cost, high quality services and equipment widely available. Policies promoting greater competition in combination withtargeted support for disadvantaged users or especially high costor rural areas would advance both rapid infrastructuremodernization and expanded Universal Service.         Action:  Develop a New Concept of Universal Service.  To         gather information on the best characteristics of an         expanded concept of Universal Service, the Commerce         Department's National Telecommunications and Information         Administration (NTIA) will hold a series of public hearings         on Universal Service and the NII, beginning by December         1993.  The Administration will make a special effort to hear         from public interest groups.  Building on the knowledge         gained from these activities, the IITF will work with the         Advisory Council on the National Information Infrastructure,         as well as with state regulatory commissions, to determine         how the Universal Service concept should be applied in the         21st Century.3.       Promote Technological Innovation and New Applications         Government regulatory, antitrust, tax, and intellectualproperty policies all  affect the level and timing of newofferings in services and equipment -- including the technologybase that generates innovations for the marketplace.  Buttechnological innovations ultimately depend upon purposefulinvestment in research and development, by both the privatesector and government.  R&D  investment helps firms to createbetter products and services at lower costs.         As noted in the Administration's February 22, 1993technology policy statement:  "We are moving to accelerate thedevelopment of technologies critical for long-term growth but notreceiving adequate support from private firms, either because thereturns are too distant or because the level of funding requiredis too great for individual firms to bear."  Government researchsupport already has helped create basic information technologiesin computing, networking and electronics.  We will supportfurther NII-related research and technology development throughresearch partnerships and other mechanisms to acceleratetechnologies where market mechanisms do not adequately reflectthe nation's return on investment.  In particular, thesegovernment research and funding programs will focus on thedevelopment of beneficial public applications in the fields ofeducation, health care, manufacturing, and provision ofgovernment services.         Action:  Continue the High-Performance Computing and         Communications Program.  Established by the High-Performance         Computing Act of 1991, the HPCC Program funds R&D designed         to create more powerful computers, faster computer networks,         and more sophisticated software.  In addition, the HPCC         Program is providing scientists and engineers with the tools         and training they need to solve "Grand Challenges," research         problems -- like designing new drugs -- that cannot be         solved without the most powerful computers.  The         Administration has requested $1 billion for the HPCC Program         in fiscal year 1994, and is in the process of forming a         "High-Performance Computing Advisory Committee," to provide         private sector input on the Program.           We have also requested an additional $96 million in the FY         1994 budget to create a new component of the HPCC Program --         Information Infrastructure Technologies and Applications         (IITA).  The Administration is working with Congress to         obtain authorization to fund this effort, which will develop         and apply high-performance computing and high-speed         networking technologies for use in the fields of health         care, education, libraries, manufacturing, and provision of         government information.         Action:  Implement the NII Pilot Projects Program.  In its         FY 94 budget, the Administration has requested funding from         the Congress for NII networking pilot and demonstration         projects.  Under NTIA's direction, this pilot program will         provide matching grants to state and local governments,         health care providers, school districts, libraries,         universities, and other non-profit entities.  The grants         will be awarded after a competitive merit review process and         will be used to fund projects to connect institutions to         existing networks, enhance communications networks that are         currently operational, and permit users to interconnect         among different networks.  Funded projects will demonstrate         the potential of the NII and provide tangible benefits to         their communities.  Equally important, they will help         leverage the resources and creativity of the private sector         to devise new applications and uses of the NII.  The         successes of the these pilot projects will create an         iterative process that will generate more innovative         approaches each year.         Action:  Inventory NII Applications Projects.  Many insights         can be gained by sharing information about how government         can effectively use the NII.  By the end of January 1994,         the IITF will complete an inventory of current and planned         government activities and will widely disseminate the         results through electronic and printed means.  An electronic         forum is being established to encourage government and         private sector contributions and comments about government         applications projects.4.       Promote Seamless, Interactive, User-Driven Operation         Because the NII will be a network of networks, informationmust be transferable over the disparate networks easily,accurately, and without compromising the content of the messages. Moreover, the NII will be of maximum value to users if it issufficiently "open" and interactive so that users can develop newservices and applications or exchange information amongthemselves, without waiting for services to be offered by thefirms that operate the NII.  In this way, users will develop new"electronic communities" and share knowledge and experiences thatcan improve the way that they learn, work, play, and participatein the American democracy.         To assure interoperability and openness of the manycomponents of an efficient, high-capacity NII, standards forvoice, video, data, and multi-media services must be developed. Those standards also must be compatible with the large installedbase of communications technologies, and flexible and adaptableenough to meet user needs at affordable costs.  The United Stateshas long relied on a consensus-based, voluntary standards-settingprocess in communications.  Particularly in the area ofinformation and communications technology, where product cyclesare often measured in months, not years, the standards process iscritical and has not always worked to speed technologicalinnovation and serve end-users well.  