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The IRS, Community Networking, and Public Policy

Shava NERAD <shava@digitaldivide.org>


This paper documents the two-year history of the United States' Internal Revenue Service (IRS) examination of nonprofit Internet services, and the resistance by community networking and other interested parties. The IRS put forth a policy decision in August 1998 that the Internet cannot be provided by educational or charitable nonprofits, schools, libraries, or local governments if cost recovery is required.

The author has been at the heart of this controversy, first as the general manager of Oregon Public Networking -- the first community network to fall under compliance audit by the IRS -- and later as the founder of the advocacy organization, datafication.org. She hopes to document the history of this public policy issue and examine the impact on the delivery of services to American communities, comparing the United States with Canada, in particular.

The IRS policy poses a threat to the provision of universal service to the Internet for disadvantaged communities (urban poor and remote rural populations) in the United States. The lack of penetration of Internet access into these communities threatens the viability of the U.S. work force, as our computer and network literacy slides behind the rest of the world's "information societies."

In Canada, this same issue was resolved in favor of free-nets in the courts over three years ago as of the conference date. We will attempt to show that, in Canada, the proliferation of tax-exempt community networks has increased competition by commercial Internet service providers (ISPs) in rural areas.

Extensive documentation of the legal and media resistance to the IRS is available at www.opn.org, including links to the New York Times article of 7 August 1998, and a record of media exposure in Business Week, The Chronicle of Philanthropy, National Public Radio, Public Radio International, and other media.

The speaker will also relate her personal, inside history with this public policy struggle, updated beyond the submission date for the paper, in the hope that the lessons learned can be applied to other Internet public policy issues.

The IRS policy treats Internet access via a modem as a provisioned, commercial utility, without the need for training and community support or involvement. A public broadcasting professional compared giving rural communities unmediated access to the Net to "giving someone a copy of an encyclopedia on CD-ROM, and telling them to put it under their pillow."

In a Federal Communications Commission hearing in 1998, testimony was heard that the commercial market had virtually provided universal service to the Net, since 95 percent of Americans were then living within a local call to a commercial ISP. This statement not only ignores the plight of low-income Americans who wish to access the Internet, but shows a dangerous ignorance of the urban/rural divide. That last 5 percent -- presumably the least densely populated areas of the United States -- represents over half of the land mass in this country.

These rural areas do not have the resources to, as the IRS policy requires, have their schools, libraries, and local governments provide access "free" to the general public. They are a very bad risk for a local commercial ISP, and a shunned market for national ISPs. Rural American and Canadian community networks have repeatedly developed viable markets for follow-on commercial ISPs.

Community networks can provide dial-up access to rural communities using modest cost recovery through fees, grant funding and donations, and community investment through volunteerism. This sustainable model treads lightly on the limited tax base of rural counties. By denying 501(c)(3) status to community networks, the IRS could impose a delay of years on the cause of universal service to the Internet, particularly to remote rural communities.


U.S. digital divide: disaster and opportunity

Many of us would love to believe that the chaos surrounding transitions to an Information Society are leading to increased opportunities. The literature is full of Information Society utopias, mainly from futurists who are American, white, urban, and well-off. But for those of you who are reading this from less information rich societies -- whether in Africa or in rural Nevada or inner-city Miami -- you may have less confidence in how the Information Society is leading to an equitable, fair, free society.

In this paper, though I refer to a few policies from other countries, I am focusing on the policies and opportunities involving access to the Internet and public information in the United States. The problems for the poorest and most remote citizens of the United States may be trivial beside the problems facing some other countries. However, I hope that the picture I present will serve as a foreshadowing of issues to avoid. I hope it also will serve as a heads-up -- a notice that the United States is drawing out of the lead in some areas of workforce and economic development, and that your homelands may be able to profit from this in many ways.

It will not be long before the U.S. workforce is forced to import even more labor from other countries, or lose information industries or the lead in information industries to other nations. Already, one in ten technical jobs goes unfilled for lack of trained workers here [4], and our efforts to teach information, computer, and network literacy are not up to the growth we should support.

I will discuss the U.S. community networking movement and its parallels, some issues concerning the "information underclass" and growing "digital divide," U.S. laws and policies regarding these issues, and the OPN (Oregon Public Networking) case in particular (which may be skimmed by some readers). I will also discuss some possible consequences of the current flow of events (should they remain on their current course), and some proposals for remediation through education and law/policy contexts.

Community networking and the freenet

The Community Network (CN) is a scoped Internet service that is provided for the benefit of the local community.

The (U.S.) Association for Community Networking defines CN, in part, as "comprised of a wide variety of groups that make up a community (e.g., libraries, Universities, K-12 schools, local government, businesses, media, individuals), with special focus on including those who are traditionally left out of community decisionmaking in general, and technology decisionmaking in particular (e.g., low-income, minorities, senior citizens)." [1]

Some U.S. community networks, such as the Boulder (Colorado) Community Network, provide only a local "Web portal," providing local information about local issues on the Web. Other organizations, such as the Seattle (Washington State) Community Network, Oregon Public Networking (Lane County, OR), and Charlotte's Web (Charlotte, North Carolina), provide free or low-cost dial-up, based on formal means testing, to the entire community at a lower level of service than that of a commercial Internet service provider (ISP).

In the United States

Cleveland Freenet

In 1986, a group of interested citizens in Cleveland, Ohio, in the mid-western United States, joined forces to bring a virtual city environment to Cleveland residents. Using a text-based interface, you could enter a "town square," which gave you access to a "library" of information, a "coffee shop" for open discussions, a "city hall" with local government information, and so on.

This model gave rise to an increasing number of community networks, which are now estimated at 350-400 networks serving 600,000 or more Americans. [2]


There are a series of American professional organizations and coalitions that have tried, with varying but little success to date, to organize the U.S. community networks. Many have speculated that this is because these organizations are operating under extreme pressures to survive.

In a marketplace where Internet skills bring a premium, and one in ten technical jobs goes unfilled for lack of trained workers, getting "techies" to volunteer time or to take nonprofit jobs at significantly below commercial scale is problematic. One community network displays a sign in their offices: "Strip-mining Idealism since 1987."

Despite this, U.S. CNs are locally effective. Their leadership shares information over the Internet in e-mail and via Web pages as an alternative to more traditional organizing tools. While it shows the strength of the Net for helping similar but locally scoped community organizations, it is to the detriment of the U.S. CNs' potential to influence policy.


Although American community networking leadership hopes to make a significant commitment to the internationalization of CN organizations, we are not strong leaders in policy at home. In comparison with the United States, many other CN countries have more effectively integrated CNs with their governmental and public policy decision makers.


Canadian freenets (as many Canadian community networks are known) have had better success than their southern neighbors. Canada seems to have the most fertile environment for freenets, perhaps because it is a more community-oriented society, while it is still heavily (and prosperously) invested in the Information Society. In February 1999, Canada's finance minister, Paul Martin, announced that Canada intends to be the most wired country in the world, "to ensure that all Canadians get a chance to learn and profit from the Internet." Canada will put more than 1.8 billion dollars (Canadian) into this project over four years, including sizable investments in community-based networks through their Community Access Program. [3] Because of their liberal grassroots datafication policies, Canada has a head start over the United States.


Community networks are prospering and are effective in many nations. For example:

Building community

No matter where the community networks live, they live on the ground, not in cyberspace. The motto of one U.S. community network is: "Surf globally, act locally!" No matter where you go, you will find that (like many Web sites on college campuses) although the CN may offer resources to the World Wide Web, their focus is a local constituency.

Principles that set CNs apart from their local profit-oriented brethren ISPs include:

Local control of local information

GeoCities (www.geocities.com) may have information on any particular community, but they may not be a source trusted by local people. Geographic "portals" are often commercially oriented and full of information meant to sell rather than to inform the reader.

Means to publish and exchange information

The actual cost of enabling publishing in the information age is truly trivial, contrasted with print. Any organization or individual with a budget (and a wired location) can buy a Web site, but many cannot afford one. For many nonprofit organizations, the costs and learning curves are daunting!

To the provider, the cost of maintaining and supporting Web authors is far higher than the cost of providing disk and incremental bandwidth. Few commercial ISPs will take up the burden of supporting low-income and nonprofit information providers.

Support for community-building projects

Mailing lists, newsgroups, and conferencing systems give asynchronous opportunities for civic and social participation. These opportunities have been increasingly rare in a society where all adults in a household work, and weekends are no longer free for all persons to schedule meetings.

Internet tools give all members of a community a chance to supplement their ability to organize on a local basis, to make strong contacts within their community, and to be recognized for their leadership even when it occurs outside of face-to-face contact.

A social amplifier: Giving voice to those unable to be heard

Low-income, elderly, minority, rural populations, and people with disabilities are underrepresented on the U.S. Internet, and have been in many cases actually losing ground in the past few years (falling through the net!).

Researchers at RAND, a U.S. military/strategic policy think tank, reported in 1995 that,

"We find that use of electronic mail is valuable for individuals, for communities, for the practice and spread of democracy, and for the general development of available National Information Infrastructure (NII). Consequently, the nation should support universal access to e-mail through appropriate public and private policies." [ref]

Also from the RAND report policy conclusions and recommendations:

"Individuals' accessibility to e-mail is hampered by increasing income, education, and racial gaps in the availability of computers and access to network services. Some policy remedies appear to be required. These include creative ways to make terminals cheaper; to have them recycled; to provide access in libraries, community centers, and other public venues; and to provide e-mail 'vouchers' or support other forms of cross-subsidies." [ref]

There has been little tangible government support for such efforts, beyond unfunded policy statements (the National Telecommunications and Information Agency's [NTIA] TIIAP program being one of the few exceptions). National public foundations and nongovernmental organizations (NGOs), such as the Kellogg Foundation, Merino Foundation, Corporation for Public Broadcasting (CPB), and a handful of others, have funded projects to establish these measures for communities all over the United States.

TIIAP's and CPB's budget cuts, and Merino's focus away from CNs, have removed some of the national level support for CN projects, and foundation money is increasingly tight -- there are too many needs.

