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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

Expert Opinion

Rahul Sen Sharma: The Metaverse is Not Web 3.0

The Metaverse is at the forefront of developments in seamless payments and richer information flows.

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The author of this Expert Opinion is Rahul Sen Sharma, managing partner at Indxx.

Web 3.0 is a concept for the next generation of internet architecture that envisions a decentralized ecosystem based on blockchain technology. It is an evolution of how users would control, own, and manage their online content, digital assets and identities.

Web 3.0 marks a departure from the centralized mega platforms and corporations that currently dominate the Web 2.0 ecosystem.

The Metaverse is at the forefront of the Web 3.0 internet revolution. It can be defined as a set of interconnected, experience driven 3D virtual worlds where users can socialize in real-time to form a persistent and thriving user-owned internet economy regardless of any physical or geographical constraints.

Both the technologies of Web 3.0 and Metaverse support each other perfectly. Even though the Metaverse is a virtual space whereas Web 3.0 favours a decentralized web, it could form the basis for connectivity in the Metaverse. While the development of the Metaverse is in nascent stages, the exponential growth of non-fungible tokens, P2E (Play to Earn) games and decentralised autonomous organisations have boosted the development of Web 3.0.

A future involving distributed and anonymous users

Web 3.0 envisions a future involving distributed anonymous users and machines interacting without the need for an intermediary, to form a composable human-centric and privacy preserving computing fabric.

These interactions would range from seamless payments and richer information flows, to trusted data transfers via a mechanism of peer-to-peer networks without the need for third parties.

The shift should lead to a wave of new business models that bypass the existing global co-operatives that we currently have, and replace them with decentralised, autonomous organisations and self-sovereign data marketplaces.

As mentioned, Web3 is built on blockchain technology and DAOs rather than the current model of centralized servers owned by large corporations. In the same way, the ideal structure of the Metaverse is also full decentralisation.

The technologies behind achieving decentralization would be distributed ledgers and blockchain technology which enables value-exchange between softwares, self-sovereign identities and the creation of a transparent and secure environment.

The blockchain is central to the Metaverse, and to Web 3.0

In an ideal form, both Web 3.0 and the Metaverse takes advantage of blockchain to give unrestricted, permissionless access to everyone with an internet connection.

Currently, development towards the Metaverse is being spearheaded by big tech corporations such as Meta, Microsoft, Nvidia, and more, all of which are major players in Web 2.0. The model of centralised Metaverse being built by them involves closed ecosystems that are only designed to extract value at the expense of their most valuable assets – users, content creators and customers.

This contrasts with the envisioned form of Metaverse and Web 3.0 with decentralization, interoperability and seamless interaction between different virtual worlds and the real world.

Still, the big tech corporations are investing resources into their Metaverse development and have their own vision and plans for what the Metaverse would be.

Meanwhile, decentralized Metaverses and Web3 initiatives are currently attracting record investment, pulling in around $30 billion in venture capital last year alone.

As we shift to what will likely be a more decentralized web, the creator economy is also evolving and likely to become a multibillion-dollar industry with immense potential for creators and publishers.

The creator economy in the Metaverse can supplement the vision of web 3.0 for developing a new financial world with decentralized solutions.

In Web 3.0, users can create content while owning, controlling, and monetizing them through the implementation of blockchain and cryptocurrencies. However, the model of this creator economy is likely to disrupt the business models of many current big-tech corporations.

Regardless, the Metaverse requires both big tech companies to build the technology and the creator economy to produce interesting content for driving engagement. Partnerships, reduced platform fees and creative commissions by big tech to creators within the metaverse can be a way to stimulate the already fast-growing creator economy.

Rahul Sen Sharma is a managing partner at Indxx and has been instrumental in leading the firm’s growth since 2011. He manages Indxx’s Sales, Client Engagement, Marketing and Branding teams while also helping to set the firm’s overall strategic objectives and vision. Prior to joining Indxx, Rahul was the Director of Investment Research for RR Advisory Group (now part of Mariner Wealth Advisors), a full service private wealth management firm based in New York that caters to high net worth individuals. 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 expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Digital Inclusion

W. Antoni Sinkfield: To Succeed in 21st Century, Communities Need to Get Connected Now

One of the primary responsibilities of being a faith leader is to listen to your community and understand its problems.