Government can catalyzethis industry-driven process by participating more actively inprivate-sector standards-writing bodies and by working withindustry to address strategic technical barriers tointeroperability and adoption of new technologies.         To increase the likelihood that the NII will be bothinteractive and, to a large extent, user-driven, government alsomust reform regulations and policies that may inadvertentlyhamper the development of interactive applications.  For example,government regulations concerning the lack of reimbursement ofhealth care procedures may deter the growth of distance medicineapplications.          Action:  Review and clarify the standards process to speed         NII applications.  By October 15, 1993 the Commerce         Department's National Institute for Standards and Technology         (NIST) will establish a panel and work with other         appropriate agencies to review the government's involvement         in establishing network requirements and standards with         domestic and international partners.  The panel, with input         from the private sector and other levels of government, will         consider the role of the government in the standards process         and will identify opportunities for accelerating the         deployment of the NII.         Action:  Review and reform government regulations that         impede development of interactive services and applications.          The Administration will work closely with the private         sector, as well as state and local governments, to identify         government policies and regulations that may hinder the         growth of interactive services and applications.  The IITF         will determine how those regulations should be changed.5.       Ensure Information Security and Network Reliability         The trustworthiness and security of communications channelsand networks are essential to the success of the NII.  Users mustbe assured that information transmitted over the infrastructurewill go when and where it is intended to go.  Electronicinformation systems can create new vulnerabilities.  For example,electronic files can be broken into and copied from remotelocations, and cellular phone conversations can be monitoredeasily.  Yet these same systems, if properly designed, can offergreater security than less advanced communications channels.         Through the use of information systems, gathering, sending,and receiving a wide variety of personal information is nowsimple, quick, and relatively inexpensive.  The use ofinformation technologies to access, modify, revise, repackage,and resell information can benefit individuals, but unauthorizeduse can encroach on their privacy.  While media reports oftenemphasize the role of modern information technology in invadingprivacy, technology advances and enhanced management oversightalso offer the opportunity for privacy protection.  Thisprotection is especially important to businesses thatincreasingly transmit sensitive proprietary data throughelectronic means.  In a climate of tough global competitivenessto gain market advantage, the confidentiality of this informationcan spell the difference between business success or failure.          In addition, it is essential that the Federal governmentwork with the communications industry to reduce the vulnerabilityof the nation's information infrastructure.  The NII must bedesigned and managed in a way that minimizes the impact ofaccident or sabotage.  The system must also continue to functionin the event of attack or catastrophic natural disaster.         Action:  Review privacy concerns of the NII.  The IITF has         developed a work plan to investigate what policies are         necessary to ensure individual privacy, while recognizing         the legitimate societal needs for information, including         those of law enforcement.  The IITF has also developed a         work plan to investigate how the government will ensure that         the infrastructure's operations are compatible with the         legitimate privacy interests of its users.           Action:  Review of encryption technology.  In April, the         President announced a thorough review of Federal policies on         encryption technology.  In addition, Federal agencies are         working with industry to develop new technologies that         protect the privacy of citizens, while enabling law         enforcement agencies to continue to use court-authorized         wiretaps to fight terrorism, drug rings, organized crime,         and corruption.  Federal agencies are working with industry         to develop encryption hardware and software that can be used         for this application.         Action:  Work with industry to increase network reliability.          The National Communications System brings together 23         Federal agencies with industry to reduce the vulnerability         of the nation's telecommunications systems to accident,         sabotage, natural disaster, or military attack.  And the         Federal Communications Commission has an industry and user         Network Reliability Council to advise it on ensuring the         reliability of the nation's commercial telecommunications         networks.   These efforts are increasingly important as the         threat posed by terrorism and computing hacking grows.  The         NCS will continue its work and will coordinate with the         IITF.  In addition, the National Security Telecommunications         Advisory Committee, which advises the President in         coordination with the NCS, as well as the FCC's Network         Reliability Council, will coordinate with and complement the         work of the Advisory Council on the National Information         Infrastructure.6.       Improve Management of the Radio Frequency Spectrum                  Many of the dramatic changes expected from the developmentof the information infrastructure will grow out of advances inwireless technologies.  The ability to access the resources ofthe NII at any time, from anywhere in the country, will beconstrained, however, if there is inadequate spectrum available. To ensure that spectrum scarcity does not impede the developmentof the NII, the Administration places a high priority onstreamlining its procedures for the allocation and use of thisvaluable resource.         Action:  Streamline allocation and use of spectrum. The         Administration is working with Congress to fully implement         the spectrum management provisions of the Omnibus Budget and         Reconciliation Act of 1993, to streamline government use of         spectrum and to get spectrum to the public efficiently.          These provisions will provide greater flexibility in         spectrum allocation, including increased sharing of spectrum         between private sector and government users, increased