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Lindsay Mark Lewis: As Inflation Spiked, Broadband is ‘The Dog That Didn’t Bark’

Why have internet prices remained constant while demand surges? It all boils down to investment.

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The author of this Expert Opinion is Lindsay Mark Lewis, executive director of the Progressive Policy Institute.

There are many lessons to be learned from last year’s midterms, but Democrats should not take the results as some broad endorsement of the economic status quo. Midterm voters identified inflation as the most important issue driving their votes. And while the latest Labor Department data shows the producer price index decreasing by 0.1% in February, prices remain 4.6% higher than a year ago, which means lawmakers still have work to do to bring inflation under control.

And as they search for ideas, they may want to examine the dog that didn’t bark – in particular, the one sector of the economy that has been an interesting counternarrative to the otherwise troubling inflation story.

Home internet service is one of the few major living costs that isn’t skyrocketing. In fact, the most popular broadband speed tier one year ago actually costs 15% less today, on average.

This success story – and the bipartisan policies behind it – offers important lessons.

Remarkably, broadband prices are declining even as demand surges. The pandemic made home internet service more essential than ever for education, job opportunities and health care – all driving internet traffic 25% to 50% above pre-pandemic levels.

So why have internet prices remained constant – even declined by some measures – while demand surges? In short, it all boils down to investment.

When the pandemic cratered economic activity in the spring of 2020, executives in many industries – from lumber to oil refineries to computer chips – made the snap decision to pull back on long-term investments in new factories and manufacturing capacity. When the economy roared back, those industries couldn’t meet demand, sending prices soaring.

In the broadband industry, conversely, providers responded by investing $86 billion into their network infrastructure in 2021 – the biggest one-year total in nearly 20 years. These investments are fueling faster speeds – fixed broadband speeds are up 35% nationwide in the past 12 months – while making sure networks have the capacity to handle growing traffic needs.

This teaches us three things.

First, we should observe a Hippocratic oath and “do no harm.” America’s broadband system has thrived under a decades long bipartisan consensus for light-touch, pro-investment policies. Nearly $2 trillion in private capital built the networks that now deliver American consumers higher speeds at lower per-megabit prices than consumers enjoy in Europe, despite having to cover greater distances and more difficult terrain.

This further tells us that it’s precisely the wrong time to abandon this successful model in favor of price controls and utility-style regulation, as some House and Senate progressives have proposed. Even Democratic policy experts acknowledge that approach would be toxic for private investment.

Second, policymakers need to recognize that broadband isn’t immune from the supply chain crunches plaguing so many other sectors of the economy. Broadband buildouts are already getting delayed by shortages in fiber cable, network hardware and skilled labor. And that’s before $42 billion in federal infrastructure funding goes out the door starting next year, which will only intensify demand for these scarce supplies.

That means rural buildout projects funded by federal dollars are likely to see inflationary pressures – and take longer to complete – than Congress expected when it passed the infrastructure bill in 2021. That will put pressure on state broadband offices to be even more diligent about waste, and to emphasize reliable supply chains with experienced network builders. Bidders will also need the flexibility to buy fiber from wherever they can manage to source it, even if that means relaxing the program’s strict “Buy American” rules. This requires a regulator ability to do smart tweaking of rules to expedite buildouts cost-effectively.

Third, we need to help more financially struggling households get connected. Thanks to President Joe Biden’s Affordable Connectivity Program – and an agreement with 20 broadband companies – 48 million households can now get home internet service for free.

But more than a year later, just over a third of eligible households have signed up. Investing in enrollment campaigns and digital literacy training programs is the fastest way we can crank up the dial on enrollment. Relatively small investments here could pay huge dividends in bringing millions more Americans into the digital economy.

Even with these remaining challenges, the overall contours of American broadband policy – encouraging investment, competition and affordability – are working well. And as the saying goes: “If it ain’t broke, don’t fix it.” In an inflation-roiled economy that defies easy answers, we should learn from – not mess with – this all-too-rare success story.

Lindsay Mark Lewis is executive director of the Progressive Policy Institute. Contact him at llewis@ppionline.org. This piece was originally published in the Richmond Times on March 24, 2023, 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 reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

Broadband Breakfast is a decade-old news organization based in Washington that is building a community of interest around broadband policy and internet technology, with a particular focus on better broadband infrastructure, the politics of privacy and the regulation of social media. Learn more about Broadband Breakfast.

Expert Opinion

Craig Settles: And a Little Child Shall Lead Them — Digitally

How many communities are leveraging their teen populations in the pursuit of broadband and digital equity?

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The author of this Expert Opinion is Craig Settles, who leads telehealth-broadband integration initiatives.

In 2011 at the MoBroadbandNow Summit in Missouri, I listened to the CIO of the City of Springfield explain why his city included teenagers in important broadband needs assessment and planning meetings. “In your home, who do you call when you’re trying to figure out how to use the VCR?”

