Executive Summary: How Free Computers Are Filling the Digital Divide

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Executive Summary: How Free Computers Are Filling the Digital Divide

April 20, 2000 3 min read Download Report
Adam Thierer
F.M. Kirby Research Fellow in National Security Policy

As the public policy debate over America's "digital divide" intensifies, federal, state, and local policymakers are considering what steps should be taken to solve the apparent gap between the technological "haves" and "have nots." The issue has two components: the wiring of classrooms for educational purposes and the wiring of homes to ensure that all Americans have personal computers (PCs) and are connected to the Internet. The implications of the latter are considerable. Using heated rhetoric, some policymakers in Washington are calling for the creation of a new entitlement to address what they perceive as a national civil rights crisis--the fact that many low-income Americans do not yet own a computer. As Eric Cohen, managing editor of The Public Interest, recently noted in The Weekly Standard, "The digital divide is now the hottest social policy issue in Washington. It's the 'new new thing' in civil rights politics."

Dozens of solutions to this supposed crisis are being advanced. The Clinton Administration's fiscal year (FY) 2001 budget proposes a variety of new federal programs and over $2 billion in new spending initiatives. Vice President Al Gore has floated a package of proposals, and Members of Congress continue to debate legislation ranging from tax credits for the donation of computers to needy schools or individuals to the creation of new federal programs. One proposal would give low-income families a tax credit of up to $500 to subsidize the cost of a new PC system. Another would create a New Deal-type program resembling the Rural Electrification Administration to provide $3 billion in low-interest loans to companies to deploy high-speed broadband networks to rural or remote sections of America.

Yet today's dynamic market for personal computers and the availability of access to the Internet is generating a virtual digital deluge of opportunity for every American to be connected. For example:

  • PCs are becoming very affordable.
    Internet-ready PCs are available from major retailers, catalogue companies, and online vendors for less than $400 and, in some cases, even under $300, because of heavy market competition.

  • PC systems are being given away.
    Some companies are giving away PCs almost free of charge in exchange for nominal monthly fees and/or long-term service agreements.

  • Some PCs are cheaper to buy than TVs.
    Entry-level computer systems are now cheaper than new television sets. This begs an obvious question: If Americans can purchase an Internet-ready PC for less than the cost of many TVs, just how real is the digital divide? After all, 98.7 percent of all Americans--including 97.3 percent of all poor households--now own a television set.

  • Internet access is cheap, and often free.
    Free access to the Internet is offered by advertising-supported Internet service providers. This means consumers who own a PC can sign up for Internet service for no additional monthly fee.

  • Many companies offer free computing services.
    There has been an explosion in the number of other free computing and Internet services, which include free e-mail, free file storage sites, free technical support, and free software.

  • Emerging hybrid computing systems may soon make PCs irrelevant.
    Hybrid systems known as "Internet appliances" or "dumb terminals," often costing less than $99, can offer consumers instantaneous Internet access without having to purchase a hard drive.

  • Companies are rushing to deploy state-of-the-art broadband networks into the home.
    Telecommunications network providers--including telephone, cable, fiber optic, electrical, and wireless satellite companies--offer consumers a variety of technological options for accessing the Internet and online networks.

  • Employers are increasingly offering free or subsidized PCs to employees.
    Many large private-sector employers, such as Ford Motor Co., Delta Air Lines Inc., American Airlines, and Intel Corp., offer their employees subsidized PCs and free Internet access. This new workplace benefit is likely to become more prevalent as employers compete for quality workers.

  • Free markets are spreading new technologies more quickly than subsidies.
    Personal computers and Internet services have spread quite rapidly throughout society. In fact, roughly half of all American households gained access to the Internet in far less time than it took them to be serviced by radio, television, cable, telephones, and electricity.

Is there a "digital divide" in America, or at least a pressing public policy concern that demands a national solution and an expensive federal entitlement program? Clearly, the vibrant PC market is doing more than an adequate job of providing computing technologies to all Americans. Free computers and inexpensive computing technologies are filling any digital divide that remains. Washington should be patient and not interfere with this well-functioning process.

Adam D. Thierer is a former Alex C. Walker Fellow in Economic Policy Studies in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.


Adam Thierer

F.M. Kirby Research Fellow in National Security Policy