Tag Archives: Digital divide

ISPs and the Digital Divide

It seems that almost monthly that I am asked about the role that ISPs should take in making sure that we solve the digital divide. I think that people are somewhat shocked every time when I tell them this is not a role for ISPs.

In explaining my answer, let me start by parsing what is meant by the question. We are about to see a lot of grant funding for getting computers into homes and training folks on how to use them. The folks asking this question are hopeful that ISPs are going to take up that role in any meaningful way. The reality is that is rarely going to happen – and it’s not something we should be expecting from ISPs.

ISPs are in the business of building broadband networks and keeping them running. That’s a full-time job. I think that people assume that ISPs want new customers badly enough that they are willing to tackle the digital divide efforts needed so that folks know how to use broadband. An ISP’s role in solving the digital divide is to bring the broadband to homes willing to buy broadband. To use the old analogy of the three-legged stool, the ISP function is to provide the broadband connection– it’s up to somebody else to tackle the other issues of computers and training.

I don’t think that the folks asking this question understand the challenge involved in helping somebody to cross the digital divide. You can’t just hand out computers to homes that don’t have them. A computer is a brick for a household where nobody knows how to use it. It takes a lot of one-on-one effort to sit with people and help them learn how to navigate the possibilities of broadband.

There are programs around that have been doing this the right way. I’ve been told by several folks who train folks that the key to getting somebody to learn to use a computer is to help them to accomplish something they want to do. That’s different for everybody. It might mean helping them look for a job, talk with relatives on social media, search for knitting patterns, or learn a new language – it doesn’t matter what it is, but helping a new computer user to accomplish something useful is the way to prove to them that a computer and broadband is a useful tool.

My firm has been doing broadband surveys for many years, and we’ve noticed that folks will not admit to being afraid or intimated by computers and technology. Folks won’t tell you that the reason they can’t use a computer is that they can’t read very well. But the folks that do computer training tell me that these are some the basic reasons folks don’t or won’t use computers. Somewhere in the past, they tried and failed, and they don’t want to do that again.

I remember twenty years ago, when cable modems and DSL were new that there were computer training courses everywhere. There were free classes in most towns teaching how to use Excel or Word. The training classes were held in computer labs with twenty students at a time – and the training was largely an abysmal failure. While those skills are important for many jobs, they are not things that most people will use regularly, if ever. But somehow, it became accepted that teaching those skills was the way to make folks computer literate. These classes were mostly such a colossal failure that the training courses died out within a few years and were not replaced. We’ve largely gone two decades where there has been no formal forum for folks to learn how to use a computer except to sit with a friend or relative that would take the time to teach them. And this is a shame. There is an immense richness of content on the web today – there is something for everybody.

But back to my original premise of the blog. ISPs do not have the resources to dedicate employees to sit with folks to learn how to use a computer and navigate the web. Some of the big ISPs have given the impression that they are doing this for folks – but that is mostly done for public relations purposes.

There are some ISPs that might be willing to take up this challenge. Some municipal or cooperatives might take a stab at solving the digital divide. I could see some of them using grant money to develop a great program for teaching computer use. But even that is going to be a challenge, because the main focus of these ISPs is like every other ISP – to keep the network operating. We don’t expect car companies to teach us to drive. We don’t expect banks to teach us how to be wise with our money. We really can’t expect ISPs to teach folks how to use computers.

Communities that want to solve the digital divide issues should look elsewhere – perhaps at existing non-profits. There are some local governments that are going to take a stab at this. If no such group exists, then use grant money to kick-start the effort.

How Are You Solving the Digital Divide

One of the most common questions I’m being asked these days is from local politicians and economic development folks who want examples of other communities that are tackling and solving the digital divide.

I’m able to trot out the big-picture stories because they come to my attention in reading about the industry. As an example, just before I wrote this blog, I read an article that says that the State of Maryland will be providing 150,000 laptops to homes that don’t have a computer. The article also mentions that the State has a program labeled the Emergency Broadband Benefits program that has spent $4.6 million this year to help low-income homes pay for home broadband.