Many of the successful grantees have been CNs and associated organizations such as CTCnet. The reports from equitably wired communities are hopeful, showing that nonprofit, social, and civic groups thrive -- one community network hosts over 700 nonprofit accounts in a town of about 120,000 -- and there is better communication between government and citizenry. For example, many CNs host "virtual town hall" meetings, online chats with decision makers, and face-to-face meetings with decision makers.

"E-mail is not like a commodity or a gadget, where we've grown to expect socioeconomic stratification," noted Tora Bikson, the co-author of RAND's Universal Access To E-mail, in a December 1995 interview. "Rather, it's much more a means for accessing information, communicating, and exchanging ideas, and participating in voluntary associations, civic organizations, (and) political activity...If people are cut off from the means to participate in these kinds of activities, it really has a negative impact on society as a whole."

Carol Edwards, director of programs at the National Education Association's National Foundation for the Improvement of Education, blames the technology gap partly on the way computer technology is sold. Cars, furniture, housing, and other big-ticket items often come with financing options, but computers, which are marketed mainly to the middle class, often must be bought all at once. "Look at where you buy computers: in upper-class malls or through mail order," Edwards says. "People in poor communities don't have easy access to these distributors." Nor do many poor people have checking accounts or credit cards, which often are required to get an Internet account, she adds (from Bit by Bit).

But CNs such as Oregon Public Networking (OPN) recycle old computers -- 286's and MacPlusses and up -- for equipment lending libraries to needy families and the nonprofits that serve them. OPN also teaches a class, "How to get on the Internet for less than $50," and offers text-based Unix shell accounts, and technical and instructional support for older computers, which has become atypical of commercial ISPs in this country.

For example, to enroll in America Online's (AOL) service, you must have a fairly modern Mac or PC, and a credit card. If services such as AOL were the only option, many low-income Americans would have no option to use the Internet aside from public access points.

Extending the reach of community-based nonprofits

With over 700 nonprofit accounts, and hosting the Lane County [Social Services] Information and Retrieval database, Oregon Public Networking is the heart of the nonprofit infrastructure. Eugene, Oregon, boasts the highest count of nonprofit organizations per capita in the United States, due to its pleasant living conditions and Oregon's liberal nonprofit laws. But many of these organizations are national, even international in scope, and are very poorly funded.

Most nonprofits cannot hire professionals to upgrade their use of information technology. They cannot buy new computers -- or any computers. Yet the value they deliver to their communities is effective beyond their budgets, and this is why they are supported by donations and by tax exemption.

CNs are among the organizations working to increase the effectiveness of the nonprofit sector, by extending their missions via the Web, mailing lists, online grant applications, and low-cost member communications via electronic media.

In addition to dial-up and walk-in access, CNs such as OPN provide Web authoring training, tutoring in online advocacy and member communications, cost-recovery color printing, and free e-mail lists, newsgroups, and Web conferencing.

By assisting those who assist the disadvantaged, CNs provide leverage to the good works in their communities.

Local access, affordable or free, and public access

There's a differentiation made between public access -- where an end user walks into a computer lab and uses the computer there -- and dial-in access, where the end-user's equipment accesses the network from home.

"Our research leads us to conclude that two implementation issues are particularly critical in this context: ensuring access to computers and providing adequate training and ongoing technical support. In addition to home access, options for network access in public places (e.g., libraries, schools, public buildings, hotel lobbies, business centers) should be established. Offering training and support services at such locations also should be considered." RAND Universal Access to E-Mail, Chapter 5 CIVIC NETWORKS: SOCIAL BENEFITS OF ON-LINE COMMUNITIES, conclusions

Canada's Community Access Program (www.cap.ca) has rural telecentres in towns scattered across Canada. In the United States, community technology centers (CTCs) are fostered through CTCnet and many CNs.

In CTCnet's 1998 survey, public access center use shows gender equity (62% of users were female in a recent study), age diversity (users ranged from 13 to 91 years old), and ethnic/racial diversity (2/3 identified as non-white). [8] This is far from the case of Internet users in the general population. [9]

Sixty-five percent of respondents took CTC classes to improve their working skills, and 30% used the facilities to seek work -- finding significant success.

More than half of the users -- presumably mostly users without dial-in access -- considered it fairly or very important to come to the center to get access to information on local, state, and federal government information. [10]

About 3/4 of the users of CTCs reported household incomes in ranges under US$30,000, and over half reported incomes less than US$15,000. By comparison, the 1997 U.S. median income was $37,005, and the poverty threshold for a household of three was about $12,802.

One of the pleasant results was that 85% of the respondents rated that they felt somewhat to much more positive about themselves "as a learner" from their coming to the CTC. It would be interesting to see how many of those who attend schools, universities, or libraries would rate their experience so highly.[11]

Cooperative access projects

Low-income housing. Without intervention, "fewer and fewer Americans will be able to fully participate in our nation's economic, social, civic, and government life," says the Department of Housing and Urban Development (HUD). [12] The HUD Neighborhood Networks program has brought computers to low-income housing developments all around the United States.

In these HUD-funded programs and independently, CNs have targeted low-income housing and neighborhoods for public access centers or workstations. In the heart of Silicon Valley, in East Palo Alto, you can find Plugged In! bringing Internet access to the barrio youth in the shadows of high-tech headquarters buildings.

Such projects, as discussed elsewhere, bring job training and job search tools to their constituencies:

Since the Network Node (NN) center at Plumley Village East in Worcester, Massachusetts, opened its doors in September 1995, approximately 340 residents have used the center for résumé writing and job searches and about 70 have found jobs in clerical, health care, retail, insurance, and manufacturing. The center offers programs in GED preparation, computer skills, workforce readiness, and job development. [13]

Primary through post-secondary schools. Most U.S. public schools are primarily funded through local property taxes. Where property values are low, school budgets are often strangled. Inner-city schools are crumbling, literally, for lack of resources. It is hard to bring technology to a high school where the roof has leaked for so long that the plaster has fallen in.

Despite considerable progress, schools in low-income communities have fewer computers and modems than schools serving wealthier districts. According to Computers and Classrooms: The Status of Technology in U.S. Schools, a study by the Educational Testing Service (ETS), minority and poor students had significantly less access to computers in their classes than more affluent children. Schools with minority enrollment greater than 90 percent had a student-to-computer ratio of 17 to 1, compared to the national average of 10 to 1. For computers with advanced graphics and interactive video capabilities, the discrepancies were even bigger. While 62 percent of schools in high-income areas had Internet access in 1995, just 31 percent of schools serving low-income populations had access, according to the Department of Education's 1996 report, Getting America's Students Ready for the Twenty-First Century. ETS's later study found that the number of schools with Internet access rose markedly in 1996, but the gap remained: 75 percent of schools in high-income areas and just 55 percent in low-income areas had Internet access. "The kids with the most needs are getting the least access," an ETS researcher told the Washington Post. (from Bit by Bit)

Even where computers and network access are available, there are few teachers able to use the equipment to its full capacity. Many teachers have no computers or Internet access from home, and teachers trained in elementary education or humanities education, even a few years ago, were unlikely to learn to use computers as part of their own education.

Market Data Retrieval (MDR) released its annual Technology in Education 1998 report, a comprehensive look at technology use in the nation's K-12 public schools. Key findings include: (1) While 23 percent report that virtually all of their teachers use computers daily, almost 22 percent of schools report that none of their teachers use computers daily for instructional purposes; (2) Only seven percent of schools reported that the majority of their teachers are at an advanced skill level (able to integrate technology use into the curriculum); (3) Nearly 38 percent of schools classified the majority of their teachers as beginners (learning basics) and 43 percent are at an intermediate skill level (able to use a variety of applications). [14] (some information and charts from the original report are available at http://www.schooldata.com/publications3.html)

Community centers. After libraries, community centers are the most likely place to look for a public access workstation, with Internet available. In the depressed town of Oakridge, OR, one computer is available to anyone, without fee, in a corner of the community center -- in a town where the only dial-up Internet access is via the community network 42 miles away.

Communications technologies may be especially important to neighborhood-based organizations, many of which struggle in relative isolation to deal with such daunting problems as abandoned housing, poor street maintenance, crime, substandard health care and education, and environmental threats. Yet the Urban University and Neighborhood Network (UUNN), a coalition of universities and community organizations in Ohio, found in a recent survey that most such organizations have neither Internet access, nor believe that they could afford it. According to the UUNN, organizations without access may be undermining their own prospects for survival because the Internet in at least some cases is not only the most efficient resource for information, but also for updates on pending legislation and funding opportunities.
"Those who lack access to the Internet...will lose out in an increasingly competitive environment," the UUNN concluded. "Because so many neighborhood-based organizations are small, geographically isolated, and woefully underfunded, their members don't have efficient access to the information needed to understand all aspects of their neighborhood problems and the paths toward solutions." (Benton's Bit by Bit)

Senior centers take special advantage of public access. Rural senior citizens (55 years and older) have the lowest penetration of computer ownership (11.9%), closely followed by their counterparts in central cities (12.0%). [15] But at senior centers all over the United States, groups of seniors support each other to learn the new technologies -- often spurred on by the desire to keep in touch with far-flung or e-mail-accessible grandchildren.

CTCnet found that young people were the largest "decade" of users in community technology centers. Like libraries, "...community technology centers represented a 'safe place' for children and young adults to spend their time." [16] Young adults also seem to be a large slice of the volunteers at CNs and CTCs, in a generation where voluntarism is not burgeoning.

Dial-up access

A more detailed argument of this point, by the same author, is available at www.opn.org/irs/response/PAinsufficient.html.

How disadvantaged populations use the Internet

[More information is available at http://www.opn.org/irs/response/whohelp.html]

When an Internal Revenue Service (IRS) auditor tried to explain why granting Internet access to poor people was not charity, she claimed, "You can give a poor person food or clothing as a charity -- but you can't give them round trip tickets to Reno [a popular gambling resort]." The implication -- that the Internet is an entertainment medium of questionable merit -- was delivered by a woman who admitted that she was a reluctant and infrequent user of the Net at work, and never used the medium from home. This analogy boggles many Internet professionals. Later in the interview, the auditor also asked how OPN could grant members access to pornography as part of their charitable work. This is, apparently, the character the Internet has to our tax service.

