"The End of an Era: Where We Go From Here" Remarks by Larry Irving Assistant Secretary for Communications and Information The National Telecommunications and Information Administration Department of Commerce at the Minority Media and Telecommunications Council's Annual Luncheon and Meeting Washington, D.C. June 16, 1995 [as prepared] On Monday, June 12, the Supreme Court issued an opinion that ended an era. The Court handed down its opinion in Adarand, declaring that "federal racial classifications, like those of a State, must serve a compelling government interest, and must be narrowly tailored to further that interest," and thus adopting the so-called strict scrutiny test. For those of us who agree with Justice Marshall's statement in an earlier case concerning minority-owned businesses (Fullilove), that strict scrutiny is "strict in theory, but fatal in fact," Adarand has closed the door on opportunity. Moreover, we are in the midst of watching Congress reform our national telecommunications law, and while there is absolutely nothing in the legislation that supports minority- ownership and participation, there is much that could undermine gains made to date. These are dark days. Despondent and discouraged, some are tempted to throw in the towel. However, our efforts to create opportunities for minorities must continue. As President Clinton said this past Tuesday, "The Supreme Court's decision [in Adarand] sets a new legal standard for judging affirmative action, but it must not set us back in our fight to end discrimination and create equal opportunity for all. It is regrettable that already, with the ink barely dry, many are using the Court's opinion as a reason to abandon that fight. Exaggerated claims about the end of affirmative action -- whether in celebration or dismay -- do not serve the interest all of us have in a responsible national conversation about how to move forward together and create equal opportunity." The President is right. The current outlook for minorities may be dimmer and grimmer, but while these are not the best of time, they certainly are not the worst of times either. Times such as these demand that we take the initiative. We must be determined not merely to survive, but thrive. As the saying goes, where there is a will, there is a way. We must have the will. This group has already shown that will by rapidly coming together and meeting last night to discuss the impact of Adarand on the upcoming Block C auctions. Bill Kennard gave graciously of his time to join you. This is a tough issue -- as I have said before, I'm glad I don't have Bill's job. Bill is by far the best person for that job. But a serious reading Adarand leaves one with the impression that it would be nearly impossible, in my opinion, for the Commission to pass the strict scrutiny test. It is important that the Commission knows the positions of minority players on this issue as it reassesses its rules. Thus, NTIA supports Bill's idea of possibly doing a rulemaking at the Commission on this issue. I have heard the statements that minority entrepreneurs cannot survive in the new hostile environment. The feeling is that Bob Johnson, Percy Sutton, Stan Thomas, Eduardo Gomez, and other successful minority individuals had the benefit of a less hostile environment in which people recognized the importance and benefits of diversity and were open to notions of change. Now, some in the political leadership of this country does not want to listen, thereby making compromise or reasoning unlikely, if not impossible. Many of us in this room today, including myself, have benefitted from a more supportive environment and from affirmative action programs. But, I think that we can all agree that there has never been a time when there has been no hostility. That past has created in us a toughness or strength, which can assist us in the future. I believe that an era has ended; but not everything is over. Today, I want to talk about opportunities, focusing on those in the telecommunications arena. I will focus first on economic opportunities, and then talk about opportunities to influence policy making. Economic Opportunities It is now clear that opportunities won't be given to us; they must be created. I know that there are minority entrepreneurs out there who have the ingenuity and the drive to create them. Minorities can find economic opportunities in the telecommunications and information industries. There are four areas where African Americans, Hispanic Americans, Asian Americans, Native Americans, and all ethnic minorities can use the National Information Infrastructure (NII) to create new business opportunities and enrich their communities: (1) constructing the information superhighway; (2) developing the content -- the information that will travel over the superhighway; (3) using the information superhighway to expand opportunities in every line of business; and (4) preparing our youth through education and training to take advantage of the opportunities that will be created. First, let us take a look at some of the opportunities for minorities in constructing the information superhighway. The development of new personal communications services (PCS) could bring thousands, perhaps millions, of dollars to minority companies and entrepreneurs. And minority ownership of PCS is likely to do more for minority communities in terms of employment, training, community investment, and community enrichment than majority ownership. I recognize that meaningful and long-term ownership opportunities may be difficult for many minority firms to acquire, particularly because of legal challenges to broadband PCS significant preferences for "designated entities," as well as access to capital issues. Access to capital for minorities is a problem, especially with respect to the new wireless technologies. In the aggregate, narrowband and broadband PCS licenses went for billions of dollars, far exceeding expectations. In addition, building out