Tag Archives: Digital divide

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?

 

Are We Ready for the New Digital Divide?

digital-divideYesterday I briefly discussed a few of the major predictions that have come out of a Pew Research survey of industry experts that ask what we’ll be seeing from broadband applications by 2025. They predicted such things as a major use of telepresence, greatly enhanced virtual reality and closer daily tie between us and our computers. Today I want to talk in more detail about one of the negative predictions where many of the experts predicted that we will see a new digital divide that will be more extreme than the current one.

The digital divide today is between people who have broadband and those that don’t. Those without broadband fall into a few categories – those that live in rural areas where broadband is not available, those who are too poor to afford broadband and those that don’t want it. I’ve talked about this before, but these experts are saying that the future digital divide will be more extreme because it will separate those who can participate in an all-digital world and those who cannot.

The future digital divide will matter because there are going to be essential services that require big bandwidth. Businesses without enough bandwidth will not be able to take part in telepresence, and this is going to cut them off from much of the world. Both their suppliers and customers are going to expect them to be able to communicate virtually. Homes are going to need big bandwidth for education, medical care and even shopping. Anybody without big bandwidth is going to be left out of the mainstream and will have to accept something less.

Those that have access to the bandwidth and the kinds of applications that are predicted for a decade from now will have a major advantage over those who do not have good enough broadband. This means people with big broadband will get the jobs, enjoy better health, be able to live in their homes to an older age and be better educated than those that don’t have big broadband. The gap today is not nearly this extreme, but with the future that the experts all foresee, broadband becomes a necessity and not something that is nice to have.

Big bandwidth services are going to require a landline broadband connection, be that fiber or an upgraded cable network. Wireless is going to have its place to keep you connected to the basic services while on the move, but telepresence, virtual reality and most IoT services are going to be landline-based.

It is almost certain that a lot more people will fall on the wrong side of the digital divide than today. Today there are tens of millions of households and businesses for which the broadband they have today will become totally inadequate in the future. Many of the technologies we use today that deliver okay bandwidth – DSL networks, older generation cable networks and WISP wireless networks – are not capable of delivering the kind of bandwidth that will be needed in the future. These technologies today can provide bandwidth speeds that most people find acceptable. But when we start using applications that are going to require speeds of a hundred megabits or maybe many hundreds of megabits, these technologies are all going to be inadequate.

The only two technologies that can deliver the kind of bandwidth needed in the future are fiber and updated cable networks. We all know that fiber is capable of incredible speeds and normally requires an upgrade in lasers and electronics to go faster. But there are upgrade paths for cable networks that ought to be able to provide gigabit speeds. The problem is that the cable network upgrades are complicated and costly. In many cases it’s not just electronics that needs to be changed for a cable network to go faster. It can mean building a lot more fiber into the cable network and sometimes even having to replace much of the coaxial cable. It means changing the cable headend, the settop boxes and the cable modems. It means almost a whole new network to get to gigabit speeds. But it can be done.

One has to realistically ask how many communities are going to get very fast, yet still affordable broadband. Certainly some of the major cities are getting gigabit fiber from Google and a handful of other providers. But even in those communities it looks like fiber isn’t going everywhere. Fiber is being put into neighborhoods willing to pay for the advanced services but it’s largely bypassing poorer neighborhoods and apartment buildings. In those same communities the cable companies are responding to fiber competition by upgrading speeds.

But what about all of the places that don’t get fiber over the next decade? Will the cable companies make the needed investments in smaller markets to get faster speeds? Much of small-town America that has broadband speeds today between 3 Mbps – 15 Mbps due to older technology and its not hard to bet that they are not going to upgraded.

One of the new industry buzzwords is that fiber is a utility, and is something that every community needs to be able to thrive. While this may be somewhat true today, within a decade fast data speeds will be essential for businesses to operate and for homes to partake in the services that come only with speed. The demands for faster broadband will become louder as more and more communities that have okay broadband today find that same broadband to be totally inadequate tomorrow.

