ECONOMIC DEVELOPMENT DECREASE

Mr. WOLF. Your budget proposes to reduce EDA program by $76 million from last year. Last year it was funded at $411 million. Would you want to comment on why you reduced that?

Secretary EVANS. Well, I think, again, it is an area that has had fairly substantial increases in the last number of years. I think it is important to take a hard look at it and see that we are getting the kind of results that we had hoped for. I believe that the performance is indeed there.

One of the very important principles that I want to make sure is being applied in this area is, as we commit these resources to areas that need support for infrastructure, I want to make sure that it is money that leads to the creation of a healthy workforce in the area that we are helping.

I have seen a lot of these development programs in the past, dollars are spent and the hardware is there and the infrastructure is there, but there is no workforce there. And so, therefore, the local community does not grow, does not survive.

And so as I have talked to people that I think are experts in this field, that is one of the fundamental principles they tell me that is often missing, and I want to make sure that it is not missing in our programs.

So it was twofold. After seeing a healthy increase, I think let's roll it back somewhat but continue it. I think we are funding at three hundred and sixty-something million, I believe. Three-sixtyfive, which is, I think a pretty healthy amount. And we are going to take a hard look at it, and if it is doing well and we think it should have higher priority in 2003, we will give it higher priority.

Mr. WOLF. Well, I agree with you. I agree with what you are doing. You had mentioned EDA earlier and economic development for Indian tribes. I think it is important for the Administration to look to see this whole issue of economic development on the reservations doing something constructive that really makes a difference in their lives.

I have followed this rush of Indian gambling. They call it gaming, but it is gambling. And frankly, we looked at a study from the Boston Globe the other day where it said 50 percent, of the revenue coming in from Indian gambling is going to two percent of the Indians. And many of the Indians that it is actually going to may really not even be Indians.

The Foxwood operation up there in Connecticut. And 80 percent of the Indians have never received any economic development at all.

So I think the more we can do in a constructive way to help with regard to helping infrastructure, putting real jobs, training and education on the reservations and not having gambling which is coming in which is beginning to frankly corrupt the country, the number of Indian tribes that are giving large contributions to both political parties. It is beginning to really I think have an impact on the country.

So I think as we look at this, I think the Administration has to look at the whole issue of the expansion, because the Office of BIA in this Administration will have a direct impact on who gets to get

the tribal governance, who has the ability to open up those gambling tribes. And many times in communities that do not want that type of economic, they want different type of jobs.

SPECTRUM AVAILABILITY

The National Telecommunications and Information Administration published a report requested by the Committee to analyze the current and future use of the spectrum to protect and maintain this nation's critical infrastructure. The understanding of the Committee was the report is that the spectrum currently available to the Department of Defense will not be available for commercial industry. Is that accurate?

Secretary EVANS. Well, I am not sure that is accurate, Mr. Chairman. I have had a conversation with Chairman Powell and Secretary Rumsfeld, and we both share the concerns of adequate amounts of spectrum allocation for this country for commercial use. Understand there are very important issues to consider when we think about moving government services from one part of the spectrum to another part of the spectrum.

There are not only the national security issues that one needs to think about, but there are also the safety of life issues that are very important when you look at moving spectrum and whether or not there is any interference in spectrum. One of the studies that we just conducted suggested that there was maybe some modest amount of interference. And because of that, it may prohibit the use of commercial application in the spectrum.

On the surface, one might say, we could stand for a modest amount of interference, but when you start thinking about it being a safety-of-life issue, then all of a sudden, as far as I am concerned, a modest amount of interference is unacceptable.

So there are just some difficult issues that I think we need to continue to work through. I think, again, the most important aspect of this is not a rush to judgment. I think it needs a serious review by the principals involved and making sure the principals involved have their teams of people, their organizations, looking at it seriously and thoughtfully.

And so, I am not in a position at this moment, and I am not sure anybody in the Administration could tell you what our recommendation would be or what we may be able to move in the spectrum or cannot move, because we really have not had a chance yet to take a real, hard, serious look at it. I think it is important that we not rush to judgment.

