A critique of federal telecommunications policy initiatives relating to universal service and open access to the national information infrastructure

A Critique of Federal Telecommunications Policy Initiatives Relating to Universal Service and Open Access to the National Information Infrastructure

John C. Beachboard* Charles R. McClure John Carlo Bet-tot

While accepting the importance of expanding the definition of universal service in the information age, this article forwards the argument that regulatory and rhetorical emphasis on telecommunications is skewing the policy debate and undermining the policy goals identified by Congress in the Telecommunications Act of 1996 (P.L. 104104). The universal service provisions of the Act are critiqued in terms of their economic and social implications. The social objectives of expanding the definition of universal service are restated, and recommendations regarding their pursuit are offered.

In the long run, improvements in technology are good for almost everyone. Technological progress is the fundamental engine of economic growth, and economic growth sooner or later raises incomes throughout a society.... Unfortunately, what is true in the long run need not be true over shorter periods. New technologies, even when they raise the productivity of the economy as a whole, can reduce the demand for once-valuable skills and thus gravely harm those whose incomes depend on those skills.’

National Information Infrastructure: Agenda for Action* describes the Clinton administration’s vision for creating a National Information Infrastructure (NII) to consist of “a seamless web of communications networks, computers, databases, and consumer

* Direct all correspondence to: John C. Beachboard, School of lnfomtation Studies, Centerfor nology, Syractise University, Syracuse, New York I3244-4100

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Government information Quarterly, Volume 14, Number 1, pages 11-26. Copyright 8 1997 by JAI Press Inc. All rights of reproduction in any form reserved. ISSN: 0740-624X

Science & Tech-

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electronics that will put vast amounts of information at users’ fingertips” and promote economic growth, more efficient health care, civic networking, life-long learning, and a more efficient government. Recognizing the potentially inequitable consequences of development of the NII, the administration has committed itself to making networked information services available to all: Because full and productive participation in American society will increasingly depend on access to information, the administration is committed to promoting the availability of information resources to all people at affordable prices.j To this end the administration proposed the reform of telecommunications regulation to preserve and advance “universal service to avoid creating a society of information ‘haves’ and ‘have nots.“’ The administration recognized that “universal service” will need to be redefined and extended if this objective is to be met and has sought maximum public participation in developing new universal service policies.3 On February 8, 1996, President Clinton signed the Telecommunications Act of I996 (P.L. 104-104).5 The Act, the first comprehensive rewrite of the Communications Act of 1934,’ overturns line-of-business restrictions imposed on the Regional Bell Operating Companies by the Modification of Final Judgment (MFJ).’ The Act will significantly impact virtually all sectors of the telecommunications industry by promoting competition in long-haul, local-exchange area, cable and wireless services. However, the benefit of increased competition is unlikely to be gained without some social costs-primarily as the move toward full competition undermines funding subsidies that have been used to hold down the cost of residential phone service in support of the nation’s universal service objectives. With passage of the Act, Congress established general principles for the development of universal service policies and moved this complex debate to the Federal Communications Commission (FCC) and the states. Congress has set a tight schedule for the development of federal universal service policies.* On March 8, 1996 the FCC released a Notice of Proposed Rulemaking (NPRM) to: l

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Define the services that will be supported by federal universal service mechanisms; Define those support mechanisms; and Otherwise recommend changes to regulations to implement the universal directives of the Act.’

support

service

More than 400 comments and replies to comments were received in response to this NPRM.” However, as a highly contentious debate regarding the definition and funding of universal service is ongoing, the issues presented here remain relevant.’ ’ This article responds to the position expressed by some public-interest advocates on ??I? The expanding the range of services included under the rubric of “universal services. emphasis being placed by these advocates for universal service policies to support access immediately to advanced telecommunications services reflects an optimism regarding technology that may not be warranted. Furthermore, these advocates, by pursuing a rapid expansion of the universal service definition, may undermine policy initiatives to achieve

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shorter-term objectives of connecting public institutions such as public schools and libraries to the Internet. In this article, the authors suggest that, rather than focusing on early deployment of advanced telecommunications services, I3 the needs of society’s information “have nots” would be better served by expanding residential access to the existing public switched network and the Internet, improving the quality of “content” available on the Internet, expanding the internal information infrastructures and Internet connectivity of public institutions, and encouraging ownership of personal computers. Promoting policies immediately to incorporate advanced telecommunications within the definition of universal service may effectively slow deployment of those services, encourage individuals and public ancillary

institutions technology,

to misallocate

limited

and not truly support

investment

funds on telecommunications

the public-interest

objectives

and

that the universal

service policies are intended to serve. IMPLICATIONS OF INCLUDING ADVANCED TELECOMMUNICATIONS SERVICES IN THE UNIVERSAL SERVICE POLICY The policy issues surrounding universal service are extremely complex, as they concern a fundamental tension between a strongly held faith in the efficacy of market-driven competition and the recognized need for some degree of market regulation in order to promote social equity and effective functioning of a democratic society. This tension, evident in the testimony offered during the universal service field hearings,14 forms the basis for the key policy questions posed in the National Telecommunication and Information Administration’s (NTIA) Inquiry on Universal Services and Open Access’” and FCC’s aforementioned NPRM.16 This article was prepared under the following assumptions: l

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That information and information technology are playing increasingly important roles in the U.S. economy; That contined development of information technology and infrastructure will be required for “U.S. businesses to remain competitive in a global marketplace;“” That converging digital computer and communications technologies are enabling the development and delivery of new multimedia information services; and That the capability to “access, analyze and assimilate”” complex information effectively using these new technologies is becoming increasingly important for successful participation in society.

