Net Neutrality and the Digital Divide

There is an interesting idea floating around the industry that is bound to annoy fans of net neutrality. The idea comes from Roslyn Layton who does telecom research at Aalborg University in Denmark. She served on the FCC Transition team for the new administration.

She envisions zero-rating as the best way to solve the digital divide and to finally bring Internet access to everybody. She says that after decades of not finding any other solutions that this might the only reasonable path to get Internet access to people that can’t afford a monthly subscription.

The idea is simple – there are companies who will provide an advertising-driven broadband connection for free to customers, particularly on a cellphone. It’s not hard to envision big companies like Facebook or Google sponsoring cellphone connections and providing data access to customers who would be a captive audience for their ads and content.

This idea is already working elsewhere. Facebook offers this same service in other countries today under the brand name “Free Basics.’ While it certainly costs Facebook to buy the wholesale data connections they must have done the math and figured that having a new customer on their platform is worth more than the cost. Facebook’s stated goal is to serve most of the billions of people on earth and this is a good way to add a lot of customers. With Free basics customers get full use of the Facebook platform along with the basic ability to surf the web. However, the free basic service does not allow a user to freely watch streaming video or to do other data-intensive activities that are not part of the Facebook universe – it’s not an unlimited data plan. I can remember similar products in the US back in the dial-up days when several dial-up providers that gave free connections as long as the customers didn’t mind being bombarded by ads.

There are certainly upsides to this. Such a service would provide enough bandwidth for people to use the web for the basics like hunting for a job or doing school work. And users would get unlimited use of the Facebook platform for functions such as messaging or watching Facebook-sponsored video and content. There are still a substantial number of people in the US who can’t afford a broadband subscription and this would provide a basic level of broadband to anybody willing to deal with the ad-heavy environment.

But there are downsides. This idea violates net neutrality. Even if the current FCC does away with net neutrality one has to think that a future FCC will institute something similar. But even with net neutrality rules in place the FCC could make an exception for a service that tackles the digital divide.

The real downside is that this is not the same as the real internet access that others enjoy. Users would be largely trapped inside whatever platform sponsors their product. That could be Facebook or Google, but it could also be an organization with a social or political agenda. Anybody using this kind of free platform would have something less than unfettered Internet access, and they would be limited to whatever the platform sponsor allows them to see or do outside the base platform. At best this could be called curated Internet access, but realistically it’s a platform to give sponsors unlimited access to users.

But I think we have to be realistic that nobody has yet found a solution to the digital divide. The FCC’s Lifeline program barely makes a dent in it. And I’m not aware of any major ISP who has ever found any mechanism to solve the digital divide issue.

While Facebook offers this in many countries around the globe they received massive pushback when they tried to bring this to India. The Indian government did not want a class of people given a clearly inferior class of Internet connectivity. But in India the government is working hard themselves to solve the digital divide. But there is nobody in the US giving the issue any more than lip service. The issue has been with us since the dial-up days and there has been little progress in the decades since then.

I read some persuasive articles a few years ago when the net neutrality debate was being discussed about this kind of product. There were arguments made that there would be long-term negative ramifications from having a second-class kind of Internet access. The articles worried about the underlying sponsors heavily influencing people with their particular agenda.

But on the flip side, somebody who doesn’t have broadband access probably thinks this is a great idea. It’s unrealistic to think that people have adequate broadband access when they can only get it at the library or a coffee shop. For broadband to benefit somebody it needs to be available when and where they need to use it.

I lean towards thinking this as an idea worth trying. I would hope that there would be more than one or two companies willing to sponsor this, in which case any provider who is too obnoxious or restrictive would not retain customers. People who go to sites like Facebook today are already voluntarily subjected to ads, so this doesn’t seem like too steep of a price to pay to get more people connected to the Internet.

The Vision of Next Century Cities

Next Century Cities is an organization comprised of 166 mayors of cities that have the mission statement to make sure that all of their citizens have access to fast, affordable and reliable Internet access. The members range from small towns to NFL cities. They recently published their 2017 Policy Agenda that highlights the issues that they think are the biggest impediments to meeting their broadband goals. These goals are worth some thought since they differ from the wish list of most other stakeholders in the industry.

