Divide, then multiply

Among the most dangerous activities a journalist can partake in is mathematics. Most reporters learn fairly early in life that numbers don't agree with them and quietly migrate to a less quantitative pursuit.

Of course, that doesn't stop most of us from using mathematical references. In recent weeks, we've heard quite often about the digital divide - the idea that the gap between rich and poor in this country (and elsewhere) also translates to a division of access to higher technology, specifically the Internet.

The topic makes for great political fodder, especially in an election year. It takes almost no intellectual capacity to stand on a platform and proclaim that you're behind the idea that every American should have faster access to the Internet. It's almost like claiming to be pro-education: Virtually no one - particularly a candidate stumping for votes - would claim to support bad schools.

The statistics back the argument that a majority of Americans do not enjoy the fruits of the Internet boom. A recent report from the departments of Agriculture and Commerce, titled "Advanced Telecommunications in Rural America: The Challenge of Bringing Broadband Service to All America," put computer ownership at slightly more than 40% of U.S. households. The same report said one-quarter of all households had Internet access at the end of 1998. While that number has improved somewhat, studies show that a majority of U.S. households are not connected to the Internet.

Unlike many issues surrounding access to wealth-building tools, though, the digital divide is less a matter of economics and more dependent on geography. People living in rural areas have the least amount of access. The Agriculture/Commerce report notes that the primary impediments to broadband rollouts in rural areas have to do with technology, economics, universal service and opening local markets to competition.

Like most issues, the messy part is figuring out what to do about it.

A pure capitalist would say do nothing, that those without the means to purchase access to such goods shouldn't be given anything because it would destroy the competitive desire to improve their lots in life. On the other end of the spectrum are those who want the government to fill in the gap with billions of dollars in subsidies to buy devices for people who can't afford them. The solution is probably somewhere in the middle, and telcos, ISPs and cable operators likely will play a central role.

In many cases, carriers will receive new funds to extend service. However, with the entry ofnew media players, nothing in the new environment of guaranteed advanced services is guaranteed, and the possibility that a non-traditional carrier will be part of the universal service mix is increasing.

Last week's spitting contest between Time Warner and Disney over the local ABC signal in several markets served notice that there won't be any single winner in the content vs. distribution war. Content is king only if it is distributed and accessible to subjects. Conversely, distribution networks such as the Internet and the public network are only as valuable as the bits of conversations or data flowing over them.

Services such as high-speed Internet access are destined to become part of the universal service definition. And like it or not, telcos with a 94% penetration rate in U.S. homes will be a part of the new equation.