For Immediate Release: November 30, 2000

Report Released as Institute Prepares to Award
Private California Organizations for Programs Bridging Divide

San Francisco, CA - Government proposals to bridge the so-called "digital divide" threaten to hinder access to technology for low-income communities, according to a new report from the California-based Pacific Research Institute.

The report is being released a week before the Institute is set to award private California organizations and non-profits for innovative programs that use technology to maximize the social and economic growth of their communities. The grand prize winner will be announced at PRI's annual privatization dinner in San Francisco on Wednesday, December 6, 2000.

How the High-Tech Sector is Bridging the "Digital Divide reveals that current proposals, such as tax incentives for high-tech companies and subsidies to low-income households to purchase computers and Internet services, would interfere with market forces that are already making technology more affordable and more accessible than ever.

"The competition is so fierce many high-tech companies are already offering low-cost and free Internet service and personal computers," said the author, Helen Chaney, a fellow with the Pacific Research Institute's Center for Freedom and Technology.

The report notes that personal computers are available for less than the cost of a new TV, and Internet and email-only computers run under $200. Many Internet service providers offer "free PCs" in exchange for $20-30 a month Internet service contracts, and consumers can also get free Internet service through advertising-supported ISPs.

"If the government starts offering subsidies, we risk subsidizing one technology or one industry over another, and this would interfere with the market forces that are already working to increase access," warns Chaney. "It could have the inadvertent result of increasing prices."

The report also notes that proposals that offer hundreds of millions of dollars of tax incentives to high-tech companies that donate computers and provide technology training are unnecessary.

"Companies such as Microsoft, IBM, Cisco, and America Online are already donating hundreds of millions of dollars in equipment and training for disadvantaged communities," said Chaney. "The government doesn't need to send taxpayers' dollars to affluent companies for donations they are already willing to make."

The report concludes that the real role of government officials should be to implement deep reforms in the failing public education system that will promote literacy, train skilled workers for the high-tech industry, and equip all Americans with the skills needed for the 21st century.

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To schedule an interview, call Dawn Dingwell at (415) 989-0833, ext. 136. For a copy of the report or more information on the December 6, 2000 award ceremony, including winner profiles, click here.