Anthony Wilhelm
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Mergers Offer Community Opportunities
Anthony Wilhelm, Ph.D.,  is the newly appointed Benton Foundation Program Director for Communications Policy and Practice. Dr. Wilhelm came from Claremont University's Tomas Rivera Policy Institute, where he served as Director of Information Technology Research.

Tony Wilhelm, Ph.D.

Since the passage of the Telecommunications Act of 1996, intended to spur innovation and increase consumer choice, a flurry of communications mergers has left large local phone companies poised to squelch any possible competition in the provision of residential telephone, Internet, and media services. Of the eight regional phone companies  -- GTE and the seven Baby Bells created by the 1984 divestiture of AT&T  -- only six individual companies stand today as a result of rapid industry consolidation. Even fewer will exist if states and the Federal Communications Commission approve the pending GTE/Bell Atlantic and SBC/Ameritech mergers.

Perhaps one of the greatest concerns for consumer advocates is that the recent merger mania has resulted in the formation of communications giants that will have the ability to decide who has access to essential information tools of the future, and how much it will cost. In the past, government-granted phone monopolies were under obligations to provide service to unprofitable areas. Today, the quid pro quo is for less regulation in exchange for increased competition. The latter has yet to materialize; thus there is fear that  -- in the absence of both competition and government regulation  -- there will be little incentive for companies to deploy new high-speed services to rural areas, inner cities, and other high cost or low revenue places.

Open Studio: The Arts Online

Bridging the Worlds of Arts & Technology

While the Web and Internet communications tools are improving access to personal, professional, and civic opportunities, most artists and arts organizations have been left out of this information revolution. In response, the Benton Foundation and the National Endowment for the Arts created "Open Studio: The Arts Online," a national initiative that funds organizations to train the nonprofit arts community with the necessary skills to effectively use the World Wide Web for online communication, publication, and creative expression.

Launched in 1996, Open Studio established ten regional training sites to provide training in basic Internet and Web publishing skills, and more than 70 access sites in communities across the nation to provide free Internet access and assistance in finding national and local arts and cultural resources online. Now in its third year, the Open Studio community has grown to include 18 training sites nationwide  -- ten of these sites specifically offer training to artists and arts organizations in traditionally underrepresented communities. To date, over 600 artists and representatives of arts organizations have received training through Open Studio's regional programs. For more information about the program and its regional training sites, please visit the Open Studio Web site at or call 202-638-5770.

II. Digital Divide

It is already apparent that digital technologies, which bring an exciting array of new opportunities to many Americans, actually aggravate the poverty and isolation that plague some rural areas and inner cities. Study after study show that three major factors -- race, education, and income level -- increasingly determine who will have access to new digital technologies and who will not. According to a Computer Intelligence 1998 Consumer Technology Survey, 80 percent of families making more than $100,000 a year have computers. By contrast, only 25 percent of families making less than $30,000 a year own a computer.

A 1998 Vanderbilt University study based on Nielsen data from late 1996 and early 1997 indicates that racial inequities in computer ownership and Internet access are especially significantly for households with incomes less than $40,000. In such cases, African Americans were less than half as likely as whites to own a home computer and about 60 percent as likely to have Internet access. "The rich are going to be getting richer in terms of information," says James Katz, a researcher at Bellcore and co-author of a survey on Internet usage. "The information poor will become more impoverished because government bodies, community organizations, and corporations are displacing resources from their ordinary channels of communication onto the Internet. To the extent any demographic group becomes excluded from and underrepresented on the Internet, it will also be excluded from the economic fruits that such participation promises."[1]

III. Improving Access Through Community Institutions

Technology skills and access to information will be essential tools for life in the 21st century. The Department of Labor has estimated that 60 percent of all new jobs are expected to require computer skills by the year 2000. Millions of Americans are eager to participate in the new, technology-based economy, society, and polity. But they need access to computers, training, and support, to acquire the skills required by these roles.