Restore Local Authority. Cities want to have a hand in finding their own broadband solutions and they don’t want to be restricted by state or federal law from doing so. I would note that the vast majority of cities do not want to be a retail ISP, but they still want to have the ability to make the investments needed to meet their broadband goals. They want to be able to form meaningful public-private partnerships. And more than anything else they want the legal authority to find broadband solutions.

Competition in Multi-Dwelling Units (MDUs). Cities with any significant percentage of citizens living in MDUs are concerned that those citizens are often not getting the same quality broadband products or having the same array of choice as single family homes. For example, even where fiber has been built, overbuilders often skip MDUs that present construction or operational issues. Cities are also still concerned about the proliferation of exclusive contracts between MDU owners and ISPs.

Anti-Monopoly and Competition. Mayors are concerned by what they see as shrinking competition. In many cities the cable companies have won the broadband battle against the telco. Where there are no significant third-party fiber overbuilders the mayors see broadband becoming a monopoly product. The cities generally are against the mergers of gigantic ISPs.

High-Quality Low-Income Internet Access. Cities are still looking for ways to solve the digital divide. They understand that there is a significant percentage of the population that doesn’t have broadband because they can’t afford it. They are currently dismayed by what they perceive as the FCC walking away from the Lifeline program that can subsidize broadband service in low income households.

Small Cell/5G/DAS. Cities are grappling with how to best foster and physically accommodate the coming proliferation of wireless transmitters that will be spread through the community to distribute 5G and millimeter wave spectrum. They are anticipating a host of new wireless broadband products, but they have concerns about how to deal with numerous wireless providers wanting to utilize the same key locations.

One Touch Make Ready. Cities are in favor of regulatory changes that make it easier for fiber overbuilders to get onto poles or into existing conduits. The ‘one touch make ready’ concept would greatly speed up the process and reduce the costs of the pole attachment process. It would give a new fiber builder the ability to more easily move wires of existing carriers to speed up the construction process. In cities with numerous existing carriers on pole lines the cost and time involved in gaining approval and of implementing the changes needed to accommodate a new carrier can be numbingly slow.

Infrastructure Investment. Cities want to be included in broadband infrastructure spending that might come from any federal infrastructure plan. They fear that any broadband money will be aimed only at rural areas and the FCC still estimates that there are more than 10 million people in large urban areas that can’t buy bandwidth that meets the FCC’s 25/3 Mbps threshold. And while smaller rural towns and cities might have broadband that meets that test, they often have older networks that are far below the standards of metropolitan areas.

Summary. Of all of the various stakeholder groups involved in broadband infrastructure deployment, cities the most focus on getting quality broadband to everybody. That focus puts them into opposition with incumbent ISPs on some issues. Experience shows us that cities are often more aligned with new overbuilders, at least to the extent that those ISPs don’t want to only cherry-pick the most lucrative customers in the city. Because of various state restrictions, cities vary widely in how much influence they have over broadband. But cities everywhere are the ones that determine some of the key processes in broadband deployment such as permitting and local construction practices. And that means that their goals must be recognized by anybody wanting to deploy new broadband in cities.

Solving the Urban Digital Divide

old computerI can remember talking about the digital divide twenty years ago. At that time the main issue was to get computers to low income households so that they could buy DSL. There were some fairly successful programs around, mostly run by volunteers or with grant funding to try to make this work.

But now twenty years later most cities I visit are still trying to solve the digital divide. But today it’s a different divide and the urban divide is now mostly one of affordability. There are isolated pockets in many cities that don’t have broadband, but the vast majority of people in urban areas have physical access to broadband. But there are numerous surveys that show that somewhere between 10% and 20% of households in most cities say that they can’t afford broadband.