Those programs sound great, and there are other large initiatives at the state level around the country undertaking similar efforts. But telling local officials about those big programs is not the answer they are looking for. They want to know what they can do to tackle the digital divide in their local town or county.

My blog has been full of discussions over the last year of federal and state grant programs aimed at building faster broadband networks to rural homes that have no decent broadband alternatives. I’ve had several recent blogs talking about how the pace of building new broadband networks is going maddingly slow – but these networks are coming.

While a new rural fiber or wireless network in a county might solve the broadband speed issue, these local folks know that they still have a lot of other broadband issues to overcome. The classic example of the digital divide uses the analogy of a three-legged stool. Even when a home gets faster broadband, the home is not going to get over the digital divide until three issues are solved. Bringing a new network solves the need for an adequate broadband connection. But many homes will not be able to afford the new broadband connection. Folks also need a computer in the home in order to fully enjoy the benefits of broadband. Finally, folks need to know how to use the computer and how to navigate the online world to achieve their digital goals.

Local officials are looking for examples of local plans and programs that are tackling all three of these issues. I think it’s almost universally agreed that a community will be far better off when most of its citizens have digital literacy.

My broadband career has been focused on the network solution – how to fund and build the needed broadband networks that communities need. I find that I have almost no examples of small or rural communities that have solved any of the three legs of the digital divide. For example, I have talked to dozens of counties that found ways to get computers to every student during the pandemic. But none of these counties had any plans for getting computers to homes without students – and very few have any plans for continuing to give computers to students once the federal monies that paid for the computers are gone.

This blog is asking for help from my readers. I want to hear stories from communities that are tackling any of the three legs of the digital divide head-on. I really want to hear from a community that is tackling all three issues – because they are the poster child that everybody is looking for. I will likely write blogs about some of the success stories I hear – but even if I don’t write about each one, I will let other communities know what you are doing. I also am interested in hearing about efforts that didn’t work – please help others not repeat your mistakes.

Everybody tells me that solving the digital divide means tackling the issue for one person or one family at a time. The question everybody is asking me is how to create a sustainable program that can do that. My contact email is under my picture on this blog. I’d love to hear your story.

The Digital Equity Challenge

It’s hard to look anywhere in the broadband industry today and not hear about digital inclusion. One big reason for this is the two giant grant programs created by Congress in the Infrastructure Investment and Jobs Act to tackle digital equity issues. The first is the State Digital Equity Capacity Grant Program, that will allocate $1.5 billion to the States for this program – that’s $300 million per year from 2022 through 2026. The second is the Digital Equity Competitive Grant Program. This grant program of $1.25 billion will be administered directly by the NTIA and will award $250 million per year from 2022 through 2026.

As I talk to folks, I’m starting to understand that a lot of people don’t really understand what digital equity means. Twenty years ago, we referred to this as the digital divide. The folks working with the digital divide issue came up with a three-legged stool analogy to describe the way to tackle the issue – make sure homes have a computer, make sure they have the training to use the computer, and get them connected to broadband.

These three steps haven’t changed. Unfortunately, we have twenty years of experience that shows that very few communities have made a big dent in the digital divide. There are communities that have been successful in solving parts of the three-legged stool – but not the whole thing. We now have a large amount of grant funding that can help communities finally make a real difference with digital equity.

One thing we’ve learned is that you have to solve all three issues for a given household to bring them into the digital world. It doesn’t do any good to provide the help needed to navigate the paperwork to get the $30 discount with the ACP program for a house that doesn’t have a computer. It does no good to give a computer to people who don’t know how to use it.

I remember twenty years ago that a lot of communities had free basic computer courses. But over the years, that kind of basic training seems to have melted away. This is partially due to an erroneous assumption that most adults know how to use computers. But I also think the training back then being wasn’t relevant to what people wanted from a computer, and instead tended to do things like teaching folks how to use Excel and Word.

Librarians can tell you how to do this the right way. People don’t ask for generic computer training in the library – they usually want to accomplish a specific task on the computer. That might mean applying for a specific job, looking up ancestors, using social media, or learning about a hobby. A librarian will tell you that helping somebody achieve a specific goal is the best way to demystify the Internet and to get people over any fear of using the computer.

