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Broadband's Impact

Towards Universal Broadband: Flexible Broadband Pricing and the Digital Divide

WASHINGTON, November 16, 2009 – The difference in the adoption of high-speed internet technology between the technological savvy and the unsophisticated may not constitute a digital divide so much as a lag between lower- and high-income groups, according to experts assembled by the Georgetown Center for Business and Public Policy.

In a report by Kevin Hassett and Robert Shapiro, “Towards Universal Broadband Flexible Broadband Pricing and the Digital Divide,” the authors honed in on the effects broadband pricing. They presented their research at a Friday morning event.

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WASHINGTON, November 16, 2009 – The difference in the adoption of high-speed internet technology between the technological savvy and the unsophisticated may not constitute a digital divide so much as a lag between lower- and high-income groups, according to experts assembled by the Georgetown Center for Business and Public Policy.

In a report by Kevin Hassett and Robert Shapiro, “Towards Universal Broadband Flexible Broadband Pricing and the Digital Divide,” the authors honed in on the effects broadband pricing. They presented their research at a Friday morning event.

“The percentage of homes connected to broadband service increased from 33 percent in spring 2005 to 63 percent in spring 2009,” said the report.

According to John Mayo, executive director of the Georgetown Center for Business and Public Policy, the deployment of any technology that has this type of increase rate appears to have a success story, but “the deployment has not been uniform.”

Broken down into the categories of wealth and race, Hassett and Shapiro found that the use of broadband was more common in the past for people of higher income than it was for people who were poorer.

“The factors that drive technological advances are price decreases,” Shapiro said. In addition, “As the value of technology advances, bringing the price down, they diffuse across income groups.”

While 63 percent of the country is currently connected to broadband, 37 percent are not connected; they are the ones who are currently feeling the effects of being disconnected.

“There is an idea that a lot of investment is needed for bandwidth,” Hassett said. He criticized that perspective.

Using the example of a provider investing $300 million in higher capacity to make its service more appealing to consumers, Hassett countered: two-thirds of the country is already connected with broadband and the other third could not possibly afford it. How is the provider going to make up its $300 million investment and still keep prices low? It just isn’t possible, he said. The provider would need to increase their price.

Shapiro and Hassett also looked at different possibilities to help the deployment of broadband to those who cannot afford a monthly payment plus premiums.

Leaving the prices that people pay at the level they are now is one suggestion. Using this model, Shapiro and Hassett found that with no price increases for broadband, “we would expect to see universal broadband by 2017.”

Hassett and Shapiro touted the tiered pricing system that, they said, had been used in Norway and in Korea. Under such a system, price is connected to the amount of bandwidth used: instead of being one flat rate.

Only being charged for the bandwidth that is being used could be of benefit for those who are “sensitive of the increase price of broadband as their income falls,” said Hassett.

An intern at the National Journalism Center and a student at American University’s Washington Semester Program, Christina is a Reporter-Researcher for BroadbandBreakfast.com. She is a student at Concordia College in Moorhead, Minnesota.

Digital Inclusion

Lack of Public Broadband Pricing Information a Cause of Digital Divide, Say Advocates

Panelists argued that lack of equitable digital access is deadly and driven by lack of competition.

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September 24, 2021- Affordability, language and lack of competition are among the factors that continue to perpetuate the digital divide and related inequities, according to panelists at a Thursday event on race and broadband.

One of the panelists faulted the lack of public broadband pricing information as a root cause.

In poorer communities there’s “fewer ISPs. There’s less competition. There’s less investment in fiber,” said Herman Galperin, associate professor at the University of Southern California. “It is about income. It is about race, but what really matters is the combination of poverty and communities of color. That’s where we find the largest deficits of broadband infrastructure.”

While acknowledging that “there is an ongoing effort at the [Federal Communications Commission] to significantly improve the type of data and the granularity of the data that the ISPs will be required to report,” Galperin said that the lack of a push to make ISP pricing public will doom that effort to fail.

He also questioned why ISPs do not or are not required to report their maps of service coverage revealing areas of no or low service. “Affordability is perhaps the biggest factor in preventing low-income folks from connecting,” Galperin said.

“It’s plain bang for their buck,” said Traci Morris, executive director of the American Indian Policy Institute at Arizona State University, referring to broadband providers reluctance to serve rural and remote areas. “It costs more money to go to [tribal lands].”

Furthermore, the COVID-19 pandemic has only made that digital divide clearer and more deadly. “There was no access to information for telehealth,” said Morris. “No access to information on how the virus spread.”

Galperin also raised the impact of digital gaps in access upon homeless and low-income populations. As people come in and out of homelessness, they have trouble connecting to the internet at crucial times, because – for example – a library might be closed.

Low-income populations also have “systemic” digital access issues struggling at times with paying their bills having to shut their internet off for months at a time.

Another issue facing the digital divide is linguistic. Rebecca Kauma, economic and digital inclusion program manager for the city of Long Beach, California, said that residents often speak a language other than English. But ISPs may not offer interpretation services for them to be able to communicate in their language.