The Gigabit Divide

WDM_FOWe all know what the digital divide is – it’s when one place or demographic has broadband when those nearby do not. The term was originally coined after DSL and cable modems came to urban areas while rural America was left with dial-up access.

Over the years the definition is still the same but the circumstances have changed. For example, there still are some millions of households in the country stuck with dial-up or satellite broadband. But most of the digital divide today is an urban / rural divide where the telecom companies have invested in much newer and faster technology in urban areas and have ignored rural areas. Metropolitan areas all over the country now have at least some 100 Mbps cable modems while surrounding smaller towns often still get maybe 3 Mbps. And there is an economic digital divide within cities where some neighborhoods, particularly richer ones, get better infrastructure than poor.

But we are about to embark on the most dramatic divide of all, the gigabit divide. I spent last week in Austin and they are a good example of what I fear will be happening all over the country. There are three companies building gigabit fiber in Austin – Google, AT&T and Grande. None of them are going to build everywhere. For instance, Google will only build to a ‘fiberhood’ where enough people in an area pre-sign with Google. And the other two carriers are going to do something similar and carve out their parts of the market.

This is great for those who get fiber. They will end up with the fastest fiber connections in the world, and hopefully over time that will make a big difference in their lives. But my concern is that not everybody in Austin is going to get fiber. To see how this works we only have to look at Verizon FiOS. For years Verizon built to the neighborhoods with the lowest construction costs. That meant, for example, that they would favor an older community with aerial cable that could be over-lashed over a newer community where everything was buried and construction costs were high.

You find a real hodge-podge when you look closely at FiOS – it will be on one street and not the next, in one neighborhood and not the adjoining one. And Austin is going to be the same way. These three carriers are not going to all overbuild the same neighborhoods because in a competitive 3-way overbuild none of them will make money. Instead it is likely that Austin will get balkanized and chopped up into little fiberhoods for each of the three carriers.

But what about those that don’t get any fiber? There will likely be significant parts of the City where nobody builds. Those houses are going to be on the wrong side of the gigabit divide. Since most of the world is on the wrong side of the gigabit divide that doesn’t sound so bad. But think what it means. Who is going to buy a house in the future Austin that doesn’t have gigabit fiber? This is going to create a permanent and very tangible division of fiber haves and have-nots.

Cities used to protect their citizens against this sort of thing and that is why cable franchises were awarded locally so that a City could make sure that everybody got served. But cities are embarrassingly falling over themselves for Google to the detriment of many of their own citizens. They are going to take care of the richer neighborhoods at the expense of the poorer ones. This is not what cities are supposed to do since they represent all of their citizens. We have had processes in place for years to make sure that telecom companies don’t bully and divide our communities, and now City Hall is in front of the line inviting them to do so.

I say shame on Austin if they wake up five years from now and find that 20% or 30% of their City doesn’t have fiber and is being left far behind. The houses and businesses in those neighborhoods will have lost value and will probably be the seeds of the slums of the future. When we look back twenty years from now I think we’ll see that this short-sighted policy to bow to Google cost the City more money than it gained.

The New Digital Divide

The InternetThere was a time, not very many years ago, when the digital divide meant the difference between pockets of people that had dial-up versus places that had something faster. But this is no longer a good definition and I think the digital divide is growing very quickly and is a huge issue again. The new digital divide is between cities and suburbs that have relatively fast broadband and rural areas and urban pockets that have been left a few generations of technology behind. Below when I say rural areas we can’t forget that there are many parts of inner cities in the same condition and that have become broadband deserts.

Today, most of rural America is several generations of technology behind the cities and there is no real expectation that this gap will ever close. A large portion of rural America is served by DOCSIS 2.0 cable modems and first generation DSL. These technologies are delivering anything from 1 Mbps up to maybe 5 Mbps to the average home and business in these communities. The incumbent carriers claim these areas are served by broadband, and they are always careful to claim that these communities have advertised speeds that are about the paltry 4 Mbps used by the FCC to define broadband.

But every community in this situation has now fallen on the wrong side of the new digital divide. The large telcos and cable companies are making big investments in the metropolitan areas. There are numerous affluent parts of the country that have broadband between 50 Mbps and 100 Mbps download if people are willing to pay a premium price. But in these markets even the slower cable modem products are already between 20 – 30 Mbps.