These giant federal grants can help communities tackle this in the right way. A full digital equity plan might include somebody who can help folks navigate the ACP subsidy plan to choose and subscribe to a broadband product. The grants can be used to create a sustainable program to make sure homes can get computers. And a plan can provide trainers who can help individuals learn how to use the Internet to do the things that are most relevant in their lives.

Several colleagues have been telling me stories of the right way to train somebody to use the Internet. For example, one recent story I heard was about helping a young man develop the specific computer skills needed to land a higher-paying job. That kind of training can be transformational. That kind of result is not going to come from generic training courses in a computer lab – but with one-on-one training to help people achieve a specific goal. The whole community is better for every person lifted into digital literacy.

I guess the bottom line of this discussion is that the funding is available to put together comprehensive programs that can work. But it’s going to take a coordinated effort in a community to make real headway with digital equity. It’s going to be sad if communities use the one-time grant funding to tackle only one leg of the digital divide – we’ve been trying that approach for decades with only limited success. The good news is that there are people who know how to do this the right way – find them as soon as you can.

The Magnitude of the Urban Digital Divide

The web is full of stories of rural areas with no broadband options, and I’ve spent a lot of time in the last few decades helping rural areas get better broadband. There has not been nearly as much coverage of the huge broadband gap in urban areas. There are a lot of urban homes that can’t afford broadband and, in many cases got bypassed when the telcos and/or cable companies built their networks.

I just saw a statistic that made me realize the magnitude of the urban broadband divide. There has always been a lot of urban homes that don’t have broadband, but the issue took on new importance when schools were forced to send students home to work. I read an article in the Democrat and Chronicle, from Rochester, New York that says that 20% of residences in New York City don’t have access to home broadband. That’s a pretty typical percentage in looking at cities across the country. The statistic that astounded me was that this translates into 750,000 students who don’t have a way to tackle schoolwork from home.

That number is mind-boggling. There are more students in NYC without home broadband than the total number of residents of Alaska, Vermont, Wyoming, or Washington DC. The article says that the percentage of homes without broadband is in the same 20% range in Rochester and Buffalo. In Syracuse, the percentage of homes without broadband is much higher at 32%. Nationwide my firm has studied urban markets where the percentage of homes without broadband ranges from under 10% to as high as 35%.

We know the primary reasons that homes don’t have broadband. Surveys and studies over the years in different markets have uncovered the same list of primary reasons homes don’t have broadband. Some homes simply aren’t interested in broadband and wouldn’t use it if was free. Some homes have low broadband needs and are happy with what they can get from a cellular plan. The biggest single barrier is the price – broadband has grown to be more expensive over time and many homes have a hard time justifying paying for broadband when they are struggling to pay for food or rent. Some homes can afford broadband but can’t also afford to keep a working computer in the home. Some people don’t know how to use a computer and need training in basic computer skills. The last reason we see given for not having broadband is a dislike for the way that ISPs and social media misuse personal data.

Around the country, some communities have found solutions for some of these problems. The gigantic challenge is how to apply solutions at the scale of a big city. How can a city provide digital literacy training on computer skills to several hundred thousand people? How do you get hundreds of thousands of computers into homes that need them? And the big dollar question is how to subsidize the cost of a monthly broadband connection to half a million homes.

What’s scary is that every other city is similar, with some in even worse shape than New York City. How do you scale up and provide solutions when the universe of people on the wrong side of the digital divide is 10 million to 20 million?

Local communities have tackled some of these issues during the pandemic. I’ve talked to rural counties that are making sure that every student has a computer at home and that every student has enough broadband to connect to school servers – usually using cellular hot spots. However, local governments are not going to be able to keep paying the fees for home broadband – even in a small community that will add up to a lot of money over time.

We can’t shy away from tackling digital divide issues just because the problem is so large and is found in almost every community. Local solutions can make a real difference, particularly in smaller communities – but the magnitude of the digital divide is too immense to easily tackle in larger cities.

Who Should Solve the Digital Divide?