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The author of this Expert Opinion is Reverend W. Antoni Sinkfield, Associate Dean for Community Life at Wesley Theological Seminary.

One of the primary responsibilities of being a faith leader is to listen to your community, understand its problems, and provide support in challenging times. Particularly during the pandemic, it has been hard not to notice that my parishioners, and folks across the country, are divided into two groups: those with access to the internet, and those without.

In 2022, digital inclusion is still something we strive for in poor and rural areas throughout America. The lack of reliable internet access is an enormous disadvantage to so many people in all facets of their lives.

To fully participate in today’s society, all people, no matter who they are and no matter where they live, must have access to the internet. Think of the remote learning every child had to experience when schools were closed, and the challenges that families faced when they didn’t have access to a quality connection.

It’s a question of plain fairness.

Politicians have been talking for decades about bringing high-speed internet access to everyone, however many families continue to be left behind. More than 42 million people across the country lack affordable, reliable broadband connections, and as many as 120 million people who cannot get online are stuck with slow service that does not allow them to take advantage of everything the internet has to offer.

People of color are disproportionately affected by lack of broadband access

Lack of broadband disproportionately affects communities of color, as well: 35 percent of Americans of Latino descent and 29 percent of African-Americans do not have a broadband connection at home.

Every person in rural towns, urban neighborhoods, and tribal communities needs and deserves equal and full economic and educational opportunities. Studies show that students without home access to the internet are less likely to attend college and face a digital skills gap equivalent to three years’ worth of schooling. Small businesses, which are the cornerstone of rural and urban communities alike, need broadband to reach their customers and provide the service they expect.

Simply put, having access to the internet in every community is vital to its ability to succeed in the 21st century.

Fortunately, we have an opportunity to take major steps toward a solution. Last year, Congress passed President Biden’s Infrastructure Investment and Jobs Act, which provides $65 billion to expand broadband access and affordability. It is essential that we use this money to connect as many unserved and underserved communities as we can – and as quickly as we can.

Different places need different options to bridge the digital divide

As we bridge the digital divide, we must listen to those who have been left behind and make sure that we deploy solutions that fit their needs. Different places need different options – so it’s important that all voices are heard, and the technology that works best for the community is made readily available.

All people need access to broadband to learn, work, shop, pay bills, and get efficient healthcare.

When I talk to my parishioners, they speak about how much of their lives have transitioned online and are frustrated about not having reliable access. They do not care about the nuances of how we bring broadband to everyone. They just want to have it now – and understandably so.

This means that we must explore all solutions possible to provide high-speed broadband with the connection and support they need, when they need it, regardless of where they live.

Now is the time to meet those struggling where they are, stop dreaming about bridging the divide, and just get it done. Our government has a rare opportunity to fix an enormous problem, using money already approved for the purpose. Let’s make sure they do so in a manner that works for the communities they’re trying to help.

Rev. W. Antoni Sinkfield, Ph.D., serves as Associate Dean for Community Life at Wesley Theological Seminary, and is an ordained Itinerate Elder in the African Methodist Episcopal Church. 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 expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Broadband Mapping & Data

Bryan Darr: Federal Broadband Funding is Available for Local Governments

Ookla can help your community get the funding you need to provide access for all to the digital economy.

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The author of this Expert Opinion is Bryan Darr, vice president of Smart Communities at Ookla.

Local governments, the clock is ticking.

The Infrastructure Investment and Jobs Act set billions of dollars out on the infrastructure buffet table for local governments in the United States and there are more guests invited to the party than ever before.

This funding is almost certainly a once-in-a-lifetime opportunity to connect your community and provide access for all to the digital economy. The question is: will you be at the front or the back of the line?

Ookla can help you. This article is designed to give you the information you need to get started on the path toward getting the funding you need for your communities.

Look to your state for funding

Historically, broadband funding has had a very top-down approach.

The Federal Communications Commission has held almost all the power to determine where federal broadband infrastructure dollars have been spent. But for the first time, state governments will have an active role in guiding these decisions.

