During his State of the Union address on
January 27, 1999, President Bill Clinton argued that "a national
crusade" was necessary to connect all Americans to the Internet.
The Administration sees a "digital divide" between those in America
who have access to the Internet and those who do not. The President
and supporters of his plan in the Administration and Congress
maintain that as-yet undefined government spending programs or
regulatory initiatives will be required to rectify the apparent
income-based or race-related technological disparities in America.
Indeed, a July 1999 U.S. Department of Commerce National
Telecommunications and Information Administration (NTIA) report
entitled Falling Through the Net: A Report on the
Telecommunications and Information Gap in America laid the
foundation for federal action to solve this ostensible "digital
problem of access to the Internet, however, has been greatly
overstated; regrettably, it is being used by some in Washington to
support Big Government solutions to "problems" already being solved
at a rapid pace by competition and choice in the free market. Just
six years ago, only 6 percent of American households had access to
the Internet; today, Forrester Research, Inc., estimates that
number to be over 43 percent, and growing quickly. Policymakers
should exercise patience and restraint when considering the
President's proposals so as not to give their support to burdensome
and counterproductive new communications industry regulatory
schemes or expensive spending programs based on misguided and
Making a Mountain Out of the Molehill
The NTIA study, and supporters of new government programs and
solutions to address a nebulous "digital divide," generally paint a
very static picture of the dynamic Internet marketplace. America's
Internet or "broadband" marketplace is evolving more rapidly than
anyone predicted. "The Internet" has become a common household
word, and Internet-based services and applications are spreading
quickly throughout the country.
While it is true that the spread of the
Internet has not been perfectly uniform, there is nothing unusual
or inherently unfair about the way services are being delivered. As
was the case with almost all previous technological innovations,
the pace and pattern of the dispersion of technological advances to
Main Street and Home Town America has never been perfectly uniform.
New products and services have always been sensitive to income
levels, demographics, and geography. Televisions, radios, and
videocassette recorders started as luxury items within the reach of
only a handful of Americans. Today, almost everyone has these
products in their homes. Some communities have gained access to new
technologies before others based on the cost of service and factors
related to their geographic location. For example, the availability
of flush toilets and cellular telephone services first was
concentrated in urban areas; eventually, almost every American
community came to possess them.
other words, merely because disparities between various groups of
people exist as the new goods and services are being offered does
not mean there is a national crisis that requires federal
intervention. Just as the market made other technologies more
affordable and within the reach of almost every American home and
business, so too will it spread access to the Internet--and sooner
rather than later.
Allowing the Market to Grow.
Personal computers (PCs) are now available for under $500 and many
analysts predict the era of free computing is near. Some Internet
Service Providers (ISPs) already offer free PCs to consumers who
sign up for long-term contracts. Internet access remains quite
inexpensive and flat-rate plans for unlimited access are common.
Finally, numerous communications network providers (such as cable,
telephone, fiber optics, and wireless-based) are racing to offer
high-speed Internet connections to the home.
Although the Clinton Administration paints
a dismal picture of an unwired and technologically backward country
that needs federal assistance and guidance to develop,
private-sector forces and businesses are working diligently to
provide Americans with a virtual "digital deluge" of new
technological goods and services. The problem of access is solving
course, more can and will be done by the private sector to ensure
that Americans gain access to the Internet and interactive
technologies. But Congress can take steps that will facilitate
these beneficial developments. For example, it should:
Deregulate the Internet market
completely, allowing any network provider to offer services to
consumers free of all archaic regulations or newly proposed service
mandates under the guise of "open access."
Provide tax relief for the
communications industry, which currently faces a dizzying array
of burdensome industry-specific taxes at the federal, state, and
Encourage wireless and satellite
solutions by freeing up and auctioning off more publicly held
spectrum and deregulating existing wireless providers so they can
offer more broadband services.
Devolve responsibility for the issue to
state and local officials, who are in a better position
to craft targeted solutions to the parochial problems that could
arise in some communities.
The Clinton Administration has adopted the New Deal's "chicken in
every pot" entitlement mentality and given it a decidedly modern
spin; now, it is "a computer in every house" that is promised to
Americans. There is clearly no constitutional basis for federal
action of this sort. Fortunately, new national spending or
regulatory programs also are not needed. America will be "wired"
and Internet-ready in a few short years. Instead of rushing to
create expensive or unconstitutional new federal programs,
policymakers should be patient and allow the market to fulfill
consumers' needs as they evolve.