If ever an industry did not need federal help, it’s computers, with its falling prices, high-paying jobs, innovative products and seemingly endless amounts of entrepreneurial energy. But now the Clinton administration wants to jump on a horse that’s already in the lead and then claim victory as it crosses the finish line.
The administration’s new budget is a veritable high-tech pork barrel of new federal programs and spending initiatives. Among the proposals: $903 million to prepare classrooms and teachers for the “Digital Age”; $100 million to create 1,000 “community technology centers” in low-income communities; $50 million to help low-income families gain Internet access; $45 million for a vaguely defined “Technology Opportunities Program” for low-income areas; $25 million to bring high-speed communication networks to rural communities; and $19 million to help small firms develop electronic (or “e-commerce”) businesses. Rounding out the budget is a 13 percent spending boost for the Federal Communications Commission which threatens more regulation from Washington.
This is all part of the president’s campaign to bridge America’s so-called “digital divide” the gap between the technological haves and have-nots. In other words, the Clinton administration has adopted the New Deal era’s “chicken in every pot” entitlement mentality and given it a decidedly modern spin.
Ironically, even as details began leaking out of President Clinton’s Internet budget proposals, two major corporations, Ford Motor Co. and Delta Airlines, were announcing plans to provide every one of their more than 400,000 combined employees with a computer, printer and Internet access for just $5 to $12 a month. Many corporations already have such programs in place, and others are poised to follow suit.
Even Americans without such an employer-based plan can buy a computer for under $500, and many analysts predict the era of free computing is near. Some Internet service providers offer free computers to consumers who sign long-term contracts. Internet access has become less and less expensive, with an abundance of “all-you-can-eat” flat-rate plans available. And a growing number of communications network providers cable, telephone, fiber optics and wireless are racing to offer high-speed Internet connections to the home.
So where’s the crisis that demands Mr. Clinton’s “national crusade”? While the administration paints a dismal picture of an unwired and technologically backward country that needs federal assistance, private-sector forces are working diligently to provide Americans with a virtual “digital deluge” of new technological goods and services. Six years ago, only 6 percent of American households had Internet access; today, according to Forrester Research Inc., a leading tracker of Internet traffic, the number exceeds 43 percent and is growing rapidly. The problem of computer ownership and Internet access is solving itself.
True, the spread of computers and the Internet has not been perfectly uniform, but there is nothing unusual or inherently unfair about the way these services are being delivered. As was the case with almost all previous technological innovations, the dispersion of technological advances from Wall Street to Main Street has often moved in fits and starts. New products and services have always been sensitive to income levels, demographics and geography.
Televisions, radios and videocassette recorders were, at first, luxury items within the reach of only higher-income Americans. Today almost everyone has these products in their homes. Yes, some communities gained access to new technologies before others, but this was based more on geographic factors than any “digital divide.” For example, the availability of flush toilets and cellular telephones was first concentrated in urban areas, but eventually almost every American community came to possess them.
In short, merely because disparities between various groups exist as new goods and services are being offered does not mean there is a national crisis that requires federal intervention. Just as market forces gradually placed other technologies within the reach of almost every American home and business, so too will they spread computers and Internet access, and sooner rather than later.
The best thing those concerned about the “digital divide” can do is be patient. America will be completely “wired” and Internet-ready in just a few years, without any help from the federal government. It’s time for Congress to build a “firewall” between the computer industry and Washington.
Adam D. Thierer is the Walker fellow in economic policy at the Heritage Foundation.