
Boston Globe, Sept. 23, 2002
"Closing the Digital Divide"
By John Conyers, Jr. and Mel King
In the same way that the technology sector fueled the economic boom
in the latter part of the 1990s, the implosion of the technology sector
is creating a drag on economic recovery. Since 2000, technology companies
lost nearly $2 trillion in paper value on the stock market, witnessed
the elimination of 225,000 jobs one-fifth of the total jobs lost
in the country and accumulated as much as $400 billion in questionable
debt.
In our quest to revitalize this essential sector, we must realize one
of its past shortcomings: too few people participated in the information
revolution. Indeed, only 30% of African Americans, and 32% of Hispanics
use the Internet, usage rates less than half that of the general population.
And while the next and most promising generation of Internet transmission
technology known as DSL or broadband is available in 85%
of American households, only 12% of households actually choose to use
the pricey service.
Revitalizing the technology sector requires first and foremost public
policies that will bring more Americans into the information age as full
participants. This is especially important in African American and other
communities of color where technology, if readily accessible, helps our
communities overcome historical racial inequities in the marketplace.
Problems of dusty, outdated school textbooks can be clicked away on line;
innovative software knows no color barriers.
One of the most important things that Congress ever did in this respect
was to pass the 1996 Telecommunications Act. It required the Bell monopolies
open their transmission pipelines to competitors who wanted to develop
innovative services. The law gave the Bells some handsome benefits it
allowed them to charge these competitors profits leasing these transmission
lines, and to enter the lucrative long distance market as well.
It was a first step, and is now showing great promise. It has opened
the door for hundreds of our small businesses African American
Latino, Asian and Native American to be part of the information
age as entrepreneurs. These small telecom companies now offer service
to 16 million consumers, generally at prices 10-50 percent less than
the Bell companies. And in states like Michigan where competition is
vigorously enforced, the Bells have been forced to slash basic phone
rates by a third, from $21 to $14, saving consumers in that state $27
million annually.
All told, competitors have invested well over $65 billion in new networks,
and today account for over 60% of local Internet traffic passed over
new networks built by local competitors. Surveys show that consumers
and small businesses prefer their services. And it is these small businesses
that are the ones likely to provide the necessary service at affordable
rates in urban communities and communities of color.
The policy idea behind all this is called "market-access" or "open systems." And
it's become the acid-test of civil rights in the technology arena. Because
without open systems, our small entrepreneurial firms can't get access
to the essential transmission pipelines and will never bring their innovative
services to the market. And without open systems, there will be no competition
to bring down prices so Americans of modest incomes can participate in
the information age on equal footing. It's the technological equivalent
of getting a seat on the bus.
Amazingly, Congress is now considering legislation that would not strengthen
the 1996 Act, but effectively repeal it. Why would it consider such a
thing? If you're guessing that the Bell monopolies are pushing it as
their number one Washington priority you're right.
The truth is that, while the Bells told us they'd support the democratizing
requirements of the 1996 Act, they never fully supported it. In Massachusetts
and elsewhere throughout the country, they've been fined over $2 billion
for thumbing their nose at the Act.
Their goal is to wear down competitors and regulators to keep their
systems closed. According to numerous published reports, they have repeatedly
attempted to put out of business one of the most promising young African
American telecommunications entrepreneurs Keith Machen of Baltimore by
repeatedly thwarting his access to the transmission lines. As such, they've
managed to cling to their monopoly, holding onto to nearly 90% of the
market, and controlling nearly every phone line going into the home.
The Bells argue today that we must revert back to closed systems, because
leasing their transmission lines to competitors, they say, causes them
to lose money they would otherwise use to deploy more fiber for broadband
networks.
But in Verizon v. FCC, the conservative and pro-business U.S.
Supreme Court called their story "patently absurd," and noted conversely "actual
investment in competing facilities since the effective date of the Act
simply belies the no-stimulation argument's conclusion." Further, the
problem is not deploying new high-speed (a.k.a. broadband) networks 85%
of American households has access to them. The problem is that prices
as high as $50 per month puts them out of reach for most Americans, including
in our communities of color.
Does the proposed repeal of the 1996 Act sound counter-productive and
anti-social yet? Well there's even more. Their bill proposes to preempt
state regulators from protecting Massachusetts consumers from overcharges
and other abuses. One state recently found that its Bell company had
overcharged consumers $350 million for local telephone bills and millions
more for DSL service that consumers never received. Questions have also
been raised as to whether Verizon, through accounting games, is passing
on false equipment expenses to Massachusetts consumers.
Other countries, by contrast, have seen the light. South Korea champions
competition as its principle policy to keep its telecommunications sector
vibrant. Broadband usage there is four times as high there as it is in
the United States. Economic growth and civil rights go hand in hand.
Bringing more people to the economic table means more innovation, lower
prices and a bigger customer base. And there is no principle that ushers
that along better than market-access. It's a calling card for economic
civil rights in this new millennium.
# # #
John Conyers, Jr. of Michigan is ranking Democrat on the House Judiciary
Committee.
Mel King is senior lecturer emeritus in MIT's Department of Urban Studies
and Planning and a former state representative from the South End and
Roxbury.
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