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.
Broadband Breakfast on October 27, 2021 — When ‘Greenfield’ Fiber Meets ‘Brownfield’ Multiple Dwelling Units
What options do owners of, operators in, and tenants within MDUs have for better-quality broadband?
Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the October 27, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.
Wednesday, October 27, 2021, 12 Noon ET — “When Greenfield Fiber Meets Brownfield Multiple Dwelling Units”
Bringing fiber to the premises is sometimes only half the battle. For example, bringing fiber to an MDU may not mean that every tenant will get better-quality broadband. In the case of multiple dwelling units or multi-tenant housing, it isn’t easy to completely rewire an existing building with fiber-to-the-unit. Further, the Biden Administration and the Federal Communications Commission are pushing real estate owners to eliminate or minimize exclusive MDU broadband contacts. What options do the owners of, operators in, and tenants within MDUs have to enjoy both competitive and better-quality broadband?
- Kevin Donnelly, Vice President, Government Affairs, Technology and Strategic Initiatives, National Multifamily Housing Council
- Jenna Leventoff, Senior Policy Counsel, Public Knowledge
- Pierre Trudeau, President and Chief Technology Officer, Positron Access
- Other Guests have been invited
- Drew Clark (moderator), Editor and Publisher of Broadband Breakfast
Kevin Donnelly is Vice President for Government Affairs, Technology and Strategic Initiatives at the National Multifamily Housing Council (NMHC) and represents the interests of the multifamily industry before the federal government focusing on technology, connectivity, risk management and their intersection with housing policy. Kevin is a part of NMHC’s Innovation and Technology team and leads its Intelligent Buildings and Connectivity Committee. Kevin has spent over 15 years in the public policy arena at leading real estate trade associations and on Capitol Hill. Kevin received his BA from Rutgers University and his Masters in Public Management from Johns Hopkins University.
Jenna Leventoff is a Senior Policy Counsel at Public Knowledge, where she focuses on broadband deployment and adoption. Prior to joining Public Knowledge, Jenna served as a Senior Policy Analyst for the Workforce Data Quality Campaign (WDQC) at the National Skills Coalition, where she led WDQC’s state policy advocacy and technical assistance efforts on state data system development and use. She also served as an Associate at Upturn, where she analyzed the civil rights implications of new technologies, and as Manager and Legal Counsel of the International Intellectual Property Institute, where she led the organization’s efforts to utilize intellectual property for international economic development. Jenna received her J.D, cum laude, and B.A from Case Western Reserve University.
Pierre Trudeau is President and Chief Technology Officer, Positron Access.
Drew Clark, Editor and Publisher of Broadband Breakfast, also serves as Of Counsel to The CommLaw Group. He has helped fiber-based and fixed wireless providers negotiate telecom leases and fiber IRUs, litigate to operate in the public right of way, and argue regulatory classifications before federal and state authorities. He has also worked with cities on structuring Public-Private Partnerships for better broadband access for their communities. Drew brings experts and practitioners together to advance the benefits provided by broadband. He is also the President of the Rural Telecommunications Congress.
As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.
National Non-Profit to Launch Joint Initiative to Close Broadband Affordability and Homework Gap
EducationSuperHighway is signing up partners and will launch November 4.
WASHINGTON, October 18, 2021 – National non-profit Education Super Highway is set to launch a campaign next month that will work with internet service providers to identify students without broadband and expand programs that will help connect the unconnected.
On November 4, the No Home Left Offline initiative will launch to close the digital divide for 18 million American households that “have access to the Internet but can’t afford to connect,” according to a Monday press release.
The campaign will publish a detailed report with “crucial data insights into the broadband affordability gap and the opportunities that exist to close it,” use data to identify unconnected households and students, and launch broadband adoption and free apartment Wi-Fi programs in Washington D.C.
The non-profit and ISPs will share information confidentially to identify students without broadband at home and “enable states and school districts to purchase Internet service for families through sponsored service agreements,” the website said.
The initiative will run on five principles: identify student need, have ISPs create sponsored service offerings for school districts or other entities, set eligibility standards, minimize the amount of information necessary to sign up families, and protect privacy.
The non-profit said 82 percent of Washington D.C.’s total unconnected households – a total of just over 100,000 people – have access to the internet but can’t afford to connect.