Accordingly, policies promoting universal service must be examined in terms of national economic competitiveness and democratic concepts of equity for all members of society. The administration’s and many public interest groups’ universal service policy direction emphasizes connectivity-particularly high-speed connectivity. The Communications Act of 1994 (S. 1822) proposed by the 103rd Congress, reflected this emphasis by calling for U.S. communications policy to: Promote the development and widespread availability of new technologies and advanced telecommunications and information services... [and] to make available so far as possible,

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to all the people of the United States, regardless of race, color, national origin, income, residence in a rural or urban area, or disability, high capacity, two-way communications networks capable of enabling users to originate and receive affordable and accessible high quaMy

voice,

data,

graphics,

video,

and other types of telecommunications

services.‘9

(emphasis added) Although the Act recognized that the definition of universal service will need to evolve, the 104th Congress chose to limit consideration to telecommunications services that: l

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Are essential to education, public health, or public safety; Have, through the operation of market choices by customers, been subscribed to by a substantial majority of residential customers; Are being deployed in public telecommunications networks by telecommunications carriers; and Are consistent with public interest, convenience, and necessity.‘”

The FCC interprets this language to direct that all four criteria must be considered-but not necessarily be met-in deciding which services to include.*l The principles established by Congress for use by the legislatively enacted Federal-State Joint Board developing federal universal service policies include: l

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Quality and Rates-Quality services should be available at just, reasonable, and affordable rates. Access to Advanced Services-Access to advanced telecommunications and information services should be provided in all regions of the nation. Access in Rural and High Cost Areas-Consumers in all regions of the nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas. providers of Contributions-All Equitable Nondiscriminatory and telecommunications services should make an equitable and nondiscriminatory contribution to the preservation and advancement of universal service. Specific and Predictable Support Mechanisms-There should be specific, predictable, and sufficient federal and state mechanisms to preserve and advance universal service. Access to Advanced Telecommunications Services for Schools, Health Care, and Libraries-Elementary and secondary schools and classrooms, health care providers, and libraries should have access to advanced telecommunications services as described in subsection (h). Additional Principles-Such other principles as the Joint Board and the Commission determine as necessary and appropriate for the protection of the public interest, convenience, and necessity and are consistent with this Act.**

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Several of these principles direct that universal service policies be developed to support access to advanced telecommunications services in all rural and high-cost areas of the country at rates reasonably comparable to those available in urban areas. These principles imply a continuation of rate averaging or cross-subsidization policies that have existed for plain-old-telephone service (POTS). These policies have been reasonably effective (although some would argue inefficientZ3) in a regulated environment where monopoly providers of telecommunications were guaranteed adequate profits on their investments.‘3 Telephone companies have been able to charge business and long-distance subscribers higher rates in order to subsidize residential and rural users because the demand for telephone service has been relatively inelastic.‘” The Act additionally authorizes the FCC to develop a special definition of universal service for public schools, libraries, and health care providers.‘(’ These public institutions will be able to obtain specially advanced telecommunications services at preferential rates. 27 Both the Administration and Congress, however, have expressed a commitment to promoting increased market competition in the telecommunications industry and encouraging private development of the NII. The Administration stated, “pro-competitive policies... will result in lower prices and better service to more Americans.“‘s Congress concurred: Increased competition in telecommunications services can, if subject to appropriate safeguards, encourage infrastructure development and have beneficial effects on the price, universal availability, variety. and quality of telecommunications services.‘” Yet, there

is a fundamental

tension

between

the objective

of stimulating

private-sector

the NII and simultaneously expanding universal access to include advanced telecommunications services. The telecommunications industry is being asked to make a significant investment in upgrading its facilities to enable access to high-speed services. Demand for commercial high-speed services, such as that required for video-dialtone services, remains uncertain. A MacWorld magazine national public-opinion survey reveals that only 28 percent of adults surveyed are interested in video-on-demand, with only 19 percent of that segment willing to pay more than $10 per month for the service.j” The MacWorld survey revealed much greater interest in public-oriented services such as electronic voting, referencematerial searches, distance, learning and participation in electronic town halls. Interestingly, these services do not inherently require advanced telecommunications services. The industry’s return-on-investment problem is compounded by the Administration’s and state public utility commissions’ reluctance to raise rates on existing telecommunications services. The Administration has directed the FCC and the states to “prevent undue rate increases for any class or group of ratepayers.“” This directive implies that telephone rates should not be raised in order to subsidize an expanded range of universal services. Not surprisingly, consumer interest groups have resisted having their basic telephone rates increased to support expanded services.“* Attempting to ensure availability of a broad range of advanced telecommunications services throughout the country at roughly comparable rates will greatly increase the capital costs of telecommunications providers. The effect of these requirements is to increase rates for unsubsidized subscribers of advanced telecommunications services and, investment

