Monday, May 09, 2005

Digital Divide" / Universal Service / Technology Entitlements / The "E-Rate" Program

Few high-tech policy debates have attracted as much attention in recent years as the debate over the so-called "digital divide." Policymakers of all stripes, and at all levels of government, are considering what steps should be taken to solve the apparent gap between the technological "haves" and "have nots" in America.

But while some "Chicken Littles" decry a world of "technological segregation" or "classic apartheid" in a shameless attempt to turn this into a civil rights crusade, the reality is that Americans are gaining access to telecommunications and Internet technologies at an almost unprecedented rate when compared with technologies of the past. For example, while it took over fifty years for 50 percent of Americans to gain access to electricity, and over seventy years for 50 percent of all households to receive phone service, it has taken less that twenty years for 50 percent of Americans to gain access to a personal computer (PC) and less than ten years to receive Internet access. These results are all the more amazing in light of the fact that the former technologies were heavily subsidized by government while PC and Internet technologies have not been.

Moreover, even a cursory review of the marketplace for personal computers and Internet services reveals the remarkable choices and bargains consumers have available to them. Average PC prices have fallen below $1,000, but more importantly, entry-level systems can be found for well under $400. Many PC systems are now offered to consumers virtually free-of-charge with promotional discounts and mail-in rebates. Likewise, Internet access is typically priced very low at "all-you-can-eat" prices, such as $9.99 to $19.99 per month. In many cases, free Internet access and e-mail services can be found on the Web. And while high-speed Net access is not yet ubiquitous, new connections to the home are appearing every day.

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