"NTIA's research reveals that many of the groups that are most disadvantaged in terms of absolute computer and modem penetration are the most enthusiastic users of on-line services that facilitate economic uplift and empowerment. Low- income, minority, young, and less educated computer households in rural areas and central cities appear to be likely to engage actively in searching classified ads for employment, taking educational classes, and accessing government reports, on-line via modem." NTIA "Falling Through the Net" [link]
Basic computer/network literacy

In "Network Literacy in an Electronic Society: An Educational Disconnect?", pp. 137-178 in The Knowledge Economy: The Nature of Information in the 21st Century. Annual Review of the Institute for Information Studies, 1993-1994, a joint program of Northern Telecom Inc. and The Aspen Institute, author Charles R. McClure reflects:

There is an educational disconnect between the rapidly developing communications technologies and information resources available to the public, and the public's ability to use these resources -- our education system seems largely oblivious to the widening gap between the network literates and illiterates. Indeed, the "networked society" is already taking shape, while other individuals fear that they will have to learn to reset the time on their VCRs! Federal policy and planning has been inadequate to assist the public with accessing these new repositories of information -- will the networked society result in excluding a range of services and opportunities from those who, for whatever reason, cannot participate? How will the public make decisions about technology that will affect them, when a large portion of these individuals have little or no concept of its importance? How we address and resolve these issues will have a significant impact on how society evolves, how notions of literacy and a literate society evolve, and the degree to which social equity can be enhanced in this country.

RAND sees the level of education in this country as inadequate to the needs of the Information Society:

Almost a century ago, Americans established a high school education as the basic educational requirement for all citizens. At that time, the telegraph was the height of communications technology and the telephone was on the horizon but far from an everyday instrument. Engineers and scientists looked to their slide rule as the best instrument for advanced calculations. Today, computers, the Internet, and a host of advanced technologies are everyday work tools. Clearly, it is time to recognize that the required educational level of a century ago is no longer adequate for preparing the modern workforce. " RAND, Breaking the Social Contract Recommendation 5

Yet the bureaucracies and curricula, facilities and faculties of public education, are slow to adapt. Resources, aging teacher workforces, a lack of skilled young professional teachers, low compensation (compared with technology fields, certainly!), all keep technologically literate young adults away from the teaching professions.

Reading and writing skills

Computers help teach reading and writing skills. Aside from the ability of a machine to provide drills for rote memorization, using a computer for gaming or e-mail requires a level of literacy that many may not find motivation to acquire from book literature.

Handwriting is not judged; spellcheckers are engaged. Whole passages can be reworked or deleted. The struggling literate is less intimidated to write via a keyboard than with paper and pen.

The abstract socialization available on the Internet often draws shy or awkward people into community. At CNs we have seen autistic young adults bloom in the asynchronous, slow, manageable medium of online discourse. In these cases, even social and public speaking skills can be gained from a "print" medium.

Job and workplace skills

Keyboarding is a basic skill in today's workplace. Whether "driving" a complex cash register at a fast food joint, a machine control console in a factory, or a word-processing application in an office, most entry-level jobs involve the logic, dexterity -- and confidence -- involved in keyboarding use of electronics.

Internet use teaches the odd logic of application use and technical procedure, the abstract navigation of territory-less maps. Information retrieval is the basic idiom of the Web, and surfing teaches database skills such as query formation, problem analysis, and prioritized searches. In the problematic world of self-taught, seat-of-the-pants computer users, problem solving is a basic survival trait -- especially for low-income users with old equipment.

Users of public access or CTCs learn to respect the working environment and tools, and interact positively with center staff. Many who disdain public education become enthusiastic learners when instruction opens a new virtual world. Many continue from users to hardware or software "nerds," even programmers and technicians. These are skills that many industries desire in an entry-level worker.

Job search

CTCnet found that CTC users were there to seek new job skills, and improve skills, and were satisfied that they were finding jobs because of the information access they gained through the center. [17]

Without concern for "column inches," Web job postings are elaborated job descriptions, and prospective employers can be sought out in e-mail, rather than waiting for a Sunday classified ad. These are confidence-building factors to an online job search in a discouraging job market.

Social services information

The most comprehensive and current directory of social services information in Lane County, Oregon, is available on the local community network. Sponsored by the county, with sponsorship from numerous private companies and by the in-kind donations of local nonprofits, this service has virtually replaced the paper "HelpBook" published yearly with a less elaborate, less well indexed snapshot of the county's social services safety net.

Online directories and information can eliminate "information gatekeepers" at agencies that, while chartered to deliver access or referral to services, can actually deter clients by their lack of comfort, or by their lack of physical access to a referring agent.

Public services and government information

The United States has been "reinventing government" lately, which is Vice President Gore's favorite term for a series of reforms, many involving equitable access to information and services.

OMBWatch [18] shows that the government's mandate through the Electronic Freedom of Information Act (EFOIA), signed into law on 2 October 1996, is not being met. Still, more government information is available on the Web than is easily available in print to any individual or agency. The currency of that information is higher -- important to the clients of government programs in a changing world.

Making Government Work: Electronic Delivery of Federal Services, from the U.S. Office of Technology Assessment, discusses the policy climate surrounding public information access as early as 1993. They say:

The greatest risks of electronic delivery are: a) overlooking the human element and the need for affordable, user-friendly applications; b) widening the gap between the information technology "haves" and "have-nots," and the advantages that educated, technically proficient citizens have over those less so; and c) [failing to take advantage of partnerships among federal, state and local government, and private agencies]
The establishment of a Corporation for Electronic Service Delivery, modeled after the Corporation for Public Broadcasting, would foster strategic partnerships.
The key is to provide at least a base level of funding for electronic delivery activities. As a percentage of the governmentwide information technology budget, even just one-quarter of one percent -- about $65 million -- would make a big difference when used by local community, volunteer, consumer, and self-help groups.

The Office of Technology Assessment (OTA) consulted intimately with leaders in the CN community such as Frank Odasz of Big Sky Telegraph (BST), a prominent rural access advocate, and T. M. Grundner of the now defunct National Public Telecommunications Network (NPTN), the original U.S. freenet umbrella association. Box 5-A from the report, "Grassroots Computer Networking: Lessons Learned," finds community networks to be of great advantage to government, communities, and citizens, and recommends federal mechanisms to support CNs.

From the same report:

"Without grassroots initiatives such as BST, NPTN, and RTK Net -- multiplied many times over -- the gap between the information 'haves' and 'have-nots' likely will widen, and Federal electronic service delivery probably will fall well short of its potential."

The OTA was disbanded in 1995, and leaves only a legacy of policy recommendations, and no statutory support for CNs. Ironically, it is the OTA review of the IRS that led to substantial reforms of that agency in the past few years.

Keeping families in communication in a mobile society

In researching the use of the Internet by disadvantaged populations, the author was particularly struck by the number of users who reported that e-mail was the only way that they could keep in touch with family members. E-mail eliminates long-distance charges, and many of our younger generation are more likely to reply to e-mail than to call on a phone -- far less write a letter and manage to mail it!

For many of the rural elderly, e-mail is their only contact with children who have moved to the city. Every year our population is more concentrated in urban areas, and families are dissolved by distance.

Children leave for college. Cousins move on, seeking work to replace lost jobs.

The Internet can alleviate some of these social effects, which are an agent of despair in a time of radical social change.

Communities of support

Beyond the family, online communities are well known for their communities of support. These aspects of virtual community include the following:

AA meetings online for rural nondrivers. Alcoholics Anonymous is a support group for the alcohol addicted. However, for some alcoholics in rural areas, "hitting the wall" may entail some run-ins with the State Police, driving while under the influence. Rural folks, after all, can rarely walk to a friend's house or a bar.

Living in a rural area without a car is rough in American culture. But it can also mean social isolation, and isolation from counseling and support, for a reformed alcoholic.

AA meetings are available on an hourly basis, 24 hours a day, on the Internet.

This is only one example of a community of support that is greatly facilitated by the Internet. The net is saving lives, every day, for isolated rural or housebound people in need of community.

Health advocacy. Many people use the Internet to access health and health advocacy information. Some 19 million people search the Internet regularly for health and medical information (Howe, L., 1997, November, Patients on the Internet: A new force in health care community building. Medicine on the net; http://www.mednet-i.com), but the need for medical information is often highest for populations with the least access to friendly medical expertise.

Few poor or rural people can or will enter a medical library to double-check their doctor's opinion, but more will research their own health issues on the Internet. For persons living in poverty, health care may be marginal in this country. Rural or inner-city health care providers may be underpaid, overworked, and out of date. Access to second opinions in one-doctor or no-doctor towns can save lives.

Home schooling and supplemental education. Whether enrolled in public or private schools, or home schooled, children are making increasing use of the Internet to supplement their education. Curriculum support, Web sites oriented to various age groups, research and special interest sites -- there is a lot available that is safe, well-designed, and fun for children.

School-age children commonly have pen pals on the Internet, by which they learn better reading and writing skills, as well as gaining exposure to different communities and new friends.

Churches, volunteer groups, political and civic organizations. Once a community organization figures out just how to use the Net, the advantages become manifest. Printing and mailing costs alone can save many organizations enough money to cover increased computer, software, and access fees -- over time. Minutes from meetings go out immediately. Action alerts spread faster in e-mail than by phone tree. The essence of a community organization's character and mission is better described, certainly, in 15 pages of HTML than in one tri-fold brochure -- and color is virtually free!

Those who have difficulties coming to meetings can participate in online discussions, increasing participation in civic affairs. Synergies are more easily found -- after all, they do call it "networking" -- and the sharing of information online among groups leads to gains for all.

Social groups -- hobbies, geek of the month. It's important to remember that there is nothing wrong with the recreational use of the Internet. Young families, the elderly, young adults, and people with disabilities are particularly helped by the social contact brought to their homes by dial-in access to the social and entertainment resources on the Internet.

The information underclass

Although what CNs do for their constituencies is variable, it is important to know who is served. If the CN movement only served persons who were eligible and equipped to sign up and pay for AOL, they would have very little reason to exist as a special category.

The Information Society

We hear utopian projections of the Information Society, but in rural America, it's hard to see this utopia. Neither the winners nor the losers in the Information Revolution seem to have found serenity.

Bernard Carl Rosen talks of the American New Elite -- a class of "bright collar" information workers that comprise the cream of the service sector workers in the United States, in his recent book, Winners and Losers of the Information Revolution, Psychosocial Change and Its Discontents (Prager, Westport/London, 1998).