to build

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in accordance with accepted economic theory (the price elasticity of demand), to weaken demand. These policies can only inhibit the formation of private investment required for development of the NH. On the other hand, there are still compelling reasons why universal service regulations should be considered critical to achieving the social-policy objectives of the NII. Communications connectivity is a key component of the NII. Connectivity enables the flow of information from where it is stored to where it is needed. Connectivity implies levels of standardization and integration which can promote sharing of data-promoting what one writer has referred to as the development of a “collective IQ.“3” Tremendous revenues are generated within the telecommunications industry.” The U.S. government and states have historically applied a portion of these revenues to hold down the cost of residential telephone service and thereby support universal telephone service objectives. Roughly 4.4 million households received more than $140 million collectively in assistance under Federal Link Up and Lifeline Assistance programs in 19c)4.j5 California estimates that as much as $ I .4 billion is contributed by Pacific Bell customers “through a complex system of subsidies from tolls and other services” to keep telephone service affordable.j6 The FCC estimates that $735 million is transferred from interexchange carriers to the Universal Service Fund.j7 Accordingly, both the fundamental policy framework and a potential source of revenue are in place to seek a broader contribution from the telecommunications industry (and its subscribers) to pay for expanded universal service. While recognizing the potential benefits of an expanded range of universal services, proposals that focus on the early inclusion of advanced telecommunications may hold false promises for the resolution of social problems and limit consideration of alternative remedies. Beyond that, demanding that the telecommunications industry achieve an equitable distribution of services during the early fielding of advanced telecommunications technologies may limit its ability to launch those new services. UNIVERSAL

SERVICE:

MORE

THAN

CONNECTIVITY

To realize the full benefit of the information

age, high speed networks that tie together millions of computers must be built.... Our current national information policy resembles the worst aspects of our old agricultural policy, which left grain rotting in thousands ol storage silos while people were starving. We have warehouses of unused information rotting....‘”

This emphasis on connectivity has led to protests before the FCC citing discrimination in the deployment of video dialtone facilities.j9 Fearing that proposed plans will “bypass many lower income and/or minority communities in their initial deployment of video dialtone facilities,” the Center for Media Education’” argued: This discretionary practice amounts to denial of a service which may be essential to the economic and social livelihood of the community which is redlined. Video dialtone construction is a primary step in the development of our national information infrastructure.... If redlining is allowed, many of the public interest benefits of video dialtone will not be obtained. Increasingly. information means economic, social. and political power. If substantial segments of the population. particularly those of lowcr-

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income or minority status, are denied access to advanced networks, America will be divided into the technologically-wealthy and the technologically-disadvantaged underclass, and we will all suffer from it.4’ An unstated assumption of the media center’s argument is that connectivity advanced video dialtone technology implies access to public-interest services and content such as telemedicine and distance learning. In this context, a useful distinction between universal access and universal service should be noted. In testimony before the House Subcommittee on Science, Charles R. .McClure suggested: “Universal access to the information superhighway implies equal reasonable opportunity for the individual to be connected to the Internet.... The notion of universal service, however, implies some baseline or minimal level of Internet services which the federal government assures the public it can access and use.“42 Under universal access, a service must simply be available for purchase by consumers regardless of their geographic location. On the other hand, universal service assumes an obligation on the part of government to ensure that the service be both affordable and usable. Members of the 104th Congress support “access to advanced telecommunications and information services... in all regions of the nation.“4” Congress’s intent, however, limits the definition of universal service to the inclusion of telecommunications services.44 Therefore, even if telecommunications services are subsidized, questions regarding the cost of public-interest information services remain to be addressed. External connectivity charges represent only 7 to 15 percent of the recurring costs of operating a public school information.4s Other costs in the referenced Department of Education and McKinsey studies included staff to support the systems and equipment-replacement. The cost of access to commercially-available content and on-going training and maintenance costs were not included. In a similar study prepared for the National Commission of Library and Information Science, telecommunications charges as a percentage of total recurring costs ranged from 3.5 to approximately 15 percent, depending upon the configuration.46 Access to commercial databases such as CarlUncover or Dialog represented additional recurring costs. The strategy of pursuing the inclusion of advanced telecommunications services under the definition of universal service while available technologies remain relatively underemployed is dubious. Despite the growth of residential access to the Internet and commercial online services, there are still substantially more citizens that do not subscribe, regardless of their economic circumstances, than those who do subscribe. Although the public is increasingly using public libraries to access networked information, less than half of all public libraries have Internet connectivity.47 Public schools have done somewhat better, with approximately 50 percent having some type of Internet connectivity.48 While one may fundamentally agree with expanding the definition of universal service to include a wider range of telecommunications and information services, it is still possible to disagree substantially with pushing for the inclusion of advanced telecommunications services within the definition of universal service at this time. The technologies (e.g., neighborhood distribution of broadband digital signals and video server architectures) are not as mature as many observers assume, as evidenced by the difficulties companies have had launching video trials.4” As John Malone, President-CEO of TeleCommunications Inc., noted:

