April 14, 2000

Good afternoon and thank you for that very kind introduction.

I want to thank you for inviting me to address ASNE's 2000 Convention. With President Clinton, Vice President Gore and General Colin Powell—among other distinguished leaders—preceding me to this podium over the past few days, I am truly honored to be here.

I understand a number of you visited AOL earlier this week, saw our operations center and met Bob Pittman, Dick Parsons and Washington's own favorite team owner, Ted Leonsis—or at least he was until last night's game, where they lost by a touchdown! But if anyone knows about comebacks, Ted does.

I hope you sensed the excitement we feel and why we think it's such an amazing time for both of our industries and, frankly, for our country and the entire world.

Every day, we see new evidence that our lives are growing increasingly connected. The interactive experience is changing the way we communicate—and the way we build our communities. It is changing the way we entertain and inform ourselves; the way we do our jobs and run our businesses—and even the way we connect with our government and our elected leaders.

And, if you think about it, we are about to elect the first President of the Internet Century.

Now, it might sound like a bold statement to label this century before it's even six months old. But already we are seeing this medium's power to transform people's lives. With the explosion of this new medium, we have the opportunity not only to figure out how it can best benefit society, but also to take advantage of the ways it's transforming every aspect of our lives.

With that in mind, I'd like to begin with a brief look back at a moment in presidential election history and then raise a question about the current campaign.

The moment was in 1960. Like today, it was an exciting time. Social and political change were in the air. The civil rights movement was gaining force and moral authority. Technology was developing at a pretty brisk clip as the United States and the Soviet Union vied to be the first to send a man to space.

Then, as now, it was an election year. But certainly not an ordinary election. It was an election that would see the first televised debate of candidates for President—an event that helped bring about the greatest voter turn-out in ten presidential elections.

Both scholars and pundits tell us that Nixon won the debate on radio, but—most important—Kennedy won on the emerging medium, television.

The question I pose to you today is: Who will win online in 2000?

And I don't just mean whether Vice President Gore or Governor Bush—or even Jesse Ventura—will win the online campaign.

What I'm really talking about is whether the Internet can help recast the debate and reshape the issues of this election by forcing us to think about them in a new light.

Because the future of the Internet is about much more than bytes or bandwidth. It's about more than Web sites or streaming video. It is about how creatively, effectively, and intelligently we can use that technology to improve people's lives—by building bridges between industries and mediums, by building bridges between governments and the citizens they serve, and by building bridges between people and their communities.

As you all know, the Internet has already changed the landscape of our lives.

Ten years ago, the Internet was the exclusive province of researchers. Just five years ago, the World Wide Web barely existed, there was no talk about a "new economy," and, hard though it may be to believe, "e" was just the fifth letter in the alphabet.

Today, more than two hundred million people are online worldwide, and if projections hold true—as I think they will—that number will more than double in the next three years. There are around 800 million Web pages, covering everything from world markets to world wrestling. And "e" has become the prefix for a massive social and economic transformation.

I probably don't have to tell any of you this, because you've seen the Internet dramatically transform the newspaper business—and watched the news media transform the Internet.

It's safe to say that the online medium would not have taken off the way it has without the content you provide, the consumer demand for information you have primed, and the high standards you have set. As the value chain has moved from information to insight, you have responded by offering context as well as content.

In fact, few businesses are better equipped to compete in this new medium than newspapers. I say this as someone who loves newspapers and expects them to be around far into the future. I'm a pretty voracious reader, and I like news. I read a lot online, but I also like the paper edition you can fold, take with you around the house, and clip.

But I also know that the opportunities for reaching people are multiplying even faster than the stories the news covers. And that people are beginning to expect more from the medium.

The average AOL user has gone from being online one hour a week to one hour a day. And while that's been gratifying for us and a sign of real progress, it's just scratching the surface.

Having gotten a taste of interactivity, people are starting to say, "Why can't my PC be as simple and visually compelling as my TV—and why can't my TV be as powerful and flexible as my PC?" They're starting to ask, "Why can't I send instant messages from my cell phone?" And, "Why can't all these new devices work together in a way that's simple and easy to understand?"

These days, we call it convergence—and it is turbo-charging a second Internet Revolution that will make the first one look almost quaint by comparison.