Adjit Walia, a Global Technology Strategist at Deutsche Bank suggested in a recent paper that it’s in the best interest of US tech companies to tackle the digital divide. He says that those companies rely on a computer-literate public and workforce and that they ought to take a small sliver of their earnings and invest in students today before they fall on the wrong side of the digital divide.

By tech companies, I assume Walia is talking about Google, Amazon, Facebook, Apple, and the hundred other large corporations that make their money on software and the web. Walia cites a statistic that 61% of existing US jobs and 69% of new jobs require digital literacy and that the tech companies need to be proactive to help make sure that America has the workforce needed for these companies to continue to thrive. I find it interesting that his argument looks at closing the digital literacy gap as an investment that will yield a high return for these companies. I’ve always thought this was the case and that we are never going to solve the digital divide if doing so is viewed somehow as charity.

Walia is specifically referring to the millions of urban students that don’t have home broadband or computers. We have ample evidence that kids without digital tools at home fall far behind other students in achievement. A recent study from the Quello Center at the Michigan State University quantified the impact of the computer gap in a study that neutralized the impact of poverty. The scariest finding of that study is that 11th graders without home computers have the average equivalent digital literacy of 8th graders with home computers.

Walia is proposing a $15 billion plan to be spent over five years. He proposes the solution has three components.

  • He recommends subsiding broadband connections to homes through programs offered by the big cable companies. He says the tech companies should invest $1 billion per year in this effort.
  • He proposes a program to get computers into homes that he estimates at around $1 billion.
  • Finally, the most expensive part of his proposed solution would be a one-year training module for students and adults in the affected households in digital literacy. He estimates the cost of this training at $9 billion over five years.

This is an intriguing idea and I hope that some of the tech companies step up to the concept. Every generation of kids who graduate with poor digital literacy skills is going to struggle for life in an economy that is moving more and more to digital skills.

His solutions are not new, and anybody involved in digital literacy has been seeking these same three solutions for several decades. There are numerous local programs that help kids in cities around the country, but we’ve never had the funding to do this right.

It’s easy to talk about $15 billion as it is an unachievable and gigantic goal. Walia pointed out that the stock value of the biggest tech firms increased by over $2 trillion just since the start of the pandemic. This is an industry that could easily afford to give back some of their earnings, since, as Walia argues, the investment made now will repay these companies many times over through having millions of more citizens who are part of the digital economy.

Walia’s appeal is not just that solving the digital divide is the right thing to do. I doubt you can find anybody who doesn’t understand the consequences of generation after generation of kids who lag behind their peers due to something as simple to fix as broadband. What I like is that Walia has made this an appeal to the pocketbooks of the big companies – and I hope they are listening.

A Tale of Tackling the Digital Divide

A new book came out in November that tells about one of the first attempts to solve the digital divide on a large scale. The book is The Charisma Machine: The Life, Death, and Legacy of One Laptop per Child published by MIT Press and available on Amazon and other places online.  In 2005, Nicholas Negroponte, the founder of MIT Media Lab created a program that he hoped would solve the digital divide in the third world. The program was called One Laptop per Child (OLPC) and delivered inexpensive laptops to children between the ages of 6 and 12 in third world countries.

The program was nearly a complete bust. The stripped-down computers were produced for a price of about $100. A third world country had to come up with the money to buy the computers, and many did, and over 3 million computers were sold. But the realities of using computers in the third world became quickly apparent. Many students didn’t have access to electricity – the laptop came with a hand crank that could be used to charge it, but it didn’t work very well. Computers also broke and there was no process in place to repair computers with problems.

The biggest failure came due to a lack of adult supervision and training for using the computers. For example, in Paraguay, the most successful trial of OLPC, teachers make half the minimum wage in the country and very few of them understood the computers well enough to teach children how to use them. In Africa, the teaching role often is done by mothers who had no training on how to use a computer.

There was also very little Internet access in these third world countries in 2005 (and many places are still without access). Only a small percentage of children had access to the Internet and without that, there wasn’t a lot of things to do on the computers other than play some simple games or attempt to write code – something most kids had no idea how to do.