In the last twenty years broadband has gotten a lot more expensive. And I think we are headed for a time when it’s going to become even more expensive. The big telcos and cable companies are now looking for broadband to be their major source of revenue growth. The cable companies added over 3 million new broadband customers last year and are expected to do so again this year. But you don’t have to look very far into the future to foresee the time when growth will be slow for every ISP. They will be forced to raise broadband rates to meet Wall Street earnings expectations.

There are some cities that have built their own networks – cable HFC networks or fiber networks – but even these cities have not done a very good job of providing broadband to all of their low-income households. It’s expensive to build the last mile and particularly expensive to connect homes to a fiber system.

There are some solutions that can solve part of the problem:

  • There are a number of cities that have built to or purchase broadband for public housing projects. But generally this only covers a small percentage of the households that need broadband.
  • There are some large ISPs that bring broadband to public housing. I recall seeing announcements recently where both Google and AT&T have brought broadband to public housing in one or two cities, and of course they crowed loudly about it. And while these gestures are nice, they solve a tiny slice of the problem.
  • There are cities that have tried to build ubiquitous outdoor WiFi. But these networks are expensive to build and the technology doesn’t seem to last for many years. I know of a number of these networks that have been discontinued in the past.
  • There are also cities experimenting with trying to beam WiFi into low income homes, but this is even more expensive than building outdoor WiFi.
  • Communities everywhere have put broadband into libraries, figuring that having a place for people to get access to broadband is better than nothing at all.

But I see that the digital divide topic is back in vogue and a lot of cities are having the discussion again of how to bring broadband to where people need it. There was a time in the past where broadband was something that was nice to have, but today it is becoming a necessity for most people. And not having affordable broadband puts people at a major disadvantage. There are a lot of people today that use their smartphone for Internet access. This works for a lot of purposes, but it can quickly get dreadfully expensive if you actually use the broadband much.

I don’t have a solution. I was just in a city last week that owns their own cable network and I reminded them that using that network to solve the digital divide is by far the most cost effective way to do this. This city was extremely interested in the new federal lifeline program for data and that might be enough of an incentive for them to develop a lifeline product that can be afforded by a lot of the households in their city.

When I look around at the number of households that want broadband and the numbers that will be eligible for the federal program I wonder if the USF Lifeline Fund is large enough to help everybody who needs it. I saw that Congress is already trying to cap this fund, but if we want to get broadband everywhere then the USF fund might be a powerful tool for getting broadband into a lot more homes.

Paying for Rural Fiber

I am in an interesting place in the industry in that our firm works for both municipalities as well as lots of small commercial ISPs like telcos, cable companies and CLECs. One thing that I have noticed over the years is that there is a huge amount of distrust by commercial ISPs towards municipalities that explore building fiber optic networks.

And I think for the most part this distrust is misplaced. It’s been my experience that there are almost no cities that want to be an ISP. I think perhaps the idea that cities want to do this has been caused by the big telcos and cable companies spreading alarms about the cities that have done this. I think that most of the cities that have built fiber, except for a few like Chattanooga, would have much preferred to have a commercial company bring competitive broadband to their city.

It’s easy to forget about the fear and angst in rural America concerning broadband. Rural communities keep seeing other rural places that are getting gigabit broadband while they still have homes that don’t even have DSL. They look around and see little towns of their own size with broadband that are thriving and they realize that if their town stays on the wrong side of the digital divide that their long term viability is at risk.

Perhaps the best example of this that I’ve heard came from Hiawatha Broadband of Winona, Minnesota. This is a commercial overbuilder who built broadband networks to a number of small towns in their region. They have been at this for a while and what they observed in the last census is that every one of the towns with one of their broadband networks gained significant population while every town around them that doesn’t have broadband is losing population.

People need broadband and they are going to live where they can get it. New homes are going to be built where there is broadband. People want to work at home and can only do that where there is broadband. And people with kids want broadband so that their family is not at a disadvantage. Towns and rural areas without broadband understand these issues and they don’t want their area to dry up and disappear.