“This ‘broadband affordability gap’ keeps 47 million Americans offline, is present in every state, and disproportionately impacts low-income, Black, and Latinx communities,” the release said. “Without high-speed Internet access at home, families in Washington DC can’t send their children to school, work remotely, or access healthcare, job training, the social safety net, or critical government services.”
Over 120 regional and national carriers have signed up for the initiative.
The initiative is another in a national effort to close the “homework gap.” The Federal Communications Commission is connected schools, libraries and students using money from the Emergency Connectivity Fund, which is subsidizing devices and connections. It has received $5 billion in requested funds in just round one.
Steve Lacoff: A New Standard for the ‘Cloudification’ of Communications Services
The cloudification of communications services makes it easy to include voice, data, SMS, and video within any existing service.
The line of demarcation between what has traditionally been considered a telecommunications service was once very clear. It was tangible – there were wires, end points, towers, switches, facilities. Essentially, there was infrastructure required to relay voice or data from point A to point B.
Today that line is fuzzy, if not invisible. The legacy infrastructure remains, but an industry of cloud-based services that don’t require the physical connections has exploded. Voice, data, SMS, and video conferencing can now be conveniently delivered OTT. Enabled by simple API integrations, businesses can embed just one of these services or a complete communications platform-as-a-service (CPaaS) into an app, service, or product.
Cloudification is a game changer
This “cloudification” of communications services makes it easy to include voice, data, SMS, and video within any existing application, product, or service. These are essential components for many business models.
Consider these services we have come to rely on in our daily lives: food or grocery delivery, ride services, and business and personal communications. These require multiple methods of communication with shoppers, drivers, co-workers, watch party groups, and external business partners.
The exciting news is there is no end in sight. Use cases will continue to evolve and growth will continue to skyrocket. The scale cloud delivery accommodates is massive. These untethered, easy to embed communications services are a critical differentiator for both business-to-business and business-to-consumer buyers, and the lifeblood of the businesses providing both the end user subscriptions and the APIs.
In fact, one industry juggernaut saw H1 YoY video application service demand grow nearly 600% in 2020.
Not surprisingly, as business demand for these services increases smaller CPaaS players continue to enter the market to quickly snag market share. According to a recent IDC study, “the global market revenue for CPaaS reached $5.9bn in 2020, up from $4.26bn in 2019, and is expected to reach $17.71bn by 2024.”
Merger and acquisition activity is aligned with this hockey stick growth forecast. Large telcos, SaaS providers, and even other CPaaS providers are all on the hunt. Whether they want to add additional features to punch up their products or eliminate the competition in a very tight, nuanced market, the end game is clear – as the market expands, the players will ultimately contract leaving only the most competitive offerings.
Don’t let communications tax take you by surprise
One of the least understood risks when adding cloud-based voice, data, SMS, or video conferencing to an existing product or service is new eligibility for and exposure to the complex world of communications taxation. Making mistakes can get costly very quickly.
Here are some of the key pitfalls to keep an eye on:
- Expanded nexus: Understanding communications tax nexus is different – and exceptionally more complicated – than sales tax. There are approximately 60,000 federal, state, local, and special taxing jurisdictions, each with uniquely complex rules that tend to change at their own pace. Rules are very different for each service.
- More complex calculations: The more communications services you provide via API, the more complicated communications taxes will be. Each feature can be taxed at different rates in each individual jurisdiction, or the whole bundle can be taxed at one rate. It’s critical to monitor monthly to avoid audit issues.
- Maintaining overall compliance: Just as tax rates and rules need to be maintained, so must tax and regulatory filing forms in each jurisdiction. Some of these are very long and require significant detail. They must be filed in a timely, accurate cadence to avoid additional audit risk.
Bottom line: Don’t assume, be prepared! As these communications services become more pervasive a larger swath of technology providers will find themselves liable for communications tax. The more your business falls behind, the more it can cost you.
It pays to be proactive and prepared. Tax and legal advisory experts can help determine your level of risk, and tax and compliance software providers can help you keep up with changing rules and regulations. Don’t underestimate the ongoing value of networking with peers who are either struggling to answer the same questions or have already overcome the hurdles you’re facing today.
Steve Lacoff is General Manager of Avalara for Communications. With a focus on data, VoIP, and video streaming, Steve has spent 15 years in various product and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives business strategy on today’s changing industry landscape and associated tax impacts. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to email@example.com. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
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