KEEPING ELECTRIC COOPERATIVE MEMBERS FROM FALLING THROUGH THE NET.

• Author: Massaro, Donald J.

Everything connected to the Internet appears to be booming. There is a dot-com gold rush on Wall Street. But, is Main Street being left behind? In a word: Yes. The information gap between people with Internet access and those without has a name - the "Digital Divide". This article discusses the:

1. Pervasiveness of the Internet,

2. Significance of the "Digital Divide",

3. Strategic Advantages for Community-Oriented Electric Utilities, and

4. Opportunities for Leading Rural Electric Cooperatives to Deliver e-services.

   Pervasiveness of the Internet

   It seems like everyone in America is on the Internet. They're e-mailing friends and family, buying merchandise and trading stocks--if you believe what you see in the news. Over 63 million Americans are online, according to one recent study (The America Online/Roper Starch Cyberstudy: November 1999). Internet users are still more upscale - with a median income of $51,000 per year - and they are better educated and younger than the general population. However, Internet users are becoming more mainstream as older Americans and people of more moderate incomes and educational backgrounds go online.

   What is equally significant to the number of people online is their attitude about the Internet. More than 8 out of 10 experienced users say that being online is making their lives better, and that the computer is the most important product of the century, when compared to the telephone or television. Over half of those online have moved furniture to accommodate their household computer.

   And, if they were stranded on a desert island, two-thirds of those online say that they would prefer a computer with an Internet connection to either a telephone or a television.

   When asked about the future of the Internet, three-quarters of those online predict that the Internet will greatly affect education; two-thirds say the same about the workplace. Half believe that the online medium will impact media and entertainment.

   Significance of the "Digital Divide"

   Yet, while the number of Americans accessing the Internet grows, the gap between information "haves" and "have-nots" continues to widen, according to a recent U.S. Commerce Department Report (Falling Through the Net: Defining the Digital Divide: July 1999).

   The term "Digital Divide" is becoming widely used to describe people who do not own a personal computer (PC) with Internet access, either because PCs or access is too expensive, or because PCs are too difficult to use.

   Most disturbing in the Commerce report is that Americans living in rural areas are lagging behind the national average in computer and Internet access, regardless of income level. At some income levels, those in urban areas are 50% more likely to have Internet access than those earning the same income in rural areas. Yet, with regard to telephones, rural households are as well connected as urban households, and far better connected than those in central cities. In short, too many Americans outside of major metropolitan areas are being left behind in the Internet revolution that is sweeping the rest of the country.

   Strategic Advantages for Community Utilities

   Fortunately, community-oriented electric utilities are strategically positioned to capitalize on the Internet revolution, and can help bridge the "Digital Divide" for their customers / members.

   Community-owned utilities in general, and rural electric cooperatives specifically, have the highest positive customer perception and loyalty among other service providers, such as telecommunications or cable companies.

   Local electric utilities have established themselves as a trusted channel for the delivery of services. To that end, electric cooperatives are well positioned to pursue new customer-valued services to build a product offering beyond energy, enhance brand equity, and establish switching barriers to potential competitors who may consider entering their electric market. Initiatives like Touchstone Energy have decisively documented and leveraged...