advanced, digital systems for personal communications services involves tens of millions, perhaps even hundreds of millions, of dollars. As most of you know, in April, NTIA released a report entitled, "Capital Formation and Investment in the Telecommunications Industries," better know as Telecap. The report confirms what most of us believed and identifies financial barriers faced by minority entrepreneurs and businesses seeking to compete in these industries. The evidence presented in this report indicates that there are real barriers to minority participation in telecommunications and that minorities often lack access to the types and amounts of capital required to form and expand telecommunications businesses. The report suggests possible solutions to the access to such problems. Overall, this brings us back to one basic point: going forward, we have to be creative in our entrepreneurial ventures. The same types of opportunities that existed over the last decade, are no longer there. A second set of opportunities exists in developing the content -- the information that will travel over the superhighway. In the very near term, we are going to have more bandwidth than ever before, much of which will be filled with video programming. There will be increased opportunities for minorities to be providers of video. Currently, we have only one television network that is owned and geared to an African-American audience -- Black Entertainment Television -- and no Hispanic, Asian, or Native-American owned national networks. When you talk about having 500 cable channels, 150 channels via direct satellite broadcasting, and an infinite number of channels from your telephone company, there is a lot of room for more providers. And there is demand. African American culture is universal -- jazz in the '50s, Motown in the '60s, Funk in the '80s (I won't mention disco), and now hip hop in the '90s. Latinos are the nation's fastest growing consumer group. Or, look to the booming computer industry. If you browse on-line or go to your nearby software store, you will find that there are few on-line services and software products geared to minority populations. Currently, there are niche on-line systems that appeal to women (Women's Wire and Echo), the digitally hip (Transom, Pipeline, and @Wired), older hipsters (SeniorNet), and sports fanatics (ESPNet Sports Zone). This is where great opportunities lay. There are countless of niche markets to be served in the minority community. An entrepreneur named David Ellington capitalized on this idea. A little over a year ago, Mr. Ellington, a young, bright African-American came to NTIA to describe his vision of an on-line service geared to the African-American community. Next Monday, Mr. Ellington will launch "NetNoir," an on-line service, in conjunction with America On-Line. NetNoir offers content with a focus on global Afrocentric culture. LatinoNet is a similar endeavor. The reality is that there are hundreds of thousands of African-American families and Latino families who will buy computers if they have services like NetNoir and LatinoNet. However, as I have noted before, you do not have to be a telecommunications or information supplier to take advantage of the NII. Whatever your business, you need to think imaginatively about how these new technologies can open up new markets, reach new consumers, and lower your costs of doing business. If you are in retail, you need to realize the power of using the Internet to expand your customer base. Many companies now offer catalogues with pictures of their products that allow for home shopping for everything from books to earrings to homes. I can get on the Net any hour of the day and order Navajo blankets, hot salsa, . . . . People around the country are using the Internet to expand their customer base. New 3-D imaging allows artists to exhibit their pottery and sculptures, as well as builders and realtors to walk you through a house. And for those concerned about network security (an oxymoron?), the Net will soon be a safer place in which to do business. A new alliance announced in April involving Terisa Systems, America On-Line, CompuServe, EIT, IBM, Netscape, Prodigy, and RSA will create a single, open security platform. Whatever business you are in, or would like to be in, the information superhighway will make a difference. If you are in construction, there are opportunities to help build the information superhighway. New emerging wireless technologies provide a chance to get involved not only in the ownership but also in the construction of facilities. For minority companies in the construction business, the focus must be on cell sites for cellular and new personal communications services, not on FM-stations. Yet, I do not see many minority firms or entrepreneurs approaching the A and B lottery winners. Moreover, those skills that you learn and services you provide here will be transferable and invaluable as we venture into overseas markets. As China, Brazil, Argentina, South Africa, just to name a few, open up their markets, U.S exports could soar. And Secretary Brown and I want to introduce people with the skills and experience to our international counterparts. I do not mean to be harsh, but the reality is that there will be little, if any, direct government financial assistance to minorities. We must turn to other private sector resources. I am probably preaching to the choir, but I cannot emphasize too strongly the need to take the offensive. Minority firms and entrepreneurs must promote their ideas, products, and services. Generate your own partnerships with other companies, both minority and majority. The idea of the Telecom Development Fund, created by members of the MMTC, is exactly the type of thinking we need to be engaged in. My staff at NTIA is working with its creators to try to make this or something like this project work. We also need to ensure that our youth have the education and training to take advantage of these