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Digital Impact Group: Persistent Digital Divide Among Low-Income Individuals

PHILADELPHIA, Penn., March 8, 2010 – There is a persistent digital divide among low-income individuals, households, and communities throughout the US, as it relates to “always on” high-speed Internet access in homes. Over 100 million individuals representing over 40 million households do not use broadband because they cannot access it, cannot afford it, do not know how to use it, or are not aware of its benefits.

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Editor’s Note: The following guest commentary appears by special invitation of Broadband Census News. Neither BroadbandCensus.com nor BroadbandBreakfast.com endorse the views in the commentary. We invite officials, experts and individuals interested in the state of broadband to offer commentaries of their own. To offer a commentary, please e-mail commentary@broadbandcensus.com. Not all commentaries may be published.

By Greg Goldman, CEO, Digital Impact Group; and Lee Huang, Econsult Corporation

PHILADELPHIA, Penn., March 8, 2010 – There is a persistent digital divide among low-income individuals, households, and communities throughout the US, as it relates to “always on” high-speed Internet access in homes. Over 100 million individuals representing over 40 million households do not use broadband because they cannot access it, cannot afford it, do not know how to use it, or are not aware of its benefits.

It is widely understood that there are significant costs to non-adopters, but economic analysis of these costs was not available before. We have attempted to quantify those costs—to those without computers and internet access themselves, as well as to those who are networked, the economy, and society as a whole.

The conclusion of our study is that, summing the conservative, low-end estimates of 11 categories of economic impact yields an aggregate estimate of the current costs of digital exclusion at over $55 billion per year.

Furthermore, over time, the costs of digital exclusion are likely to increase, as technological advances in key sectors enhance the efficiencies enjoyed by digitally included populations and therefore magnify the costliness of being excluded.

A recent report issued by the NTIA found that while “virtually all demographic groups have increased their adoption of broadband services at home over time . . . the data also reveal that demographic disparities among groups have persisted over time.” The NTIA report demonstrates that “persons with low incomes, seniors, minorities, the less-educated, non-family households, and the non-employed tend to lag behind other groups in home broadband use.”

In particular, the report found that only 46 percent of non-Hispanic Blacks and only 40 percent of Hispanics have access to broadband at home. Only 29 percent of families earning less than $15,000 a year have broadband access at home, a rate that improves only modestly to 35 percent for families earning between $15,000 and $25,000 annually. Older Americans also lag significantly in adopting broadband service, with only 46 percent of those over the age of 55 using broadband at home. In total, 36 percent of all US households still lack broadband access.

The persistent lack of broadband access for many Americans is costly for individuals, families, communities and the nation. Many aspects of day-to-day life, including work, shopping, education, accessing medical care and entertainment now require broadband access, and large segments of the populations are simply cut off from taking advantage of the resulting efficiencies.

Today the lack of broadband access results in increased costs for a wide variety of reasons. From the perspective of individuals and families, lack of broadband access:

1. Limits access to goods and services, resulting in higher costs for households;
2. Reduces access to education and inhibits learning among children;
3. Increases job search costs, which lowers both earnings and the chance of finding a job;
4. Reduces access to health information; and
5. Increases the costs associated with household financial management.

Beyond the impact on individuals, Governmental entities incur higher costs in communicating with populations without broadband access since communications and transactions must occur via paper, mail, telephone or face-to-face contact. Digital exclusion also increases the cost of civic engagement, which reduces participation in the political process.

The lack of broadband access also constrains local, regional, and national economic performance. Communities with limited broadband penetration rates have less productive households and bear higher costs in providing public services, placing them at a competitive disadvantage. At the national level, lack of broadband access lowers national production and wealth for at least five reasons:

1. Higher job search costs lower the number of people fully employed;
2. Higher job search costs result in sub-optimal job matching and lower earnings;
3. Higher costs to employers seeking access to the labor market will limit employment;
4. Lower educational attainment will lower production compared to what could be obtained; and
5. Higher costs for private businesses providing financial, real estate and other services, with large segments cut off from these services entirely.

On the positive side, remedying digital exclusion will yield:

1. Personal Gains. Digital access results in individuals and groups directly gaining new economic, social and educational resources.

2. Reduction in Opportunity Costs. A particular form of direct gain to individuals and groups comes from reductions in opportunity costs. An activity made more efficient by online access is usually still available to those who are not online, but in vastly inferior forms: an entrepreneur who can access the Internet only from the local library when researching market opportunities, a resident who must wait in line to renew his or her driver’s license,, and a shopper who must settle for a more limited selection of goods.

