Traditionally, our notion of being connected to the nation's communications networks has meant having a telephone. Today, Americans' increased use of computers and the Internet has changed that notion. To be connected today increasingly means to have access to telephones, computers, and the Internet. While these items may not be necessary for survival, arguably in today's emerging digital economy they are necessary for success. As the Department of Commerce has found in its Emerging Digital Economy reports,(1) the dramatic growth of electronic commerce and the development of information technology (IT) industries are changing the way Americans work, communicate, purchase goods, and obtain information. Jobs in the new economy now increasingly require technical skills and familiarity with new technologies. Additionally, obtaining services and information increasingly requires access to the Internet.
Policymakers have achieved high levels of telephone connectivity through the implementation of two key initiatives. Pro-competition policies at the state and national levels have resulted in lower prices for consumers of telephone services. Universal service policies have helped assure that most Americans can enjoy affordable access today. Assistance for low-income households (e.g., the Federal Communications Commission's Lifeline Assistance and Link-Up America and state programs) and support for high-cost regions of the country (e.g., the FCC's Universal Service Fund; other State and Federal rate-averaging) are prime examples of such programs. And the U.S. Department of Agriculture's Rural Utilities Service (RUS) provides targeted lending and technical advice to help ensure that advanced telecommunications infrastructure is in place for rural communities.
With the data in this report, we are in a better position to identify where and how to reach everyone. Policymakers should explore ways to continue to boost telephone penetration, particularly among the underserved, and to expand computer and Internet connectivity. For some individuals, it is an economic solution. Lower prices, leasing arrangements, and even free computer deals will bridge the digital gap for them. For high cost communities and low-income individuals, universal service policies will remain of critical importance. For other individuals, there are language and cultural barriers that need to be addressed. Products will need to be adapted to meet special needs, such as those of the disabled community. Finally, we need to redouble our outreach efforts, especially directed at the information disadvantaged.
Promoting Competition and Universal Service
To some extent, the surging use of computers and the Internet among American households reflects the success of our nation's pro-competition policies. A significantly higher percentage of households owned PCs in 1998 (42.1%) than in 1997 (36.6%), and experienced greater Internet access during the same period (26.2% versus 18.6%). The increased competition among PC-providers and lower costs of manufacturing have resulted in PCs selling for well below $1000. The increasing use of other Internet-accessing devices, such as televisions, palm computers, and Internet phones, should further invigorate competition among manufacturers and reduce prices for consumers.
While competition has made computers and the Internet increasingly affordable, these technologies still remain beyond the budget of many American households. When asked why they lacked Internet access, a significant portion of households (16.8%) responded that it was too expensive. Respondents particularly cited the cost of monthly bills, followed by toll calling for ISP access. A significantly higher percentage of minority and low-income households reported that Internet access was cost prohibitive. In addition, cost ranked highest among reasons given by those who discontinued Internet use. And, the proportion of non-use would surely be higher still for those who do not yet own PCs or other Internet-access devices. Policymakers, such as the Federal-State Universal Service Joint Board, State Public Service Commissions, and the Federal Communications Commission should carefully consider these facts in their attempts to evaluate the new universal service and access needs.
These findings suggest that further competition and price reductions will be vital to making information tools affordable for most Americans. Going forward, it will be important to promote policies that directly enhance competition among companies manufacturing computers and other Internet devices, as well as among Internet service providers. Expanding competition in rural areas and central cities is particularly significant, as these areas lag behind the national averages for PC-ownership and household Internet access.
At the same time, the data demonstrate the need for continued universal service support for telephony, particularly in rural and other high-cost areas. And we need to encourage the buildout of broadband networks to rural and other underserved areas of our nation, so that all Americans can take full advantage of new information technologies and services.
Expanding Community Access Centers
Competition is a significant answer to providing affordable access to computers and the Internet, but it is not the total solution. It is highly unlikely that, in the foreseeable future, prices will fall to the point where most homes will have computers and Internet access. As a result, a digital divide may continue to exist at home between the information rich and the information poor. Given the great advantages accruing to those who have access, it is not economically or socially prudent to idly await the day when most, if not all, homes can claim connectivity. Part of the short-term answer lies in providing Internet access at community access centers (CACs), such as schools, libraries, and other public access facilities.
The 1998 data demonstrate why providing public access to the Internet at these external sources is critical. To begin with, these sources tend to be used by groups that lack Internet access at home or at work; chiefly, minorities, people earning lower incomes, those with lower education levels, and the unemployed. Households with incomes of less than $20,000 and Black households, for example, are twice as likely to get Internet access through a public library or community center than are households earning more than $20,000 or White households. Similarly, low-income households and households with lower education levels are obtaining access at schools at far higher rates.
