Regulation - What is it Good For?

Digital Equity Foundation Act

In an interesting bill before Congress, Senator Ray Lujan of New Mexico and Representative Doris Matsui of California introduced the Digital Equity Foundation Act of 2022. This bill would create a nonprofit organization called the Foundation for Digital Equity that would work to leverage public and private funds to solve the digital equity gap. Within six months after the bill is passed, the Secretary of Commerce would be required to establish a nonprofit corporation called the Foundation for Digital Equity.

It’s an interesting concept because it would create an organization that would bridge government and philanthropic organizations to formally tackle problems associated with digital equity. The Foundation would have four specific goals:

  • Work to raise funds from philanthropic organizations, businesses, and state and local governments to tackle issues associated with digital literacy, digital inclusion, and digital equity.
  • Work to promote partnerships and collaborations that would tackle specific hands-on projects that would further digital equity goals.
  • Promote equitable access to broadband and associated applications like telehealth, distant learning, and e-government.
  • Work to supplement programs from the NTIA that are aimed at solving digital equity issues.

The Act gives the Foundation a wide scope of operations and suggests a number of different activities that the Board would be free to pursue. Some examples include:

  • Conduct and support studies, competitions, and projects.
  • Award digital equity, digital inclusion, and digital literacy grants (I assume the grants would be funded by the private sector).
  • Support training programs related to digital equity for researchers, scientists, government officials, and those in higher education.
  • Create for-profit subsidiaries to stimulate economic development.
  • Engage in data collection related to inequities and community needs related to digital equity.
  • Write, edit, print, publish, and sell books and other materials relating to efforts carried out by the Foundation, the Department of Commerce, or the FCC.
  • Developing a publicly available evaluation process to enable communities to identify and quantify digital equity problems.

The Foundation would not be a government agency but instead would be a 501(c) nonprofit. However, there would be some government funding to pay for the administrative operation of the Foundation. Interestingly, donations to the Foundation would not be tax deductible. The governance of the Foundation would start with a Committee of named government officials who would have six months to seek a Board of five non-compensated Board members to permanently operate the Foundation. At least three of the Board members must have broad and general experience with digital equity, digital inclusion, or digital literacy. One member must have experience working with private nonprofit organizations. The Secretary of Commerce, the Director of the NTIA, the Chairman of the FCC, the Secretary of the Treasury, and the Under Secretary of Agriculture for Rural Development will also serve as non-voting members of the Board.

This is an interesting approach and recognizes that it’s going to take a long time to tackle digital equity problems. The IIJA provides for $3 billion in digital equity grants over the next three years, but this Act recognizes that a long-term approach is needed to go beyond the work started with these grants.

The one thing I’ve learned about digital equity in the last year is that the only successful approach requires working with people one by one. Somebody has to sit with the recipient of a first computer to help them learn how to use it. Training somebody to effectively use the web requires individual training. This Foundation is not going to itself solve any digital equity problems. But if done well, it will match government, philanthropic, and business donations with organizations that are going to do the hard work that is needed.

The Industry

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.

Regulation - What is it Good For?

Broadband Adoption Grants

The recently enacted Infrastructure Investment and Jobs Act (IIJA) created two new grant programs to address digital equity and inclusion. This section of the IIJA recognizes that providing broadband access alone will not close the digital divide. There are millions of homes that lack computers and the digital skills needed to use broadband. The grant programs take two different approaches to try to close the digital divide.

The State Digital Equity Capacity Grant Program will give money to States to then distribute through grants. The stated goal of this grant program is to promote the achievement of digital equity, support digital inclusion activities, and build capacity for efforts by States relating to the adoption of broadband. I haven’t heard an acronym for this grant program – it’s likely that each state will come up with a name for the state program.

The Act allocates $1.5 billion to the States for this program – that’s $300 million per year from 2022 through 2026. Before getting any funding, each state must submit a plan to the NTIA on how it plans to use the funding. States will have to name the entity that will operate the program, and interestingly, it doesn’t have to be a branch of government. States could assign the role to a non-profit or other entity.

The amount of funding that will go to each state is formulaic. 50% will be awarded based upon the population of each state according to the 2020 Census. 25% will be awarded based upon the number of homes that have household incomes that are less than 150% of the poverty level, as defined by the U.S. Census. The final 25% will come from the comparative lack of broadband adoption as measured by the FCC 477 process, the American Community Survey conducted by the U.S. Census, and the NTIA Internet Use Survey.