3. Positive Externalities. The term “externalities” describes a situation in which the full costs or benefits of an action are not borne by those taking the action. Universal broadband access would result in many positive externalities: new connectivity helps educate people, connects them more efficiently to employment opportunities and business information, and provides avenues to organize themselves around civic issues and to hold their governments accountable.

4. Positive Network Effects. A particular type of externality is known as “network effects.” Metcalfe’s Law states that the value of a telecommunications network is proportional to the square of the number of connected users of the system. Thus when a person is added to the network, all network members are positively affected. An important enhancement to personal and commercial wellbeing that is provided by the Internet is the ability to easily and efficiently connect to a broader network of users. Remedying digital exclusion adds to that network of users, with important implications for fields such as health care, disaster and emergency response, energy management, and transportation.

Prior research on Digital Impact Group (DIG) has demonstrated that comprehensive interventions can be highly successful in bringing vulnerable populations online, with impact on families in the areas of education, employment, health, and more.

As a result of this study, we now know that investing in such programs will have major economic impact on families, communities, government, commerce and the nation as a whole.

Economic Impact Category Estimate of Current Annual Costs of Digital Exclusion (Intersection with FCC National Broadband Plan Priorities)
Health Educa­tion Econ­omic Oppor­tunity Energy Govern­ment / Civic Engage­ment Public Safety
Health Care $15B X X
Education $4B X X
Economic Opportunity $15B X
Civic Engagement Too Diffuse to Quantify But Very Significant X
E-Government $2B X
Energy $100M X X
Transportation $100M X X
Public Safety and Emergency Response $4B X X
Personal Financial Management $2.5B X
Consumer Benefits $5B X
Personal Communications and Entertainment $7.5B X X
Total $55.2B

Broadband Mapping & Data

Garland McCoy: How Your State Can Defend Its Broadband Maps for Maximum Funds

Crowdsourced and bulk data are subject to a challenge process that has successfully eliminated crowdsourced data in the past.

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The author of this Expert Opinion is Garland McCoy, Co-Founder and Executive Director of PAgCASA

On September 15, 2022, the Federal Communications Commission’s Broadband Data Task Force issued a public notice on “Specifications for Bulk Fixed Availability Challenge and Crowdsource Data.”

The notice provided guidance for filing bulk challenges, and bulk crowdsource data, to fixed broadband availability data that will be published later this year by the FCC as part of its new Broadband Data Collection. According to the notice, “individuals and entities, including consumers, state, local, and Tribal governmental entities, and service providers,” can submit challenges to the BDC fixed broadband availability data for single locations, as well as “bulk” challenges with respect to multiple locations.

Historically, Internet Service Providers have effectively used the FCC’s challenge process to disqualify the vast majority of disputes brought forward by states, counties, and other complainants regarding FCC’s broadband maps. And frankly, this will be the case again unless states take a new tack to validate their own data in such a way that will stand up to ISP challenges. Given the enormity of the federal broadband funds available to states this time around, the stakes could not be higher; that is, a single state could forgo hundreds of millions of dollars of federal broadband funds due to insufficient preparation to challenge-proof its data.

Here are two observations to start:  1) The ISPs are correct in challenging the data if the data is corrupted or incapable of being validated, and therefore should be disqualified. 2) the FCC and the ISPs must now be seen as embracing the new “crowdsourcing” challenge process since the Broadband Data Act of 2020 was very specific in requiring that the FCC’s new data gathering methodology include third-party crowdsourced data. That said, third-party “crowdsourced” and “bulk” data are subject to the same challenge process that has successfully eliminated individual and crowdsourced data in the past.

Three ways ISPs successfully challenge and disqualify third-party data

Alone, or in combination, the following three scenarios have succeeded year after year in ensuring that third-party data, crowdsourced or otherwise, has not made it past the challenge process and onto the FCC’s approved maps.

  • Was the speed test launched from a device wirelessly? Modern modems set up a Wireless Area Network around the premises over the one or two Wi-Fi channels allocated. Almost all devices are now connected wirelessly to the modem. A wireless launch of a speed test, e.g., from your laptop or smart phone, therefore affects/corrupts the network speed test and disqualifies the data.
  • Was the on-premises modem “still” when the speed test was taken? By “still” the ISP is referring to the modem’s management of data coming from any device remotely or over cable, ethernet connection, during the time of the test. For example, if a family member is working on their laptop, e.g., doing homework, the modem’s management of the data from the laptop will affect a speed test taken during that time. This will disqualify the speed test data.
  • Was the crowdsourced and or bulk data drawn exclusively from the ISP’s premium service customers? The FCC stipulates that the speed testing data must be drawn from an ISP’s customers who have purchased the service provider’s best available service package. A customer might not need or be able to afford FCC’s “broadband” minimum service of 25/3 mbps, and thus would purchase a less expensive, slower service package offered by the ISP. For purposes of accurate speed testing, the ISP should not be penalized for offering true broadband-speed service that is passed over by a customer seeking a cheaper service.

