Tauzin-Dingell: Focusing on the Wrong Fire

Monday Morning Report

The announcement this morning that cable giant Comcast intends to purchase the vast broadband capabilities of AT&T, which would create the largest high-speed cable Internet company in the U.S., adds fuel to an already raging fire in Washington over high-speed broadband Internet access. But recent Ipsos-Reid research suggests that relieving Americans' fears about the security of their personal information online, rather than pushing high-speed broadband access, should be the topmost Internet issue that both government and the private sector should be addressing.

The fight between the regional phone companies--who support the Tauzin-Dingell bill (officially, the Internet Freedom and Broadband Deployment Act of 2001)--and the competitive local phone companies and AT&T-- who support the opposition bill (called the American Broadband Competition Act of 2001)--is one of the biggest lobbying fights in Washington today. Supporters on both sides might want to argue that Internet access, especially high-speed, broadband Internet access for more Americans, is an important problem that needs to be addressed by passage of the bill. And, research supports the contention that the U.S. is lagging in this regard: Canadians are twice as likely as Americans to have high-speed broadband access, according to online surveys conducted in March and May, 2001, using the Ipsos-Reid North American Internet Advisory Panel.*

*The North American Internet Advisory Panel consists of 30,000 Canadian households and 50,000 American households that participate in Internet surveys on all topics on a regular basis with Ipsos-Reid. (Ipsos-Reid is a global public opinion and market research company). This Internet Advisory Panel includes some of the more Internet savvy consumers in North America, all of whom spend at least an hour a week on-line.

% of Internet Households with High Speed Internet Connection

160

U.S.

Canada

March and May 2001

14

31

From an online survey of 1,000 Canadians in March and 740 Americans in May from the North American Internet Advisory Panel.

But while broadband access in the U.S. could certainly be improved, other recent global surveys indicate that the primary barrier to broadband growth in the U.S. is not access. Instead, it is Americans' worries about what might happen to their personal and/or financial information when they post it online. These fears are more potent in limiting the growth of the Internet than is access to the latest and greatest high-speed connection.

1. The U.S. Is No Longer the Leader in Internet Growth

Tauzin-Dingell issues in Washington may be garnering a lot of attention, but Ipsos-Reid data on global Internet usage trends suggest that the real fire is elsewhere. The data suggest that Americans' attitudes and even fears, rather than technological limitations, are the main culprits preventing further Internet growth in the U.S.

"The Internet is no longer an American institution. The bulk of future global Internet growth will NOT be in North America. Moreover, the growth that will come in North America will not come because Tauzin-Dingell passed, or because it was defeated. That's because access to the Internet, whether it is broadband or dial-up access, is not the real barrier to increased Internet usage in North America. Attitudes are the problem," says Thomas Riehle, President, U.S. Public Affairs, Ipsos-Reid.

Total Global Internet Use

Contribution by Region (Reported as % of total global Internet use)

160

2001

2000

1999

United States

34

36

40

Western Europe

23

22

18

Non-U.S. English Speaking

13

12

13

Japan

4

9

11

Asian Tigers

9

8

7

Ibero-American

8

6

6

Rest of the World

8

6

5

From the Ipsos-Reid Global Express Survey February and March 2001 with 8,583 adults in 16 countries.

2. Looking at Americans' Online Security Fears

Other regions will fuel more Internet growth than America will in the near future, in the sense of non-users coming online and becoming part of the Internet population. The focus now for the Internet industry, when it comes to Americans, should be on optimizing the online population's experience with the Internet. For Americans to make fuller use of the Internet, they have to feel more comfortable with it. For this to happen, a big attitudinal barrier needs to be assuaged: fear of fraud and theft. This, more than any problems with high-speed Internet deployment, represents the real obstacle to future Internet growth. To expand and accelerate Internet growth, Congress might do better by passing measures that would reassure the public about the safety of their personal/financial information on the Internet than by fretting over Tauzin-Dingell.

Concerned about Online Fraud (Ranked by % who feel online fraud is major concern)

160

Major Concern

Moderate Concern

Minor Concern/Not a Concern/DK

France

63

23

14

United Kingdom

55

19

26

Canada

54

21

25

Brazil

51

10

39

Japan

50

38

12

Germany

49

31

20

Netherlands

49

28

23

United States

47

23

30

Italy

47

21

32

Switzerland

41

31

28

South Korea

40

25

35

Denmark

39

24

27

Jamaica

35

10

55

Spain

26

26

48

China

15

39

46

Poland

11

23

66

From the Ipsos-Reid Global Express Survey February and March 2001 with 8,583 adults in 16 countries.

3. Americans In Particular Are Also Fearful About General Privacy on the Internet

While Americans are evidently nervous about online security, they're still shopping on the Internet, as the following table illustrates. Americans are more likely than Canadians are to have made online purchases. However, they're much less likely than Canadians are to have conducted banking transactions, and they're less likely to trust the banking industry to protect their privacy. What does this spell? Americans have already pulled out their credit cards to make purchases on the Internet, and they might become a lot more involved in all-things-financial-and-Internet were some institution, or a combination of them, to step up to the plate and quell their fears about the potential (mis)use of their personal information.

160

Percent of Internet Users Who...

160

U.S.

Canada

Have high speed Internet connection

14

31

Have done banking online

29

61

Have made purchases online

77

68

Are confident that banking industry can ensure online privacy

49

69

From an online survey of 1,000 Canadians in March and 740 Americans in May from the North American Internet Advisory Panel.

  1. Where Will Growth Come From?

According to Tom Neri, President of Ipsos-Reid U.S Market Research, the Internet's future growth in North America depends on some important perceptual shifts among both the online and offline public. He notes: "Internet growth in Canada and the U.S. has hit an upper limit among the current populations. Certainly, new growth in these countries will come from youth, who are relatively free of the attitudinal barriers inhibiting some of their older counterparts from going online. But there are ways that growth could revive among the older North American population: new applications that convince more people that they need the Internet, as well as greater assurances that the Internet is a safe place to be a consumer."

Says Ipsos-Reid U.S. Public Affairs President Riehle: "If either of the broadband Internet access bills were as good as their names, they would focus on minimizing the potential for Internet banking fraud, and not on the relationship between old telephone regulations and new broadband Internet applications. These bills are jumping an important step. The barrier to Internet growth arises from the oldest of human worries--the threat of highway robbery (in this case, robbery on the information superhighway), and of being exposed to those you'd rather not even know you. These ancient fears remain the biggest stumbling blocks to increased Internet use as well as profits. Once these are taken care of, we'll be on the right road toward speedier broadband deployment."

Contact: Thom Riehle Tel: (202) 463-7300 email: thomas.riehle@ipsos-reid.com

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