I think it is important that we look at this very thoughtfully and very thoroughly.

Mr. WOLF. So it is really not accurate to say, then, that the spectrum currently available to DoD will not be available for commercial? Because you have not concluded is what you are saying?

Secretary EVANS. Yes. We have not concluded. I mean, I would say it is certainly not available today. We all know that. Mr. WOLF. How about will not be in the future?

Secretary EVANS. Yes. And will not be is just a function of whether or not we sit down with, as I sit down with Secretary Rumsfeld and let him sit down with his people, and talk about the needs of spectrum in our society and see if there are other spec

trum that might serve them in the same kind of way, if not better than they are being served now, they could move some of theirs.

I mean, that is a possibility. And I just do not know at this stage of the game whether or not it will become a reality. It is just something that needs to be reviewed.

I know this. I know they are certainly willing to talk about it. So if they are willing to talk about it, that says to me that, it is a possibility that we may be able to free up some spectrum.

Mr. WOLF. The issue of a stable Internet is important to the U.S. and most other countries worldwide. Currently, the authoritative route serve for the Internet is housed here in the U.S. Is the Department of Commerce doing anything to alter the current status of the route server? And has any country, including China, proposed or threatened in any way to establish its own route server? Secretary EVANS. I do not know, Mr. Chairman. I would have to get back to you on that one. That is an issue that has just not come across my desk. But I am happy to get back to you on it and get you a full response on it.

[Clarifying statement follows:]

The Chinese Government has not made any public statements threatening to establish its own "A" root server. However, several companies and organizations, both U.S. and non-U.S., are experimenting with new technical standards that allow users to register domain names in character sets other than English. My understanding is that China is working on systems that would facilitate domain name registration in the Chinese language.

The authoritative root server is currently operated by Network Solutions, Inc. under a Cooperative Agreement with the U.S. Department of Commerce. The Internet Corporation for Assigned Names and Numbers (ICANN) has been working with an expert group of Internet engineers and root server operators on an enhanced architecture for Internet root server system security. This study, which has been undertaken in cooperation with the Department of Commerce under a Cooperative Research and Development Agreement (CRADA), is an important effort aimed at increasing the overall security, robustness, and reliability of the Internet domain name system. When the necessary technical capacity is in place, the Department may enter into a cooperative agreement or other legal arrangement with ICANN to operate the "A" root server on the Department's behalf. If this were to occur, the Department would likely require ICANN to operate the "A" root server under the same terms and conditions under which Network Solutions, Inc., currently operates the "A" root server for the Department.

ADVANCED TECHNOLOGY PROGRAM

Mr. WOLF. The budget with regard to the Advanced Technology Program, could you say a little bit about it? It does not include funding for the Advanced Technology Program. We heard that you wanted to have a review of it. Is it a review to see if you want to have it? And when will the review be completed?

Could you for the record tell us

Secretary EVANS. Sure, I would be happy to, Mr. Chairman. I know it is an issue that has been discussed ad nauseam here. And, I would just say to you that I think a couple of things. That the Federal Government's got a very important role to play in the area of research. And there should be no question that this Federal Government has been dedicated to research over the years. Certainly I am not confused at all about the fact that this technology boom, this knowledge-based economy, and this high-tech economy that we are all experiencing, comes from research from the Federal Govern

ment back in the fifties and the sixties. I mean, that is where it all began.

And so there should be no question about the principle of the Federal Government's role in research, particularly I would say basic research.

Now when you come to NIST and look at its core mission and you understand its core mission, as I mentioned earlier, I do not think there is anything more important than making sure that that is funded. And when I listen to some people that serve on advisory committees that are there and they tell me that they are worried about the funding of the core mission of NIST, NIST labs coming out of the ground that I know the money has already been allocated and appropriated for the building of the buildings. But then you have to make sure you have the best of equipment available to the scientists.