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The telecommunications industry has announced a lot of technology to put in press releases that hasn’t really been developed yet and isn’t even ready for the marketplace yet.... It’s like we’re developing this miracle drug. It’s killed a few bacteria, but hasn’t been tested on humans yet5”

services may be too high for many public institutions as well. The North Carolina Information Highway (NCIH) project provides a good example. In cooperation with telecommunications providers, North Carolina supported development of the nation’s first statewide ATM network.” However, schools or libraries wishing to connect to the NCIH faced one-time charges of approximately $150,000 and annual recurring charges of $54,000 in order to utilize its high-quality, video-teleconferencing capability (45-155 megabit per second service).” This is in sharp contrast to the I .54 megabit-per-second service previously available to public institutions in North Carolina at a one-time charge of $12,000 and annual recurring charges of $750.” The focus of public-interest information-technology policy initiatives must be redirected from emphasizing advanced telecommunications services to the social objectives that those services are expected to address. Before building larger pipes, we need to understand why e_xisting connectivity is not better employed. The cost of high-speed

RECOMMENDATIONS The effort to expand universal access to information services can be viewed as a “diffusion of innovation”” problem. Rogers, a noted researcher in the area of technology diffusion, reports

that:

individuals who have greater resources usually benefit more from the innovations introduced by development agencies than those individuals who have fewer resources. thus widening the socioeconomic benefits gap.ss

The risk is compounded in that information technology literacy will support the development of skills increasingly required to compete in an information-based economy. Accordingly, a key social objective related to expanding the definition of universal service. is to attempt to ensure that all members of society have the opportunity to obtain these skills. Diffusion research suggests that the rate of adoption of technological innovations is a function of the characteristics of the adopters, the social context, and attributes of the innovation itself. If one is willing to agree that the objectives of the Administration’s NII policy are to accelerate adoption of information technology (actually, the socially desirable applications which infomration technology will enable) and minimize social inequities likely to result, diffusion research suggests some useful criteria for evaluating informationtechnology related public-policy initiatives.s’ Rogers identifies attributes of innovations found to be associated with rates of adoption:- 57 l

Relative udvuntage is the degree to which an innovation is perceived to be better than the idea it supersedes. The relative advantage of an innovation, as perceived by members of a social system. is positively related to its rate of adoption.

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Compatibility is the degree to which an innovation is perceived as being consistent with existing values, past experiences, and needs of potential adopters. Compatibility of an innovation, as perceived by members of the social system, is positively related to its rate of adoption. Complexity is the degree to which an innovation is perceived as relatively difficult to understand and use. The complexity of an innovation, as perceived by members of the social system, is negatively related to its rate of adoption. Trialability is the degree to which an innovation may be experimented with on a limited basis. The trialability of an innovation, as perceived by members of the social system, is positively related to its rate of adoption. Observability is the degree to which the results of an innovation are visible to others. The observability of an innovation, as perceived by members of the social system, is positively related to its rate of adoption.

The expense of adopting current information services is currently high relative to perceived advantages. The cost of a personal computer and access to the Internet or commercial online provider may seem high to consumers who have not recognized the benefits of online connectivity. The transition from paper-based to electronic-based communication requires a significant change in practice for most individuals and problems with the complexity of existing technologies are often mentioned. Access to relatively expensive equipment is required to even try these new services, and use of information services is not widely observable. Effective public policy needs to address these barriers to the adoption of information technology. Better utilization of existing information technologies and services such as the Internet and World Wide Web should be encouraged by federal and state policy makers. The following recommendations focus on addressing some of the factors identified in diffusion theory that hinder adoption of current technology. Improve

Universal

Plain-Old-Telephone

Service

Evidence suggests that universal access to plain-old-telephone service does not exist today.58 In effect, the United States already has a significant, albeit relatively small, population of technology “have-riots... Additionally, a NCLIS study,“’ testimony before Congress,60 and numerous postings made during NTIA’s “virtual conference” on universal service6’ revealed that the cost of telephone access to networked services can be serious problem. Rural subscribers often face intrastate toll charges to reach an Internet provider’s point-of-presence. Rather than confounding this existing problem of telecommunications costs by adding expensive advanced services to the universal service equation, federal and state governments should do more to address universal access to POTS and reduce intrastate and interstate toll charges. Toll charges are artificially high because a significant portion of toll revenues is used to subsidize residential local access. The existing subsidization of local access is indiscriminate-providing subsidies regardless of economic need. Better access to information services could be improved by lowering long-distance toll rates, allowing residential access charges to approach their actual cost gradually, and targeting subsidies to those legitimately needing assistance.62 The total requirement for

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subsidies could be reduced by targeting assistance. The reduction in the total level of subsidization would allow for a reduction in long-distance toll charges (intra- and inter-state) as well as lower business access charges-one of the expenses which must be passed on by Internet access and commercial Promote

online service providers.