I remember a bunch of articles back in 2012 where somebody had estimated that it would cost $140 billion to build fiber everywhere in the country. I have no idea if that is a good estimate, but obviously it would cost a lot. What I think is important to understand is that even if all of the small telcos and cable companies and electric coops wanted to build fiber everywhere that the combined borrowing power of those companies in aggregate is not large enough to get the job done. As much as folks want to think that small carriers are the national solution, as a whole they could not borrow the needed billions.

What I am finding is that communities are starting to wake to the fact that they are going to have to contribute to financing fiber if they want broadband. The likelihood of an ISP just showing up and building fiber in most rural communities is very small. It’s hard to make a good business case with rural fiber, and even if you can make the case it’s exceedingly difficult to borrow the money.

So I think it’s time to get rid of the mistrust between municipalities and small ISPs and instead come together to get the job done. I’ve done a lot of financial analysis of rural America and fiber projects are a lot more feasible when part of the project is funded by municipal bonds and not just from bank debt.

I think the way to get this done is through the creation of public private partnerships (PPPs). There are already a number of examples of places where this has worked, but there needs to be a whole lot more PPPs created. If rural towns and counties really want to get broadband then they ought to be willing to put skin in the game to make it happen. It’s something that taxpayers want and rural surveys are generally overwhelmingly in favor of local government helping to solve their broadband problems.

There are some very specific steps that ought to be taken to put together a good PPP for rural fiber. It would probably take a dozen blogs to discuss this topic thoroughly. I may or may not do that, but meanwhile, if your community needs a broadband solution give me a yell. I can tell you how other communities have gotten this done and point you in the right direction towards finding a PPP broadband solution for your area.

The Birth of a New Digital Divide

eyeballPew Research Center released some interesting data a few weeks ago that suggest that cord cutting might be starting to affect broadband connections and not just cable connections. According to a recent Pew poll, 67% of households now have a landline broadband connection, down from a high in 2013 of 70%.

When you consider both landline broadband and cellular data products together you get a slightly different story and the combination of the two services was 80% of households in 2015, up from 78% in 2013. Pew draws the conclusion that there is now a migration from households with a wireline connection to households that only use cellphone data. Pew reports that 13% of households now rely on cellphone data as their only connection to the Internet.

Luckily the latest Pew poll dug into this phenomenon in more detail and what they found was that 59% of all of the households using only cellular data do not buy a landline data product due to price. This matches very well with the report put out by the Brookings Institute last month that shows that landline broadband adoption rates are very related to income.

But Pew is the first one to suggest that there is an overall drop in landline broadband adoption. For example, when the major ISPs release customer counts every quarter there has been a steady and noticeable overall growth in broadband customers. Within those statistics there has been a steady and noticeable drop in DSL customers and an increase in cable modem customers, but overall the trend has always been upward.

But if the Pew numbers hold up to be right over time, then this might suggest that we are going to reach a market cap on broadband customers that is lower than what the industry has been expecting. And this cap will be driven by the price of the products, not the desire of homes to have broadband.

I was just reminiscing about the changes in prices in the industry the other day. I can remember back to a time in the mid-90s when I paid $19.95 a month to AOL, something a little less than $30 for my landline from Verizon, and around $50 for a cable package that included some movie channels. That was the whole triple play for $100 per month.

But today the cost of telecom products is much higher and has grown much faster than inflation. We now have households where most of the family pays at least $50 each for a cellular line (not including the cost of the phone). While there are still some inexpensive DSL plans available in some places, it costs at least $50 per month to get a decent data speed. And the big cable companies all report the average revenue from all of their cable plans is more than $70 per month. Only about half of households still have landlines and those can vary anywhere from $20 to $40 per month. And the costs don’t stop there. Most people are paying for settop boxes and cable modems, the prices on both have crept up to $7 – $8 each. And all ISPs now have a range of ‘fees’ that many people assume are taxes but which go straight into the ISP’s pockets.

And then there are the new services that weren’t around in 1995: a lot of houses now pay for Netflix and possibly for music services like Spotify, people must now buy cellphones that are generally obsolete every two years, and on top of those prices the carriers want to tack on handset insurance and other fees to cellular bills. Finally, there are data overages. Today that mostly affects cellphone users but, as seen by the rash of complaints against Comcast, is likely to start affecting landline data bills as well.