Just think about the four devices we rely on the most in our homes: the television, the PC, the telephone and the stereo. Already, the distinctions between these four devices are blurring—and interactivity is starting to connect all of them—giving people access to the Internet wherever they are and whenever they want.

Soon, televisions will come equipped with interactive program guides, and people will be able to bookmark their favorite programs like they bookmark their favorite Web sites. They will even be able to access interactive services like e-mail and Instant Messaging while they're watching TV—and trade comments on breaking stories or sports events.

The role of the PC will change, too. Just as the TV has evolved in many houses from a single console in the living room, people will have interactive devices all through the house. A recent AOL survey found that 52% of people online are already rearranging the furniture for the PC. By the way, that statistic even exceeded our favorite one that said the majority are skipping breakfast to log on.

The fact is, the first steps of convergence already are driving consumers' expectations—and the more they get, the more they want.

One of the reasons we are so excited about our plan to merge AOL and Time Warner is that it gives us a chance to drive this second Internet Revolution—not only by providing all the separate pieces, but also by connecting the dots for consumers in a simple, convenient way that makes their lives better.

This is the future that we are committed to building. And it's not just a technologist's dream—it's what people are asking for.

Already, the interactive experience is beginning to influence our expectations—not only as consumers, but as citizens.

People are already beginning to ask: "Why can't I renew my driver's license online?"... "How can I use the Internet to pay my student loan?"... and "Why doesn't my local school board have a Web site?"

And governments are already responding. From Washington, DC to Washington State to Washington County, digital government services are a growing phenomenon—and a hot business opportunity. Entrepreneurs and governments alike are clamoring to find new ways to make government easier and more accessible on the Web.

And that's not all. As all of you know, the Internet is influencing the political process—from public debates to online voting.

Last month Arizona held the first-ever online Democratic primary. Candidates are increasingly using the Internet to raise campaign funds and to connect with their constituents online. And now you can type in your zip code and find out everything from who your representative in Congress is to how he or she voted—and even e-mail them to tell them what you think. And these are just a few of the new opportunities to keep citizens informed and inspire them to get involved.

This is all extremely promising—but the Internet has an even greater potential to help us address the issues that most concern our lives.

Think of it this way.

The issues that are being debated in this election are pretty much the same issues that have dominated most elections. The traditional tension between lowering taxes and increasing funding for social programs, the ideological battles over gun control and family planning, the debate over the role of government in our lives. And of course, issues like education, health care and foreign policy continue to dominate headlines.

We may have begun to use the Internet to debate these issues—but we haven't really begun to ask the bigger question: how can the Internet be a catalyst to think about them in a new way?

And this is the question we most need to answer in a changing world.

Now, I don't pretend that this will be easy. It certainly wasn't easy for many businesses to embrace the Internet and really integrate it in a way that benefits consumers.

It's sort of like the "Seven Stages of Internet Acceptance"—a process I'll wager a few of you are very familiar with.

The first stage is dismissal. The Internet is a fad or a gimmick, and it has nothing to do with my business.

The next stage is denial. Maybe a few businesses are going online, but their success is a fluke.

Then comes abject terror. I will never be able to understand the Internet, let alone use it to transform my business.

Fear gives way to curiosity: How can I make the most of this growing opportunity?

Then comes experimentation. I'll launch a Web site and see what happens.

The next stage is actual use. You have a Web site, you even allocate some staff to deal with your online presence, but you haven't fundamentally changed the way you do business.

Finally, transformation. No more incremental changes. The Internet is not just an interactive ad; it is a way of doing business, a way to solve problems of distribution and marketing, a way of life.

Now, when it comes to using the Internet's enormous potential to confront the issues that will shape this century—I would say we are still somewhere between curiosity and experimentation.

But if the past five years have taught us anything, it's that the future isn't around the corner. The future is now.

So, I'd like to talk about four of the issues that are on the campaign agenda—education, taxation, globalization, and the Digital Divide—and how the Internet is forcing us to think about them in a fresh way.

These aren't Internet issues, per se, but they are issues for which the Internet can be a catalyst for real social and political change.

Take education.

In the next few months, we will hear a lot about whether we should provide school vouchers or create more charter schools. Well, as the parent of school-aged children, I agree that this is a very important question, but it's not exactly new.

Maybe the bigger question we should be asking is how we can ensure that all of our schools are teaching our kids the skills they need to succeed in the global workforce of the Internet Century.