The second new grant program is called the Digital Equity Competitive Grant Program. These are grants that will be administered by the NTIA and awarded directly to grant recipients. The budget for this grant program is $1.25 billion, with $250 million per year to be awarded in 2022 through 2026.

These grants can be awarded to a wide range of entities, including government entities, Indian Tribes, non-profit foundations and corporations, community anchor institutions, education agencies, entities that engage in workforce development, or a partnership between any of the above entities.

This will be a competitive grant program, with the rules to be developed by the NTIA. While the broadband infrastructure grants in the Act include a long list of proscribed rules, Congress is largely letting it up the NTIA to determine how to structure this grant program.

That’s going to make for some interesting choices for entities involved in digital inclusion. They can go after funding through the state or compete for nationwide grants. I doubt that anybody can make that decision until we see the specific grant rules coming out of each program.

I’ve been hearing about digital inclusion at every conference I’ve attended for the last fifteen years. For many years we talked about this as finding ways to solve the digital divide. We’ve known for all these years that there are homes that don’t have broadband because they can’t afford a broadband connection. We’ve known that homes can’t afford computers or other devices. And we’ve known for a long time that a lot of people don’t have the digital skills needed to use broadband.

There have been efforts over the years to address the issues, mostly done at the local level and mostly through non-profits. This is the first time that real funding is being aimed at solving these issues. It’s going to be interesting to see what comes out of this funding. I’m sure there will be some dazzlingly successful programs as well as some that will fizzle – but these grants will provide the grand experiment to find out what works the best. I like that these grants make new awards each year for five years – and I hope Congress pays attention because some of the best programs that get this funding will deserve to be funded when these grants are over.

We are only going to best thrive as a nation when everybody comes along for the ride, and this is the first set of grants that will take a serious shot at bringing broadband to those who are not benefitting from broadband technology.

The Industry

Seattle Tackles MDU Broadband


Our industry takes it as general wisdom that urban areas have better broadband than rural areas, and as a general premise it’s true. But within urban areas, the segment of the community with the widest range of broadband coverage are apartment buildings. I think you can go to every big city and find some apartments with gigabit speeds while other apartment buildings have little or no broadband.

There are several reasons for the wide variance in broadband coverage. First, landlords have always had a say about what carriers they will allow in their buildings. I’ve seen numerous cases of landlords that include slow broadband into the rent and don’t let faster ISPs into their building. Some buildings don’t have broadband due to what can only be described as redlining where ISPs avoided poor or troubled neighborhoods. Finally, some older apartment buildings are expensive to rewire due to the way they were originally constructed.

The City of Seattle is tackling the issue in an interesting way. Over half of the living units in the city are in MDU’s (multi-dwelling units), meaning apartments, condominiums, and townhouses. In 2019 almost 81% of new units built in the city are in MDUs. The city views the ability of MDU tenants to have the same broadband quality and options as single family homes as a digital equity issue.

The city has been gathering facts about MDU broadband for several years and came to understand the wide variance of broadband in different buildings. They found that MDUs routinely don’t have the same broadband options as nearby single-family homes. The city conducted a survey in 2017 that found that 95% of MDU tenants have access to broadband of at least 25/3 Mbps. However, the survey found that few tenants in the city have a competitive choice between multiple ISPs at speeds of 100 Mbps or faster. The tenants who have the choice of multiple fast ISPs were the most satisfied with their broadband. The city concluded from the survey that choice was just as important to MDU tenants as broadband speeds.

Probably the most important finding of Seattle’s research is that there is a wide variance among landlords in terms of understanding their broadband options. They found landlords who know very little about broadband up to landlords that have sophisticated tech plans. The city found that many landlords have relied on the advice from ISPs – which clearly can be self-serving and not in the benefit of landlords and tenants.

The city concluded that one way that they could help improve MDU broadband was by helping to educate landlords. The Seattle Office of Cable Communications launched an initiative they call B4B – Build for Broadband. Their goal is to create awareness of the importance of broadband for landlords and to provide educational content for the many landlords that can’t afford telecom planners and consultants.

The city has undertaken an initiative to provide information about broadband to landlords. They’ve started a series of webinars covering topics of interest to landlords. I should disclose that I helped the city with a webinar that compared wired and wireless technologies. The city is also gathering other information for landlords on their website.

This initiative makes a lot of sense in Seattle since it has one of the highest percentages of MDU residents in the country. However, any city that has MDUs could consider something similar. I’ve done broadband feasibility studies for cities that have between 20 to 50 MDU complexes, and inevitably they are as widely disparate as the ones in Seattle. There usually are a few that have little or no broadband and a few that have been wired with fiber and that offer gigabit broadband.