Electronic and Other

Access to Government Public-Interest

Information

Content

The value of the NII resides not only in connectivity but also in the content that becomes accessible. Difficult issues remain to be solved concerning how to distribute copyrighted information fairly in a networked environment.” However, it may be possible to accelerate the availability of public-interest content by focusing on the electronic dissemination of government information. All levels of government have infomration dissemination functions. Federal, as well as state and local, agencies are increasing their presence on the Internet in order to improve their information dissemination efforts6” As the number of potential subscribers grows, agencies will find it increasingly difficult to maintain the level of server resources required to meet access demand. This problem could be addressed by an expansion of the Government Printing Office’s (GPO) depository library program and increasing assistance to public libraries to support a distributed infomration-server environment. Public librarians, knowing the needs of their patrons, would be able to download materials of local interest, minimizing both congestion on the communications links and agency servers. Inter-agency and inter-governmental cooperation could help fund the distributed-server environment. Some current agency information-dissemination costs could be offset by supporting this new type of service which is clearly in the public interest.“’ Additionally, relatively small investments could be made to leverage access to existing public interest infomration. A good example of this type of service is AskERIC. which is supported by the Department of Education through the ERIC Clearinghouse at Syracuse University. AskERIC is an Internet-based service which assists kindergarten through I?thgrade teachers and library media specialists in locating and retrieving educational research information.“6 Near-term access to existing electronic information sources and selection of content for inclusion in new electronic repositories could be accelerated by designating selected public and university libraries to create human, subject-area specialists, network-referral services analogous to the AskERIC program. These library-based, online assistance centers could significantly improve the dissemination of federally-funded scientific, technical, consumer safety, and health information. This recommendation offers threefold benefits. First, it emphasizes the placement of additional public-interest content on the Internet and supports existing government information dissemination objectives. Second, it recognizes that the Internet is still a relatively user-unfriendly environment and, accordingly, provides humanmediated assistance pending a time when automated retrieval tools might suffice. Third, it provides a relatively cost-effective means of leveraging the use of existing public institutions (public libraries) to improve access to electronic information sources. Many of these sources remain under-utilized due to lack of public awareness.

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Focus on Improving

Public-Institution

Access to Existing Information

(Library and School) Services

Approximately half of U.S. schools and public libraries are connected to the Internet or commercial online services. The General Accounting Office reports that “schools in central cities and schools with a 50-percent or more minority population are more likely to have insufficient technology....“67 Smaller public libraries are similarly disadvantaged.68 Congress has taken a positive step in this regard by directing that public health care providers, schools, and libraries be provided preferential rates for telecommunications services.” Congress specifically provided for the provision of advanced telecommunications services directing the commission to “establish competitively neutral rules... to enhance, to the extent feasible and economically reasonable, access to advanced telecommunications and information services for all public and nonprofit elementary school classrooms, health care providers, and libraries.... “70 However, as mentioned above, external telecommunications generally represents only 3.5 to 15 percent of total costs. Accordingly, even a substantial discount in the telecommunications charges does not imply that these public institutions will be capable of employing advanced information technologies. Installing sensible configurations in every public school, health care facility, and library is an important objective. Costs, however, can be minimized by providing centralized access facilities analogous to computer clusters found on many college campuses. In their report to the National Information Infrastructure Advisory Council (NIIAC), McKinsey & Company identified four models for estimating the cost of connecting K- 12 schools to the Internet.” The models ranged from support of a single computer lab with 25 computers to a model in which all classrooms had computers (one computer for every five students). McKinsey & Company estimate that $11 billion would be required to support the initial deployment of the centralized school-lab model to all of the K- 12 public schools in the United States, and $47 billion to deploy the classroom model.” An additional $9 billion would be required to deploy a lower-end, professional-quality, dedicated video infrastructure with the classroom mode1.73 In the face of such large total costs for implementing advanced information technology, public officials must take care not to be drawn into overbuying sophisticated telecommunications simply because the price seems right. The recommendation to proceed with connecting public schools and libraries to the Internet does not imply that schools or libraries should not offer advanced telecommunications services such as video teleconferencing. Networking and information processing capabilities are very scaleable and should be tailored to the particular needs and capabilities of the public institution. For example, it may be more beneficial to allocate funds to the purchase of a CD-ROM server, LAN, additional personal computers, and higher speed Internet service than to invest in a broadband video-conferencing service. President Clinton proposed a five-year, $2 billion federal grant program to the states to improve “technology literacy.” This proposal represents an important step in ensuring that the total information technology needs of public schools are addressed. The funds would be used to provide teacher training, develop software and online learning resources, and upgrade information technology infrastructure in schools.74

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of Personal Computers

Currently. only about one third of U.S. households have personal computers7s Owning a personal computer or having ready access to public computing facilities is a necessary first step in achieving meaningful NII connectivity. With the increasing use of personal computers in schools, children living in households lacking a personal computer will be increasingly disadvantaged irrespective of advances made in networking. A variety of innovative programs could be developed at federal, state, or local levels to address this issue. Some degree of support from computer manufacturers and software developers should be possible, given the long-term advantages to their industries. Businesses and individuals should be encouraged to donate used systems to public-service organizations when they upgrade. It may be possible to implement a sliding-scale subsidization program for the purchase of personal computers by families with schoolaged children. The key is for schools to identify for students and their parents the advantages of computer ownership. The objective is to place personal computers into the homes of all students as a necessary first step toward achieving computer and network7’ literacy and building demand for networked information services.