His point? Springfield learned a valuable lesson: Teens push the edges of technology, and understand how to use technology better than many adults do. Therefore, it is imperative to include teenagers in the planning of what is and will be their main future technologies. The brain power and the creativity alone will lead to the success of tapping this demographic.

Fast forward to 2023. How many communities are leveraging their teen populations in the pursuit of broadband and digital equity? “Kids want to get a look into the future,” said Kevin Morris in a video. “That’s the thing that drives many of them in school.” Morris talks to many students as the director of college, careers and community services for the Duarte Unified School District.

What about their future in broadband, I wondered, when a friend talked to me about her efforts to recruit internship positions for the K12 Foothill Consortium? Many of the high school students in the Consortium are anxious to intern remotely or in-person near their homes in Southern California. It hit me — take the Springfield model of teen engagement to the rest of America!

Imagine the possibilities for local broadband or digital equity teams, local government and nonprofits if they can channel bright, tech-savvy, energetic, inquisitive teens on a mission to help bring the digital equity solutions to communities. Remote or in person interns can help with focus groups, town halls logistics, preparing and writing newsletters, usability testing and Affordable Connectivity Program enrollments.

The K12 Foothill Consortium is recruiting internship hosts for the June through August period and for at least 60 hours total. Those groups and organizations engaged with broadband and digital inclusion projects get the benefit of interns’ prior training in coding, health care, web design, engineering and other related disciplines. Since interns prefer paid internships, the Consortium also raises money for organizations that may be too cash-strapped to offer a stipend but can offer meaningful internships.

Photo of Career Technical Education students courtesy of the K12 Foothill Consortium

Internship hosts view the relationships as a win-win for everyone involved. Ivan Ayro, director of adult and career technical education at Charter Oak Unified School District, agrees. “Students are able to connect the educational experience they’re getting from Career Technical Education classes with real-life experience from workplace learning. Through the internships, many of our students are able to realize in high school if this is something that they want to do for the rest of their lives.”

A recent US News & World Report article states that, although internships are traditionally for college students, high school students increasingly are participating in them. Benjamin Caldarelli, co-founder of Princeton College Consulting, a New Jersey-based educational consulting company, said, “High school students want to work somewhere that interests them and potentially make what they feel is a more meaningful contribution. They see internships as an enrichment activity and opportunity to make an impact rather than simply trading time for a little money.”

More than 205,000 new jobs will need to be created to complete the Broadband Equity, Access and Deployment expansion plans, many of them skilled workers. “There is a lot of focus placed on building broadband networks, but we cannot build them without a proper workforce,” Fiber Broadband Association CEO Gary Bolton said in a press release. “Failure to ensure the availability of high-skilled labor will result in workforce bottlenecks, which will ultimately lead to higher costs and project delays.”

The National Telecommunications and Information Association is requiring every state to have a five-year workforce development strategy. FBA published a guidebook to help states develop that strategy. Broadband and digital inclusion teams need to pencil in “internships” as part of their plans.

High school broadband and digital inclusion interns may not be considered skilled workers, obviously, but the interns should be considered the beginning levels of workforce development campaigns in every community. Start people thinking about broadband and all things digital in high school and use internships to shape their college or post-high school plans. Don’t forget that Gen Z can be an important part of broadband discussions, even if they’re not interns.

Amy Foell, principal of Amy Foell Consulting LLC, heads the K12 Foothill Consortium for Azusa, Charter Oak, Duarte and Monrovia Unified School Districts’ CTE. Their mission is to educate and train students to provide a community-sourced talent pool to sustain a healthy, balanced, local economy. Foell also supports workforce development programs across the San Gabriel Valley, including Pasadena Unified School District.

“I like to have an initial phone call and 15 to 20 Zoom sessions to ensure prospective internship sites understand the program,” said Foell. “Before we meet, it’s advisable to create a brief description of the internship project — be sure to share the organization’s purpose and mission. We’ll help hosts identify and interview candidates in May to early June, and students can start mid-June.”

Craig Settles conducts needs analyses, planning, and grant assessments with community stakeholders who want broadband networks and telehealth to improve economic development, healthcare, education and local government. 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

Debra Berlyn: Creating a Path to Close the Digital Divide for Older Adults

Programs like the ACP and technologies like fixed wireless can play a key role in connecting older adults.

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The author of this Expert Opinion is Debra Berlyn, Executive Director of Project GOAL.

Today, three-year old Max wants to get on the family computer and see his Grammy on the other side of the country, but she could be one of the approximately 34 percent of those age 65 and older who still aren’t connected to the internet at home.

When it comes to getting connected to the internet, older adults continue to remain an isolated and unserved demographic across the country. There’s more work that remains to be done to get older adults connected to the internet. It’s time to get creative and expand the effort for broadband everywhere to everyone.

There’s an unprecedented wave of federal funding for broadband expansion on the horizon. The Broadband Equity Access and Deployment effort is underway and will soon roll-out the $42.5 billion allocated by Congress to expand high-speed internet access across all fifty states and U.S. territories.

