By Blair Levin
25 years ago, then NTIA Administrator Larry Irving warned that the rising importance of the internet had the downside of creating what he coined a “digital divide.”
15 years later, the National Broadband Plan reported that as “more aspects of daily life move online and offline alternatives disappear, the range of choices available to people without broadband narrows. Digital exclusion compounds inequities for historically marginalized groups.” In light of these trends, the plan warned “the cost of digital exclusion is large and growing.”
Judging by the limited government response to those described dangers, both warnings arguably were ahead of their times. In those eras, many viewed internet access as a luxury and saw many other needs as higher priorities for government funds.
That changed this past spring. COVID accelerated the momentum of the economy and society towards “remote everything,” revealing that the divide was more costly and urgent than the country had realized. This then launched countless editorials from a wide spectrum of political views, that called for government action to get networks everywhere, get everyone on them, and use them to improve the delivery of essential public goods like education, health care and job training.
That is progress but it is still far from an achievement.
To get networks everywhere, we first need accurate data, something that on a bipartisan basis Congress recognized the FCC has not collected. We also need the FCC to revisit two issues: what now constitutes being unserved, and the minimum standards for any government subsidized deployment. While many have offered their instinctual views on the answers to both, COVID created a real world experiment for high-bandwidth use cases that we should use to illuminate how we answer those questions for a remote everything economy and society.
Once we have a better map and understanding broadband need, Congress should provide funding, at a minimum, to pay for the capital expense of building out networks where no further operating expenses are necessary. Those funds should be allocated in ways that use market forces to assure the public funds are efficiently distributed.
That is not always true today. For example, recently the Department of Agriculture’s Rural Utility Service (RUS) awarded Beehive Telephone Company Inc. a $2.3 million ReConnect grant to deploy a fiber-to-the-premises network to four residents, four farms, and four businesses in Washington County, Utah. It also doled out a $2.7 million grant to deploy a fiber-to-the-premises network to connect 147 people in Elko County, Nevada. These average out to be more than $33,000 per home passed.
That compares rather unfavorably to the FCC’s recent Rural Development Opportunity Fund (RDOF) reverse auction which averaged about $1,770 per home passed. There are concerns about that auction, particularly as other such auctions have experienced a number of defaults owing to technological, economic or competitive factors. Further, the mapping failure likely led to millions spent on unnecessary subsidies. Still, the auction demonstrates that if we had good maps and devoted the appropriate resources, we can finish the job of getting networks everywhere.
Helping everyone connect is tougher and statistically more important. After all, three times as many Americans have access to networks but have not adopted service as those who simply have no available networks. Yet we devote far more to the availability gap than we do the adoption gap. in 2019 the ratio was greater than five to one—even though the cost to America of an individual not adopting is similar to the cost of an individual not having access.
To get everyone on, we have to address two critical issues: digital readiness and affordability. For digital readiness, we need a more focused effort at the local, state and federal level, for developing, testing and improving such efforts for targeted communities of non-adopters.
Affordability, however, is the most significant factor. Affordability can mean two things. First, it can mean the price of an average service. Second, it can mean the entry level price for a baseline service. Policy needs to explore both; if we are looking at the challenge of affordability for the currently unconnected, we have to prioritize addressing the second.
The current program for addressing that affordability is called Lifeline. It is inadequate in many respects, most obviously in the subsidy it offers, of $9.25 a month. It also is distributed poorly, with only 7 million of the 38 million eligible homes taking the benefit. But if the FCC increased both the subsidy and the number of recipients, it would blow up the current funding mechanism, which is based on an assessment on certain phone services that is already at 30%.
Further, even if the monthly subsidy could be increased, it would not necessarily lead to broadband where we need it. We should approach Lifeline reform by recognizing that certain public goods are enhanced with greater broadband in homes. We all benefit when all school children have to tools to do their homework and engage in other online learning in their homes. We also benefit when all can take advantage of telehealth in the home, both improving community health and lowering costs for the overall system. We all benefit when the unemployed are not cut off from on-line training or the tools to search, apply and interview for new jobs, diminishing the time they are unemployed.