Drawn largely from the recent middle class, these "neophile" workers believe strongly in the American Dream of the Self-Made Man (sic), and though they believe in helping the needy, they do not show this with a pocketbook, voluntaristic, or generally compassionate way. People who can't "get with the program" with computers are characterized as being "dinosaurs," darwinianly inferior. Pursued by the furies of competitive precariousness, a need for personal excellence and perfection, and plagued by impostor syndromes, the New Elites ennoble their own sacrifice of hours of study of technical subjects and "dues paying" in 60-hours and more per week by saying, "If I can do this, anyone could." At the same time they are waiting for the next generation of youngsters to displace them. It's an anxious world -- and these are the winners.

For the losers, the livelihood and ways of life of our parents and grandparents are nearly gone.

In 1981, the author was Chief Software Engineer on a computer-aided instruction project for Digital Equipment Corporation (DEC) and General Motors (GM). The program taught three levels of functional literacy for the Allan-Bradley Programmable Logic Controller (PLC). The PLC is still in use as a robotics controller on many assembly lines, in many different industries.

DEC's IVIS multimedia platform integrated video, illustration, and adaptive testing to teach line workers how to use a simple Boolean formal language to program and troubleshoot the controllers on the line. A second, simpler line of instruction taught supervisors the tactical and strategic importance of this literacy to the effectiveness of the team. A final abstraction for plant managers taught only strategic issues -- and enough vocabulary to sound literate to supervisors and line workers.

This was a direct illustration of the evaporation of the non-technical entry-level industrial job. A line assembly worker at GM would need to learn Boolean programming to get and keep a good position almost 20 years ago. It's hard to find an industrial, entry-level position in the United States with a living wage that doesn't involve interaction with computers, automated inventory, just-in-time strategies, and so on.

Agriculture has experienced its own Industrial Revolution -- the "Green Revolution" of chemical farming and factory farms. The successful small-scale farmer in the United States is a small, highly wired, specialty farm. These new family or small group farms model crops and weather by computer, watch commodity markets on the Net, and market their specialty and organic produce via the Web.

Parallels to the Industrial Revolution

This is our second technological upheaval in about a century. The Industrial Revolution displaced most agrarian workers into cities, split families, impoverished many on an absolute or relative scale, as the "winners" of that revolution prospered and invented new consumerisms.

New work styles

Ironically, the Industrial Revolution reduced the need for individual craftsmanship, individual creation, and initiative. Workers needed to work as parts of the industrial machine, conforming and compliant. The cobblers of France gave us the term "sabotage" as, in protest of the new shoemaking machine, they cast "sabot," wooden clog soles, into the machinery. Luddites bemoaned the change in society and were, perhaps, unduly demonized by the histories written by the victors.

Today, "monkey wrenchers" sabotage high-tech or ecologically incorrect industries, a diagnostic on an alienating workplace.

New literacies

The prior revolution required general literacies in reading, writing, and math that had never been expected of the general run of workers. Literacies that, in the 18th century, had been required of few, became required by most jobs. Public education in the three R's became basic literacy, not simply the pastime of the children of elites.

Basic computer literacy is becoming fundamental in U.S. high schools. Keyboarding replaces typing, and computers help tutorials and labs, or Web research for any subject. Many school systems assign Web homework, on the blind assumption that children have home access to Internet resources. These assumptions accentuate class divisions in social and academic achievement.

Information overload

Alvin Toffler's "Future Shock" didn't invent the idea of information overload. In 1881, Dr. George M. Beard, a respected New York neurologist, identified "American nervousness." He attributed the increased incidence of sick headaches, hypochondria, hysteria, and other stress-related ills to "modern civilization." Dr. Beard believed that life had become too hectic, that Americans were addicted to work. We had become a nation of compulsive clock-watchers.

This anxiety arose from the culture of the industrial city, with its crowds, noise, competition -- and information overload. He singled out the telegraph as the primary cause of this new malaise, afflicting people who might have only heard local bad news with a whole world of it. He saw it as a special difficulty to his affluent clientele.

"This continual fluctuation of values, and the knowledge of those fluctuations in every part of the world, are the scourges of business men, the tyrants of trade -- every cut in prices in wholesale lines in the smallest of any of the Western cities, becomes known in less than an hour all over the Union; thus competition is both diffused and intensified." (George M. Beard, American Nervousness: It's Causes and Consequences, New York, Putnam's, 1881, p.104)

What would Dr. Beard think of television, or the modern nuclear -- much less single-parent -- family? What would he think of the Internet?

Displaced workers

It took Dickens' novels to excite a sense of compassion for the industrial underclass among the new elites of the industrial revolution, and I think we have not found the Dickens for the Information Society. Dickens' tales of vagabond children in London evoked images that don't find their parallels in modern media's treatment of homeless youths.

Entering workers

When American business tycoon Andrew Carnegie entered the workforce in the 1850s (!!), he came to the workplace with a love of reading, an insatiable curiosity, and no social standing. He came to the attention of !!, who got him his first "bright collar" job as a telegraph operator for the railroads -- but perhaps more importantly, opened his extensive personal library to the voracious young mind.

When the author entered the workforce in 1977, having good grammar, writing style, and even a little knowledge of computers was a great advantage. She had no doubt she could do anything she set herself to do. Today, a similar teenager would be competing on an even basis with most high school graduates for a small pool of living wage, entry-level jobs.

Our youth are not coming out of school with a can-do attitude. Competing with their peers and elders for entry-level positions is demoralizing, and social promotion -- right on up through college -- is transparently meaningless to our youth and their potential employers. A mobile society has only somewhat reduced the old-boy network. Perhaps it's generally equalizing opportunity, but a mediocre technology schooling has made the marketplace much more "who you know" for the technologically literate. For the information illiterate, there is little opportunity at all.

Parallels to the Carnegie library movement

It was because of Carnegie's early access to a good library, to teach himself, that he went on to establish the public library system in the United States, opening similar opportunities to young minds in more than 1,000 communities nationwide.

At the time Carnegie established his first public library, there were only 271 public libraries in the United States. Now there are (!!) in Rhode Island, the smallest state in the United States. Libraries instill a love of reading and a habit of inquiry that have been essential to our workforce for more than a hundred years. In library circles, Carnegie is sometimes referred to as "Saint Andrew," with a polite back turned to some of his industrial and labor history.

Today, more than half of our public libraries are in rural areas, and nearly one in five serves areas of poverty or extreme poverty.[19] These are our populations most in need of information resources and technology training. But nearly half of our libraries have only one modern computer with public access to the Internet, often serving tens of thousands of residents, and thousands of patrons. Very few have dial-up access to the Internet, and many that do are working with or as a community network.

These are the tools that will bring technical -- now basic -- literacy into the homes of workers. We need information workers -- workers who understand how to input, categorize, retrieve, present, and analyze information. Dial-up community networks make available the means to acquire these skills regardless of means or location.

Parallels to Sputnik-inspired education

The 96-minute reminder

In 1957, the Soviet Sputnik launch shook American confidence in their technological primacy. Resources of the military-industrial complex set to work on reforming U.S. science and math education. Every 96 minutes (on a clear night) American leaders were reminded that there was an area of technology in which we had fallen behind. The Christian Science Monitor (Boston, Massachusetts) headline was: "Space Era Advent Jolts Washington." A year later, the National Defense Education Act poured a billion 1958 dollars into science, math, and modern foreign language education.

Yet this expenditure was perceived to be taking resources away from humanities education, and was accused of a blatant Cold War political agenda. Certainly, it aided the technical, scientific, and military industries of the past 40 decades, and it lay great resources at the feet of the gods of Progress. However, it seems also to have served to open opportunities to agrarian states to participate in the new technologies. It may well have served as a social equalizer, bringing science and higher math skills, and foreign language education, to children who otherwise might be only exposed to narrowly oriented 3R ("Reading, 'Riting, and 'Rithmatic") curricula.

In the middle 1980s, "A Nation at Risk: The Imperative for Educational Reform" was produced by the National Commission on Excellence in Education. ("A Nation At Risk: The Imperative for Educational Reform," Superintendent of Documents (April 1983) U.S. Government Printing Office, Washington, D.C. 20402, discussed in context at [20]) An opening paragraph was dramatic:

If an unfriendly foreign power had attempted to impose on America the mediocre educational performance that exists today, we might well have viewed it as an act of war. As it stands, we have allowed this to happen to ourselves.... We have, in effect, been committing an act of unthinking, unilateral educational disarmament.

Why does it take a military analogy to motivate Americans to invest in education?


Some critics of computer literacy training [21] despair at the dominance of workplace-oriented education. Yet it seems that the lack of job-skill education in our public schools is the lesser of two evils. Just as reading and writing are prerequisite skills to writing a paper on psychology or history, keyboarding and computer use are simply prerequisites to a deeper level of broad literacies that involve research and information skills that transcend and include print media.

We do not have a choice, at this point, between computer education as a technical skill, and putting money into humanities programs. We have a choice to integrate a new tool set into the curriculum. The transition from the typewriter to the computer represents far more than the transition from penmanship to typing. It represents the transition from the slate tablet to the library -- from a rote medium to a research and learning environment.

The Carnegie Commission on Science, Technology, and Government reports, in their work "In the National Interest: The Federal Government in the Reform of K-12 Math and Science Education" (1991):

We must also dispel the fallacy that students disadvantaged by poverty, race, or language in urban and rural schools are not needed to support the technical base in this country. Students in poverty comprise nearly 25 percent of our student base and thus 25 percent of our potential technical expertise. Because their school systems cannot attract the best teachers or supply the latest teaching materials and environments, poor urban and rural students are shortchanged in their education.

Information literacy will take a major reform effort in the U.S. public education system, but there is unlikely to be any nearly unified front. We do not have the Soviet threat to prod us. It may be up to grassroots efforts -- and without financial and coalition-based support, grassroots efforts are neither economical nor sustainable in the long term.

Parallels to public broadcasting in the U.S.: The return of Saint Andrew's ghost

From the 1950s through the middle 1960s, commercial, advertiser-supported broadcast media exploded. The commercial industry began to aggressively question the place of nonprofit radio and television outlets, which they considered to be competition operating under an implicit tax subsidy.