And so I know we are going to be coming to this Committee in the ensuing years asking for funding, substantial funding, quite frankly, for new equipment in these buildings. That is a pretty high priority to me.

And so I think about that priority in the years ahead. And then I look at the Advanced Technology Program. And I acknowledge that there are a number of terrific successes inside the Advanced Technology Program, you know, and that is notable and I do make note of that.

But I would say to you that I think it is time to look at it thoughtfully and thoroughly and say that, yes, this is where this kind of research belongs, and it does not belong someplace else.

I mean, to me it is just part of the total research dollars that the Federal Government is committing. And so, I wanted to think through, is this the right place for it? And I also wanted to make sure that it was structured in a way that I thought was appropriate.

I at least asked for it. I mean, one of the problems I have with the program is that universities are not allowed to take a lead role. Now, one of the biggest problems we have in America today is the lack of graduating scientists and engineers. And, we have got requests in for H1B visas of 192,000, and we are graduating 62,000 engineers and scientists a year.

And so, to me, I would want to be someone who was allowing the universities to take lead roles in these kinds of programs. I had a fair amount of experience myself in Texas, having served as the Chairman of the Board of Regents at the University of Texas system. I saw our system. I saw our universities developing real strong public-private partnerships where they took lead roles in this kind of research.

And so, I questioned whether or not that would enhance the program.

So, I felt like it was time to reassess, knowing the issues on both sides of the Advanced Technology Program. Some people have called it corporate welfare. Some people have called it venture capital. I want to make sure that those dollars are being spent in an appropriate way and felt like it was time to take a hard look at

it.

Again, as I mentioned earlier, we have already awarded some grants that have not one year, not two year, but three year commitments to those grants. And I felt like we ought to develop a way so that we could fully fund those commitments in year two and year three, and that is why I think in our request that we sent up I said, we still have sixty-some million dollars left in the 2001 budget. Let's take those dollars to fund the commitments out over the next two to three years.

Mr. WOLF. Well, I think that is reasonable. Obviously, people have spoken to you about it. You are basically saying you just want to take a look at it. It is not ending exactly, but you just want to take a close look at it and give it a review and maybe come back. Is that sort of what you are saying?

Secretary EVANS. Yes, sir.

CONFLICT DIAMONDS

Mr. WOLF. I think that is very fair. Switching issues a little bit, since you mentioned NIST, the National Institute of Standards and Technology does internal research in addition to external research grants.

They were part of a working group in the last Administration to explore the technical solutions to the diamond problem. And I wonder-I do not know how much you know about the diamond problem. The conflict diamonds are driving the war in Sierra Leone. They are driving the war in the Congo. If you looked at The Washington Post on Monday, three million people have died in the Congo in the last three years. And in Sierra Leone, you have lost probably 150,000, and they are hacking off arms of women and children. Will you get NIST to take a look at this again and see if they could kind of cooperate and maybe come up with something that would help us to deal with this issue?

Secretary EVANS. Indeed I will, Chairman. I am aware of it. I know of our concern. It is my concern, too. I know NIST has looked at it. Their conclusion was not what we would want it to be the first time around. They said it would be very, very tough to identify the diamonds. But I will get fully briefed on it and ask them to take another look at it to see if there is something that they can do to help us with this serious problem that we face in the world.

PATENT AND TRADEMARK FUNDING

Mr. WOLF. Thank you. Just a couple more, and then I will go to Mr. Serrano and come back. As you know, the industry with regard to the patent and trademarks, which is in my area, a critical amount of time it takes, members in the industry complain, for the Patent and Trademark Office to process applications.

The same critics have been faulting the Administration and this Committee, the Appropriations Committee, for inadequately funding this office. Your request includes an increase of $100 million over the last year for a total $1.14 billion. Are you confident that the level requested in the budget is adequate to address the needs for those applying for patents and trademarks? That is one.

And the other is, they have increased tremendously, I think 51 percent in fiscal year 1999. They have lost 51 percent of the people, but their budget has gone up. Is it just a budget issue, or is it also