Local governments are finally using the Infobahn to cut costs and bypass bureaucracy

By NINA PLANCK

n weekdays at 8:45 a.m., Sophie Boue leaves her oldest children, aged four and five, at preschool in Blois, a city of 55,000 in France's Loire Valley. Tucked into her handbag are the kids' personal Ville Plus smart cards. With a quick swipe through a scanner, their mother registers their presence and whether they're eating lunch and staying for after-school care or a swim. The card also takes care of family spending by automatically recording and, in many cases, debiting fees for school services. It's "an electronic wallet," says Boue. "It's very convenient and a practical way to manage our household budget." Teachers don't have to count noses and kids don't lose their lunch money.

In Villena, a Spanish city of 31,000 in the Valencia region, 350 km southeast of Madrid, even the local butcher is wired. In a system city officials dub Infoville, everything from municipal services to pupils' homework is available on the Internet. Butcher Luiz Saez, 23, is one of 60 retailers with wares online. "It's quicker and there's no queuing," he says.

In Cordoba, a city of 320,000 in central Andalucia, a southern Spanish region, Dr. Luciano Barrios logs on to his computer and demonstrates the region's health and social services smart cards. "We can check a patient's medical history and contact his doctor without his files," says Barrios, the director of the Levante-Norte health center, which oversees 35,000 patients. "It saves us hours in paperwork."

Such services are the bright ideas of public officials who believe that government--the mother of all service industries--should provide citizens with the same modern conveniences businesses offer. While banks and bookshops have embraced the revolutionary possibilities of information technology, state authorities have been slower to adapt. Shoppers use cards--debit or credit--in most stores, and the Internet is a fount of information ranging from stock quotes to football scores. Yet most governments still waste the time and try the patience of their customers with bureaucratic queues, rubber stamps and red tape.

Some European governments--especially at the local level--are beginning to adapt services to the Internet age. France developed and introduced the smart card with an embedded microchip to the world in the early 1980s, and it became popular in 1983 with France Telecom's pre-paid phone cards. The city of Blois put medical information for pregnant women and the elderly on smart cards in 1983. In 1991, Blois officials introduced smart cards for admission to city swimming pools. "If we could convince kids, how could parents refuse?" reasoned Bernard Valette, Blois' deputy mayor and former president of the software company Val de Loire Monetique, which proposed the program.

Still, the officials met resistance when they brought smart cards to schools and day-care centers in 1994. "Parents, bureaucrats, public officials--everyone gave us the evil eye," says Valette. Parents feared their kids would become mere numbers or be issued credit lines. The city countered by offering discounts to card users. Now, 12,000 of the 16,000 Ville Plus cards in circulation are held by children. The cards pay for 14 municipal services, from activity centers to lunch at city employees' cafeterias. When the balance runs low, cardholders--or their parents--can top up the account at four spots in town.

The pre-paid amounts are modest--so far. Families are encouraged to keep a balance of $20 a month to cover minor expenses such as school lunch, but larger expenditures like after-school care can run up the tab. The average expenditure for Blois families is about $80 per month. Lost cards can be canceled, but they have no access code.

The cards have a social purpose beyond convenience and efficiency. The Ville Plus central administrative office is in an underprivileged neighborhood. Says Valette, "People who are better off in other parts of the city can take their cars." And one official--not a handful--deals with each family because the card's social and administrative services are now centralized in one office rather than several. "When there's a divorce, or someone's in prison, it's not very nice to run from one office to another telling your story to every bureaucrat," says the chief administrator of the program, Claude Suraud. "People said smart cards were impersonal. 'My child is a number.' That's true. But on another level, it's much more human."

It is also smart government. After investments totaling more than $1 million since 1991, the Blois program is producing savings. The Ville Plus cards provide "enormous economies of scale" for school cafeterias, says Valette. "Before, they would run short of carrots or salad. Now they calculate down to the serving." Fewer employees are needed to do paperwork; billing is more efficient; payments are more regular. Before smart cards, 4% of bills for school services went unpaid. That has fallen to 1%, which compares with a default rate on school-related fees as high as 10% in Paris, says Valette.

Spain's regional government in Andalucia also hopes to streamline services and save money with new double-faced smart cards containing personal records. The regional government has issued 2.2 million cards since November, representing 35% of the population. On the green side, a magnetic strip stores patients' medical history which can be read by scanners in doctors' offices and medical centers. "I can change my doctor or choose my hospital without filling in dozens of forms," says Jose de Haro, Director of Insurance, Planning and Finance for the Andalucia Health Service. Soon the card will make health care seamless by permitting patients to see any doctor, anywhere. Away from home and need a prescription? A strange pharmacist won't refuse treatment.

On the card's red flip side, a microchip tells the bearer's work history, including everything from time spent on welfare to eligibility for disability pensions. The cards "simplify bureaucracy, increase efficiency and prevent fraud," says de Haro. By slipping the card into one of 300 special computer terminals, the holder can begin pension payments or sign on for welfare.

Such efficiencies are especially welcome in Andalucia because of crippling unemployment, which runs as high as 34%. But the program isn't cheap. The national government subsidizes most of the $56 million cost of the pilot project. But Madrid is watching closely, and if Andalucia's experiment is a success, cards could be introduced nationally.

Not far away, in Valencia, the town of Villena has put one in 10 homes and many businesses and municipal services on the Internet. With a password to protect privacy, it's easy to make medical appointments, place grocery orders and even do schoolwork. Connecting to 110 main services costs a modest 87 cents an hour and the site is ad-free. Infoville is run by a private company and funded by the Valencian regional government, IBM and the national phone and electric companies, Telefonica and Iberdrola.

In 1996, the town offered residents IBM PCs at half price--$595--and installed isdn lines at home or work. Telefonica laid 1,300 km of fiber optic cable and Sun Microsystems offered Java software. IBM won't profit from the sale of PCs, but hopes to make money designing new applications. "A lot of cities had similar projects, but most didn't get past the drawing board," says IBM's Bart Steuker, manager of the Global Government Industry Division. "This is the most revolutionary."

Now six other Valencian towns have joined Infoville, for a total of 3,144 subscribers. With discounts on computers and installation, officials expect 100,000 homes and businesses to be online by 1999. Valencia's regional government hopes to recoup its investment--$1.5 million of the $10 million price tag--by adding educational services, selling more connections to businesses and creating databases.

"It's not just a project, it's a philosophy," says management consultant Emilio Cervera, 48, who dreamt up Infoville. "Information technology is as important for primary school children as chalk and pencils were," says Cervera. For governments committed to promoting convenience and economic growth, a 21st century electronic infrastructure may be just as important as roads were to the Romans.

--Reported by Edward Owen /Villena, Tala Skari /Paris And Jane Walker /Madrid