Moreover, the same households that are using community access centers at higher rates are also using the Internet more often than other groups to find jobs or for educational purposes. CACs are, therefore, providing the very tools these groups need to advance economically and professionally.
The data support the continued funding of CACs by both industry and government. Industry has already come forward with significant assistance. Companies are supporting the creation of community technology centers, helping connect schools through "NetDays," and donating computers and software to schools and neighborhood centers. NTIA's Telecommunications and Information Infrastructure Assistance Program (TIIAP) has funded a number of pioneering CAC efforts.(2) The U.S. Department of Education's new Community Technology Centers (CTC) program will enable the funding of CACs in economically distressed communities on a broader scale.
The 1998 data also underscore the importance of the Administration's efforts to ensure that all schools and libraries have affordable access to the Internet. Under the E-rate program, telecommunications carriers are providing eligible schools and libraries with a discounted rate for telecommunications services, internal connections among classrooms, and Internet access. As a result, the E-rate program is helping to connect more than 80,000 schools and libraries and is enabling children and adults to both learn new technologies and have new points of access. The data demonstrate that these community access centers are, indeed, used by people who lack access at home and merit further funding.
In addition, we should look to other community-based organizations that can help us achieve these goals -- traditional community centers, churches, credit unions, housing projects, senior centers, museums, fire and police stations, and more. Each community knows best how to reach and connect its residents.
While many Americans are embracing computers and the Internet, there are many others who do not realize that this technology is relevant to their lives. We need to reach out to these communities and let them know why they should care -- how new technologies can open new opportunities for them and their children.
We also need to find out why people are or are not connected. While such outreach works best at the local level, this type of information should be shared with policymakers at all levels of government -- local, state, tribal, and federal. Only when we have a good understanding about why different communities do or do not have access to digital tools can we fashion appropriate policies.
Addressing Content Concerns
The data show that Americans are concerned about invasions of their privacy caused by accessing the Internet. Almost two-thirds of American are either "very concerned" or "somewhat concerned" about confidentiality on the Internet. There are legitimate concerns regarding the collection and transmission of personal information via the Internet, especially information gathered from children. The Administration has set forth an Electronic Bill of Rights, proposing that every consumer have: the right to choose whether her personal information is disclosed; the right to know how, when and how much of that information is being used; the right to see that information; and the right to know if information is accurate and to be able to correct it if it is not.
The Administration believes that the private sector should take the lead in implementing meaningful, consumer-friendly privacy regimes. We would like for companies to take steps to notify customers of their privacy policies, process consumer privacy preferences, protect customer data, and handle inquiries and complaints. Several promising private sector initiatives are underway, such as BBBOnline and TRUSTe, which require merchants to adhere to fair trade practices. These programs provide a seal to businesses that post privacy policies that meet certain criteria.
Parents are also concerned about their children's safety while using the Internet. The data show that one of the reasons that households with a computer have never used the Internet is "concerns with children." The Administration is committed to empowering parents, teachers, and other guardians with tools to keep children safe while online. The Administration has encouraged private sector initiatives, such as "One Click Away," which are designed to give parents technology and educational resources to protect their children from material that they deem to be inappropriate and to know who to contact when their children encounter dangerous situations online. The Administration has also promoted the concept of "greenspaces" -- educational, age-appropriate, noncommercial content that is easily identifiable for families online.
Good public policy requires a good factual foundation. Continued studies -- public and private -- are vital to permitting policymakers to make prudent decisions. Policymakers should explore ways to improve the availability of reliable penetration data for historically small but vitally important groups, such as Native Americans and Asians/Pacific Islanders. Potential solutions include "over-sampling" as part of a broader-based survey or conducting special studies that target these groups. A new analytical tool to gauge the status of Internet connectivity could be a Household Access Index, designed to highlight progress or deficiencies in this regard. A composite index could be developed that represents the country's combined penetration for telephones, computers, other Internet access devices, and the Internet. In 1998, the HAI for U.S. households would have equaled 162.4%, increasing from 149.0% in 1997.
In the final analysis, no one should be left behind as our nation advances into the 21st Century, where having access to computers and the Internet may be key to becoming a successful member of society.
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1. The Emerging Digital Economy (April 1998) and The Emerging Digital Economy II (June 1999).
2. Networks for People: TIIAP at Work, available on NTIA's web site, includes discussions of a number of TIIAP-funded CAC projects.