Funding, though not a quick fix-all, often brings about positive change in the right hands. Long Beach received more than $1 million from the U.S. CARES Act, passed in the wake of the early pandemic last year. “One of the programs that we designed was to administer free hotspots and computing devices to those that qualify,” she said.

Some “band-aid solutions” to “systemic problems” exist but aren’t receiving the attention or initiative they deserve, said Galperin. “What advocacy organizations are doing but we need a lot more effort is helping people sign up for existing low-cost offers.” The problem, he says, is that “ISPs are not particularly eager to promote” low-cost offers.

The event “Race and Digital Inequity: The Impact on Poor Communities of Color,” was hosted by the Michelson 20MM Foundation and its partners the California Community Foundation, Silicon Valley Community Foundation and Southern California Grantmakers.

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Broadband's Impact

USC, CETF Collaborate on Research for Broadband Affordability

Advisory panel includes leaders in broadband and a chief economist at the FCC.

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Hernan Galperin of USC's Annenberg School

WASHINGTON, September 22, 2021 – Researchers from the University of Southern California’s Annenberg School and the California Emerging Technology Fund is partnering to recommend strategies for bringing affordable broadband to all Americans.

In a press release on Tuesday, the university’s school of communications and journalism and the CETF will be guided by an expert advisory panel, “whose members include highly respected leaders in government, academia, foundations and non-profit and consumer-focused organizations.”

Members of the advisory panel include a chief economist at the Federal Communications Commission, digital inclusion experts, broadband advisors to governors, professors and deans, and other public interest organizations.

“With the federal government and states committing billions to broadband in the near term, there is a unique window of opportunity to connect millions of low-income Americans to the infrastructure they need to thrive in the 21st century,” Hernan Galperin, a professor at the school, said in the release.

“However, we need to make sure public funds are used effectively, and that subsidies are distributed in an equitable and sustainable manner,” he added. “This research program will contribute to achieve these goals by providing evidence-based recommendations about the most cost-effective ways to make these historic investments in broadband work for all.”

The CETF and USC have collaborated before on surveys about broadband adoption. In a series of said surveys recently, the organizations found disparities along income levels, as lower-income families reported lower levels of technology adoption, despite improvement over the course of the pandemic.

The surveys also showed that access to connected devices was growing, but racial minorities are still disproportionately impacted by the digital divide.

The collaboration comes before the House is expected to vote on a massive infrastructure package that includes $65 billion for broadband. Observers and experts have noted the package’s vision for flexibility, but some are concerned about the details of how that money will be spent going forward.

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Broadband's Impact

Technology Policy Institute Introduces Data Index to Help Identify Connectivity-Deprived Areas

The Broadband Connectivity Index uses multiple datasets to try to get a better understanding of well- and under-connected areas in the U.S.

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Scott Wallsten is president and senior fellow at the Technology Policy Institute

WASHINGTON, September 16, 2021 – The Technology Policy Institute introduced Thursday a broadband data index that it said could help policymakers study areas across the country with inadequate connectivity.

The TPI said the Broadband Connectivity Index uses multiple broadband datasets to compare overall connectivity “objectively and consistently across any geographic areas.” It said it will be adding it soon into its TPI Broadband Map.

The BCI uses a “machine learning principal components analysis” to take into account the share of households that can access fixed speeds the federal standard of 25 Megabits per second download and 3 Mbps upload and 100/25 – which is calculated based on the Federal Communications Commission’s Form 477 data with the American Community Survey – while also using download speed data from Ookla, Microsoft data for share of households with 25/3, and the share of households with a broadband subscription, which comes from the American Community Survey.

The BCI has a range of zero to 10, where zero is the worst connected and 10 is the best. It found that Falls Church, Virginia was the county with the highest score with the following characteristic: 99 percent of households have access to at least 100/25, 100 percent of households connect to Microsoft services at 25/3, the average fixed download speed is 243 Mbps in Ookla in the second quarter of this year, and 94 percent of households have a fixed internet connection.

Meanwhile, the worst-connected county is Echols County in Georgia. None of the population has access to a fixed connection of 25/3, which doesn’t include satellite connectivity, three percent connect to Microsoft’s servers at 25/3, the average download speed is 7 Mbps, and only 47 percent of households have an internet connection. It notes that service providers won $3.6 million out of the $9.2-billion Rural Digital Opportunity Fund to provide service in this county.

“Policymakers could use this index to identify areas that require a closer look. Perhaps any county below, say, the fifth percentile, for example, would be places to spend effort trying to understand,” the TPI said.

“We don’t claim that this index is the perfect indicator of connectivity, or even the best one we can create,” TPI added. “In some cases, it might magnify errors, particularly if multiple datasets include errors in the same area.

“We’re still fine-tuning it to reduce error to the extent possible and ensure the index truly captures useful information. Still, this preliminary exercise shows that it is possible to obtain new information on connectivity with existing datasets rather than relying only on future, extremely expensive data.”

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