Cities are often surprised by the wide variance in broadband availability and speeds at different MDUs. Cities are also often surprised to hear that even if they find a broadband solution for improving broadband for single-family homes and businesses, that the solution will not necessarily apply to MDUs. I know of many fiber overbuilders that skip past MDUs due to the cost of rewiring the buildings, the reluctance of landlords to let them in, or the marketing challenge of keeping up with tenant churn.

It’s not hard for smaller cities to take an inventory of the state of broadband in their MDU community. It’s normally as simple as to visit each apartment complex to find out what’s available to tenants. While smaller cities are not going to undertake an educational process with the scope of Seattle’s, cities can assist MDUs with poor broadband to find a better solution. Sometimes it’s as easy as helping to match competitive ISPs and landlords. It might mean getting landlords talking to each other. One thing is for sure – no solutions can be found until the problems are identified.

The Industry

Maximizing the Benefits of Fiber

I recently talked to Deb Socia who is now the CEO of the Enterprise Center in Chattanooga, Tennessee. Anybody who knows Deb knows that she’s worked for decades to find solutions for digital inclusion and was also the founder of Next Century Cities. It’s not a surprise to see her now as the head of the Enterprise Center, which is a non-profit that is working to leverage the city’s fiber network to benefit a number of sectors of the community.

The organization has three primary areas of focus. First, the Enterprise Center helped to establish and now is at the forefront of promoting Chattanooga’s Innovation District. This is a section of town that is focused on promoting new business start-ups and to create collaboration between creative thinkers, entrepreneurs, the local University community, and technology gurus. This effort involves numerous initiatives such as a high-tech business incubator program, co-working space for new businesses, and a host of services to help new businesses succeed.

The second area of emphasis is the Smart City Collaborative. This currently involves a 1.5-mile section of the city that is fully-sensored with a wide range of smart devices. The area is a testbed for smart city applications and has attracted institutions like the Oak Ridge National Laboratory, the National Science Foundation, U.S. Ignite, and the University of Southern California, along with numerous vendors and entrepreneurs. The collaboration has a number of goals. One is to test new smart city ideas in a field environment that is wired with gigabit fiber. The collaboration also concentrates on smart city applications that don’t violate citizen privacy. The long-term goal of the Enterprise Center is to spread the best of the smart city applications to the rest of Chattanooga.

Finally, Deb returned to her roots and is promoting digital equity through various programs such as Tech Goes Home – something she worked on in her past. Chattanooga is known for having fiber available everywhere, but like most cities still has many households that can’t afford broadband. The digital equity effort works to provide the three necessary components of digital inclusion – connectivity, computer hardware, and the training needed to use broadband. Deb reports that the demand for computer training is far exceeding predictions.

All of this is made possible to some degree by the fact that Chattanooga has a municipal broadband network. Deb says that City-owned ISP is key for her success. That can be seen in other communities like Wilson, North Carolina where the city has leveraged broadband to make big strides in revitalizing downtown, attracting businesses, invigorating the arts, and helping to solve the digital divide. Eugene, Oregon has leveraged gigabit fiber to create an economic boom by enabling a sizable community of software developers.

I’ve always been mystified why more cities don’t follow the lead of cities like Chattanooga, Wilson, and Eugene. There are now a few hundred communities that have built municipal fiber networks and many of them have not taken the next step past using the network to provide faster broadband. Faster and better broadband is important and can alone bring big benefits to a City such as increased incomes from citizens working from home, or from citizens levering broadband to start new businesses. The Enterprise Center has made the bold statement that broadband alone is not nearly enough, and a City has to expend effort to get the full benefits out of a broadband network.

Even more puzzling is that it’s rare to see this same effort in cities that have broadband networks provided by commercial ISPs. There are now many cities served by Google Fiber or other fiber overbuilders. I can’t think of anything that stops such cities from duplicating the efforts undertaken by the Enterprise Center and its many partners in the City.

I think cities that don’t tackle these issues are missing a huge opportunity. My guess is that twenty years from now the City of Chattanooga will be able to point to major employers that got their start through the business incubator effort. The city is likely to have benefitted hugely by keeping some of its brightest entrepreneurs at home rather than have them move to the handful of big tech centers around the country. It’s almost impossible to calculate the gigantic community benefit that can come from helping low-income households join the digital world. In a decade Chattanooga will start seeing young professionals and entrepreneurs that were aided by the efforts made today to solve the digital divide.

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