Proponents of solving the digital divide now understand that there are three components in a fully successful digital divide program. Just as with OLPC, many schools in the US now have programs that give laptops or tablets to all students – many who don’t have a computer in their homes. Teachers supply the training and context for using computers, and teachers get intensive training on using computers as part of the overall curriculum of the schools. These programs also have ways to deal with broken or lost computers.

Most school systems still haven’t found a solution for the third leg of solving the digital divide – getting broadband access into the homes of children with computers. We now call this lack of home broadband the homework divide since children without home broadband access lag behind other students, even when all have access to the same computers and computer curriculum.

There are places that are tackling the homework divide, but in most communities, that’s the hardest and most expensive part of solving the digital divide. I wrote a blog earlier this year talking about the program in Buffalo New York to bring WiFi into the homes of thousands of students without access to broadband. Many communities are looking at similar solutions. Some of the cities that have built fiber-to-the-home have a low-income product to promote getting broadband to school children.

The folks behind OLPC had good intentions. Today there are a host of people with experience in solving the digital divide who could have told the program it would fail. Solving the digital divide is not easy and it is not cheap. A successful digital divide effort needs to provide a lot more than just computers to be successful. There is a tiny fraction of kids who can run with computers without much help. But the vast majority of students need help to learn how to use a computer – and the training must be done in a way to motivate kids to stick with it.

This is not a cheap book, priced at over $20 for kindle and $33 in paperback. However, it’s an interesting read and worth it to anybody thinking of tackling the digital divide. The OLPC program made almost every mistake possible and the book is a primer of what not to do to solve the digital divide. I kept wanted to leap into the screen yelling, “No, no, no”, to the mistakes made by the program.

The Census Bureau and the Digital Divide

John Horrigan recently wrote an interesting article in The Daily Yonder that cited the results of a survey done by the Census Bureau. The agency conducts an annual survey called the American Community Survey (ACS) of 3.5 million households. In recent years the survey has included a few questions about broadband. The most recent ACS survey included questions about the digital divide. The results are at first glance a bit surprising.

The survey shows that more than 20.4 million homes have no broadband subscription at home. The survey shows that 5.1 million homes with no broadband connection are rural and 15.3 million homes are non-rural. Anybody who tracks rural broadband instantly doesn’t think those numbers can be right. However, the Census Bureau uses its own definition of rural which is different than the way most of the world thinks or rural versus urban.

According to the Census Bureau definition, rural is everything that is not urban. The Census bureau looks at the country by regional clusters of population. They count two kinds of urban areas – urbanized areas (UAs) are clusters with 50,000 or more people and urban clusters (UCs) which have between 2,500 and 50,000 people. Most of us would consider many of the UCs to be rural because within this category are a lot of rural county seats and the immediately surrounding areas. The Census statistics count a lot of people who live just outside of towns as urban when our industry considers homes past the last cable company connection as rural.

Horrigan interpets the results of the Census Bureau survey to mean that affordability is a bigger reason today than connectivity for why people don’t have broadband. He reached that conclusion by considering a recent Pew Research poll on the same topic that shows that more homes cite reasons other than availability as reasons they don’t have broadband.

The Pew Research survey asked households why they don’t have broadband. Respondents could supply more than one response.

  • 50% claimed that price was a major factor and 21% cited this as the primary reason.
  • 45% said that their smartphone could do everything they need.
  • 43% said they had good access to the Internet outside the home.
  • 31% said they couldn’t afford a computer.
  • Only 22% said that they couldn’t order a broadband connection, and only 7% said that was the primary reason they didn’t have broadband.

The Census Bureau also correlated their results with household income, and it’s not surprising that low-income households have a much lower broadband connection rate. The Census Bureau survey showed that only 59% of homes that make less than $20,000 per year have broadband. The subscription rate for all households making more than $20,000 is 88%.

Interestingly, the FCC doesn’t ask why people don’t have broadband. They interpret their mission to measure broadband availability and they count homes with or without broadband connections. This raises a few questions. What exactly is the FCC’s mandate from Congress – to get America has connection to reach the Internet or to make sure that America makes those broadband connections? I read the FCC’s mandate from Congress to have some of both goals. If availability is not the primary reason why homes don’t have broadband, the FCC might get more bang from their buck by putting some effort into digital inclusion programs. According to the Horrigan article, there are now more homes that can’t afford broadband than homes that don’t have a connectivity option.

