TR007241
We suddenly have a new way to tackle the urban digital divide. The Consolidated Appropriations Act of 2021 allocated $3.2 billion to bring broadband to homes that need it during the pandemic. Further, a recent editorial in the Washington Post suggests that we expand this program and make it permanent. I have conflicted feelings about the plan.
It’s wonderful for the federal government to finally recognize that there is a huge digital divide in urban America. The FCC has rightfully concentrated its effort on rural homes that have no broadband option, but this means there is barely any official acknowledgement that an urban digital divide even exists. Finally recognizing the issue is a great step towards starting the process of finding permanent solutions to the problem.
This feels like the absolute right solution for 2021 while we are still under the pandemic. The proposed solution would pay $50 for a home broadband connection for homes that need it. There are still millions of homes with students struggling with schooling from home and millions more were sent home to work. Broadband is also essential for the millions who have lost jobs during the pandemic. $3.2 billion will pay for broadband to 10 million homes for six months or 20 million homes for three months. I wonder if anybody even knows how many homes need broadband right now – I’m guessing it’s far more than 10 million.
But I can’t help feeling like this is a big giveaway to the biggest ISPs which are likely to claim most of this money. It’s impossible for Washington DC outsiders to understand where ideas like this came from. I’d feel better about this idea if it came from digital divide advocates than if this idea was hatched by big ISP lobbyists who see a way to snag billion in federal money.
That’s a legitimate concern because this plan largely ignores the other two issues faced by homes without broadband. Many such homes don’t have a computer and many people don’t know how to use computers. Urban digital divide proponents will tell you that we need to solve all three issues before a home can meaningfully take advantage of getting broadband.
I also hope that any money used this way goes towards real broadband. It will be maddening if Comcast can charge the federal $50 monthly for what it already provides with its $9.95 Internet Essentials program. Comcast has crowed loudly about the good done by this program, but Comcast recently announced it is upgrading the program for 25/3 to 50/5 Mbps – a speed that is still inadequate for multiple people to use at the same time. I thought that was a decent program before the pandemic, but it no longer delivers what a home needs to stay connected during the pandemic.
I also hope that none of this money goes to AT&T DSL since the company stopped offering DSL to the public in October. None of this money should go to DSL in general since most DSL connections have upload speeds even slower than the Comcast Essentials.
I have reservations against making this a permanent solution. I might be wrong about this and perhaps I can be convinced that this is the best solution for the urban digital divide. I can’t help but wonder about what happens the day this subsidy ends and millions of homes lose their broadband connection. Perhaps the big ISPs already envision that day and know the temptation will be for the government to continue funding the program endlessly. My other big concern is that if this is made permanent that it will always be an annual target for politicians to eliminate.
My gut tells me that billions could be better spent by building a permanent broadband solution for poor urban neighborhoods. Before we make $50 payments into a permanent solution, as has been proposed by the Washington Post, I’d like to at least explore using federal funds to create urban broadband cooperatives or non-profit ISPs that could bring permanent broadband to neighborhoods that most need it. We already have a great historical example of how this can work. Rural America basically got electricity because the federal government loaned money to cooperatives to build electric networks. My guess is that we’d see the same thing happen in urban America if the government offered the oans. It makes a lot more sense to loan the money needed to let neighborhoods help themselves than to create a permanent subsidy.
“this plan largely ignores the other two issues faced by homes without broadband. Many such homes don’t have a computer and many people don’t know how to use computers. Urban digital divide proponents will tell you that we need to solve all three issues before a home can meaningfully take advantage of getting broadband.”
This is a 1990s view. Back then, the first uses of advanced telecom were “going online” with computers over legacy copper telephone networks via dialup and later DSL. Fiber optic technology that should have by 2010 replaced copper telephone infrastructure for all homes supports digital voice and video as well as computer data services. The “digital divide” is an infrastructure issue, borne out of the failure to timely modernize legacy copper to fiber.
Doug, Spot on regarding federal funds slipping to the big ISP’s. History repeats itself. Keep the light on.
All broadband funding must go to local governments to build out fiber to the home networks and private ISP’s can lease capacity and offer competing service ‘packages’ — in transportation terms — government owns the roads and private sector owns ‘content’ or vehicles using the roads. The only way the US can reclaim compensation for use of public right of way land and create a competitive telecom economy is to own the infrastructure that’s located in public rights of way. Right now the monopolist telephone and cable companies pay nothing ($0) for using public land to sell Internet service.
This is a market problem. The digital divide is the result of expected profit – cost of buildout being a negative number. Incumbents have price points that poor people, mostly, aren’t going to meet. We’re not going to “modernize” our way out of it.
The incumbents have voted with their feet. We could have society bribe them off or we could have more competition. They have an excellent track record of getting paid off.
Municipal backbones, shared fiber, regulations on ISPs forcing them into uncomfortable positions where they have to compete.
We can’t treat this like it’s a market where competition will magically arise.
It is indeed difficult for households to meet the price points for fiber when only business class service is offered circa $600/month.
Just to be clear I’m 100% sympathetic with the idea that everyone should have access and that the prices are too high all around.
The telcos are kind of hosed because they’ve always been terrible at innovation (downloadable ringtones?). So, existing as public companies that are rewarded for growth just doesn’t work once their markets are saturated. Which they are, for anyplace that is wealthy enough to afford their price points.
They’ve blocked off most avenues of competition and are existing on a gigantic annuity plus some crypto and not-so-crypto taxpayer graft.
In this country we have derided government and regulations for forty years and lionized “privatization” for forty years. And that has *totally* created this whole mess. That and our strong slant towards running companies as short term, financialized, no account vampire squids.
Regulated telco utilities, bay-bee. That’s what we need. It’s not like they’d be missing out on competition.
I don’t understand how creating urban broadband coops would solve the affordability problem in cities. It would lead to more competition, which would bring prices down, but as the take rate of Internet Essentials demonstrates, even a charge of $10/month is out of reach for many families already struggling to put food on the table.
Non-profit ISPs offering no-cost service have proliferated during the pandemic, but without an ongoing subsidy for low-income households, it’s not clear how many of them will survive once the spotlight fades on the digital divide and the philanthropic funding sources dry up. Even if federal loans (or even grants) helped covered the capital cost associated with building networks to low-income areas, there are ongoing operational costs associated with providing service and maintaining the network, and without some kind of subsidy for low-income households, its hard for me to imagine that these mission-driven networks you’re suggesting will find a sustainable business model. What am I missing?