We've made a lot of progress in a few short years to put computers and Internet connections in our public schools and libraries.

A recent Quality Education Data Report shows that 95 percent of our schools are connected to the Internet and 72 percent of our classrooms are online—up from only 57 percent last year. 62 percent of kids between 8 and 15 are online. 33 percent of kids used the Internet for school projects—which might not sound like a lot, until you compare it with the 18 percent who used libraries.

But already, that's not enough. We have to use the Internet to actually transform education.

The Internet shouldn't just supplement the way we've always taught our children. It isn't ketchup or mustard. It's not even the main course. It's more like the plate. It needs to be there for just about every meal.

That means we have to use technology not only to pass on the substance of a lesson, but to improve the very process of learning and teach our kids the skills they need to succeed in the global workplace.

And it means we have to teach our teachers, as the Crosby Stills and Nash song says, and teach them well.

Teachers too often get thrown to the cyber-wolves, because training gets overlooked and under budgeted. Our investment in educational technology should be matched with an investment in teacher training and professional development throughout their careers.

Technology is a tool, not a miracle. The best education systems will follow the lessons retail establishments have already learned: they need both face-to-face interaction and an engaging online presence.

But I believe we have a moral responsibility to use this medium to help every child to succeed—and we can't afford to leave anybody behind in the Internet Century.

Another issue we ought to be thinking about in a new way is taxation.

Now, in this election—like just about every election I can remember—we will hear a lot about whether we should have more tax cuts or more investment in social programs. That's certainly nothing new—and I don't think we'll probably solve such a fundamental difference in political ideology this year, or next.

We also may hear something about how we should tax Internet transactions. I think most people understand that the fundamental principles which should guide us in this matter are simplicity and fairness. The Internet should not get special treatment—it should not become a tax haven—but neither should it be unfairly targeted.

There are more than 7,500 state and local jurisdictions that levy sales taxes. Tax rates and definitions vary across these jurisdictions, posing real challenges for small businesses using the Internet to sell products nationally.

Take as an example a 3-person business that sells handkerchiefs over the Internet. A handkerchief is treated as "clothing" in some states and as an "accessory" in others. And of course, "clothing" and "accessories" are taxed at different rates in different states. If this tiny business were required to collect sales taxes on its handkerchiefs in all jurisdictions where purchases occurred, it could face a significant administrative cost.

Now suppose our budding entrepreneurs, instead of selling handkerchiefs, sell digitized products, such as downloaded music or software. With these products, the residence or location of the buyer is typically unknown. Is it worth jeopardizing the privacy of their customers simply to collect the sales tax? Of course not.

Don't misunderstand me. I believe that cyberstores and brick-and-mortar stores should face the same tax collection responsibilities and burdens. In such a world, there would be no distinction on whether the purchase is made online, through a catalogue or telephone operation, or in a store—purchases and businesses would all be treated the same.

But we're not there yet. And getting there is going to require more than tinkering with the tax code. We shouldn't just be asking how the Internet should be taxed. We should be asking how we should transform our tax system to reflect the changes of a more connected world.

We have an opportunity now, while the Internet is still young and the impact of e-commerce relatively small, to craft tax policies that address the challenges and embrace the opportunities of the Digital era. We shouldn't squander this opportunity.

Global trade is another area where fresh thinking is needed, and the Internet can help recast the debate.

For years, we've argued over whether we should give China a place in the WTO to make them full trading partners or to deny it because of their record on human rights. The Internet is making this into a false choice.

The interactive medium is opening up countries like China to the rest of the world.

Today, more than 9 million Chinese are online and over the next few years China is expected to become one of the largest Internet markets in the world. And while the vast majority of China's population still has yet to go online, the Internet already is making a difference in the way the Chinese people live, work and learn.

But the promise of China's catapult online has far greater implications. At a time when China is undergoing a remarkable transformation, the Internet can be a powerful tool to give the Chinese people unfettered access to the world of ideas and information that is the cornerstone of freedom.

Incorporating the Internet in China will not occur overnight and without expressions of concern at some levels of that Government. Yet, it will inevitably occur, and America and the rest of the world can play a positive role in contributing to this process.

My view on this has been shaped by the powerful impact of the medium in other countries. Earlier this year, I had the opportunity to talk to the leaders of Israel, Jordan and the Palestinian Authority. Each of them wanted to discuss strategies for expanding Internet use in the Middle East, not only because they saw the it as critical to economic development, but also because they believed it could help the next generation of young people find a path to lasting peace.