President Lyndon Johnson made a special effort to support public interest television, and proposed a Public Television Act. His vision was expanded to include current and future media.

The Public Broadcasting Act of 1967 was another information access reform guided by the Carnegie Foundation. Although this act was written in 1967, the Carnegie Foundation and other interested parties anticipated that new technologies -- beyond radio and television -- would be included. Non-broadcast media, local public telecommunications services, community programs and outreach, and universal service are all addressed in this document.

The act provided protections, not only for organizations working with the Corporation for Public Broadcasting, but for independent, 501(c)(3) media outlets such as classical music radio stations and religious broadcasting outlets.

It is worth reviewing the preamble, which is too lengthy to include here. Bullets 5 and 7 say the most:

(5) it furthers the general welfare to encourage public telecommunications services which will be responsive to the interests of people both in particular localities and throughout the United States, which will constitute an expression of diversity and excellence, and which will constitute a source of alternative telecommunications services for all the citizens of the Nation;
(7) it is necessary and appropriate for the Federal Government to complement, assist, and support a national policy that will most effectively make public telecommunications services available to all citizens of the United States;

Although this act demonstrates a clear charge from Congress to support public non-broadcast media, the IRS considered this law to be an insufficient basis for the support of Congress for public dial-up Internet facilities.

The place of CNs/Freenets in spreading literacies

The place of CNs/Freenets in rural development

The U.S. legal context

This section assumes an international audience, and therefore is longer than it might be to an American audience. (General readers may want to skim this section.)

Telecom regulation and deregulation

The Telecom Act of 1996 removed much of the local monopoly rights and privileges given to telecommunications utilities in the United States in the Telecommunications Act of 1936. Local monopolies allowed the land-based telecom carriers to subsidize expensive rural access with the high-income, high-density urban clientele.

We are told that deregulation of telecom -- and more recently, electric -- utilities is meant to reduce costs to the consumer by creating a competitive marketplace. However, deregulation seems to operate on the assumption that our infrastructure is adequately "built out" to all high-cost areas.

Rural "electrification" and telephony

Rural electric and telephone were scant and of poor quality in the early 1930s, when the Telecommunications Act of 1936 was being worked out. Pressured by the still powerful agrarian states, the build-out of the electrical and telephone infrastructure was muscled through Congress by the southern and western states, which viewed the industrial and financial power of the northeast with envy and foreboding.

Regulated, incumbent telecom monopolies provided their rural/urban territories with averaged rates. This strategy equalized the opportunity for information economy growth, which was already a limiting factor in many industries.

Without the regulation of electric and telephone infrastructures, rural areas might never have seen decent service. The cost per mile of line in rural counties is astronomically high compared with the densely developed urban centers -- and the telcos were allowed to charge a purely fictional differential to business customers.

For example, within a mixed urban and rural service area, all residential "plain old telephone service" (POTS) might be US$13 per month, where a business might be charged US$30-60 per month, per line, for equivalent service. The cost per line might be US$7 in an urban center, or US$25 in a small rural town -- higher to a remote ranch. As recently as January 1999, rural service costs of up to $500 per line were quoted to the Oregon Public Utility Commission (PUC). Yet every residential rate payer pays a regulated rate of average cost, plus an allowed potential profit, determined by the state's PUC.

Rural telecom coops (501(C)(12))

For many rural areas, the Bell monopolies did not do enough, soon enough. The Internal Revenue Service established a nonprofit (but not charitable), member-owned utility coop corporate structure in 19!!, in Internal Revenue Code (IRC) 501(C)(12). This chapter of the IRC provides a legal structure where member-owned and governed utility coops can operate under exemption from federal taxation. Eighty-five percent of all fees collected must be for provision of service (which may be electrical, irrigation, or telephony), and 85% of all fees collected must be spent on provision of service. The membership can vote its own rate structures and governance.

In my state of Oregon, there are both (C)(12)s and People's Utility Districts (PUDs), a more liberal Oregon legal structure with advantages over the (C)(12) structure. Coops of both descriptions offer cost-effective service, pouring any excess into infrastructure. Only a bit outside of Portland, the {!!} coop provides better service at a lower rate than USWest to a largely rural constituency, by virtue of not taking profits.

Such coops also have access to "high-cost" subsidy funds that incumbent telcos, such as USWest, can't touch.

Although the IRS has proposed (C)(12) "data coops" as an alternative structure to the current charitable/educational (C)(3) structure, they have declined to define what provision of Internet service would cover. Would it cover only dial-tone Internet access? What about e-mail? File store? Web space? Commerce servers? If only 15% of revenues can go into anything but transport, (C)(12) structure could never cover a full range of ISP services.

Many CNs also fear that membership-based administration could lead to a buildup of infrastructure for a majority of high-income, low-cost members -- who might show little altruism in subsidizing disadvantaged members, if the alternative were rates at a fraction of the commercial market.

CNs also worry that a (C)(12) data coop, delivering service without concern for profit, might reduce market competition, producing a paradoxical result to the IRS's expressed concerns.

Universal Service

On 26 August 1998, an industry representative brought the good news to the Federal Communications Commission (FCC) that we've been waiting for the marketplace to provide Universal Service for advanced services -- and it has! Ninety-five percent of all Americans live within a local call of an ISP. What the representative didn't mention is that the last 5% of the U.S. population lives on half or more of the land mass of the United States (depending if you go by county-based density or absolute population density). Neither did anyone point out that many of these Internet services (AOL comes to mind) require high-end computers and monthly fees -- fees beyond the budgets of more than 5% of the population, even in areas with access.

Lifeline service

A recognition that plain old telephone service (POTS) is a basic social, economic, and safety necessity for an American standard of living prompted the FCC to establish universal service for POTS -- every resident has a right to basic no-frills telephone service, regardless of income or location.

Advanced Services

However, there is no provision in the current Telecom Act for individual access to Advanced Services, meaning access to the Internet. Instead, a built-by-committee compromise created the E-Rate -- the provision of bulk transit discounts for libraries, schools, and rural telemedicine services. E-Rate subsidies pay for 20-90% of the network services. They do not pay for training, computers, or wiring buildings. They do not pay for planning, although many states' library and education organizations have helped their constituencies with planning as well as aggregating demand for grant applications.

As a special twist, the utility industry negotiators insisted that any subsidy via the E-Rate be explicit. Where urban rate payers once paid a progressive implicit (hidden) rate differential to subsidize high-cost areas, now all rate payers pay a flat per-line "tax" to subsidize the E-Rate's eventual beneficiaries. This explicit tax has been the target of repeated attacks in Congress.

The E-Rate miasma

As soon as the E-Rate was defined with the passage of the Telecom Act, it descended into regulatory hell. Challenged by lawsuits and relegated to its own NGO administrative corporations, the E-Rate moneys are being collected and trickled out very slowly. Applications for next year's allocations were originally due before this year's allocations were assigned, much less disbursed. Bills are submitted periodically to tie up, reduce, restrict, or redirect the money. [22]

In addition, many of the libraries, schools, and medical facilities most in need of telecommunications cannot afford even a discounted rate for connectivity. They can't afford computers, nor can they risk investment in a program that may evaporate, nor do they have the technical workforce to support the use of Internet in their facilities.

Many "datafication" activists fear that the E-Rate is doomed. Although deadlines have passed, many applicants have not been allocated money from the first round of discounts, and a second round has not only been delayed, but is under continual threat of legislation to abolish it. [23]

State PUCs

The state Public Utility Commissions are wild cards in this process. In some states, they act as though they are the allies of the telcos over the rate payers. In some states, they are the advocate of the rate payer to the dismay of the telco. In very few cases do any of the telephony players, telco or PUC, fully understand the technical, financial, or social aspects of Internet service.

In the Oregon PUC, the engineer assigned to an informational hearing on E-Rate disbursements for Oregon's public schools was unaware that effective speeds above 9600 baud could be achieved on telephone lines with compression. Anecdotes from many states show the PUC caught between what library and school advocates interpret as the proper meaning of the E-Rate, and what the telecommunications carriers say it means.

Whatever the agenda of the state PUC, they are largely at the mercy of the telecommunications representatives, who pour money into consultants and lawyers to advise and testify to the PUC and legislatures, while the voices for universal service have little to no funding to influence regulation or legislation.

Rural data is especially problematic -- it's hard to get people who have never had access to the Internet to understand why it is important to their future. It is easier to show an urban low-income parent what opportunities are opened with computer and network literacy. In a city, the digital divide may seem obvious from the wrong side of the tracks.

Some states have provided E-Rate discount eligibility to state nonprofits. In California, community organizations are eligible, and in Louisiana -- the friendliest state for CNs -- community networks are eligible.

Why libraries/schools/rural telemedicine won't deliver

The basic premise of the E-Rate as an agent of Universal Service is flawed.

Urban Libraries Council

There is a direct link between the wealth of a library's neighborhood and the ability of that library to serve its neighborhood information needs, argues the Urban Libraries Council's Joey Rodger. "Ninety percent of library funding is local," she says. "Where there are many, many poor people, the local library has less capacity to serve them." (Bit by Bit)

"He who hesitates is lost"

Some of the advocates of the E-Rate speculate that aggregating bandwidth for schools, libraries, and medical facilities will push adequate fiber out to the rural areas. However, much of the potential E-Rate market is not prepared to invest in computers, far less bandwidth, even at a discounted rate. Hesitation may lose any opportunity to cash in on the E-Rate.

A minor rural data "success" example

The only application that has pushed any bandwidth out into rural Oregon, sad to say, is the Oregon Lottery -- an agency with centralized control, aiming to mine resources from the rural population. The state is trying to push economies of scale out to rural areas, but the lottery is the only mechanism that has found wide penetration -- because it brings resources from rural areas to the state. Some would like to see that reversed.

Rural county demographics

Like many western U.S. states, Oregon is far larger than might be imagined by many Americans. Lane County, technically a rural county with several medium and small cities, is the size of the eastern state of Connecticut, with 1/!!! the population. Population densities in our desert counties drop to X/sq. mi., and residents may live as far as 60 miles from the county library, which may have very limited hours.

It may be easy for an urbanite in Washington, DC, to assume that any American can run to the local library to sit at a Pentium II with a frame relay link to the Net. However, this is not the case for rural areas where there are no "big pipes," and it's long distance to call a commercial ISP.