opportunities. In order for them to compete in the Information Age economy, they will need to be computer and technology literate. By the year 2000, 60 percent of the new jobs will require skills held by only 20 percent of the existing population. Get the companies that you work for to partner with area skills. Work with your local school board. Make sure your local communities do not get bypassed by the information superhighway. Policy Making Opportunities The changes in the judicial and legislative landscape are causing many to leave the political arena. I urge you to remain active politically. Those of you who are in corporate America, use your influence on the Hill. More than ever, we need to voice our concerns about the impact of policies on our communities. You cannot win the game if you do not play the game. Last night's passage of the Senate telecom bill was a major defeat for those of us who want a bill that will promote true opportunity for all Americans, not simply increased profits for multinational companies. We need to be heard. For instance, when Congress debated the multiple ownership rules, there was an unfortunate absence of the minority community's voice. Media concentration is not our friend. The concepts of localism and diversity have served minorities well. Open systems matter. In this battle, do not forget us at the Department of Commerce. As many of you know, Secretary Brown is deeply committed to ensuring that minorities have opportunities. He ensures that he is accessible to members of the minority community. The Secretary, as well as myself and my staff at NTIA, want to hear from you -- of your concerns and your ideas. I have a very hectic schedule, especially now that I am trying to save the agency, but I am always available to hear your views. My staff informs me of everything -- everyone who calls, visits, writes. Please, we want to hear from you. Let there be no mistake. NTIA remains committed to helping minorities in the telecommunications industry. Right now, NTIA is in the process of expanding the mission of NTIA's Minority Telecommunications Development Program (MTDP). Historically, it has been exclusively focused on minority participation in broadcasting. I am broadening its focus, to include minorities' roles in the new emerging technologies, including wireless technologies. In addition, we are expanding ComTrain and the ownership report, and we are reenergizing our newsletter. As I have said before, for more than ten years of my professional life I have been deeply involved in all telecom issues involving minorities. I remain steadfast in my resolve to continue to help ensure that minorities' issues are heard. Beginning next month, MTDP will host monthly informal round-table discussions so that I and my staff can hear from you about your needs and your positions on key telecommunications and information policy issues. These discussions will be open and I will personally sit and listen to your concerns. Of course, all of this is dependent on NTIA's continued existence, which at the moment is under attack. As you know, my agency -- NTIA -- and the entire Commerce Department is at risk. Let us our recognize that what makes for good sound bites, does not make for good policy. Eliminating NTIA and the Department of Commerce may sound good in a press release, but what does it mean? It means that as we enter the 21st Century -- the Information Age -- and encounter critical issues such as privacy rights and copyright protections in cyberspace or universal service or electronic commerce, the President will not have the benefit of a telecommunications policy shop to advise him on how to resolve these issues. Moreover, NTIA is playing a critical role in ensuring that the National Information Infrastructure (NII) will connect all Americans, especially low-come Americans, minorities, rural Americans, individuals with disabilities, and children. NTIA is at the forefront of designing a new concept of universal service, one that allows us to bring all Americans into the 21st century. And we are actively promoting community partnerships through such means as our NII grants program -- called the Telecommunications and Information Infrastructure Assistance Program (TIIAP). TIIAP funds planning and demonstration projects throughout the country by public institutions -- state and local governments, schools, libraries, hospitals, and other nonprofit groups. The grants require at least a 50 percent match from private sources of funding, which has led to many public-private partnerships. At a time when telecommunications policy is increasingly important to the competitive health of the U.S. economy, it is short-sighted to abolish the one Executive branch agency devoted to domestic and international telecommunications and information technology issues. Indeed, it is extremely short-sighted to abolish the entire Commerce Department. The Department provides tools that enable American firms and workers to build, trade, discover, compete, and prosper. And it does its job well. Down-sizing and right-sizing are important if we are to be strong domestically and globally. But so is investing in the sources of future growth. As Secretary Brown has said, "Calls for the elimination of the Department -- or its essential technology programs -- are just plain shortsighted. They amount to unilateral disarmament in the battle for global competitiveness. They will deprive the business community and America's working families of the clout, the critical cooperation and the support needed to create the jobs of the future." That goes to the heart of the matter -- we are a Department and an agency that is preparing our nation for the Information Age. Our country needs a strong Department of Commerce and a strong NTIA. Conclusion Where do we go from here? As minorities enter this new era, we need to rely on ourselves -- our creativity, our perseverance, our self-initiative. With these tools, we can create our own opportunities.