So I see the vote for normalized trade with China as a vote on whether the United States wants to engage with China and facilitate the type of reforms that many in China are working to achieve.

And it's a vote about whether we want the Internet to flourish in China and provide the Chinese people with the same benefits that people around the world enjoy as a result of this medium.

Finally, we need to think about the challenges at home differently too.

There has always been a gap between the "haves" and the "have-nots" in our society. The question we face today is whether the Internet is going to widen that gap or close it.

As you know, there is a growing divide between people who have access to the new technology and those who don't—a divide that breaks along many fault lines, including education, income, race, and geography.

75 percent of households with incomes over $75,000 own computers yet only 10% of our poorest families do—an unacceptable situation when more then 60% of all new jobs will require high tech skills by 2002.

But we can do something about it. Giving young people the tools to reach their dreams is not a job any one person or entity can or should do alone—not parents, not teachers, not community leaders, not businesses, not government. It's something we have to do together—joining our resources and expertise, sharing the things we know can work and applying those ideas to existing programs—working from the top down and the bottom up.

I am especially proud of the role we are playing at AOL to help launch PowerUp, a unique public-private partnership to create a network of community technology centers that teach young people the skills they need—and that give them the guidance they need—to make the most of their potential

We have to keep asking ourselves: What are the concrete steps we must take to ensure that the benefits of the Internet Revolution are equally shared, leaving no community or country behind in the Internet Century?

As we enter that Century, these are the big questions we need to be asking—and answering. We need to reinvent our way of thinking about these issues to reflect the new connected world we're all living in.

Now, there's no doubt that this will be quite a task. The truth is, governments—and, to be honest, businesses—only reinvent themselves in times of crisis because the uncertainty gives them a mandate for real change.

But now we are living in incredibly prosperous times—and our real challenge is to be bold in our thinking now... not to wait for a crisis.

So, how do we tackle these challenges? The most important challenge is to develop a framework that can guide policymaking across issues and can be applied as new issues arise.

Let me take a quick cut at it.

First, anything we do should foster greater individual choice and empowerment. This new technology should be used to give individuals more voice and say about products, politics and policy. Online, the consumer has more power than ever before—look at the way the financial industry has changed, where individual investors can now access the latest research reports, chat online with leading analysts and transact with the click of a mouse. That same degree of individual empowerment should be embraced in health care, education and other fields.

Second, the line between public and private policy is going to get more blurred—and that's as it should be. Private industry is going to have to be more proactive, more-forward looking and more willing to shoulder the responsibility of developing policies that protect consumers and maximize choice. Governments will have to be willing to listen to and address industry concerns and resist the temptation to dictate solutions. The government/industry relationship needs to continue its move from one of confrontation to one of collaboration.

Third, policies should be technologically neutral. The new medium should be given its chance to succeed or fail on its own strengths and weaknesses. It doesn't need advantages, but it shouldn't be disadvantaged. At the same time, we will all be challenged to reform existing laws, neutral on their face, that create barriers to the growth of the kind of electronic commerce that can serve all consumers.

And fourth, policies should be designed so that all segments of our society and countries around the world have access to the power of the Internet and can participate fully in the economic and social changes it helps to bring about.

But this is just a beginning—it's up to us to write the rest of the story.

This week, ASNE's President issued this challenge to all of you when he said that "over the long haul we must think and act differently" to make the most of the developing medium and use it to deepen your connection to the everyday lives of your readers.

That is not too different from something President Lincoln once said—which is just as relevant today. "As our case is new, so we must think anew, and act anew. It is not "can any of us imagine better?" but, "can we all do better?" I think we can.

I'd like to close with an observation about why this election year is so important.

In the early 1800s, President Thomas Jefferson launched the "Continental Century," beginning America's long expansion West and long tradition of unlimited opportunity.

In the early 1900s, President Teddy Roosevelt launched the "American Century," leading the industrial revolution, and establishing America's presence as a global force in the world of international trade and politics.

The next President of the United States will launch the "Internet Century"—another era of new frontiers, new challenges, and new opportunities.

Every century starts with such promise. Let us do what we can to ensure that the "Internet Century" lives up to its potential to make people's lives better—all around the world.

And now, I'd be happy to take your questions.