Nonprofit dial-up is the only effective solution for Internet access for dispersed rural populations. Library or school access -- or any public access -- is an insufficient solution without dial-up. The IRS has specifically limited schools, libraries, and local government to providing dial-up access to the public only if they do it "free," [!!!CPE] or in other words, at the expense of a very limited -- and reluctant -- rural tax base.


And it will, necessarily, be the local tax base that takes the burden of providing local subsidized dial-up under the new IRS restrictions. With the climate of devolution -- decentralization of governmental function to the states, counties, and local government -- a large federal program to fund datafication is unlikely to the point of impossibility.

What is it?

The federal government in the United States has a paternalistic streak that is a mixed blessing, and the proper place of federal mandate and control has sparked heated and healthy debate throughout our short 222-year history. Paternalistic federal controls have enforced (or created) laws related to the Bill of Rights and laid down unfunded mandates in infrastructural, educational, food safety, and other purviews of government.

Recent administrations -- largely pushed by a Republican Party aversion to "Big Government" -- have tried to push more local control on money of local origination. This has led to some successes and some disasters in welfare reform and health care, for example. The benefits of current fad for social service "bloc grants" -- sending money in chunks back to the states for disbursement under local control -- is yet to be proven. It's easy to see that the change in the business of government has thrown chaos into an already baroque system.

Decentralization of control due to the Information Society

Much of this decentralization of control, or devolution, is made possible by the Information Society. Without the databases, the modern administrative methodologies, quick demographics, tracking systems, and telecommunications that the Information Society depends upon, reforms allowing local control would be problematic, at least. With local administrative polity possible, the system demands decentralization.

RAND Corporation China paper

XXXXXXX of RAND, in a paper on Information Warfare, speculates that the United States need not fear China as a great power in the Information Age. Power in the information age, he asserts, depends on decentralized control of information, and a degree of local autonomy that the Chinese system cannot tolerate. If it opens to such a level of tolerance, it would "descend" fully into a free market and democratic institutions.

The implication seems to be that the free flow of information inevitably leads to decentralization and democratization. It seems that in the United States, the former is well ahead of the latter.

Reduction of paternalism

Many Americans -- of those who are paying attention -- regard devolution with trepidation. We are used to being taken care of by the federal government. Many of us live in dominant local cultures that we would not want dictating our lives by majority rule -- we prefer a highly abstracted, representational federal democracy to a local populist plebiscite rule. This cultural tension dates from DeToqueville.

Privatization, commercialization, and orphaned interests

The deregulation of transportation and utilities (including the U.S. Internet infrastructure in 1990) points to a federal government that is unloading grand infrastructural plans as fast as possible. Local governments are now dealing with a set of expertise in dealing with telecommunications and transportation, electrical brokerage and airline routes and fare dynamics, which even the federal government can't help them with -- without a greater plan, these systems are reforming, and we only hope it is for the best.

Local government "culture lag"

Local governments are often parochial in their vision. In strategic issues, one might wish the federal government to retain some centralized vision. However, the age of the unfunded mandate is likely drawing to a close, and our Congress is constantly pledging to reduce both the deficit and taxation.

An unreduced tax burden

Without a reduced federal tax burden, local government -- whether state, county, or more locally scoped -- is unlikely to invest in infrastructure that previously had been implicitly funded, or funded by taxation (as in the pre-1990 American Internet infrastructure).

Local government more vulnerable to diversion and local political pressure

Funds are easier to divert at a local level, when federal oversight is waived, and local government is more vulnerable to the biases of the local powers-that-be. Federal policies often support views that are in the interest of the greater society, but may conflict with local priorities and prejudices.

Many professionals in the field fear that devolution will leave the most vulnerable populations behind. Federal safeguards have regulated the distribution of federal moneys to local programs -- and local programs have been known to be more vulnerable to diversion (http://www.rtk.net/T923, RTKnet's FLEX online conference on devolution, March-May 1997).

In this environment, there is little hope for a broad or grand vision to be supported by federal money. The days of large federal public works in the United States may be gone.

U.S. nonprofit tax law

When the former Soviet republic of Mongolia was tossed on its own resources, some initial steps toward a market economy were to define a code of environmental law, and a code of nonprofit law. Mongolia saw both as safeguards before loosing the capitalist dogs.

The American federal system of tax exemption is the highly elaborated child of the "Law of Elizabeth," the section of English common law that exempted such corporations as provide for the welfare of the poor or which maintain bridges, for example, from taxation on their revenues. This exemption was an implicit subsidy of functions that were perceived to be serving the paternal interests of the state, but may not earn profits.

In addition to exemption from taxation, certain highly restricted nonprofits are charities under chapter 501(C)(3) of the Internal Revenue Code (IRC). Donations to these organizations are deductible from the taxable income of the donor -- a serious incentive to the major donor, as well as a perceived institutional stamp of approval. Most U.S. foundations insist on grantees holding a 501(C)(3) incorporation.

(C)(3) organizations include "pure charities" (those directly alleviating the distress of the poor or other disadvantaged classes), educational, medical, arts, scientific/research, religious, animal welfare, and various other organizations seen to be "lightening the burden of government" by the "intent of Congress." These organizations are expected to maintain their support through donations, grants, and income directly related to their charitable functions.

Non-(C)(3) nonprofits -- those operating under tax exemption, without being tax deductible to the donor, include professional organizations, chartered utility membership coops, buying coops, civic organizations, and some number of miscellaneous organizations.

An unincorporated nonprofit versus a state nonprofit versus a tax-exempt organization

One need not incorporate federally to be a nonprofit. There are many small organizations that see very little money in a year who legitimately "fall under the radar" of the IRS. And there are many organizations that incorporate at a state level as a nonprofit (each state having its own requirements, regulations, and enforcement) without gaining federal tax exemption.

Thus, you can have an unincorporated nonprofit, an incorporated state nonprofit, a federally tax-exempt nonprofit, and the special subset of (C)(3) tax exempt/tax deductible nonprofits.

Application for exemption

To qualify as a tax-exempt organization, the corporation must file an IRS form 1023, "Application for Exemption," with the IRS district office (as an example, Oregon is part of an IRS district that includes the western coastal and immediately inland states, Alaska, and Hawaii). Several rounds of negotiation on the charitable mission (if (C)(3)) and scope of operations of the organization are expected.

As agreement is reached, a preliminary exemption is granted, to be reviewed about five years from the date of initial exemption (usually made retroactive to the first application date to protect startup donors).

Donors often require a copy of the letter of exemption to protect the tax deductibility of their donation. Donor deduction may not be revoked retroactively if the donor can show that the donation was made in good faith to an organization that would be expected to be exempt.


A (C)(3) is severely restricted as to sources of income. Any income that does not derive from mission-related works (for example, tuition to a university) is taxable income even to a tax-exempt organization. So, for example, the sale of candy to raise money for a private school project is technically taxable income if the candy is not donated to the school.

Tax on such nonexempt income is called Unrelated Business Income [UBI] Tax (UBIT). If UBI is kept under a threshold of 5% of gross income, the organization has no worries. If UBI tops 20% of gross income, the organization might surely come under scrutiny of the auditors.


UBI rules are meant to protect the profit-making sector from undue competition from the nonprofit sector. Obviously, any organization that can deliver the same product using donated or granted subsidy and volunteer labor can destroy a for-profit competitor that must pay minimum wages or more.

It is the duty of the IRS Exempt Organizations Branch auditors to protect the market from fraudulent "wolves in sheep's clothing." This not only protects the market from unscrupulous or fraudulent charities, but also protects the whole structure of charity from the well-funded influence of the commercial market in DC.

But there are any number of baroque and elaborate exemptions and qualifications involved in what is or is not competition with the marketplace.

UN Universal Declaration of Human Rights

Although one might question the magnitude of such a violation in a world when basic human rights are so often violated, the IRS decision, in combination with other governmental policies, technically violates the U.N. Universal Declaration of Human Rights, of which the United States is a signatory.

"Article 19. Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers. ...

Article 21. (1) Everyone has the right to take part in the government of his country, directly or through freely chosen representatives. (2) Everyone has the right of equal access to public service in his country...." (http://www.un.org/Overview/rights.html)

Policies set in Washington, DC, including the policies of the Government Printing Office and the Electronic Freedom of Information Act, now require time-sensitive, frequently requested, and lengthy public information to be published on the Web. The government is not very successful at this. [RTKnet study] But, where information is available electronically, paper is slower to be published, and often costs more than Web access. Information is available on a wide variety of regulations and programs, legislation, and policy, either solely on the Web, or is prohibitively costly otherwise. Without Web access, one might never know that the information existed.

In a less-wired country, information being available in print at cost would be equitable. In today's United States, having important information available on the Web only, or first on the Web, or essentially free on the Web, constitutes an advantage to the "wired" population, and a grave disadvantage to unwired Americans -- particularly acute in remote rural areas.

History of the Oregon Public Networking case

(General readers may want to skim this section.)

Oregon Public Networking (OPN/efn) has provided Lane County, Oregon, with Internet services as a charity since 1993. OPN's mission [http://www.opn.org/mission/] is as the electronic library, as an educational organization, and as a community builder for our constituency. In May of 1997, OPN received their final letter of exemption from the IRS. Within a month, they were under "compliance audit."

A compliance audit doesn't test the financials of the organization, per se, but examines how that organization is complying with their charitable mission as defined in their application for exemption and current tax law.

The Canadian process

A similar case was decided in favor of the freenets in Canada almost three years ago.

In June of 1996, after a two-year process, the Canadian [!!!supreme court], equivalent of the U.S. Supreme Court, ruled that freenets are charities under the definitions of the Law of Elizabeth, the nonprofit code of English common law.

The decision was based on the tenet of the Law of Elizabeth that exempted persons maintaining bridges and ferries for the common use. The Internet was seen as the modern infrastructure of communication and commerce, just as the roads, bridges, and ferries were in the 15th century.

Why the IRS hit OPN

OPN attempted to discover the motivation for the audit unsuccessfully. Tax issues are usually advocated through the constituent services staff at the local office for your congressional representative. Rep. Peter DeFazio's office sent a set of five questions to the IRS about OPN's case, including the questions, "What prompted this audit?" and "Why are you pursuing this non-routine audit after the final letter of exemption has been granted?"

