In the context of recent financial fiascos like those of Xerox, WorldCom, and others, it may be time to forget the "market as God" view and ensure that the Internet gets the support and the direction that a utility deserves. Ironically, both ends of the political spectrum have traditionally balked at government involvement in the Internet's development, but recent events make that stance untenable.
During the Internet business boom, the market became an artificial force shaping the direction of business and business development. This errant direction has had a disproportionate impact on the technology sector precisely because of the sectors youthful vigor.
The market, reacting to unprecedented volume and velocity, focused on stock valuations and ignored traditional business fundamentals. We now know that at least one result has been to create incentives for companies to manipulate their business practices for the sake of their stock valuation even at the expense of their customers and products.
In 1996 the government and the telecommunications industry established a set of regulations designed to encourage competition and promote the build-out of the worlds most accessible and reliable telecommunications infrastructure, including the Internet. The changes that have occurred since that time, and most dramatically in the recent financial scandals, have shown once again that infrastructure and utilities are too important to be left to those motivated by profit alone.
Deregulation of the telecom industry has given the public a decreasing number of choices as the industry consolidates and has allowed carriers to avoid taking responsibility for serving markets they deem unprofitable. According to former FCC chairman, Reed Hundt, thanks to the recent political climate, the government has insured that "the Internet will be the first new medium...that the government does not affirmatively make available to every person at an affordable price".
The result has been an exacerbation of the "digital divide" maligned by the press and the politicians of the last presidency. This presidency seems more at home with the notion that some are more equal than others. We, as the consuming public, need to take stock of where our dollars are being employed both in government and business.
Business and government should have their feet held to the fire by the investing and tax paying public. Accountability needs to be the watchword of the decade. It's almost refreshing to see Bush advocating for guidelines on the compensation of chief executives with companies in distress, but that's not nearly enough. If the public abandons the Internet to be built only as business sees fit, we will surely find that the only people who experience what the Internet should be will be those who can afford an expensive hobby. This could have the effect of limiting the development of the Net to the extent that only commercially viable interests are considered. Everyone without the necessary cost of entry will be left behind. The Internet will reach only a fraction of those who could benefit and the power of the new medium could be fundamentally usurped for the digital haves and denied to the have-nots.
There is legislation being authored now and, while there is not room to discuss it all, conservatives and liberals alike need to get involved in the process. We all need to ensure that our businesses and our government support some developments that are not judged by their profitability alone, but reflect a social contract that holds out the best chance for the future.
Remember that, at one time, no one really believed they needed a phone, but by making the phone almost universally available, society as a whole has prospered. Last time I checked that included business as well.