While it’s possible to work hard and find bundles to try to hold these costs down, without bundles these equate to telecom bills north of $300 per month. And even those that bundle would have a hard time buying these all of these things for under $200 per month.

So it’s not hard understand why households find they can’t afford all of these things. It’s hard to imagine any household that wants to partake in modern services like Netflix being satisfied with only cellular data and its tiny caps. But if you are on a budget something has to give and it’s pretty easy to understand that somebody is going to value a smartphone over a home Internet connection if you can only afford to buy one of them.

When you consider that the ISPs all intend to start increasing the cost of broadband annually like they have always done with cable then one can expect this situation to get worse over time. This means there will be a whole new digital divide defined strictly by income. People will want the products in the market but will be unable to afford them.

Broadband Adoption and Income

eyeballThe Brookings Institute just released a report, Broadband Adoption Rates and Gaps in U.S. Metropolitan Areas, that looks at metropolitan broadband rates around the country. The report uses a broad definition of broadband that includes cable modem, DSL, fiber, cellular data, satellite, and fixed wireless service.

The report acknowledges that broadband is still growing and the country saw 2.6 million households add broadband from 2013 to 2014, bringing the overall national penetration rate to 75.1%. But Brookings found that there is a lot of variance in the penetration rates in different parts of the country.

There are metropolitan areas like San Jose where the broadband penetration rate is greater than 88%. The top ten metro markets for broadband has Washington DC in tenth place at 84.7%. But there are a number of other cities that lag behind these national statistics. At the bottom is Laredo, TX at 56.2%, joined at the bottom of the list with places like McAllen, TX, Visalia, CA, Dothan, AL, and Beaumont, TX.

Brookings looked at a number of different factors that affect broadband usage for households. It’s not surprising that household income is a factor. Households with an annual income greater than $50,000 have an 88.8% broadband penetration rate while those with less than $20,000 income are only at 46.8%. Education also seems to be an influence and 91.5% of households with somebody with a bachelor’s degree have broadband while households where nobody finished high school are at 54.1%.

The report did not find a big correlation between race and broadband adoption. While there were cities where blacks or Hispanics have low broadband adoption rates, there were others where they did not. The report concludes that the determining factor is household income and not race.

The report also found some correlation with age and households that have a family member under 18 had a penetration rate of 81.9% while those with everybody over 65 were at 64.5%. But the correlation with age did not hold across all markets and the places where the elderly have lower broadband acceptance seems to be where their income is the lowest. So again, income seems like a more important factor than age.

The report found a few correlations that make a lot of sense. For instance, it found that almost all homes that include a telecommuter have broadband.

Overall the report concludes that metropolitan areas with the highest incomes, with the highest percentage of tech workers, and with the highest average education also have the highest broadband penetration rates.

The report observes that households widely value broadband and that the rate of broadband subscriptions continues to climb. But they conclude that we cannot make the transition to an all-digital society until broadband penetration rate is as ubiquitous as the rates for water and electricity. They conclude that it is going to take targeted assistance programs to get broadband into more homes. While they point to the federal Lifeline and the newly named ConnectHome programs as being a needed part of the solution, they don’t see these kind of programs closing the digital divide. They recommend many more local initiatives, including programs by carriers, to try to get broadband into more households.

Lifeline Data and the Digital Divide

FCC_New_LogoThe FCC recently approved moving forward with the process of establishing a low-income subsidy for landline data service. The target subsidy they have set is payment of $9.25 per month towards the broadband bill of qualifying households. I’m really not sure how I feel about this.

Certainly we have a digital divide. While there are still many millions of rural homes that have no broadband alternative, there are even more urban households who can’t afford broadband. The numbers bear this out. A Pew Research survey earlier this year reported that the broadband penetration rate for homes that make less than $25,000 per year is 60% while 97% of homes that make more than $150,000 per year have broadband. The overall national average broadband penetration right now is at about 74% of households and it’s clear that poorer homes have a hard time affording broadband.