CONCLUSION Advanced telecommunications and information services must not be considered a technological panacea for social problems. Exaggerating the benefits of technology risks disillusionment and may contribute to a failure in fully realizing the benefits that technology can potentially provide. The arguments presented in this article primarily concern an issue of timing. In order to achieve society’s social objectives, the resources required to effect universal access to advanced services could be better spent extending basic services: upgrading POTS connectivity, developing public-interest electronicinformation resources, connecting public institutions to the Internet. and expanding computer ownership. The focus placed on telecommunications regulations resulting from passage of the Telecommunications Act of 1996 may limit a more systematic appraisal of the social equity issues of concern. The Act lays the groundwork for focusing resources on connecting public institutions to the NII. However, as outlined above, subsidized connectivity addresses a relatively small portion of the costs to be faced by those public institutions attempting to exploit more fully the services of the NII. Additional resources are necessary to obtain the internal technology infrastructure and staff training to utilize proposed connectivity. Public resources are tight. and Americans’ faith in many of their public institutions is shaky. There is well deserved skepticism concerning the promised benefits of the “information superhighway.” Rather than taking an “if you build it, they will come” approach, this article suggests that immediate steps can be taken to build incrementally the demand for NII services by providing the public exposure and training through public institutions. This incremental approach will eventually foster the economic demand ultimately required to accelerate development of the NII. Furthermore, state and local governments can make substantial advances without federal assistance. The public library community is already making significant investments in

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networked-based resources and services-but additional strategies and support are needed.” North Carolina’s Information Highway project exemplifies the type of programs that states are capable of initiating, albeit also exemplifying some of the risks associated with pushing technology. The states will continue to have latitude in determining intrastate telecommunications-service charges, providing electronic sources of state information, and directing allocation of public-school and library funding. By focusing more directly on the social and economic objectives of the NII rather than emphasizing the implementation of seductive new technologies, federal and state policy makers are likely to expend fewer resources and more rapidly achieve their social and economic objectives, Acknowledgements:

Research reported in this article was funded by the National Science Foundation, NSF Grant RED-9454732. A previous version of this article was presented at the 23rd Annual Telecommunications Policy Research Conference, Solomons, MD, September 30-October 2, 1995.

NOTES 1. Paul Krugman, “Long-Term Riches, Short-Term Pain.” T/m Nrrr York Timrv (September 2.5, 1994) p. F9. 2. Department of Commerce, Information Infrastructure Task Force, The Nurioncd Infim~cr/ion I~~frc~.struc~urr: A,qrnd~~,for Action (Washington, D.C.: GPO. 1993). 223(40) (January 3. Vice President Albert Gore. “We’re All Going to Be Connected,” Thr I44111.Prwt JmrwI, Il. 1994). p. Al5. Policy Committee, 4. Department of Commerce. Information Infrastructure Task Force. Telecommunications Thr N/I I;i~ld Hrtlrings on Uni\vr.\cd .%nYw md 0pm A~ess: Atnrricu Spmks Out. NTIA Special Publication 94-29 (Washington, D.C.: Department of Commerce, September. 1994): National Telecommunications and Information Administration. Inquiy on Univurxrl SmGw crnd 0pen Awrs.s Issurs, Docket No. 940955425 (Washington. D.C.: Department of Commerce. September 19, 1994). Act of 1996, PL 104-104. I IO Stat. 56 (to be codified at 47 U.S.C. Sec. 151 et .sry.). s. Telecommunications For clarity and consistency with FCC documentation. references to provisions of the 1996 Act will use the sectionr at which they will be codified. 6. 47 U.S.C. Sec. 15 I rf .wq. 7. U.S. v. American Telephone & Telegraph. 5.52 F. Supp. 13 1 (1982) Modification of Final Judgment. 8. PL 104-104, Sec. 254(a)( 1) and (2) direct the FCC to appoint the Federal-State Joint Board within one month of the bill’s passage. The joint board is to make its recommendations within nine months. i.e.. November 1996. The FCC is to have completed proceedings to implement the joint board recommendations within IS months of enactment and implement subsequent recommendations of the joint board within one year after receiving such recommendations. 9. Federal Communications Commission, Notice of Proposed Rulrmtrking in thr Martrr r~fF&rcrl-Sm~r Joint Bocrrd on Universrr~ .S?miw FCC 96-93. CC Docket No. 96-45 (Washington. D.C.: March 8, 1996). p. 3. 10. David Kaut. “Federal-State Joint Board Examines Universal Service Cost Reforms,” Dcri/v Rqmrf,fiv twutirr.v, (June 7, 1996). p. Al 10. 11. For example, see: David Kaut. “Markey Exhorts Groups to Demand Free Telecommunications E-Mail for Nation’s Schools,” Dai/y Rqxwl,fiw Exeutiws, (June 11, 1996), p. A I 12; David Kaut. “Free-Market Backers Pessimistic about Blocking Expansion of Universal Service,” Burectu c?f Ntrtionul A&m, Inc. MNIZU~rr.5’ BGfing, (May 3. 1996); Mike Mills. “Phone Firms See Higher Local Rates: Average Bill Would Rise $10 a Month to Subsidize Service,” Washin#m Post (May 7. 1996), p. AOl. 12. For example. see: Francis D. Fisher. “What the Telecommunications Infrastructure Could Mean to Our Family.” A Nutionrrl Infiwmcrtion Network: Chunginfi Our Lives in the 2lst Century (Queenstown, MD: Aspen Institute, 1992) pp. I- 18: Susan Cl. Hadden, Technologies of Universal Service. Univrrscll Telrphonr SeenBiw: Rrrrdvfiw the Zlsl Cmtun: (Queenstown, MD: Aspen Institute. 1992). pp. 53-92; Mary Gardiner Jones, “The Consumer Interest in Telecommunications Infrastructure Modernization,” Information /nfrcl-

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38. 39. 40.

