Is the internet a merit good?

In 2021, the Biden Administration announced the roll out of the Affordable Connectivity Program – low cost and high-speed internet for those who couldn’t afford their own connection or have difficulty setting it up.

The government is currently on a drive to promote the initiative further as many Americans seem to be unaware of their eligibility.

16 million households are currently signed up for ACP, representing savings of over half a billion dollars per month. The internet connections come at a heavily discounted price and offer a download speed which is enough for video calls and streaming movies.

Eligibility for the program is largely based on income, with the premise of the policy that the internet is almost a necessity these days, and therefore the government should increase access when households are under consuming.

That leads us into the pertinent question of: is the internet a merit good?

Recall that a merit good is one which is socially desirable as it offers wide-ranging benefits to society, and when allocated by the free-market remains under consumed.

Here is a breakdown of some arguments for and against the proposition:

Reasons why the internet is a merit good:

1. Increased access to information: The internet provides access to an enormous amount of information that can be beneficial for individuals, businesses, and society as a whole. This information can help people make more informed decisions and increase their knowledge and skills.
2. Improved communication: The internet has revolutionized the way people communicate with each other. It allows people to communicate instantly and easily, regardless of their location, which has made it easier for people to collaborate, work together, and build relationships.
3. Economic benefits: The internet has created many new opportunities for businesses and entrepreneurs. It has made it easier for businesses to reach new customers and markets, and has lowered the cost of doing business in many industries. This has led to economic growth and job creation.

3 Reasons why the internet isn’t a merit good:

1. Online harm: The internet can also be used to spread harmful content, such as hate speech, fake news, and cyberbullying. This can have serious negative effects on individuals and society as a whole.
2. Dependence on technology: The internet has become so pervasive that many people have become dependent on it for daily life. This dependence can lead to addiction, social isolation, and a lack of face-to-face communication. It can also lead to a lack of critical thinking and problem-solving skills, as people rely on the internet to provide answers and solutions for them. This dependence can have negative impacts on mental health, labour productivity and social well-being.
3. Privacy and security risks: The internet also poses significant privacy and security risks. People’s personal information can be hacked, stolen, or misused, and the internet can be used to spread malware and viruses that can harm individuals and businesses. This can lead to significant financial and personal losses.