If you accept the premise that broadband is becoming a necessity to participate in our culture, and even more importantly that broadband is vital at home for school kids, then we do need a way to get broadband to people who need it.

But I wonder if this program is really going to make a difference and if it will get broadband into a whole lot more homes (versus giving payments to some of those 60% of low income homes that already have broadband). The dollar amount, at $9.25 doesn’t feel like a very big discount on broadband bills that are likely to be $40 or higher in most places. If a home is having trouble affording a $40 broadband bill, I wonder if reducing that to $30 is really going to make it affordable? I’m not sure that the policy makers who are deciding this really understand how little disposable income most working poor families have.

And paying for broadband isn’t the whole cost because homes that can’t afford broadband also have a hard time affording computers. It’s not like you can buy a computer once – I know I have rarely had a computer that lasts more than three years, with some of them dying earlier than that.

I know that many cities already have programs that tackle the computer issue. I know of programs that distribute refurbished computers to homes. And there are more and more school systems that are giving school kids an iPad or other computer so that they don’t have to worry about having a computer at home. For this federal program to be really successful is going to require more of those kinds of programs.

I also wonder how the FCC will cap the amount of money this is going to cost. It’s not going to take a whole lot of households to eat up any funds they set aside for this. The current Lifeline telephone subsidy cost $1.6B in 2014 and pays a $9.25 subsidy for a landline or a cellphone for homes that are below 135% of the poverty line established by the Department of Health and Human Services.

The revised plan is going to keep the $9.25 subsidy and somehow use it to cover both telephone and data connections. The exact details aren’t out, but it was said that no household could collect more than one $9.25 subsidy. If a home is already getting the phone subsidy then they wouldn’t get any additional break on their data connection.

I think every school kid ought to somehow have access to a computer and broadband. I just don’t know that this particular program is going to change the current situation a whole lot and I wonder if there ought to be a different approach. The digital divide is real and kids in poor families are the most affected by it. If this program doesn’t make a big difference I hope we are willing to try something else.

Quantifying the Benefits of Fiber

san_francisco_skyline-wideFour times in the last two weeks I have been asked the question about how to value the public benefits of operating a fiber network. It’s a fair question, because anybody that builds a fiber network for a whole community brings added value beyond just the monetary value of the revenues of the network to the service provider.

Fiber networks automatically bring a number of community benefits. With greater download speeds people are enabled to telecommute more or to work from home full-time. Communities with fiber generally see a surge in entrepreneurship. Fiber speeds make it easier for people to partake in advanced video services like distance learning or telemedicine. Applications that require bandwidth are just starting to burgeon due to the expanding number of people with broadband.

But my clients weren’t asking about those ‘normal’ benefits of fiber. What they really wanted to know is if there is something more that they could and should be doing after they have built a fast network.

Each of these carriers had made a list of ideas they wanted to discuss with me, and interestingly, they all had two of the same things on their list. First, they wanted to know if it made sense to use their fast network to bring community-wide WiFi to their service area. They also are interested in looking harder at the digital divide—particularly at the idea of making sure that every school kid in their community has access to broadband at home.

Even more specifically, they wanted to understand if there is a model for helping to pay for these ideas. They were already convinced that these are good ideas and they wanted to know if there was some ways to monetize them.

And that is a really good question. I will have two upcoming blogs that will look at the business case that can be made for these two ideas. But today I want to take more time to look at the general idea of using a fast network to bring benefits to the community.

It’s really hard to measure the social benefits of doing something like broadband. It’s fairly easy to make a list of the ways that broadband can positively affect a community. But it’s nearly impossible to put a dollar value on most of those benefits. I remember a few years ago reading a report that Seattle commissioned that quantified the value of a fiber network for the city. I don’t remember the exact bottom line conclusion, but it estimated a really big dollar benefit for the community, something like $1 billion over a few years. I recall that the benefits were greater than the cost of building the network, and if those benefits were credible the city should have dropped everything to get this done.