PAgCASA, the Precision Ag Connectivity & Accuracy Stakeholder Alliance, is a non-profit organization whose sole purpose is to ensure broadband map accuracy, connectivity, and rural prosperity, stands ready to help states get their full share of federal broadband funds and successfully defend against challenges.

PAgCASA’s on-premises, cybersecure, network monitoring methodology – which deploys the same network monitoring devices the major ISPs use, on wired/ethernet-connected customer modems, from a volunteer pool of an ISP’s premium service customers selected using standardized random sampling methods – will, in fact, address all the challenge issues above and generate data ready for potential litigation.

As noted in another recent article on Broadband Breakfast, states like Georgia and North Carolina are finding significantly fewer served locations based on their latest state broadband data compared to FCC’s most recent Form 477 data. We expect to see similar differences across the country as states and the FCC bring forward their latest respective data.

Consider this: a ten percent delta between the FCC and state maps translates into a staggering $4 billion based on an overall federal broadband infrastructure spend of $40 billion – needed funds that will not make their way to genuinely unserved or underserved communities across the country.

Our nation can and must do better.

Garland T. McCoy, Co-Founder and Executive Director of Precision Ag Connectivity and Accuracy Stakeholder Alliance, is a long-time non-profit veteran in the fields of technology and telecommunication policy having served as Founder and CEO of the Technology Education Institute & Technology Policy Institute.  Garland was recently an adjunct professor at Syracuse University’s iSchool, teaching information policy and decision making. He can be reached at garland.mccoy@pagcasa.org 

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Expert Opinion

Paul Atkinson: Why Fiber Trumps Satellite When Bridging the Digital Divide

On the surface, satellite seems like the ideal way to close the rural-urban digital divide.

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The author of this Expert Opinion is Paul Atkinson, CEO of Optical Networks of STL

The Grand Canyon in Arizona is 18 miles across at its widest point. The only thing wider is the digital divide between the state’s rural and urban areas. Roughly 99% of urban Arizonans have access to fixed terrestrial broadband services that deliver at least 25 Megabits per second (Mbps) down and 3 Mbps up, according to the FCC’s 2021 Broadband Deployment Report . Only 66% of its rural residents do.

Arizona isn’t an anomaly, either. Nearly 99% of all urban Americans have access to broadband versus 82.7% of rural residents.

This problem also is a business opportunity, which is why so many vendors and service providers are positioning their technology of choice as the best way to bridge the digital divide. The main contenders are satellite, fiber, Wi-Fi and fixed wireless access that uses 5G cellular. Each has its strengths and weaknesses.

For example, 5G FWA requires building hundreds of thousands of base stations in remote areas that might be home to only a handful of homes and businesses — a buildout that likely would take years and tens of billions of dollars. That’s a difficult investment to recoup and make profitable.

That’s simply not a viable business model, as a US Cellular white paper acknowledged: “ Our economics require approximately 500 subscribers to build a new tower, and we can’t assume that everyone will adopt the service. The cost of building and maintaining a tower in rural America can be nearly twice as expensive as building a tower in an urban area.”

Satellite and fiber have emerged as the top two contenders. On the surface, satellite seems like the ideal way to close the rural-urban digital divide because it doesn’t require hundreds of thousands of base stations. But satellite has its share of technological and business limitations, too — to the point that in August, the FCC rejected SpaceX’s application for Rural Digital Opportunity Fund (RDOF) subsidies.

FCC Chairwoman Rosenworcel questioned whether it was affordable to ‘subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements, especially when consumer would have to purchase a $600 dish.

Rural America’s high-fiber diet

The FCC’s rejection of SpaceX/Starlink is not a setback in bridging the rural-urban digital divide. It’s actually a milestone toward parity because it ensures that an unproven technology doesn’t divert scarce public subsidies from a proven one.

As Gary Bolton, Fiber Broadband Association president and CEO rightly stated, this is a huge victory for 640,000 families who were relegated to Low Earth Orbit Satellite service. They could have been redlined from being eligible for fiber broadband. There is now clarity and a path forward for fiber to bridge the digital divide.

Fiber has already proven its worth in rural America, where it has 23% of the broadband market and the highest customer satisfaction of all internet-access technologies, according to a 2021 Pivot Group study . By comparison, fixed wireless and satellite have only 10% and 6% penetration, respectively. Cable has the largest share of the rural market, but many customers find it lacking: One third say they want faster speeds.