And I am not talking only about place where Verizon has built FiOS. The larger cable companies have upgraded to DOCSIS 3.0 in many large markets and now have fast speeds. AT&T has launched U-Verse using bonded pair DSL in many of these same markets with speeds of around 40 Mbps. And we are on the verge of AT&T and other copper providers having G.Fast which is going to increase speeds on copper to as much as several hundred Mbps. Even the cellular carriers have stepped up their game in the cities, and the latest version of 3.5 G is delivering speeds of 40 Mbps to 50 Mbps in short bursts.

But these new technology upgrades are not being brought to rural America and are unlikely to be brought there. The incumbent cable companies and telcos installed the current technology over a decade ago and have not upgraded it since. Meanwhile there has been several upgrades in the areas with good broadband.

The incumbents are not willing to make the needed upgrade investments in small markets. They aren’t going to get the same kind of returns they can make for the same investment in a big suburb. They have largely ignored the small markets for years and the wires are in bad shape compared to bigger markets. So I think we now on the verge of a permanent new digital divide defined by areas that keep getting new technology upgrades and areas that will be stuck in the past. And the gulf between these two areas is only going to grow.

There are real life repercussions of this gap. Homes on the wrong side of the digital divide can’t use broadband in their homes the same way that people in a City can. But much more importantly, businesses can’t get the same bandwidth that their competitors in the City have. In the long run this is going to squelch innovation in the rural areas. Areas on the wrong side of the digital divide are going to have a really hard time creating jobs that will let their kids stay in the area. The biggest fear in rural communities is that they are going to become economically irrelevant. They won’t be able to create jobs or keep jobs, their kids will move away and over a few decades the communities will die.

Killing Municipal Broadband in Kansas

Triticum_durumThere is a bill in committee in the Kansas Senate that would basically prohibit any municipality from building a broadband network that would bring retail broadband, voice or cable TV to any customer. Kansas SB 304 is attached. If enacted this would add Kansas to the list of many other states that prohibit any form of municipal competition.

I have to declare some bias in the position that I take on this topic due to the fact that I work for a number of municipalities that have built or are thinking of building fiber networks. But I also work for a lot of commercial firms that build broadband networks, and my real bias is against having large parts of our country without adequate broadband. It is my opinion that every part of the country ought to have broadband and I think whoever is willing to step up and make an investment ought to be allowed to do so.

I can tell you from my experience in working with municipalities that decide to get into the broadband business that they feel like they have no other choice. Many rural parts of America are on the wrong side of the digital divide and it’s getting worse all of the time. The large cities are finally getting good broadband and in most metropolitan areas customers can buy broadband speeds today of 50 – 100 Mbps download.

There are still a lot of people on farms who can still only get dial-up or satellite Internet, both which are no broadband at all. But that is not what defines the digital divide any more. The real digital divide can be found in the thousands of towns and counties where the broadband speeds are 3 – 10 Mbps. Those speeds, which were probably okay five years ago, are no longer adequate. Any City that has 5 Mbps download is already on the losing end of the digital divide. With such Internet speeds they are unable to attract or keep businesses or people in their communities.

Small Cities are scared to death of becoming a place where nobody wants to live. Every community hopes for a future where their kids can find jobs somewhere nearby and stay a part of the community. Places on the wrong side of the digital divide can already see that all of their kids move off to find jobs elsewhere, and it’s getting worse all of the time.

A household with only 5 Mbps download is blocked from using the Internet in the same way as people in a metropolitan area. They can’t really do two things at once on such a connection. This means that one member of the family can’t be taking an on-line college course while another is browsing the Internet or watching a streaming TV show.

And businesses with a 5 Mbps connection are hamstrung, You certainly can’t do much if you share such a small pipe with a lot of computers. While this kind of speed might let a tiny retail business squeak by, companies that have multiple employees can’t function with inadequate broadband.