This implies the need for a much-improved Lifeline Fund. The current Lifeline program is likely not making a big difference in digital inclusion. It provides a small monthly subsidy of $9.25 per month for qualifying households to save money on either their telephone bill or their broadband bill. It’s becoming increasingly hard to qualify for Lifeline because the big telcos like AT&T are backing out of the program. Some cable companies provide low-cost cable lines to homes with school students, but to nobody else – and cable companies don’t operate outside of towns.

In addition to a more effective Lifeline program, digital inclusion also means getting computers into homes that can’t afford them. I’ve written before about the non-profit group E2D that provides computers to school students in Charlotte, NC. Perhaps some of the Universal Service Fund could be used to assist effective groups like E2D to get more computers to more households.

My firm CCG conducts surveys and we’ve seen anecdotal evidence in a few recent surveys in poor rural counties that a lot of homes don’t buy the slow DSL option available to them because of price. These homes tell us that price mattered more than connectivity. I don’t have any easy answer for the best way to promote digital inclusion. But there are folks in the country who have made amazing progress in this area and perhaps the FCC should consider giving such groups some help. At a minimum, the FCC needs to recognize that now that most homes have a broadband connection that price is a major barrier for the majority of those who are not connected.

Broadband Have-nots

In one of my recent blogs I talked about a few cities that had broadband penetration north of 90%, meaning that most households in those cities have broadband. I’ve run across three such cities this year. But there are also cities with a very different story. I saw a recent article about Syracuse, New York that claimed that 66% of the homes in the city have a landline broadband connection and only a little more than half of households have a connection that meets the FCC definition of broadband at 25/3 Mbps.

It’s easy to look at the national average broadband penetration rate of 84% and think that most people in cities across the country have broadband. This is particularly true when you adjust that national average to remove the millions of rural households that still have no landline broadband option, which adjusts the national average to over 90%.

We’ve always known that there is a correlation between income and broadband subscription rates – in fact, the basic definition of the urban digital divide is households that can’t afford broadband. We also know that in every larger city that the broadband penetration rates are not uniform but are lower in poorer neighborhoods.

I am concerned that the urban digital divide is going to get worse. Most industry analysts believe that we’ll see significant increases in broadband prices over the next decade. The big cable companies have little choice but to raise broadband rates if they want to maintain the steady bottom line revenue growth expected by Wall Street. This means that’s it’s likely over time that broadband penetration rates in cities are going to drop even lower.

Cities badly want to find a solution to the digital divide that is so heavily impacting low-income neighborhoods. They know there are huge negative impacts on households without broadband. There have been several recent studies showing that school students without home broadband lag behind students with broadband, and they never close the gap. Having whole neighborhoods that can’t afford broadband will be condemning whole generations of underperforming students, helping to perpetuate the cycle of poverty.

Syracuse is considering a solution that would bring some broadband to the neighborhoods that most need it. The city has a plan to buy 18,000 streetlights that would include outdoor WiFi hotspots. These WiFi units can produce decent broadband outdoors, but the strength of WiFi signals decrease significantly when passing through the exterior walls of buildings. While any broadband is better than nothing, outdoor WiFi units are not going to provide the same quality of broadband as a landline connection. Such efforts will likely be welcomed by residents without broadband, but this is still second-rate broadband compared to that given to households that can afford to buy broadband from the incumbent ISPs.

The dilemma for cities is that there is no easy solution to the digital divide. For Syracuse, the problem is mostly affordability and not access. Most of the homes without broadband probably have the option to buy from the incumbent providers. I say most because there are still poor neighborhoods present in almost every city that don’t have the same broadband infrastructure as the rest of the city. I’ve seen estimates that there are nearly as many residences in cities with no broadband option as are rural homes without broadband. It’s hard to know for sure because the areas without broadband are comprised of an apartment building here and a dead-end street there rather than big neighborhoods without broadband.

