Expert Opinion: The New Market Frontier in Technology

Broadband's Impact, Education, Expert Opinion, Health, Minority, The Innovation Economy, Universal Service June 30th, 2011

, President and CEO, One Economy

Last year, the National Telecommunications and Information Administration (NTIA) recognized the role of technology in strengthening this country’s economy by investing 7.2 million in funding into technology and broadband adoption initiatives through the Broadband Technology Opportunity Program (BTOP).  Through this funding the United States can build technology infrastructures and bring low-income residents online for the first time. However, technology in and of itself is not what is important. What is important is how people, families and communities use that technology to improve their lives. What will drive adoption and sustainability?  Why will someone come online for the first time?  What did we learn as an industry and society in bringing the first 100M on line that can help us in bringing the last 100M online?  What is the real cost benefit analysis on people having access to information that directly impacts the way they manage their health, educate their children or plan for their financial future.  I challenge all of us not to look at the cost of building these networks – but rather the cost of not building it.

The people in the low-income communities must be the next wave of broadband consumers to come online … this is the next new market frontier.  At its most pragmatic level, driving broadband adoption is in its essence creating an emerging market demand that will create billions of dollars of economic value and impact.

The NTIA recently published reports that there are an estimated 100 million Americans that have not adopted broadband at home. Five years ago, many households were unconnected because of coverage and availability.  The technology industry has made tremendous gains in providing network coverage to the vast majority of the nation.  Our current challenge and focus should be on broadband adoption and sustainability.

In some initial research and analysis we have done in some of One Economy’s targeted cities, we have found that the majority of low to medium income households are usually concentrated within five to seven zip codes in a large urban area.  From a wireless planning perspective, this actually is good news.  One of the key factors to manage the cost of deploying wireless services is household density per square mile.  The more people living close together, the easier it is to serve for a wireless network.

In the top 25 markets in the US – there is an addressable market of approximately six million low- to moderate-income households that live in these neighborhoods that are not currently adopting broadband.  Imagine if you will, if we can leverage new technology under the guidance of a National Broadband Plan and move the adoption/penetration needle by 5 percentage points.  This represents 300,000 new broadband households that can be brought into the digital age – creating in the excess of $50M in potential annual revenue for those carriers that deploy those services.

We are in a very rare moment in time – where we can remove barriers for participation and establish a new precedent for digital inclusion.  However, that success will be found in a collaborative, partnership model. Success stories will be driven by those companies that figure out how to work with the embedded community organization and leverage their reach and trust that they have established in the neighborhoods they serve. Industry has an obligation and opportunity to build a better model that would help unlock this potential.

Whatever we do should make as much business sense as it does social sense.  Digital Opportunity is not a one shot thing – it is a self sustaining ecosystem that can create a new business roadmap that low income families can come on line easier, faster and for longer periods of time.  It is the model where for-profit companies work with non-profit community-based organizations on how to reduce these barriers for entry.  How you market and launch new 4G services in suburban Virginia has to be dramatically different than how you would launch service in Ward 8 in the District of Columbia.  In our low-income areas, the planning and approach needs to be bottom up.

In 2009, the Knight Commission concluded in the Information Needs of Communities in a Democracy, that denial of digital access equals denial of opportunity. Anyone caught on the wrong side of three gaps, broadband, literacy and participation, runs a significant risk of being left behind. The Commission further concludes that all people have a right to be fully informed.  Americans cannot compete globally without new public policies and investment in technology.

The mission to bring all American’s online with affordable and sustainable broadband is not an option, but a moral and economic imperative.  Our ability to connect to the world and connect to each other is in many ways becomes a necessity—not a luxury.

From corporations to nonprofits and political leaders, we must use our collective talents, resources and inspiration to drive social change so that we can build and implement these new approaches to bring those not as  – into the connected world so that they have the same access to information, people and opportunity as the rest of the country.  Not only can we do it now better than ever before – but has never been as important for our future as it is right here and right now.


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