41. 42.

43. 44. 45.

46.

47.

38. 49.

50. 5 1. 52. S3.

54.

55. 56.

57. 58. 59. 60.

61. 62.

PO/ICY /nmat,ves

25

Albert Gore, “Infrastructure for the Global Village.” Scienrijic American (September, 1991), p. 15 1. Center for Media Education, Petition for Relief. The Center for Media Education petition represents diverse public-interest groups. including: Consumer Federation of America. Office of Communication of the United Church of Christ, the National Association for the Advancement of Colored People and National Council of La Raza. Center for Media Education, Petition for Relief, pp. i-ii. Statement of Charles R. McClure before the U.S. Congress, House of Representatives. Committee on Science. Space and Technology, Subcommittee on Science, Hearings on Internet Access. (October 4, 1994). Available through ERIC Clearinghouse as ED37682 1. PL 104-104 Sec. 254(b) (2). Ibid., Sec. 254(c) (1). Russell I. Rothstein, Connectin!: K-12 Schools to fhr NII: A Preliminu~ Assessment of Trchnolog?: Models rtnd ThrirA.v.rocic&d Cosrs (Washington D.C.: Department of Education, Office of Educational Technology, August 4. 1994) and McKinsey & Company, Connrcrin!: K-12 %hools to thr Informcrrion Superhighway (McKinsey & Company, Washington, D.C.. 1995). Charles R. McClure, John Carlo Bertot. & John C. Beachboard. fnrrrnrl Cost.\ cmd Cost Modrlsfijr Public Librcrrir.s (Washington, D.C.: National Commission on Librarie\ and InformatIon Science, June 1995) for a description of Internet connectivity models, cost elements and estimated cotts. John Carlo Bertot, Charles R. McClure. & Douglas L. Zweizig, Public Librcrries rend rhr lnrrrnet Survr~c Progrer.v cmd Issues (Washington, D.C.: National Commission on Library and Information Science, June 1996). The percentage of Internet-connected libraries increased from just over 20 percent to approximately 34 percent between 1994 and 1996. National Center for Education Statistics, Advanced Tr/rcommunic,cr/ions in U.S. Public Elemenlcrp tmd Sect ondory .%hool.~ NCES 96-854 (Washington, D.C.: Department of Education. February. 1996). See Leslie Cauley. “Interactive Trials Are Trials Indeed-Tough to Start and Tough to Judge” and Bart Ziegler. “Building the Highway: New Obstacles, New Solutions,” The Wcd1Street Journcd ( May 18, 1994). p, Bl: Elena Bowes. “Delays Hit UK Interactive TV. Too,” Advrrtisin,? Agr (November 21, 1994). p. 17; Edmund L. Andrew, “Discord and Delay for Bell Atlantic Network.” Thp New, York Timr.v (September 9. 1994). p. Dl. John Malone, quoted m: Jeff Jensen. “Cautious Convergence at Cable Show.” Advertlsinx A,qr (December 5. 1994). Michael Csenger. “State’s ATM Net Runs Fine-Now for the Hard Part.” Nr/work World 12(4) (January 23, 1995). p. 8. Charles R. McClure, John Carlo Bertot, & John C. Beachboard. Po[ic.x 1ssue.s in A.ssrssin,q the Role ofPubIi<, Librcrrir~ in the N/I: Fined Report Compendium. NSF Grant RED-9454732 (June 1995): Appendix K. These are subsidized rates made available through the North Carolina Research and Education Network (NCREN). At the time of the above-referenced NSF study. library and school officials were concerned that the NCIH was to supersede the NCREN and that access to the favorable pricing would be lost. Everett M. Rogers, Diffirsion of’/nno~~c~/ion.s (New York. NY: The Free Press. 1983). p. I, Ibid., p. 126. See for example: M. Lynne Markus. “Toward a ‘Critical Mass’ Theory of Interactive Media,” Communic~crrions Rr.srrrrch. 24(S) ( 1987). pp. 49 1-S 11: Paul Attewell. “Technology Diffusion and Organizational Learning: The Case for Business Computing.” 3(l) (February 1992). pp. l-19: Hadden. ‘*Technologies of Universal Service.” Rogers. Dijffusion of'/iIno,,cr/ion.v. pp. 238.240. National Telecommunications and Information Administration, Docket No. 940955.425, p, 48 I IS. Bertot. McClure, & Zweirig, Public Llbrunes crnd the In/rrnel SU~VJ. Congress. Senate. Subcommittee on Education. Arts and Humanities. Exunining rhr Role ofLibrtrrir.r in fIr~~/opin~ Amrrictr :s NC&V/q%rmcrrion Irzfrtrsrrucrurr. S. Hg. 103.569 (Washington. D.C.: GPO. April 19. 1994). On November 14-18, a virtual conference, sponsored by NTIA was held on the Internet. The findings of this conference are available on the WWW at: http://ntiaunix2.ntia.doc.gov:70/1 Is/virtual. See. John Borrows. ‘Vouchers and Universal Service,” The Ntrtioncrl Rr,q&for~ Resrurch Instirutr Quuru,rI\. Rullrrin, 16(3) (Fall 1995). pp. 423-434, and discussion on denial of local telephone service due to unpaid toll charges in Federal Communications Commission, CC Docket No. 9% 115,FCC No, 95-28.