But even a major fiber proponent like me had a hard time grasping some of the estimates that were made in the study. How can you really measure the value of things like telecommuting or being able to start a business from home? And how do you separate the value of fiber compared to the already existing benefits of broadband from cable modems and DSL? After all, people can work at home easily using a cable modem too (I am proof of that), and so the question becomes how can you figure out the incremental benefit of fiber?

In every study I have ever seen on the topic, somebody—usually an economist—develops some assumptions of the values created by fiber and then also estimates the number of times the benefit will be realized. That requires two major assumptions, neither of which can be verified.

But that doesn’t mean that value isn’t created, just that it’s nearly impossible to ever measure it even after it has happened. And this leads me to the conclusion that if you want to use a fiber network to do good, then find some way to pay for at least some part of what you are trying to accomplish and then go ahead and do it if you and the community are convinced it’s a good thing. You are never going to be able to find definitely proof of the community value of most ideas, even when you know those benefits are real.

I don’t see this as any different than many other things that are done for the public good. How can you measure the value of things like having a nice park in a city or of having a program to help the homeless? The answer is you can’t. But in most communities those kinds of things are done when the community reaches a consensus that it’s a thing worth doing. And I think that is the same way you look at the benefits of fiber. If the community wants the benefits that fiber can bring them, then the community and the network owner ought to be able to work together to make good things happen.

The Homework Gap

Generic-office-desktop2A newly released Pew Research Center poll looks at the impact of household income on the percentage of homes with Internet connectivity. The study shows that homes with children and with annual household incomes under $50,000 have significantly lower broadband penetration than higher income homes.

FCC Jessica Rosenworcel issued a statement after the release of the poll and called this phenomenon the ‘homework gap”. There have been discussions since the 1990s about the digital divide; this survey shows that the divide is still there and that it correlates with household income.

This finding comes at a time when computers are routinely integrated into schools. Most classrooms and schools now have computers. Also, though I was unable to tie down any precise statistic, what I’ve read suggests that a majority of teachers assign homework that requires a computer. There is also a new way of teaching becoming vogue. Referred to as the ‘flipped classroom’, this teaching philosophy requires students to watch videos and other online content at home and be prepared to discuss the materials in class (as opposed to the traditional way of showing content in class).

As somebody who has been helping carriers sell into different kinds of neighborhoods for years, the statistics are not surprising to me. The Pew study shows that over 31% of households with children do not have high-speed Internet at home. This low-income group makes up about 40% of all households with school age children. This contrasts to only 8% of homes with kids who make over $50,000 that lack Internet access.

The study looked at a wide range of incomes and is one of the more complete surveys I’ve seen showing broadband penetration rates. For example, it shows that all households under $25,000 per year have a 60% penetration of broadband while households making more than $150,000 per year have a penetration of 97%.

One thing this study didn’t consider was the other digital divide, which is the urban/rural one. According to the FCC statistics, there are at least 14 million homes in the country that don’t have physical access to broadband. And as I’ve written a number of times, I think that number is too low and skewed due to the underlying statistics being self-reported by the large carriers.

The FCC is considering if it should expand its Lifeline program to include broadband coverage for low-income households. Today that fund will chop a few dollars per month off of a phone for low-income families. The Universal Service Fund spends approximately $1.5 B per year for the program.

I understand the sentiment behind this kind of assistance. But I would be surprised if a few dollars per month will make much impact on whether a household can afford to buy broadband. It’s going to take a whole lot more than $1.5 billion per year to solve the obviously large gap for student homes without broadband. And of course, such a program will do no good in those rural places where no broadband exists.

This is not going to be an easy issue to solve. To close this gap we have to find a way to get broadband into many millions more homes. But we also would need to make sure that those homes have working computers that are up to the tasks required by homework. I’ve seen numerous studies over the years that show that low-income households have an equally low penetration of home computers as they do broadband. There are many school systems today that give laptops to kids for the school year and perhaps that would at least solve half of the issue if this was more widespread. But until all kids in a school can use those laptops at home, the kids without internet access are going to fall behind those that have it.

