fascinated by this topic. I think we could probably go on for another six or seven hours, but we are going to have to cut it right here. So thank you very much, and please do give us feedback on this event and on the series, as well.

Thank you.

(Applause and end of event.)

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