The Infrastructure Investment and Jobs Act directs $65 billion to improving broadband connectivity across the U.S., with $42.45 billion earmarked for building new infrastructure.

Once the initial FCC map has been released, each state that has declared their intent to participate through National Telecommunications and Information Administration will be provided a minimum $100 million to get the process started (U.S. territories will split an additional $100 million).

Much of the remaining $22 billion will target affordability, but more on that later.

The race for resources will be officially off and running.

Following this initial disbursement, there will be roughly $37 billion more to be awarded from the IIJA alone.

Many states are still sitting on billions of dollars from the American Rescue Plan Acts and broadband is an allowable expenditure for these remaining stimulus dollars.

Add to that the long running connectivity programs such as Connect America Fund, Rural Digital Opportunity Fund, Mobility Fund and the upcoming Rural 5G Fund, and all those programs combined approach $100 billion over the next decade.

Plan ahead to increase your competitiveness

Past programs have provided funding without setting proper expectations on results. More emphasis is now being placed on planning.

With a focus on estimated cost per service address, network design takes a front seat to ensure these resources are spent efficiently and state officials will be allowed to use up to five percent of this for mapping, designing, and cost estimation.

Most states are already planning, or already building, their own broadband availability maps. But if you have connectivity issues in your community, it’s time to make it known to those who will be responsible for directing funds and deciding which communities will see investment and which will not.

Ookla helped Loudoun County, Virginia secure $17 million

We have experience helping local governments navigate this challenging planning process.

When FCC Form 477 broadband availability data showed that nearly 100% of Loudoun residents have access to what the FCC defines as broadband (25 Megabits per second (Mbps) download, 3 Mbps upload), this was inconsistent with the connectivity experiences of county residents.

So the Loudoun Broadband Alliance chose to use Ookla Speedtest Intelligence® to create an accurate and reliable broadband access mapping methodology using real-world network performance data.

With this data, LBA identified a large number of unserved households in contrast to FCC data which showed them as served. Loudoun County was subsequently awarded over $17 million of funding to help eliminate the broadband gap.

Keep in mind that the maps will never be finished. They will change and evolve as the networks in your area grow.

Funded projects will need to be monitored for compliance and older networks will need to be watched for signs of deterioration. Everyone will need to keep an eye on progress, measure successes, and have the data to act early when projects go off track.

Acadiana, Louisiana used Speedtest data to win $30 million

With Speedtest data, the Acadiana Planning Commission was able to successfully challenge FCC maps on over 900 out of approximately 1,000 census blocks.

The APC applied for funding through the NTIA Broadband Infrastructure Program, which made $288 million in funding available to help close the digital divide in the U.S.. There were over 230 applicants, and only 13 grants were awarded.

Vice President Kamala Harris visited Acadiana in March to announce that the APC had been awarded a $30 million grant that will fund high-speed internet in 11 rural Acadiana communities.

Think big! Broadband funding is available for more than just infrastructure

Accessibility to broadband requires at least four components: infrastructure, affordability, equipment, and knowledge. The lack of any one of these means an individual does not have access to today’s digital economy.

Much of the focus has been on the lack of infrastructure in many rural communities, but infrastructure is the absolutely essential piece for anyone in any community to get connected.

The second component, affordability, often drives the last two requirements as people who cannot afford internet service often cannot afford the necessary equipment and, therefore, are less likely to have developed the knowledge to use it.

Tracking both of these two primary elements is key to understanding the digital divide.

You might qualify for funding in more than one of these four areas. For example, over $14 billion in a new Affordable Connectivity Program is included in the broadband portion of the IIJA.

Remaining funds include $2.75 billion for the Digital Equity Grant Program and the $2 billion Tribal Broadband Connectivity Program, as well as two more programs that will assist the USDA improve the internet in agricultural communities.

Agencies and local governments should work together

Cities should be coordinating with counties and other government entities within the same region — but someone needs to be in charge.

If your local government does not have an individual charged with coordinating all these efforts, there is bound to be duplication of efforts, wasted resources, stagnation of ideas, or all of the above.

