President Obama’s announcement was accompanied by a plan called ConnectALL. The plan was prompted in part by a recent study that shows that households making less than $25,000 per year are half as likely to have broadband as households that make more. The plan makes a number of specific proposals for things the federal government can do to increase broadband penetration rates:
- The primary tool proposed is to revise the Lifeline program that subsidizes telephone service for low income households and to redirect the $1.2 billion spent annually on that program to subsidize broadband connections instead. This is something that is already underway at the FCC and the proposed rules on how this might work are expected out later this year.
- The plan also includes an initiative to improve digital literacy skills. The plan would engage a number of volunteer and non-profit organizations to make this a priority. This would include AmeriCorps volunteers as well as organizations like the Corporation for National and Community Services, and the Institute of Museum and Library Services. The plan would also promote more computer skill training at two-year colleges.
- The plan would also promote the reuse of computers and similar equipment no longer needed by the federal government.
- The plan would also direct the NTIA to get more involved in supporting community broadband planning. It would also bring in a number of non-profits and philanthropic groups to help with this effort.
- The plan also calls for ISPs to offer more lower-price products for low-income households.
The Texas governor has not yet released any details of how he might go about connecting all school children to broadband in such a short period of time. The only solution I can imagine that could happen that quickly would be some sort of cellular plan just for kids to get connected to school servers. 2018 is practically right around the corner in terms of solving broadband issues.
These kind of announcements always sound great. Certainly both politicians have identified real issues. It’s becoming quite clear that poor households are increasingly finding broadband unaffordable. But one has to ask how much success the federal plan might really have. Certainly subsiding internet connectivity for low-income households will bring some new households onto the Internet. But you need to ask how much of an incentive $10 per month is for a home that can’t afford broadband today.
Certainly the $1.2 billion per year in Lifeline funding can reach 20 million people – that amount will provide cheaper broadband to 10 million homes. But you would have to think that a lot of those homes are already receiving this same subsidy today for their home phone, and when a household swaps a phone subsidy for a broadband subsidy they are no better off in terms of total telecom spending. They will just have swapped a $10 per month discount from one bill to another.
And all of the other proposed solutions sound wonderful on paper – but will they work to get more people on the Internet? I know that computer literacy training can work well if done right. I have one client who has been holding training sessions for customers for well over a decade and over the years they have brought a lot of elderly in their community onto the Internet. But they say that it takes a major time commitment for each potential customer and a concentrated effort for this to work – they often will work with a given customer for many months before that person is comfortable enough to buy Internet at their home.
And none of the federal ideas really fix the underlying problem of affordability. The Lifeline program will reduce broadband by $10 per month, but in homes that are surviving on jobs that pay $12 per hour or less, broadband at any price is hard to afford. I certainly don’t have an answer to this problem, but there are other ideas that I think ought to be considered as well. For example, $1.2 billion per year could supply a lot of broadband by building a huge number of neighborhood WiFi transmitters that could bring cheap or free Internet to many homes at the same time. I’ve always thought that the cities that are looking to provide free WiFi broadband are on the right track because that brings broadband the neediest households without the paperwork and expense that comes with subsidy programs.
The last item on the list above has the most promise. A lot of good could come from pushing the major ISPs to offer a $10 or $20 broadband alternative. But this was forced onto Comcast a number of years ago and they largely shirked the responsibility and provided low-price broadband to very few homes.
I’ve been skeptical for years that the Lifeline program makes a lot of difference. It probably did when the program first started in 1985 and the typical phone bill was under $20. But the $10 discount that was a lot in 1985 is worth a lot less now. It just doesn’t feel like enough of an incentive to make the difference the government is hoping for.