Cities often consider building their own broadband network as a solution to the digital divide. I undertake numerous broadband feasibility studies every year, and almost every city I’ve ever worked for has universal access to fiber as one of their primary goals. However, building fiber or any broadband infrastructure is expensive, and it’s usually hard to justify the cost of providing free or low-cost broadband to low-income homes. It’s challenging in a competitive environment to make enough profit from normal broadband customers to subsidize low-income homes.

We’ve been talking about the digital divide since the late 1990s when we saw the introduction of DSL and cable modems. In my mind, the problem is far worse today than it was then since broadband has grown to become a necessity of the same magnitude as having electric or water in a home. Unfortunately, I think the urban digital divide will be growing as broadband prices climb year after year.

San Jose Tackles the Digital Divide

As a country we have done well with 85% of households in most areas now buying some form of broadband connection. But that still means that 15% of homes don’t have broadband. Certainly there are some homes that don’t want broadband, but it’s clear that a significant percentage of those without broadband can’t afford it.

Affordability is going to become more of an issue now that we see a strategy of the big ISPs to raise rates every year. I don’t think there’s much doubt that the cost of broadband is going to climb faster than the overall rate of inflation. We recently saw Charter raise the rate of bundled broadband by $5 per month. Wall Street is crediting the higher earnings of several big cable companies due to the trend that the companies are cutting back on their willingness to offer special prices for term contracts – I think the cable companies are finally acknowledging that they have won the war against DSL.

San Jose is no different than any big city in that it has big numbers of homes without broadband. The city recently estimated that there are 95,000 residents of the city without a home broadband connection. The city just announced a plan to begin solving the digital divide and pledged $24 million to kick off the effort. They claim this is the biggest effort being taken by a major city to solve the digital divide.

The digital divide became apparent soon after the introduction of DSL and cable modems in the late 1990s. Even then there were households locked out from the new technology due to the cost of buying broadband service. The digital divide gets more acute every year as more and more of our daily lives migrate online. It’s grown to become unimaginable for a student to have an even chance in school without access to broadband. Anybody with broadband only has to stop and imagine for a second what it would be like to lose broadband access – and then realize that there are huge numbers of homes that are missing out on many of the basic benefits that those with broadband take for granted.

The San Jose plan is light on detail at this early stage, but it’s clear that the city will be looking for infrastructure plans to extend broadband rather than subsidizing service from incumbent ISPs. Consider the mayor’s stated vision for broadband:

“Ensure all residents, businesses, and organizations can participate in and benefit from the prosperity and culture of innovation in Silicon Valley . . . Broaden access to basic digital infrastructure to all residents, especially our youth, through enabling free or low cost, high-speed, 1 gigabit or faster broadband service in several low-income communities, and increasing access to hardware, including tablets and laptops, for low-income students.”

The city won’t be tackling the issue alone and is hoping for involvement from the business and charitable organizations in the city. For example, the city is already working with the Knight Foundation that has been addressing this issue for years. The city is interested in technologies like Facebook’s terragraph wireless technology that plans to use 60 GHz spectrum to create fast outdoor wireless broadband.

The city recognizes that there are no instant fixes and already recognizes that it might take a decade to bring fast affordable broadband to everybody in the city. I’m sure that $24 million is also just a downpayment towards a permanent broadband solution. But this plan puts the city ahead of every other major metropolitan area in the willingness to tackle the problem head-on.

There has been a cry for solving the digital divide for twenty years. Some communities have found solutions that help, like the charitable effort by E2D in Charlotte, NC that is bringing laptops and wireless broadband to large numbers of homeless and low-income school students. But no city has directly tackled the problem before with a pledge of serious taxpayer funds to help find a solution. It’s been obvious from the beginning of the digital divide discussions that it was going to take money and broadband infrastructure to solve the problem. I’m sure that many other cities will be watching San Jose because the broadband gap is becoming a significant contributor to creating an underclass that has less access to education, healthcare and the chance for good paying jobs. I’m willing to make a bet that the long-term economic benefits from solving the digital divide in San Jose will be far greater than the money they are putting into the effort.