Community-based organizations are particularly well positioned to play a leadership role in spreading technology in low-income communities, mainly because they already have strong local ties. Community Technology Centers (CTCs) provide low-income, minority and other disenfranchised individuals free or low-cost public access to technology tools and services. CTCs have begun to proliferate in community centers, housing projects, libraries, after-school programs, and other community-based institutions around the nation. These centers provide a range of essential services including access to the Internet, literacy training, homework help, and even advanced computer skills such as desktop publishing, multimedia, and Web page design. In a survey of more than 800 low-income users of CTCs sponsored by the National Science Foundation, nearly 90 percent reported that a CTC had made a difference in their lives. Respondents spoke of improvements in their confidence, their outlook on life, and their future prospects.[2]

But funding for these programs, which reach some of the most disenfranchised Americans, is inadequate and fragmented, and many centers are struggling to survive. While community-based technology centers have proven to be one of the most effective means of providing computer access and training to individuals who are hard to reach because of poverty, isolation, and cultural and language barriers, little federal or state aid has made its way to CTCs. The Congress has budgeted $10 million in FY 1999 to support CTCs --the most substantial sum yet appropriated --the funding wound up as part of the omnibus bill under the budget for the Adult and Vocational Education Office of the U.S. Department of Education.

The Clinton Administration has also proposed a $65 million budget for CTCs in FY 2000, which would likely appear in the Departments of Labor, Health and Human Services, and Education, appropriations bill. Tight caps on discretionary spending, however, may put CTC funding in jeopardy.

IV. State Models

In addition to proposed federal money, some states are approving regional phone mergers with conditions on combined companies that will improve consumer welfare and community access to technology. In both California and Ohio, the state utility commissions have opened up the review process to include a discussion of strategies for using the deals as an opportunity to secure funding for much needed community telecommunication services.


As part of the 1997 merger between Pacific Telesis and SBC, the California Public Utilities Commission (CPUC) approved a unique approach to expanding support for California's communities. Working with nine community coalitions, representing 134 different Latino, Asian American, African American, civil rights, and disability populations, Pacific Bell developed the Community Technology Fund, which will distribute $5 million in grants a year over the next decade. The fund is intended to bring technologies to traditionally underserved communities. [3]

Grants will be awarded to diverse projects including consumer advocacy, multilingual assistance, and technical assistance. "This fund can make a real difference and set a model for the nation," said Gwen Moore, former California Assembly member and chair of the Community Technology Foundation. "I am excited that the program has the broad-based and collaborative involvement of community based organizations throughout California that are committed and dedicated to reaching the underserved." [4]


The Public Utilities Commission of Ohio (PUCO) negotiated approval of the merger of Ameritech and SBC to improve customer service and attempt to increase residential competition in Ohio. Additionally, the combined company has agreed to create two $2.25 million funds to benefit consumers. One fund will focus on informing and educating customers about their rights concerning communication services. The other fund, much like California's Community Partnership agreement, will help insure that rural and low-income areas in Ohio have access to communications technologies. Over the next three years, SBC/Ameritech will also provide an additional $1 million to existing Community Computer Centers that were created as part of a 1994 Alternative Regulation agreement between Ameritech and PUCO.[5]

IV. Call to Action

As local technology centers anticipate the appearance of federal support, many states currently have the opportunity to ensure that communities benefit, and are not ignored, in the merger approval process. It is imperative that state utilities commissions take advantage of the chance to impact positively on people's access to the tools of citizenship for the 21st century.

The community investment provisions of the Baby Bell mergers provide local groups and actors an invitation to organize and impress on policymakers the necessity of conditions on mergers that build capacity and provide access in underserved neighborhoods. Specifically, community organizations ought to consider any or all of the following items as important conditions for regulators to place on prospective local phone mergers:

funding to build capacity and infrastructure development in existing non-profit and community access points;
funding for new computer centers;
funding for needs assessments in communities to match program with needs;
funding for outreach and awareness of CTC programs and offerings.

Benton Foundation

The Benton Foundation promotes public interest and noncommercial values in communications through research and policy analysis, outreach to nonprofits and foundations, and print, video, and online publishing. Our mission is to promote communications tools, applications, and policies in the public interest through the relationships among the nonprofit, government and corporate sectors, and by serving as a laboratory for communications technologies and strategies.

Through projects like Open Studio (see side bar), Benton is tapping the power of public service media in innovative funding partnerships, providing awards to local groups across the country and connecting them in communities of learners.


[1] Goslee, Susan, Losing Ground Bit by Bit: Low-Income Communities in the Information Age, Washington, DC: Benton Foundation, July 1998,

[2] Chow, Clifton; Jan Ellis; June Mark; and Bart Wise, Impact of CTCNet Affiliates: Findings from a National Survey of Users of Community Technology Centers, CTCNet Research and Evaluation Team at EDC, Inc., Newton, MA, July 1998,

[3] Community Partnership Agreement,

[4] Ibid.

[5] Approval of Ameritech and SBC Merger, Case No.98-1082-TP-AMT (April 8, 1998),