Net Loss

How LatinoNet -- the poster child for Washington's attempt to empower the poor with technology -- wasted money and networked almost no one

"You were hoping that you'd get some sort of phone call that said, 'We are going to go this way!' and that we could keep going," recalls Javier Ruiz, who worked as a LatinoNet staff member in 1995 and 1996. "All I know is that, when we presented different options, when Jose presented different options, there were schisms in the board that didn't allow them to go ahead, there wasn't enough support for any plan to go through."

The confrontations between Valdez, who refused to relinquish his founding vision, and Montes de Oca, who saw the organization he ran collapsing around him, became increasingly bitter. "I saw the grandfather syndrome occur," Montes de Oca recalls. "The person that develops the idea can't let go of the original idea."

Rather than blame changes in communications technology for LatinoNet's plummeting subscriptions, Valdez blamed staff.

Valdez now says in his own defense that he resisted moving to the World Wide Web because he believed LatinoNet didn't have sufficient staff to maintain information sites in more than one format. He says his community-activist board members weren't prepared to understand Internet technology.

But during conversation Valdez still blames others for Latino-Net's failure.
"The membership charges for nonprofits was quite nominal. It was 80, 120 bucks, but it was really quite nominal. The value of the training, the technical support, and the modems was easily worth from $4,000 to $6,000. We asked them to pay a $60 to $80 membership fee," Valdez says. "We thought, in terms of our own financial model, that this was a reasonable trade-off, and would generate revenues for LatinoNet, and we could use monies to help support LatinoNet."

By 1996, Jose Montes de Oca could no longer bear fighting with Valdez, and he resigned. So did four of Valdez's board members. Valdez moved LatinoNet's offices from San Francisco to San Jose, and Valdez met with the board to discuss scaling LatinoNet down to a more modest organization dedicated to teaching Latinos how to use computers. But there are many organizations -- especially in San Jose, a city run by Hispanics and computer engineers -- that teach Hispanic people how to use computers. Nobody would donate money to LatinoNet's revised cause.

Valdez and his board let the last of LatinoNet's dwindled staff go last fall. The Mexican Heritage Corp. will likely decide this month to take over what's left.

"That's sad," says former board member Luis Alvarez when told of LatinoNet's current status. "It's very, very sad."

Despite LatinoNet's failure, Valdez seems to have landed on his feet. A former Stanford University and UC Santa Cruz educator, and a much-sought-after panel speaker on the issue of "community empowerment through technology," he makes his living as the principal of Valdez Associates, a consulting firm that deals with issues of community empowerment.

Empowerment comes in a variety of forms. Earlier this year, Valdez and a group of co-researchers wrote a white paper recommending that Pacific Telesis and Southwestern Bell Corp. should rebate $1 billion to consumers as part of their merger plans.

He was at the Fisherman's Wharf Marriott last month, meeting with government officials in preparation for work as a consultant to a National Institutes of Health minority wellness program.

"It's not so much health care, but finding ways to empower communities," Valdez explains. "Work I've done with the National Cancer Institute, telecommunications policy, LatinoNet, this -- the common denominator is to empower communities. Since what I know best is community empowerment, that's a key element."

Indeed, a quick -- free -- Internet search engine probe produces the name of Dr. Armando Valdez, chairman and founder of LatinoNet, as a panelist at dozens of seminars, conferences, workshops, and round tables.

Valdez has found himself a handy niche, somewhere between the government's and academia's infatuation with technology and their urge to disguise the growing gap between the underclasses and the rest of America. It's the urge that drove Newt Gingrich to suggest placing a laptop computer in every poor child's lap. It's the infatuation that keeps the useless metaphor "Information Superhighway" on a thousand bureaucrats' lips.

It remains true that computer networks enjoy promise as a democratic leveler, even an instrument for social change. With the advent of the Web, anyone with a $1,000 computer and a Web account can, at least theoretically, have the publishing reach of a Conde Nast. Disjointed interest groups can share information through e-mail and bulletin boards, and better advocate their causes.

Armando Valdez dreamed of harnessing this promise when he launched LatinoNet.

"Experiments like LatinoNet, whether they fail or succeed, leave the question of access to technology in the air. It's unresolved, it's left unaddressed. What we now have in this country are public networks. What about the wiring of schools? What we have is technology islands. Some groups that succeed and others down the road that don't. What we're doing is getting further inequity. If indeed we're moving toward an information society, an information economy, this all becomes very suspicious to me. It undermines democracy. It's creating a lot of things this technology can very easily resolve. This is the kind of tech that can unify, that can empower communities -- that's the power of this technology."

It's a power that LatinoNet might have helped harness. But ego -- and the advance of technology itself -- got in the way.

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