26

63.

GOVERNMENT

INFORMATION

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Vol. la.iNo.

111997

Set Pamela Samuelson. “intellectual Property Rights and the Global information Economy.” C’omwwri~~cr/iw~.\ of th<, ACM.

3% I)

(January 1996). pp. 23-28 for a critical discussion regarding provision\ and omls-

sons of the Information Infrra\tructure Task Force. Worktng Group on Intellectual Property Right\, “Report on lntcllcctual Property and the Nntlonal Information Infratructure” 64.

Some tnteresttng government-sponsored page [http://www.whitehouse.gov/].

Thomas. the U.S. Congress’\ home page Ihttp://thomaa.loc,~~~~/~. the

Michigan Electronic Library [http://nlel.lib.tnt.us/] C;ui& 10 Gntvntrnmr Pre\\. 65.

Chxler

(Sept. l9YS5.

Sites on the World Wide Web include: The Whttc House home

IQi~rrntrt~rm Awikhlr

and AskERIC

cm the lrltrrrwr

[http:l/ericir.syr.edu].

(Syracuse.

NY:

See al\o Jot Ryan.

Ryan Information Management

1995). Available from the author at [email protected]. R. McClure &Joe Ryan. “Moving to the Networked

Irsuc\.” ~~&rtr/

/rt/onwrion

Information Envtromnrnt: New Challenge\

Kr

)_‘o/ic~ic\i,z t/w /YYO’\: Iwrc~., ruul Cur!flic /.$. edited by Peter Hernon. Charle\

R. McClure and Harold Relyea, Norwood NJ: Ablex

( 19961.

66.

AskERIC:

Update. 15. Sprtng 1993.

67.

General Accounttng Office. .%~/w~~/I;trc,i/r/ir\: Awcr?ur :$ .S(~lw~~l.\A’OI f)c~.sig~w(l0) l5~rri~~~w~l fi~r /Ix, _7/51 (‘en!ur\.,

ERIC & the Internet Continued. ERIUIR

HEHS-OS-Y5 (Washington D.C.: GAO. Apr1I IYYS). p. 2

6X.

1996 NCLIS

6Y.

PL 101-103, Sec. 253(h).

70.

Ibid.. See. X%(h)(2).

7 I. McKimey 72.

report with \ome explnnatory note\.

& Company. <‘wmrc./rr~,qK- I2 S?/to~~/\ 10 ~llc /~~/ormrrrim

Su/“‘rlli,~/t~~,~r~.

Ibid.. p, 21. Recent development of network perqonal computerc may provide a \ignificnnt opportunity for lowertng public institution\’ PC: -I Key Technologc\

71.

pp. 297-3 13.

McKinwy

internal information mfrawucture

cat\.

See Tom R. Halthill. “ln\lde the Web

That Will Make the Internet Fly.” Rut, 21(3)(March.

Xr Company. (‘wmcwiqq

K- 1-7 SC/w,>/\ 10 l/w /n/~~rmr/ion

1996). pp. 33-56

.Sul?[,rhf,~lnr,[r?:

p. 75.

7-1. “Cltnton Unveils $2 Billion Fund of Matching Grants for School Computers.” I)tri/y Kr/xw (Fcht-wry

7.5. National Telccomtnuntcattot1s and Information

Admlnistratmn,

“Htrw h’or.c” 11,Kuwl uru/ C/r-/w/l ,lrw,-i~a (Wa\hinpton,

bn//ir~,v /h,r~ugh /he ,Xer: ;\ Suwev r)/ /ire

D.C.: Department of Commerce. July I YY5 1. Hou

L’\CI. the percentage varie\ drntnnttcully by income and place of t-raidence. Approximately rut-al hou\chold\

-1.5 percent 01

\\ith income\ le\\ than 5 10.000 have home computers. In contru\t, a little wcr 61 pcrccnt

of urban houvzhold\ wtth tncomc\ cuxedtnp 76.

for- ttrr,ufi\,c\

16. 1996). p. A??.

Charle\ R. McClure.

“Net&o&

$75.000

have home compulers.

Litct-acy m an Electronic Environment: An Educational Diw~nnect.”

h.tlrln~/c,ci,q,I:‘ullIlll,!v. 7‘111,~l’crrurr, cl/ Itlfi~umrlrrm

irl

f/w

21.~1 C‘rntrtn

(Queenrtown.

I’lw

MD: A\pcn Institute.

190-l). pp. 137.178. 77.

Charlc\ R. McClure, John Carlo Bertot. Nr John C. Benchboard. “Enhanctng the Role of Public Ltbrarle\ In the National Inform;~tion Infra\tructurc

(NIII.”

Puh/i~~ Lihnrric.s. 35(1)(July/August

1996). pp. 223-738.