The IRS District responded that the audit was in response to a phone call from the Department of Justice (DoJ), and that this was a routine audit. When pressed to say if it were a phone call from the Oregon Department of Justice (a department which, in other states, might be called the Office of the Attorney General -- an agency that investigates charity fraud, among many other duties), or the federal Department of Justice, the first answer was a verbal "Why, the federal DoJ, of course." When asked for firm confirmation, they simply replied that the call came from Salem. They would not confirm it came from a state office.

OPN had come under investigation in 1995 for a contract with a former board member. A former employee had called down this investigation after being dismissed. The contract was judged to be legal, if of questionable wisdom. The state DoJ had questions at that time on the exempt nature of OPN's dial-up activity. However, a year and a half had passed between that case being closed and the IRS audit, and the state DoJ had no lasting interest in pursuing this case after such a lengthy interval.

Sources in Washington, DC, advised us that there was a national security interest -- Senator John Glenn's (R-OH) committee in the Senate -- who wanted to see any access to the Internet require some hard personal identification (perhaps Social Security Number and a credit card). The reason was to reduce the potential for "domestic terrorism" or destructive hacking from the Internet, and that CNs might be targeted.

OPN is filing a Freedom of Information Act inquiry to determine the precise details, but these speculations have not been comforting.

Costs to the organization, over the past two years

Over the past two years, the backwash from this audit has caused great loss and distress to OPN, burning out several staffers, impeding their ability to serve their constituency, and reducing their ability to deliver a reasonable level of service. The professional fees associated with the audit amounted to some thousands of dollars, but are dwarfed in comparison with the loss of staff time, productivity, and reputation involved in weathering a compliance audit. Four out of five of OPN's major corporate donors deserted the organization when the audit hit, likely made nervous by the possible exposure of supporting a fraudulent charity.

The ostrich syndrome

Most American community networks have been happy to support OPN abstractly, but financial support, or even public testimony, has been hard to come by. Most organizations were sure that OPN had "done something wrong," or was doing something that they weren't doing. There was very little community support until the summer of 1998, when Shava Nerad, then general manager at OPN, posted an update to the communet mailing list opining that all dial-up -- whether or not it was charged for -- was going to be judged to be nonexempt activity.

Ms. Nerad was invited to present one of the keynote addresses to the first annual meeting of the Association for Community Networks in San Jose in July, 1998, on Community Networks and the IRS. She was dismayed to be introduced as "the world expert on community networks and the IRS." Hardly an honor to be wished on a friend!

Getting publicity

OPN couldn't have picked a better year to be fighting the IRS in the press. Still, this is not a sound-bite issue. A local story was picked up by the international AP Newswire in October 1997, and was carried in such papers as the San Jose Mercury-News. OPN received unconfirmed reports of the story appearing in Canadian papers.

In August 1998, after our press release was redistributed by the Benton Foundation, we were carried -- within a few weeks -- in the New York Times online edition, in Business Week (online and newsstand), the Chronicle of Philanthropy, civic.com, Public Radio International's Marketplace business news magazine, and various other outlets.

Getting community support

Getting press helped with support in the CN community. However, there seem to be two camps on this issue.

One camp is the "What would a poor person do with the Net anyway" crowd. The IRS auditors were typical of this camp, saying, "You can give a poor person food, or you can give them clothing, but you can't give them tickets to Reno [a popular U.S. gambling mecca]," and "Poor people don't have computers."

We need to recognize, as was substantiated above in the discussion of computer lending library, public access, and e-mail access programs, that arguments about minimum equipment standards are not the basic impediment to disadvantaged Internet use.

"Rather than becoming bogged down in discussions of minimum technical standards, we would argue that the universal service debate has to refocus on the functionality of services and alternative technologies. As in other areas, we favour a much more socially orientated debate over the current emphasis on technology. From this perspective, there is a need to investigate in greater detail whether, in order to avoid exclusion and preserve regional cohesion, the existing concept of universal service should not be shifted in the direction of a concept of universal community service, extending universal service provision to incorporate a basic level of access to new information services, [This could be specified in functional rather than technical terms such as scope for electronic networking, data and mail interchange, access to new business and information services worldwide and in core regions. etc.] but limited in its obligation of universality to the educational, cultural, medical, social and economic institutions of local communities. This community-based concept of universal service provision would in effect signal a return to the historical concept of universality introduced in the last century in the U.S. with the advent of the telegraph. " (http://www.ispo.cec.be/hleg/Building.html#2G, "Building the European Information Society for us all" EU High Level Expert Group, April 1997)

However, there is no more support for this issue from the "netizen" camp. This might be typified by Richard Stallman, who was so incredulous when he heard that the IRS might find no value in giving Net access to disadvantaged folks, that he decided that OPN must be exaggerating their predicament. [24] This attitude seems to have swept through activists at EFF, CDT, and other organizations that would be assumed to be natural allies -- any issue with such obvious arguments can't be a priority for netizen energies.


OPN's first clue as to their fate was from the American Bankers Association (ABA) Journal of Tax Exemption Law, Vol.!!no!!, in June of 1998, where Director Marcus Owens of the EO Branch of the IRS opined that nonprofit Internet services would qualify as exempt (but not deductible) under IRC 501(C)(12) -- as utility coops. "That makes sense to me."

In September of 1998, the IRS published a workbook of Continuing Professional Education modules. This is the latest in an annual series of tune-ups on topical interpretive issues in tax law. Every district exempt organization auditor was exposed to the CPEs at a special training at the end of September.

In a 17-page section by [titles] Robert Harper and Donna Moore, it was specified that merely providing dial-up Internet access, even with means testing, was not an educational or charitable activity, except when provided "free" under the oversight of a governmental agency.

The decision and result

Assuming that the district EO auditors understand this publication, it is only a matter of time before other organizations come under crippling audits and reorganizations. Paradoxically, any organization who subsists primarily on grants and donations, but has paid staff, will be hit hardest -- they will not fall under the Goodwill Industry clause [see above], nor will they have any fee revenue to convert to a state nonprofit, (C)(12), or for-profit structure.

The cost of reorganization

OPN reorganized, splitting their ISP functions into a subsidiary state nonprofit organization (efn, formerly a project of OPN). They needed special permission from the IRS to transfer some material assets from the charity to the nonprofit (technically for-profit on a federal level). The split required some elaborate accounting to lease employees and equipment from one organization to the other, to provide means-tested OPN members with subsidized access through OPN's membership in the efn "data coop."

The organizations have separate but overlapping boards. It remains to be seen if the organization will survive the transition in good health. Adopting a for-profit manner is against their internal culture, and the habit of non-competition may be sticky.

Cost to new organizations

Start-up datafication projects would not be so fortunate, however. OPN was able to retain the accumulated equipment plant from six years of grants and donations. A new organization would have a very difficult time getting the equipment necessary to support any number of dial-ups (far less the 275 that OPN supports) on nondeductible donations. And very few banks or donors would fund an organization that pledged to give away a marketable commodity such as dial-up access.

Very few, if any, new CNs will be able to provide dial-up access.

The (C)(12) analyzed

The IRS has offered CNs the option of organizing as "data coops," under the tax exempt, but not tax deductible, 501(C)(12) structure. There are several aspects of the (C)(12) structure that make it less suited to community networking.

85% clauses

Utility coops must collect 85% of their income from user fees, and must spend 85% of their revenue on "provision of service." Where "provision of service" is well defined for telephone, electric, and water/irrigation systems -- you have a plug or a tap at which you provide services -- the provision of service for Internet dial-up access is less well defined.

Lack of definitions

The IRS will not define in advance what they will consider "provision of service" for the (C)(12) data coop. For "advanced rulings," or technical questions to the IRS, an organization must spend thousands of dollars to determine such questions as: "Is technical support part of provision?" "Web classes?" "File store?" "Administration of newsgroups, mailing lists and conferencing systems?" At this time, nothing but the dial-up to a modem connected to an upstream provider is admitted definitely to be "provision of service."

Start-up issues

This might cause a new organization to spend a significant proportion of their start-up costs on legal/professional fees and IRS fees before being able to so much as budget equipment.

In addition, few affordable loans are going to be made available to a nonprofit ISP. The U.S. Department of Agriculture (USDA) Rural Utility Service (the former Rural Electrification Administration) has some funds available at low interest rates (currently as low as about 5.5% APR) for datafication efforts, including (C)(12)s, but these funds are limited and are administered with electrical utility timelines -- very long and conservative -- in mind.

Without being able to use deductible donations for startup equipment and costs, few rural groups will be able to gather startup resources without significant support from the local tax base.

Membership polity versus charitable board oversight

(C)(12) members own the utility, in proportion to the fees they have paid into the service. This is a baroque accounting problem, but in addition, the membership of a (C)(12) has the right to vote policy by referendum.

In the case of a charitable board of directors, with a charitable mission, disadvantaged populations would be the first priority of the board. In the case of membership polity, a single vote could remove all subsidies from disadvantaged members, and lower the rates of a majority of higher income members, to their personal benefit.

Competition with the commercial marketplace

Ironically, a great misgiving that CNs have about the (C)(12) model is the potential for driving out the local commercial ISP. With the advantages of volunteer labor and tax exemption, a nonprofit (C)(12) ISP, without the level of service and charitable mission of a (C)(3), is likely to out-compete any small, local commercial ISP. This model almost assures the demise of local commercial Internet over time -- a condition that may come to pass anyway. It is easy to picture an ISP marketplace dominated by national giants such as AOL, Netcom, and so on, with a few struggling (C)(12)s providing scattered local portals and grassroots services.

We have seen the same developments in other areas of telecom, as well as in the banking industry and other areas of the service sector.

Threats to current datafication efforts

Many current urban center and rural datafication efforts may be imperiled by the IRS decision. Rural CNs that support businesses and dial-up are particularly under threat. The role of the library-like CN in rural areas is completely unrecognized, and although libraries can provide support services to businesses under their (C)(3), the IRS has denied that privilege to any Internet provider.

This decision will likely produce a chilling effect on many start-up efforts, as they try to assess the current amorphous policy setting.