In fact, broadband speed is a decisive factor when people are deciding where to relocate. According to the 2022 RVA Market Research & Consulting study “A Detailed Review: The Status of U.S. Broadband and The Impact of Fiber Broadband,” 47% of the people who moved to a rural area in the past year chose one where fiber-to-the-home service is available. That preference highlights how rural communities can use fiber to attract retirees, young professionals, families, entrepreneurs and other demographics looking to escape to the beautiful countryside.

Fiber’s 23% share of the rural broadband market also busts the myth that as a wired technology, it takes too much time and money to deploy in sparsely populated areas, including those with challenging terrain such as mountains. Another wired technology — electricity — overcame those challenges 86 years ago with passage of the Rural Electrification Act , which funded utility cooperatives that built out transmission and distribution networks to serve farms, ranches, small towns and other rural places.

Today, more than 250 of those co-ops have built or are planning broadband networks, according to the National Rural Electric Cooperative Association . Many have been in service for the better part of a decade — or longer. For example, in 2006, Blue Ridge Mountain EMC launched FTTH in Georgia. In 2019, it deployed a 7,000-foot line up a mountain, using drones to overcome challenges such as deep gorge and 100-foot-tall pine trees. In 2016, Elevate Fiber, a division of Delta-Montrose Electric Association, launched gigabit FTTH in two Colorado counties by overlaying fiber on its 4,000 miles of distribution lines.

Co-ops are just one example of how fiber isn’t just poised to bridge the rural-urban digital divide. It already is. That’s great news for rural Americans, who don’t have to wait on unproven, pie-in-the-sky technologies such as satellite.

Paul Atkinson is Chief Executive Officer of Optical Networks for STL. This Expert Opinion is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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5G

Johnny Kampis: Wireless Survey Shows 5G’s Role in Closing Digital Divide

5G has experienced a quantum leap in growth since it first began rolling out in 2018.

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The author of this Expert Opinion in Johnny Kampis of the Taxpayers Protection Alliance

There was universal consensus that 5G wireless technology would be a game changer for closing the digital divide. The question was whether or not private investment would be enough to deploy the needed infrastructure. A new report shows that capital expenditures from wireless providers reached a record high in 2021, as 5G saw tremendous growth and will continue to help connect households now unserved by broadband.

CTIA’s 2022 Annual Wireless Industry Survey shows that wireless providers invested $35 billion into growing and improving their networks, the fourth consecutive year of industry growth.

CTIA said this is “a powerful trend that emphasizes the societal importance of wireless connectivity and underlines the industry’s commitment to building a robust platform for innovation that connects all communities.”

5G has experienced a quantum leap in growth since it first began rolling out in 2018, as infrastructure reforms that eased deployment barriers have resulted in 5G growing twice as fast as 4G. Since the Federal Communications Commission and state legislatures worked to modernize key siting regulations that could have stymied the technology’s growth, wireless providers have added 70,000 active cell sites. There are now nearly 420,000 operational cell sites across the U.S.

As CTIA notes, “More cell sites enhance coverage, encouraging adoptions and helping to close the digital divide.”

Clearly consumers want faster mobile internet speeds as the number of connective 5G devices grew more than a whopping 500 percent this past year from 14 million to Accenture 85 million. About one-third of American now possess an active 5G device.

CTIA points out that the number of connections that require wireless technology is helping fuel the growth – everything from smart watches to medical sensors. Such data-only devices represent about 42 percent of all wireless connections.

Wireless providers have invested nearly $121 billion into their networks since the launch of 5G.

CTIA notes that in an age of incredible inflation, the wireless industry’s investment, combined with increased market competition, has led to lower prices, “providing a welcome contrast to an economy where consumers have faced priced increases for 94 percent of tracked goods and services nationwide.”

Since 2010, the cost of unlimited data plans has declined 43 percent while wireless speeds have increased 85-fold over the same period.

Investment and competition have also led to new innovations such as 5G for home broadband and 5G fixed wireless. The latter is particularly useful in connecting rural areas where it’s hard to make a business case for fiber due to the cost of the last-mile connections. CTIA notes that 5G home broadband is available in more than 40 million households, providing home connections via spectrum with high capacity and low latency rather than a wired connection.

The report also points out that 5G is helping mitigate the impacts of climate change by creating green jobs in key industries. Accenture has found that 5G-enabled use cases should delivers 20 percent of the U.S.’s emission reduction targets by 2025.

5G is clearly helping usher in a new age of connectivity in this country. CTIA’s statistics are encouraging signs that the latest wireless technology is helping make broadband access available to more Americans than ever before. The best part of this growth is that taxpayer dollars are not being spent.

Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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