I can tell you small Cities mostly look at offering broadband out of well-founded fear. They always try to get the incumbent provider to offer better broadband before they even think about it. But the ugly reality is that rural markets served by the large national incumbents get the worst service and have the oldest and worst networks in the country. While the large cable companies and telcos have stepped up their game in metropolitan areas, they have ignored investing in rural areas for decades.

So laws like the Kansas one are nothing more than the large telcos and cable companies kicking sand in the face of small town America. They have already shown them that they are not willing to invest in those areas, but they still want to milk them for revenues and don’t want anybody else to help these areas

What Happened to the Digital Divide?

Internet Access Here Sign

Internet Access Here Sign (Photo credit: Steve Rhode)

There was hardly a time in the late 90’s and early 00’s when broadband was discussed that the topic of digital divide was not mentioned. Government entities, policy people and even service providers talked about solving the digital divide to make sure that everybody had access to the Internet. There were committees and commissions formed in many communities to help solve the digital divide and to make sure that every child had a computer and an internet connection.

From what I can see the topic has disappeared from discussion and I rarely seeing the topic discussed any more. Does this mean that the digital divide has been solved? Certainly there are a lot more households with Internet access today than a decade ago, but do the poorest households now subscribe to the Internet?

Before one can even answer the question we need to define what broadband is. The FCC defines broadband as the ability to get a landline service with a download speed of at least 4 Mbps and an upload speed of 1 Mbps. In most markets that is one of the lower-speed products available and speeds in metropolitan and suburban areas are now much faster than that. According the numbers released by the FCC in August of 2012 there were 19 million people in the US with no access to broadband and another 100 million with access to broadband but who do not purchase it. But there are many who dispute the way that the FCC counted the 19 million figure and think that the real number is much larger.

Another way to look at the market is by households and the Leichtman Research Group did a study in 2012 that showed that there are almost 81 million homes with broadband, or just at 70% of all households. That same study said that broadband penetration rates in homes with average household incomes under $30,000 had only a 52% broadband penetration rate while homes with incomes over $50,000 had a 97% penetration rate. Obviously there are a lot of households who feel they cannot afford broadband.

Today one has to ask if landline broadband is the only kind of broadband. For example comscore reports that 133 million people owned smartphones as of February 2013, or 57% of everybody over 13 years old. Certainly there are many people whose only Internet access is with a smartphone.

A Pew Research Center study released a study earlier this year of the Internet usage of teenagers between 12 and 17. This group uses the Internet more than any other age group and 95% of teenagers access the Internet at least one per month. But 25% of teenagers only have a smartphone to use for Internet access. One has to question if smartphone usage is really broadband. Certainly you can read news, update Facebook and play games on a smartphone. But it’s sheer torture to use a smartphone to write something even as long as this blog and it’s hard to see smartphones being a broadband substitute for school kids trying to do various types of homework. The smartphone wasn’t really designed to handle files in the same way as a laptop or computer.

One thing that is clear in the figures is that the lower the income the less likelihood that a household will find broadband to be affordable. And to me that says that we still have the digital divide. But for some reason, nobody is talking about it anymore.

One statistic that I found interesting is that the Leichtman report said that 90% of households with computers have broadband. When you compare that to the statistics that say that only 52% of households with household incomes under $30,000 have broadband it is also easy to say that an awful lot of those homes don’t have computers.

I remember a decade ago there were major programs developed to get computers into households, particularly households with children. I just did a Google search and found a few such programs are still active, like one in Chicago, but getting computers into homes was a major focus for my clients and the country as a whole a decade ago. And that seems to have basically dwindled away as a priority.

I don’t know the reasons for this, but I can postulate. Broadband access seems to be ubiquitous in middle class neighborhoods and it is now the rare house that doesn’t have a computer and Internet access. Perhaps everybody just assumes that this is now true everywhere, while it is not. If the FCC numbers are to be believed there are still 119 million people without Internet access. Back the babies out of that number and there are still a whole lot of people without broadband.

It seems to me that the digital divide hasn’t gone away at all. We have just stopped talking or caring about it. Maybe it’s time to put this back on the agenda.