In a time when we should be accelerating our efforts to bring the Internet to every citizen of the nation, this decision will slow the penetration of the Internet to rural and disadvantaged populations all over the United States. This is a great advantage to nations such as Canada, whose more liberal information policies will continue to integrate their social and economic structures into the Information Society.

Class gaps between rural/urban and between advantaged/disadvantaged urban populations will continue to build a literacy, income, and opportunity gap in the United States.

There ought to be a law

Even the IRS auditors admitted that they wished there were support in current law for OPN's case. The author is petitioning IRS EO Director Marcus Owens for time from his technical staff to help understand what a good tax law looks like, to find acceptable models for legislation to support community networking.

The IRS was in a no-win situation in this case. If they drew remote analogies from libraries, or from public broadcasting, and applied them to CN dial-up, they would be accused of "legislation by regulation." If they decided for CN dial-up, they would also be accused of overreaching.

The IRS requires, needs, and wants the support of legislation in this case, and digitaldivide.org, AFCN, and other interested parties are working to produce it.

Update available

As of late February, Advanced Digital Network (AND), AFCN, OPN, and other interested parties are waiting for the written decision from the IRS. They are also seeking funding for a policy and legislative push to create protection for U.S. community networks, possibly the Public Networking Act of 1999, or a rider on an existing bill.

Updates on these activities will be linked from http://www.digitaldivide.org/INET99/.

Possible consequences

A stronger public access infrastructure?

Voices in the U.S. CN community despair of the future of CNs, seeing their decline as a natural step in the commercialization and privatization of the Net. It is expected by some that the atmosphere of deregulation, commercialization, and devolution will cause state and local government, and local businesses to step in, to form coalitions, and to create the opportunities for rural and urban disadvantaged people that have not been there in the past. Grassroots, community-based nonprofits will no longer be needed.

These speculations are based on the assumptions that state and local governments will act in their enlightened economic best interest in developing grassroots literacy in the Internet; that they will recognize this self-interest; that they will fund it; and that they will fund it in time to save rural and urban populations from further economic devastation. It could happen, but history wouldn't predict it.

...GII initiatives are often technology-driven, which is not overly surprising as their major instigators are generally technical ministries, telecommunications operators, and equipment suppliers. Applications projects too often appear as afterthoughts, planned to take advantage of available facilities rather than to meet the needs of, for example, educators, health-care providers, or NGOs. These "information highway" initiatives assume that converging technologies will result in information services with both social and economic benefits. Yet this assumption needs to be carefully examined." Emerging Internet: Development and Globalization of Cyberspace, Heather E. Hudson, Director of Telecommunications Management and Policy Program, McLaren School of Business, University of San Francisco, Aspen Institute, 1998

Further divergence of information haves and have-nots

It seems more likely that if government and the private sector do act, they will not act in time to prevent more harm. The CN structure has allowed a smooth mechanism to provide computer literacy at low cost, with the trust and investment of local people. The United States does not seem to have the will to put resources behind a concentrated effort to provide information equity in education or infrastructure.

As "reinventing government" and market pressures put more and more content on the Net, life without access will become more and more ghettoized and disadvantaged. The very populations to which public information is aimed will have less access than the people who have interests in cutting those social services. This can't be good.

Loss of competitiveness for the U.S. worker

Do you believe that without Sputnik, U.S. workers would have lagged in industrial, information, and economic prosperity? It's a case we can never determine with great certainty, but when we compare the education and workplace efforts of Japan with those of the United States, it's sure that there are better rote technical educational systems. The myth is that the strength of the United States has always been in creative adaptation to progress -- in originality, entrepreneurship, and novel use of tools.

At the end of WWII, Japan and Germany retooled their industrial base, rising from the rubble to take advantage of the United States' durable, safe inertia. There is a chance, perhaps, at this point, for the countries less integrated in the Information Society to "do it right the first time," and leapfrog the U.S. workforce by investing in education and infrastructure.

Next steps

Everyone talks about the weather...

...but no one does anything about it. This problem seems too big to tackle, yet it's been worked from the bottom up since the 1980s by CNs. It seems clear that the problems we face -- the digital divide in access and literacy, the increasing disadvantage of isolation from online information, the good jobs gone unfilled -- can be addressed, with guidance, coordination, minimal funding, and with permission from the federal government, using mostly local resources. Supplemental funding may come from federal, state, local, or private money for economically disadvantaged areas.

Programs such as the E-Rate and educational reforms should be rescued from corporate harassment and excess bureaucracy -- how I couldn't say -- and allowed to do their work. Best practices and information-sharing among projects should be fostered via the Net, to contain costs and build communities of interest at the end-user level.

Finding the large communities of interest

Potential casualties of the Information Revolution

I hope we are not seeing the casualties of an Information Revolution coming into focus. We will continue to see a digital divide -- a set of disenfranchised, isolated communities. Could the digital divide bring together urban poor and rural residents, transcending the far older urban/rural divide? Could the Internet -- or lack of it -- dissolve the sense of distance between communities by its vacuum?

If these communities could realize their interests in getting the good jobs, and the equal access to information and the power it brings, the digital divide could become a political issue in future elections.

What are the steps to build this coalition? Does information equity rate as a civil rights or human rights issue?

Agricultural states

Besides the populist masses hit by the digital divide, their communities and employers should be taking notice also.

As happened in the days of telephone regulation, the agricultural states have got to be feeling pressure to be able to add the Internet, but there will be no master regulatory plan to bring it to them. Agricultural state congressional delegations, especially from the west and south where high costs (sparse population, huge land areas) predominate, should be natural partners in the efforts to find solutions to the digital divide.

Worker-starved industries

High-tech industry is already hurting for information workers, but as other industries automate and re-up their use of information technology, the pressure from business to provide workplace readiness in information literacy should increase.

Legislative solutions sought

If I were to daydream, there would be a Public Internet Act of 1999, something parallel to the Public Broadcasting Act, but better designed. I'd draft the Carnegie and W.K.Kellogg Foundations, and maybe RAND. The act would make provision of dial-up access to underserved populations, or at least to means-tested populations, clearly covered under 501(c)(3). The act would fund research into information literacy curricula, and find the best ways to deliver surplus old computers back into the nonprofit and at-need, at-risk communities.

Specific steps for our digital divide communities


Where the rural communities have some hope of having capital, inner cities are less likely to find access to the Internet without nonprofit or governmental assistance. Luckily, more inner-city residents are likely to be able to walk in to a CTC and use a public access seat, so some of the need in the cities can be met without subsidized dial-in. Dial-in would still be necessary for the shut-ins, homebound families, and people who can't reach the center during open hours.


Rural areas need people who "speak rural" to bring the Internet to them. The USDA is doing what it can with efforts such as the Rural Utility Service and Internet Master's Program. Rural economic development thinkers have gotten the point, but it's harder to bring to a rural chamber. It's even harder to help rural communities figure out how to get off ramps on the fiber. In many parts of Oregon, for example, major fiber runs pass through communities without taps, because the community doesn't know they are there, can't negotiate with the fiber owners, or can't afford the cost of the point of presence (POP).

Coalitions are beginning to form, aggregating demand, building business cases for these rural POPs. Right-of-way permits are being cannily negotiated for strands of fiber. There is a high risk of rural communities overpaying, or signing bad contracts.

We need rural utility advocates to work with the communities and safeguard their interests. These consultants should be creative in telecommunications business and law, crystal gazers, and understand rural culture -- and have no vested interest in the decisions that are made. And they should be affordable. They probably do exist -- if they do, they are very busy, or not good marketeers.

Other disadvantaged populations

Programs need to be put in place to reach the underrepresented communities -- minorities, elders, non-English speakers, and so on -- who are often suspicious of the new technology, new literacies, and changes in ways of life. The Office of Technology Assessment report, cited above, recommends involving these communities directly in the establishment of CNs and CTCs that serve them.

Take this thought home, elsewhere

These are only the "next steps" that could be envisioned for the United States. For those of you from other countries, I can only recommend that you learn from our experience, bring computing and network resources to your communities, and start thinking in terms of information, not merely computer, literacy.


[1] Douglas Schuler, New Community Networks, Wired for Change
Doug Schuler, New Community Networks: Wired for Change (Boston: Addison Wesley, 1996)

[2] Winners and Losers of the Information Revolution

[3] TIIAP reports

[4] Carnegie Library book


[1] AFCN definition of CN

[2] Doug Schuler, New Community Networks: Wired for Change (Boston: Addison Wesley, 1996), quoted and extrapolated by Richard Civille, Center for Civic Networking, in personal conversation, May 1998.

[3] San Jose (CA) Mercury-News, from Reuters service, 2/16/99

[4] Singapore National Computer Board's IT2000 project

[4] http://www.itaa.org/workforce/studies/hw98.htm

[5] http://www.ispo.cec.be/hleg/Building.html

[6] http://www.s-one.gov.sg/html/mainmenu.html

[7] refer out to one of the international directory pages

[8] http://www.ctcnet.org/impact98/imp98exec.htm

[9] fftn2

[10] http://www.ctcnet.org/impact98/imp98exec.htm

[11] http://www.ctcnet.org/impact98/imp98ch4.htm

[12] quoted from HUD's Web site in http://www.benton.org/Library/Low-Income/one.html

[13] http://www.hud.gov/progdesc/neigbs.html

[14] Bit by Bit

[15] http://www.ntia.doc.gov/ntiahome/fallingthru.html

[16] http://www.ctcnet.org/impact98/imp98ch4.htm

[17] ctcnet study

[18] http://ombwatch.org/www/ombw/info/efoiareport.pdf

[19] http://www.ala.org/oitp/research/survey98.pdf

[20] http://teamweb.lbl.gov/seaborg/risk.htm

[21] http://edtech1.coe.uni.edu/classes/131/documents/besser.html

[22] http://www.lff.org/universal/index.html

[23] http://www.ala.org/washoff/alawon/alwn8011.html

[24] personal conversation, August, 1998

An extensive list of these and other related links is available at digitaldivide.org.


The author would like to acknowledge the support and cooperation of OPN (especially Executive Director Ruth Ann Howden), the (U.S.) Association for Community Networking, OPN's lawyer David Atkin, and Richard Civille of the Association for Civic Networking. The author would also like to acknowledge the generous support of Paul Brainerd, Tyler Hart, and Joseph Averett, in making this paper possible.

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