The FCC and the Digital Divide

The current FCC Chairman Ajit Pai talks a lot about his commitment to solving the digital divide and to bring broadband to everybody in the country. Chairman Pai has now made numerous visits to rural America and to poor communities and has repeatedly promised that this FCC is on board with finding broadband solutions for everyone. Yet there are numerous actions by this FCC that tell a different story.

Redefining Broadband. Last year the FCC considered changing the definition of broadband – a change which would have drastically lowered the count of households without good broadband The FCC suggested that 10/1 Mbps cellular broadband is equivalent to a 25/3 Mbps landline connection. This change would have reclassified millions of homes as having access to broadband and would have instantly ‘solved’ a huge portion of the digital divide without changing anybody’s broadband. The FCC is required by Congressional edict to set policies that bring broadband to all, and their solution was to unilaterally declare that millions of homes served with only cellular broadband needed no further FCC assistance.

The public and the industry rebelled against this suggestion and the FCC backed down. However, the FCC is required by Congress to examine the availability of broadband every year and they will have annual opportunities to redefine broadband and recalibrate the way we count those on the wrong side of the digital divide. One has to only talk to a rural household trying to run their home broadband from a tethered cellphone to understand the ridiculousness of this idea. The high cost, low data caps, slow speeds and high latency make cellular broadband an extremely expensive and unsatisfactory substitute for landline broadband. There are many people who elect to use only cellular data, but that’s not the same thing as assuming that a cellphone connection can provide enough broadband for the typical home.

Lifeline Program. This FCC seems to be trying to eliminate or greatly restrict the Lifeline program. It’s clear that Chairman Pai would like the program to go away completely and the FCC has been whittling away at the program.

First, they stopped accepting new applications for carriers that want to join the Lifeline program. I know of two municipalities that planned to expand their broadband networks to thousands of low-income homes and offer $10 – $20 broadband that would have been enabled by the $9.95 monthly Lifeline subsidy. They were dissuaded when the FCC made it clear they were not likely to approve new Lifeline providers.

The FCC also changed the rules making it hard or impossible for MVNOs (wireless resellers) from receiving the Lifeline subsidies. These companies were the primary proponents and sellers of low-cost cellular phones and data plans for low-income customers. For example, there are MVNOs that provide a low-function phone, and a limited amount of voice and data to the homeless for the $9.95 reimbursement from the Lifeline fund. There have been numerous testimonials how these phones have improved the quality of life for the homeless by providing them with access to social services and allowing them to make phone calls or texts. Blocking these carriers from Lifeline kills this kind of initiative.

The FCC also eliminated the additional $25 per month from the lifeline program that was available to low-income natives living on tribal land. Eliminating this subsidy and also restricting the Lifeline funds to only facility-based carriers is having the effect of making cellphones unaffordable in some of the poorest places in the country. Even the big cellular companies like AT&T and Verizon opposed this change to the Lifeline fund.

Eliminated Title II Regulation. Perhaps the most damaging change the FCC made was to eliminate all FCC regulation of broadband by eliminating Title II regulation. This FCC order is referred to as the net neutrality order, but there are a number of aspects of the order that have nothing to do with net neutrality.

The FCC removed itself as the watchdog on all aspects of broadband including pricing, data caps, disclosure of practices and policies, etc. The FCC instead shuttled broadband issues to the Federal Trade Commission – an agency that can punish companies which badly abuse the public, but which cannot set proactive policies.

We are poised to see big future increases in broadband prices. That’s the only way that the big monopoly ISPs can continue their historic revenue growth. The big ISPs have hit a wall with slowing numbers of new broadband customers and sinking cable TV and telephone revenues. Rising broadband prices will do more harm to universal service than any other policy. One Wall Street analyst last year suggested that Comcast’s basic broadband price ought to be $90 – something that would drive millions of homes from landline broadband. The FCC has removed themselves as broadband regulators, meaning that the big cable monopolies are going to be free to do what monopolies do and raise rates to maximize profits. Even if the FCC never directly regulates broadband prices they have many other ways to pressure big ISPs to act responsibly – but they’ve given away their regulatory authority and any regulatory leverage is gone.