What Does a Gigabit Get Us?

pro_MC220L-01This is the sort of blog I really like because it talks about the future. Last fall the Pew Research Center asked a number of industry experts what ubiquitous gigabit bandwidth would do for society. Since then there have been numerous articles written about the changes that might come with faster bandwidth. Interestingly, these are not distant Star Trek fantasies; industry experts are expecting these ideas to manifest in a decade or so. Following are some of the more interesting ideas that I’ve seen:

Enabling Hermits Everywhere. A large number of experts believe that one of the first and most practical aspects of gigabit bandwidth will be telepresence, which means the ability to meet with people holographically and feel like you are in the same room. This would largely eliminate business travel because people could meet together at any time as long as they are all connected with gigabit bandwidth.

This same technology also means you could sit for an evening with a remote family member, meet with a doctor, get a piano lesson, or do almost anything that involves meeting with somebody else without needing physical interaction. This will enable even the biggest hermits among us to interact from the safety of our living rooms. (But it will also change the way we dress when we work from home!)

I have read predictions that this is going to mean that we do away with emails, phone calls, and other methods of communications, but I don’t buy that. It’s human nature to not always want to communicate in real time with people and I think telepresence is going to make us very careful about who we let into our lives. I suspect we will become very selective about who we will share our presence with and that we won’t let salespeople and strangers into our telepresence.

Holodecks? Big bandwidth ought to bring about new forms of entertainment. If we can sit holograhically in a meeting we can also holograhically attend a concert, take a ride on a gondola in Venice, or sit on the beach in the Caribbean. It also means a huge leap forward in gaming where we can become characters within a game rather than controlling characters from without. And I am guessing that the sex industry will probably be one of the earliest to monetize these abilities.

The Ever-present Infosphere. Huge bandwidth coupled with the cloud and supercomputers means that we can have a computerized world with us anywhere there is bandwidth. This will eventually do away with computers, smartphones and other devices since the infosphere will always be there. We will have multiple screens and holographic projectors in the home and some future indiscrete wearable when away from home. We will each have a useful personal assistant that will help us navigate in a gigabit world.

The Internet of Things Becomes Useful. Rather than just having a smart thermometer and a door that we can unlock with our smartphones, we will be surrounded by devices that will tailor to our individual needs to create the environment we want. We will be constantly medically monitored and will be far healthier as a result.

Just-in-time Learning. With the infosphere always around us we will be able to access the facts we need when we need them. This will revolutionize education because we will have access to all of the ‘how-to’ manuals in the world and we will have a personal assistant to use them. This makes a lot of traditional education obsolete because everybody will be able to learn at their own pace. There might not be home-schooling, but rather personal assistant schooling. Obviously there will still need to be traditional types of training for specialties and physical skills. But the idea of needing to sit through months-long classes will become obsolete for most topics. This also will make education ubiquitous and a motivated person from anywhere on the planet and from any walk of life can learn whatever they want.

Always Monitored. Privacy will become a major issue when everything we do is being monitored. This can go one of two ways and we will either all adapt to living in a monitored society, or else there will be a outcry for a technological solution for guaranteeing our privacy. How this one issue is resolved will have a huge impact on everything else we do.

Something Unexpected. Many experts predict that ubiquitous bandwidth will probably not bring us only the things we expect, but rather things that we have not yet imagined. Who, just a decade ago, really understood the impact of smartphones, social media, and the other applications that are forefront in our lives today? It’s likely than many of the things listed above will happen, but that the most important future developments aren’t even on that list.

The Digital Divide Becomes Critical. Those without bandwidth are quickly going to be left out of the mainstream of the new society that is going to rely on gigabit tools for daily life. This will probably drive communities to find ways to get fiber at any cost, or else look at being left far behind. But we also might see some people drop out of the gigabit world and have segments of the population who refuse to partake in the bandwidth-driven future. One also has to wonder how we will cope when we lose the infosphere due to hurricanes or other acts that kill our connectivity for an extended period of time. Will we become too dependent upon the infosphere to function well without it?