Pair this with several industry discount programs to choose from and there may finally be a real opportunity to drive broadband access and adoption and start to close the digital divide for older adults.

Affordable broadband

For older adults with the greatest need, there’s one federally funded program that has had a significant impact on connecting the community to broadband: the Affordable Connectivity Program.

Congress appropriated $14.2 billion in the Infrastructure Investment and Jobs Act of 2021 for the ACP program to provide eligible lower-income households with up to a $30 monthly subsidy. About twenty internet service providers (including large ISPs AT&T, Verizon, Comcast, Charter and some smaller providers) offer a high-speed, high-quality internet service plan for no more than $30 dollars per month for those that qualify.

So, for these households leveraging ACP, which include millions of older adults, they apply their monthly $30 benefit to a plan and access the internet, essentially for free.

To date over 17 million households have signed up for ACP. Over 45 percent of ACP subscribers are age 50 years and older, and over 20 percent of the ACP recipient households are age 65 and older.

This program is truly one of the most important programs for assisting those in need and has finally provided the aging community the opportunity to receive the benefits of broadband.

While new qualified households continue to subscribe to ACP, time is running out for available funding of this important program. With the current number of household subscribers and continued growth, it’s estimated that the ACP will run out as early as the first half of 2024. Congress must consider options now for continuing funding for the Affordable Connectivity Program.

The ACP is an essential program for customers who require a subsidy to acquire or retain broadband service. For many others who may live in areas currently unserved or underserved, or who still haven’t adopted broadband service in a community, there are now new technologies for internet growth.

New approaches

One technology has upped the competitive marketplace in the home for consumers: fixed wireless internet service.  Internet service providers such as AT&T and Verizon, and wireless carriers such as T-Mobile, offer customers an alternative for accessing internet service.

It’s a type of 5G or 4G LTE technology to enable fixed broadband access using radio frequencies (instead of the cables used to wire traditional wired fixed-line broadband) from the home.  Fixed wireless internet service has opened a competitive field for internet service in many communities.

Satellite internet is another interesting approach for the provision of service. Starlink has offered high speed, low latency internet, primarily in limited rural areas, but upfront costs can be on the expensive side. Now, Amazon is entering this market with Project Kuiper to provide fast, affordable broadband service around the world.

It is planning to do this by deploying thousands of satellites in low Earth orbit linked to a global network of antennas, fiber and internet connection points on the ground. Amazon expects to begin delivering broadband connections in late 2024.

The deployment plan has an interesting strategy, with a key Amazon delivery objective of bringing affordable, high-speed connectivity to all consumers. Project Kuiper will offer low-cost and easy-to-install antennas (also known as “terminals) to make the service affordable. The plan can help connect older adults in unserved, and underserved areas of the country, particularly rural communities, and other remote areas without reliable connectivity.

Now, with the ACP offering an opportunity for affordable broadband, the BEAD roll-out, fixed wireless providing competitive broadband services and satellite internet service competition with Project Kuiper on the horizon, we are on the right track to close the digital divide for older adults.

Debra Berlyn is the Executive Director of the Project to Get Older Adults onLine (Project GOAL), which works to promote the adoption of broadband for older adults, and to advance technology applications for the community. She is also president of Consumer Policy Solutions, is on the board of the National Consumers League, and is a board member and senior fellow with the Future of Privacy Forum. 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

Learn How to Speak About Broadband, Say State Directors and Advocates at Connect (X)

Speaking simply will improve community engagement in digital inclusion efforts.

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Photo of Keith Moore of the Minority Business Development Agency, Edyn Rolls of the Oklahoma Broadband Office, Valarry Bullard of the New Jersey Broadband Office, Scott Woods of Broadband Ready

NEW ORLEANS, May 12, 2023 – How we speak about broadband when talking to consumers while deploying digital equity programs is very important, said state broadband directors at a Connect (X) panel on Wednesday.  

Community residents face significant barriers to adoption that may turn them off to programs meant to benefit them, including the Affordable Connectivity Program which subsidizes high-speed internet subscriptions for low-income households. 

These communities have been historically overlooked by governments and do not trust officials to have their best interests at heart, said Courtney Richard of nonprofit affordable housing development corporation, National CORE. 

As state officials, we need to do all we can to connect with the residents and make the experience as comfortable for them as possible, said the Director of the New Jersey Broadband Office Valarry Bullard. For example, instead of saying “broadband,” officials should say “internet.” 

Locally owned businesses and households need to understand how the internet impacts them individually, and our job is to draw that connection for them, Bullard said. “For us, an opportunity is going to be education.”  

Knowing how to speak about broadband with communities that we work in is an essential piece of the puzzle that can serve to complicate the process if not handled well, said Scott Woods, vice president of community engagement and strategic partnership at Ready.net. 

“You can turn off a community by your simple approach,” said Woods. States must go by the overarching notion that the federal government has put broadband deployment in the hands of states because they understand the needs of the communities, he added.  

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