Greedy clicks

Why President Clinton's new initiative to bring low-income households online could help Silicon Valley's bottom line more than it helps the poor.


Todd Oppenheimer
February 2, 2000 10:00PM (UTC)

What would politics be without its déjà vu delights? An initiative hinted at in President Clinton's State of the Union speech last week, and unveiled more fully this week, proposes a classic sleight of hand. The concept involves a five-year federal subsidy to help the nation's poor get online. Dubbed "ClickStart," it's supposed to solve a problem that has almost become a cliché: the growing "digital divide" between rich and poor, most pronounced between whites and nonwhites. But this has the feel of one of those well-meaning partnerships with industry in which the government gives away the store.

The initial sum is paltry enough -- $50 million, a mere asterisk in the budget of the Commerce Department, which would administer ClickStart. But the program is likely to grow substantially. Its backers hope to eventually reach all 9 million households on the food-stamp rolls. This first $50 million will cover only 300,000 of them.

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What's soft-headed in the deal becomes clear in its details, which have so far been reported in remarkably foggy fashion. Here's how it works: Commerce issues monthly vouchers, worth $10 apiece, to qualifying households -- that is, any families that certain community groups have identified as being on food stamps, without computers and with children in the public schools. The families add a monthly $5 of their own, which gets them a simplified version of a full-service computer and Internet access. Payments cease after three years.

The catch is in where this money goes, and what it buys. During his speech, Clinton said, "I thank the high-tech companies that are already doing so much." For whom? The families' and the government's monthly $15 goes solely to the companies that are "donating" the computers. After three years, those contributions come to $540 for each system. That's precisely what these computers are expected to be worth on the open market. Indeed, one of ClickStart's lead architects, Garrett Gruener, a Silicon Valley venture capitalist and the founder of Ask Jeeves, admitted that one company -- Be Inc., in Menlo Park, Calif., -- is planning to build a computer specifically for this market, and will happily fulfill every order.

No wonder. During the five years envisioned for the initiative, the price of computers is expected to drop precipitously, which means that Be and any other firm shrewd enough to cash in on the deal may do quite nicely. Gruener hopes that as prices drop, the program will compensate -- by giving away more computers, or by dropping the contribution requirements. But there's nothing in the ClickStart business plan spelling that out. And doing so will take some very aggressive oversight, for which the feds do not have a particularly stellar record.

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Most telling, perhaps, is that the plan isn't even supposed to be philanthropic. "I don't have any problem with these companies' making money," said Gruener, who happens to sit on Be's board. "You can argue that this is self-serving," said Eric Schmidt, chief executive of software development at Novell and another mover behind ClickStart. "But our feeling is that while this is good for us, it's also good for the world."

Not if it proceeds as planned. Curiously, the support anchoring ClickStart is being left almost entirely to community groups. Yet they're not slated to receive a nickel. This is no small matter.

Leaders of community agencies long active in trying to bring technology to the poor point out that ClickStart will be a sham if it offers nothing more than Net connections and cursory training. One reason is the limitations of the material available on the Net, geared as it is to information for white middle and upper classes and indulgent consumption. The poor's needs are more basic - primarily food, clothing, employment and good job training.

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An example of one effort on that front is the Appalachian Center for Economic Networks in Athens, Ohio, which is helping local food producers use the Net to connect with buyers, and with information about economic trends and competition. But it's not easy to build those skills. "The tough issues are the brick-by-brick building of connections between people at a very individual level, which is a painstakingly slow process," Preston Moore, coordinator of the Digital Divide Working Group at the First Unitarian Church in Oakland, Calif., recently told the New York Times.

This is what worries Daniel Ben-Horin, president of San Francisco's CompuMentor, one of the nation's largest providers of technology assistance to nonprofits and schools. Training and support for a poor household, Ben-Horin notes, is different from the sort of technical support the computer industry is used to. "Support doesn't mean waiting for people to call with questions," he says. "Often, they'll never call. They accept the hype about computers being plug-and-play machines and they feel stupid for having problems." In a large household with one phone line, he explains, a computer and Net connection "can be a source of conflict and frustration rather than empowerment." As consumers, Ben-Horin adds, the poor also tend to be particularly susceptible to sly advertising pitches, for which the Net is proving to be fertile ground.

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ClickStart planners want to keep advertising to a minimum with these systems. But free Internet services, or discounted computers, are being increasingly offered with onslaughts of advertising. And Gruener expects they would offer families the option to sign up for arrangements like that, as a way to reduce their costs. That can open a formidable floodgate of trouble. Just last week, there were news accounts of e-commerce firms using "Netreps" who lurk unseen over a shopper's Net browsing, waiting to pop up on the screen offering "assistance."

All of which raises an obvious question: Why is Clinton giving this freebie to the computer industry in the first place? Fifty million dollars is pocket change for this crowd. In fact, if Congress decides not to fund the initiative, ClickStart organizers say they're going to try to raise private funds for it, anyway. Why not start now and show support for what's supposedly today's preferred approach to social problems: less work by government, more from the private sector.

Wade Randlett, of Red Gorilla and another organizer of ClickStart, worries, perhaps correctly, that private initiatives, such as foundation grants, generally remain too uncoordinated to solve a national challenge.

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"It never scales," he says. "It doesn't get to everybody." That may be true. But that's where government is supposed to step in. It's called leverage. Building a population of technically savvy citizens obviously speaks to the financial interest of any computer firm. That should enable Clinton to strike a very different deal, one that approaches technology companies this way: If you help out with the hardware and Internet services, the feds will concentrate on the noncommercial understructure -- boosting good training and good Internet material. The point is, if taxpayers are going to be asked to pay for someone else's computer time, they deserve some assurance that it adds to the public interest. Both industry and the feds could do that more directly if they focused their generosity on the growing number of community technology centers across the country -- there are now more than a thousand -- where training and support infrastructures are already in place, often with a clear civic orientation.

High-tech enthusiasts often compare the Internet to the age of electrification, when wiring the entire nation was a paramount public concern. Gruener compares Internet access to telephones, where everyone, rich and poor, gets some basic level of service, and the phone companies still get to make a profit. But phone service is regulated in ways that, so far, the Internet isn't. Right now, the Internet is more like television -- an add-on, and one full of commercial pressures. When television was developing, what got continually left behind was programming that served the public interest. Eventually, the government had to step in there, too, to redress the imbalance with taxpayer support for public television, and programming requirements for every station. That's government's proper role, and it should do so again with the Internet.

The promoters of ClickStart trace their idea for its name to another historic program: Head Start. Actually, it sounds more like "Kickstart," the initiative Clinton launched in 1995 to put computers into the nations schools. After many billions spent on that campaign, there is still no solid evidence that most uses of the computer in classrooms boost learning. There is, however, plenty of evidence of the computer industry making hefty profits in the schools. Déjà vu all over again.

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Todd Oppenheimer

Todd Oppenheimer is a San Francisco writer. He is the author of "The Computer Delusion," a 1997 Atlantic Monthly article that won a National Magazine Award and is now being expanded into a book, to be published by W.W. Norton & Co.

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