The Right to Life, Liberty, the Pursuit of Happiness and Internet Access

Commentary by Bill Bittner, President, BWH Consulting

The theme at NRF this year was all around customer relationship management (CRM) and building a loyal customer base. Much of the activity was centered on the cell phone and its expected place at the center of the future in-store experience. Customers were able to talk with their friends as their image in the latest fashions was displayed on the retailer's web site. Promotion messages were directed to consumers as they walked the aisle of the store. Payment systems used the phone to complete credit card transactions or carry "cash" balances.

As I watched these demonstrations, I thought about places in the ski country of Vermont where internet access is still over dial-up lines. Then I thought about all the people who do not have a cell phone. I know that seems hard to believe but they do exist. And yet the cell phone is only part of the story. Much of the promotional information was delivered via streaming video. That's not something you really want to experience over a dial-up line. So all those households that are in remote locations where cable and DSL has yet to reach need some way to get on the network.

The challenge with constantly changing technology is that for some period of time you have double (or triple) the costs because you are supporting both the old and the new. Wouldn't it just be cheaper, less confusing, and fairer if we just said that everyone has a birthright to network access? Federal and local governments have always maintained access to the highway systems. Since the internet is the "highway of the future," why do we put it in the hands of private companies? Some cities have already started to put wireless "clouds" in their jurisdictions. Maybe this should become the norm rather than the exception.

There is a sinister side to this for retailers. Think about how much of today's discretional spending is for "hard goods." I don't mean the traditional products you would find in a hardware store; I mean anything that has a "physical presence" and requires distribution. Retailers are usually the last step in the supply chain for physical goods. If everything could be delivered over the internet, retail stores would no longer be necessary. How much of our economy is now based on "virtual goods"? Think about movies (what is the difference between a movie and a video?), music, games, etc. Then think about all the online shopping, which is still only six percent of sales but growing. How would all this change if everyone had broadband access? How much longer would we need to keep doing things both ways?

We talked about this a couple years ago when Philadelphia first announced their intentions to provide wireless access. (See RetailWire, 12/9/04 - Facing a Fork on the Information Super Highway) . Now the "content" is starting to become available. Have opinions changed? Does it make sense for the government to somehow ensure everyone has access?

There are a whole lot of different ways this discussion could go, ranging from government taking over the network to dictating the way network service providers distribute access. We already had the debates around "net neutrality" and the effort of a few big internet users to speed the delivery of their content.

I really believe we need to speed up the whole process of getting everyone onboard the internet. I don't think letting government take over the internet is the answer. What makes the most sense to me is to do like we have done with the gas companies. We have separated the distribution services from the fuel costs so that customers can shop for the "content." It seems the internet, phone services, and cable should all work the same way. Connection providers need to provide access to all neighborhoods and need to subsidize the rural customers and depressed neighborhoods that otherwise could not afford connections. This gives the content providers a level field on which to present their products.

Should we provide everyone cell phones? I don't know. We don't supply everyone a car. We do subsidize mass transit. Maybe the answer is some kind of alternative device that ensures identity and can hold a "cash" amount. If everyone had a card that assured they were who they said they are, that could be their "transit ticket." People get crazy when you talk about "identity card," but the number one security challenge is "authentication." How do you really assure yourself that a person is who they say they are? Everyone talks about biometrics but it is not hard to imagine someone lifting another person's fingerprints and applying them to their own fingers. Eye scans are another technique but I am sure contact lenses are an issue. So if the person alone is a problem, maybe we can work with a simple ID card that can be used in public devices. The card, combined with biometrics, would provide the authentication needed to allow network access.

Discussion Questions: How beneficial would universal access to high-speed communication networks be to the retailing industry? Should the industry lobby government to bring about universal access? If the government were to launch such a program, how do you think it would be implemented and in what form would it take?