Whether this person reports directly to the chief technology officer, chief information officer, mayor, or city manager, their purpose is to understand what all departments are doing in the space and coordinate discussions, grant opportunities, and overlapping initiatives to make sure that departments aren’t working at cross purposes.

Non-profits, community activists, and local corporations all have a stake in the success of these efforts.

Traffic problems won’t suddenly end at the municipal boundary. Improving traffic on one side of the line may create more problems on the other side. Working together with your neighbors is just as important as working with internal departments. The same can be said of both fixed and wireless broadband infrastructure.

Dig-once projects will score extra points in the competition to have projects selected.

Broadband is only part of the $1.2 billion infrastructure law. Roads, bridges, ports, and rail have billions of dedicated dollars as well.

Digging a new trench for a clean water system? Coordinate with the project to include conduit and fiber and your efficient use of taxpayer funds will likely be rewarded.

Consider funding for multiple technologies

As great as it might be to provide every service address in the country with a fiber connection, it may not make economic sense in some places.

But an important detail was clearly stated in the legislation that recognizes a technology neutral stance on solutions.

The rules are not yet complete on how the FCC and NTIA will award the IIJA funds and contend with challenges to their findings, but there are certainly far fewer restrictions on the ARPA funds that are already disbursed to the states. Many connectivity projects are already underway whether through infrastructure development, equipment distribution, or subsidies for affordable service.

Wireless services can get people connected much faster and there are several forms.

Traditional mobile operators are rolling out 5G and Fixed Wireless Access in some areas that can directly compete with traditional fixed services. Wireless internet service providers have launched coverage to homes and businesses that previously had satellite as their only option.

Some municipalities and school systems have launched private 4G LTE networks to connect underserved areas in their communities. And municipal Wi-Fi can still be an important part of an overall solution.

A portion of families may never find subscribing to a fixed network practical, but wireless services allow for easier movement and some don’t even require a residence. Understanding wireless network availability and performance across your jurisdiction is just as important as planning a fiber network.

And here’s a bonus — cellular and other transmission sites need fiber for any new 5G cell site. So if you know where your wireless networks need additional infrastructure, you can plan for places in the network to offer them accessible fiber connections.

If your state still has ARPA funds available, you still have an opportunity to make improvements and learn more about connectivity issues so you are better able to make your case for the IIJA funds as they begin to flow.

Ookla can provide you with the data you need to be competitive for federal funding

It has been said for years that broadband is the fourth utility.

Local governments have spent a lot of their resources managing the first three: water, gas, and electricity.

If any of those become unavailable, even for a brief period of time, their citizens will make their unhappiness known. Resiliency of these services will play a part in how elected officials are judged, whether the local government supplies these services or just manages an external provider.

If you serve in local government, you should anticipate the same expectations going forward for broadband in your community.

The internet has become vital to the way we live our lives, and access to it dictates much of our success both as residents and businesses. Recognizing connectivity as a critical service may have been a consequence of a pandemic, but that change in thinking is here to stay.

That’s why Ookla is here to help you learn more about the connectivity in your area.

We’ve already helped local governments secure tens of millions of dollars in federal funding in Loudoun County, Virginia and Acadiana, Louisiana. We are also working with state broadband offices as well as municipalities to help them gain visibility into network availability and performance.

If you want your community to take advantage of the billions pouring into improving connectivity, get in line before it’s too late.

Drawn from billions of Speedtest results, Ookla’s Broadband Performance Dataset provides governments, regulators, ISPs, and mobile operators with insights about the state of fixed networks and broadband accessibility. The Broadband Performance Dataset helps you identify unserved and underserved areas, prioritize investment opportunities to improve access to broadband, challenge funding decisions, and secure grants.

To learn more about the Broadband Performance Dataset, Speedtest Intelligence, and other solutions for your state and/or local governments, please contact us.

Bryan Darr is the Vice President of Smart Communities at Ookla. He coordinates Ookla’s outreach to local, state and federal governments and serves on CTIA’s Smart Cities Business & Technology Working Group. This piece was first published on Ookla’s web site, and is reprinted with permission.

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

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