The current Lifeline program does little to capture these benefits as in practice it is an important but limited mobile service. Simply increasing the subsidy and distribution mechanisms would not capture the benefits of home use.
We need to continue to improve efforts to connect all to voice services, but we also need to capture the public benefits of in home broadband. As to the benefits for school children, Congress to step up, as it did with the school lunch program and other federal support for schools serving low income students, ensuring that they have a baseline access to educational opportunities outside the classroom, which are overwhelming online. We also need to examine how the health and unemployment insurance programs can assist in getting such persons connected. Such programs can provide both efficient distribution mechanisms and use savings to the program to help offset the costs of a broadband benefit.
Some might argue that the FCC should use its authority to assess charges on other parts of the communications networks so as to fund in-home broadband needs itself. While that might make some theoretical sense, there are multiple problems.
First, as the recent legal battles on classifying carriers under Title I or II of the Communications Act have shown, any FCC assessment that is used to subsidize broadband has significant legal vulnerabilities until the classification controversy is resolved. Second, even if the courts were to uphold a Title II classification—the most favorable outcome for expanding FCC authority for increased assessments—the revenue base may still be too limited and charges on it tend to be regressive. Third, the issue is fraught with political difficulties, which is why, a decade after the National Broadband Plan called for reform, every FCC Chair has chosen to let his successor face the consequences of the unsustainable trends.
In short, counting on FCC action to reform the current system would likely delay closing the availability and adoption gaps for many years.
Finally, there is a utilization gap; the gap between how our communications networks are used today and how they could be used to improve outcomes in delivering essential services.
Yes, we need all students online to be able to continue learning outside the classroom, but we also need for tools that provide teachers the support they need to enable students to maximize the effectiveness of digital content. Yes, we need low income persons to be able to access telehealth, but we also need to improve how we use digital technologies to target and treat diseases that disproportionately afflict low-income communities. Yes, we need the unemployed to stay connected while searching for a job but we also need to us AI and other technologies to improve how we empower people to upgrade their skills for the jobs of the future. And we need to upgrade government services so that all can access critical information and assistance on a 24/7/365 basis.
There is no silver bullet for closing any of the three gaps. All three require multiple actions by multiple government institutions across different jurisdictions. By my rough and preliminary estimate, there are over 100 federal government actions that would useful in addressing one of the key questions for government in the next decade: how can we use the tools of the information society to create a more equitable and inclusive economy and society?
But it is also one area where there is a distinct possibility of a bipartisan effort to make progress. When I discuss these issues with Republican friends, I always ask if they think the country would be better off if there were broadband networks everywhere, if everyone who wanted to be was on, and if we used the networks to improve how we deliver health care, education and job training. The answer is always yes, something that was not true prior to COVID. I then ask if they think market forces alone will achieve those goals. The answer is always no. While we may disagree on specific policies—and while compromises will likely result in policies all sides view as sub-optimal—those answers set the stage for productive conversations and policies considerably better than we have today.
In contrast with the attitudes of decades past, COVID has created a broad and deep understanding that costs of digital exclusion are too great for our economy and society to tolerate. Congress and the incoming Administration, aided by an FCC that hopefully will take its role as an expert agency seriously, to finally assure that there are networks everywhere, everyone can get on, and that we use them to improve how we deliver essential services.
Blair Levin is a Senior Non-Resident Fellow at the Brookings Institution and a Policy Analyst for New Street Research, a global telecommunications and tech equity research firm. Previously he was Chief of Staff to the Chairman of the FCC, from 1993-1997, Executive Director of the effort that produced the 2010 United States National Broadband Plan, and he has consulted with a numerous cities, states and countries on broadband policy.