Rip Van Winkle.

BACK IN MY OLD RIO DE JANEIRO office, I had the vague feeling I was missing out on something with my low-speed modem and software from the early 1980s. My equipment fit just fine with the state of the Internet revolution in Brazil. But an imminent move to my new home in the heart of that revolution--Silicon Valley--made me fear I would have a lot of catching up to do.

Still, nothing could have prepared me for the shock of just how far Latin America lags behind the new, supposedly global, web culture.

Like Rip Van Winkle, I've spent the weeks since my family and I arrived marveling at the Internet's ubiquity. Most highway billboards now list a dot-com address. Elementary students give visiting CEOs tips on Internet startups. Northern Californians savor an ice-cream called "Computer Chip." All over the Valley people are clicking away to pay bills, consult with doctors, buy cars at cyber auctions, and read their email from laptops on the backseat armrests of Yahoo Taxis. Meanwhile, those who have never surfed the web are dubbed "Techno Eeks" in a front-page story from the area's major newspaper, the San Jose Mercury News. What would the Mercury News label the average Latin American?

While Silicon Valley is unique, its influence radiates throughout North America. According to Nua Internet Surveys, a Dublin-based group that studies the Internet, there are currently 201 million users worldwide. Over half of them are U.S. and Canadian consumers who also spend an estimated US$18 billion annually in e-commerce.

In comparison, just 3%, or 5.2 million of all Internet users, are Latin Americans. They are expected to spend just $200 million this year in online sales.

Since only an estimated one-fifth of PCs across Latin America is connected to the Internet, Nua describes the region as "one of the great online frontiers."

Nua research shows that even Argentina, which has South America's highest levels of education, income and middle class--as well as an extensive telephone system--has absurdly few citizens online. Just 250,000 users, or 0.65% of the nation 34 million inhabitants are wired.

Although Latin American nations have taken giant step in modernizing their economics, e-commerce remains rudimentary--except Brazil, which accounts or almost all of the region's online sales.

Most Latin American governments have done little to encourage Internet entrepreneurs. The region's banks still routinely reject online credit card transactions and telephone monopolies charge exorbitant prices for access. In Argentina, for example, a business must shell out $4,477 a month for a paltry 128k connection.

The barriers to entry start at the airport. In Rio, I lost track how many times I saw the cat-and-mouse game between Brazilians and surly customs agents. Returning from a trip to Miami, Brazilians would try to sneak in a laptop or a PalmPilot into the country only to be caught by a bureaucrat, who would take great delight in sticking them with a hefty import tax. In fact, it hasn't been long since foreign journalists could count on regular unannounced visits by Brazil's "computer police," who would levy fines if they found any high-tech equipment that had not been declared at the international airport.

And once Cariocas, as Rio residents are known, smuggle in their Miami bought computers (or pay double for a locally bought machine), they must hook them up to the nation's worst phone service. Since the Internet was first introduced in 1995, I could always count on slow connections, losing my connection as often as ten times a day or having the server go down for hours. That kind of service in Silicon Valley would cause riots.

Yet some experts predict Latin America will overcome its problems and undergo its own Internet revolution. According to a report by IDC Research, there will be 24 million Internet users in Latin America by 2003, generating $8 billion in e-commerce sales.

While these experts predict a web explosion within the next five years, don't expect a revolution. Latin American governments are way behind on numerous necessary pre-conditions--including remedying widening income gaps and rising unemployment (it's hard to have e-commerce explosion without a middle class), relaxing import tariffs on computer technology, ending de facto telecommunication monopolies and making telephones more easily available to the average citizen. Until that day, the Internet will grow but its users will continue to be the privileged few.