BRIDGE NEWS - October 4, 2000

Spreading The High-Speed Internet Revolution To All
Keeping The Digital Divide From Becoming Reality

Peter Morici

Every once in a while, a technology arises with such enormous potential to improve living conditions that its rapid diffusion to all segments of U.S. society becomes a political and social must.

In the past, the U.S. government has strongly supported the rapid spread of electricity, telephony and commercial aviation services to all Americans, thereby obviating concerns about earlier "have" and "have not" divides.

Today, high-speed Internet communication has the same revolutionary potential as the technologies of the past. But unless Congress acts soon to promote more rapid diffusion, the much-feared "Digital Divide" will become a stark reality.

Today, most Americans gain access to the Internet through the plain old telephone lines that have been carrying calls into and out of their homes for the last 60 years.

This is a bit like driving on a freeway with a 25-mile-an-hour speed limit. You could do it, but you lose much of the advantage of being on a freeway.

The old telephone lines were never intended for the Internet and make using it painfully slow, with millions of frustrated users lamenting the "World Wide Wait." The situation only promises to get worse.

Powerful emerging applications such as teleconferencing, online medical diagnosis and Internet university courses require the ability to send large amounts of information at high speed.

Just as a garden hose is of no use on a fire truck, so the old telephone lines are not adequate for the new applications.

So-called broadband connections can offer access to the Internet at speeds from 10 to hundreds of times faster than the old telephone lines. They remove the speed limit from the Internet freeway, or to change the metaphor, they are like a city water main compared with the soda straw of the telephone line.

It can make it possible for users to gain access to the world's finest libraries, or to real-time university classrooms from their homes. Doctors can review patients' files and make sophisticated diagnosis far from hospitals. Families with members living far apart can unite online for important celebrations.

And engineers from distant parts of the world can design and test sophisticated equipment without ever meeting or building a prototype. In the future, any individual company, school or other organization that lacks broadband connection will be at a severe economic, social and cultural disadvantage to those with access to high-speed communications.

Today only 1 percent of American homes are equipped with broadband capabilities. While such connections are expected to spread over to spread over the next few years, in many areas costs are high, and without better incentives than presently exist, many Americans will be consigned to second-class citizenship.

Legislation in the Congress sponsored by Sen. Daniel Moynihan, Democrat of New York, would solve this problem by more rapidly diffusing broadband technology.

This forward-looking proposal specifically targets efforts to extend the broadband franchise to rural and low-income communities. The bill gives a 10 percent tax credit for companies that provide current- generation broadband, and a 20 percent tax credit for those that provide next-generation broadband.

The incentives are both limited in time to five years, to accelerate the build out of American broadband capacity, and competitive, by being available to an array of companies offering competing high-speed communication technologies.

Critics charge the proposal would cost $10 billion over five years. However, the government's role in facilitating the availability of broadband technology to underserved communities is a small investment that will generate enormous social returns well beyond the life of the tax credit.

Such legislation has solid precedents in American history. When telephony was introduced, regulations were implemented to assure universal access so that all Americans would benefit from this revolutionary technology.

In like manner, the government took steps to support commercial aviation, by having the mail carried by airplanes, and through the establishment of research and development centers to spur innovations with industrial value.

More recently in the 1950s, the government initiated plans for the interstate highway system, an effort that has served to link the nation and facilitate commerce.

A national broadband infrastructure would provide similar benefits and generate enormous returns for future generations. Foreign governments recognize the opportunities broadband presents and are aggressively seeking to accelerate its deployment. The Japanese government already supports companies that bring broadband access to remote areas.

In addition, Nippon Telegraph & Telephone has the ambitious goal of running optical fiber into every Japanese home by 2005. Governments in Sweden, Singapore, Canada and India are pursuing similar efforts, recognizing the gains available from accelerating broadband rollout far surpass the modest cost of the incentives.

Continued prosperity in an information economy requires deploying the most effective technology. The impressive productivity gains of recent years are a testament to the American capacity to embrace such technology.

But we must not relent in such effort on the eve of the broadband revolution. Only a decade ago most of us had never heard of the Internet. In another 10 years, broadband access will assume a social and economic function as familiar as that served by e-mail today.

Relegating segments of our society to second class E-citizenship is an unacceptable prospect. Efforts to secure access for all Americans to the broadband revolution merit our support.