Broadband Regulatory

Bridging the Access and Adoption Gaps

The Boyerosa, Patty Boyers’ homestead in Missouri.

Access to and adoption of broadband isn’t an academic issue for Patty Boyers, Chair of ACA Connects. As president and co-founder of Boycom, a Missouri-based Internet Service Provider, broadband, as Boyers says, is personal for her.

Given that she is on the front lines trying to connect people to the greater world through broadband, her comments about the importance of closing both the access and adoption gaps in broadband were the perfect introduction for the ACA Connects webinar, Connecting America: How to Meet the Country’s Broadband Needs in the Infrastructure Package.

Approximately 50% growth in Gigabit households between June 2018 and June 2020. 90% of this growth comes from households above the baseline.
There was approximately 50% growth in Gigabit households between June 2018 and June 2020.  Image courtesy of Cartesian

Backing up Boyer’s always entertaining and meaningful anecdotes, Heather Sabel, Engagement Manager for Cartesian, summarizes the ACA/Cartesian report, Addressing Gaps in Broadband Infrastructure Availability and Service Adoption. This report estimates costs and provides a prioritization framework to help policymakers determine how best to expand broadband availability and adoption. By Cartesian’s estimation,12M homes are either unserved (0.7% of households) or have less than 25/3 Mbs download/upload speeds.

Further, from June 2018 to June 2020, 90% of the growth in “gigabit services” (900/500 Mbs) occurred in households that were already above the baseline. Sabel posits that it is unlikely that market forces alone will deliver gigabit speeds to those areas that are at or below the current baseline.

NBP Goal #1 – Achieved? #

Based on the numbers presented by Cartesian, 91% of U.S. households, or approximately 110M, have access to at least 100/20 Mbs, with 37% or 47M having more than 900/500 Mbs. It could be argued that this meets long term goal #1 from the 2010 National Broadband Plan (page XIV) that stated that by the end of the decade,

“at least 100 million U.S. homes should have affordable access to actual download speeds of at least 100 megabits per second and actual upload speeds of at least 50 megabits per second.”

Today’s upload speed falls a little short of the goal. Current penetration rates are a strong argument that broadband is affordable for most, but not all households.

Adoption dwarfs the access challenge. The National Urban League (NUL) estimates that approximately 30M households do not subscribe to fixed broadband at home for “reasons other than network availability”.¹ Although lack of relevance and digital readiness are barriers to adoption, income is a major barrier to adoption. According to a 2019 American Community Survey, 36% of all households without a fixed broadband connection make below $20k/year. At the same time, only 14% of households where the income is above $75k/year are non-connected.

Cartesian estimates it would cost $35B to $67B to upgrade approximately 19M locations, to a minimum of 100/20 Mbps.²  Solving the affordability problem is even more costly. The Cartesian numbers suggest costs of between $50B to $201B over 10-years to solve the affordability gap. This assumes a $50 per month subsidy to between 25 to 100% of the 33 million households currently eligible for the Lifeline program.

Discussion Highlights #

Giving his perspective as a former congressional representative from rural Oregon, Alpine Advisors’ Greg Walden lauds the ACA Connects/Cartesian report for providing the type of data points that can assist policymakers. One of Walden’s takeaways from the report is that federal money needs to flow to unserved rural and urban locations. In his words,

“The fast got faster and the slow got left behind.”

Walden calls for creativity in overcoming access issues, while warning not to overbuild existing networks with public dollars.

S. Derek Turner, Free Press’ Research Director. points out that overbuilding or adding a third provider will not help the millions who cannot afford to pay market rates for broadband.  Blair Levin, Nonresident Senior Fellow – Metropolitan Policy Program, believes the subsidies should be more along the lines of $25 per month, instead of $50 per month.

He points out that policymakers should examine the savings that broadband access brings to various government programs, such as schools, Medicare, the Veteran Administration, etc. The resulting savings could justify subsidies to help people adopt broadband.  Levin is the author of several of the chapters of NUL’s Lewis Latimer Plan for Digital Equity and Inclusion. As an example of how broadband can provide a return for government-funded programs, this plan cites a 2012 VA telehealth program (page 83) that provided $6,500 annual savings, compared to $1,600 annual costs.³

Ross Lieberman, ACA Connects’ SVP of Government Affairs, says that recognizing that adoption is the bigger issue is a start. The next step is to allocate funding, accordingly. Turner suggests that if an operator receives government money to build and/or operate a network, then it must offer an affordable tier.

He points out that income and racial divides have narrowed more with mobile broadband compared to fixed broadband, as people prefer mobility. Still, as pointed out in NUL’s plan, there are limitations (e.g. device, monthly data caps, and non-mobile compliant websites) that prevent mobile offerings from being a perfect substitute for fixed broadband.

Could an Affordable Tier Be Based on Content-Type Instead of Speed? #

Green lawnmower as displayed on the Gizmomedia interface on Southwest Airlines.
Example of a “Walled Garden” Internet

Private programs, such as the $9.95 Internet Essentials from Comcast, provide a basic level of affordable broadband for households that qualify for a federal program. Programs like Internet Essentials have generally been differentiated by speed. For instance, Internet Essentials has grown from 1.5/0.384 Mbs in 2012 to its current level of 50/5 Mbs in 2021.

Would it make sense for providers to offer a different kind of “essentials”; one that would provide low or zero cost access to truly essential services and not entertainment and social media services? The National Urban League categorizes workforce, health care, and education as essential services. The NUL recommends Congress create a new Lifeline+ program (PDF page 77) that encompasses these categories.

An operator could potentially offer this zero/low-cost Lifeline-like tier to all of its subscribers, betting that most would pay for full Internet access. By offering this to all households, the operator would no longer have to qualify prospective Lifeline customers. It would mean the consumer would no longer have to prove eligibility, simplifying the sign-up process and removing a barrier to adoption. This wall-garden approach is similar to how airlines offer broadband access with a free offering of limited content, with full Internet access costing a fee.

Margaret Harding McGill, Tech Policy Reporter for Axios and panel moderator, asks, “Isn’t RDOF supposed to be getting all the unserved areas?” Levin points out that mapping is a problem and that there is a sense in Congress that the FCC cannot be trusted, because of the mapping issues. Free Press’s Turner wants to see more local involvement to make sure the FCC’s maps are accurate [For an example of mapping issues, see Unlikely Silicon Valley RDOF Winners].

Apple's Urban Silicon Valley Headquarters is Slated for RDOF Funding
Apple’s Silicon Valley Headquarters an Unlikely RDOF Location

One shortcoming is that the FCC maps are static and do not account for networks under construction. For instance, based on the FCC maps, 21 Massachusetts towns would have been overbuilt using RDOF.  These rural fiber-to-the-home networks, which had also received federal funding, would have been competing with a federally-backed overbuild. Free Press’s COO, who was instrumental in the creation of these networks, had the local and bigger picture knowledge to influence the winning RDOF bidder to rescind its bid.

Levin is not convinced that municipal builds will be that significant in closing the accessibility gaps, as markets in the U.S. are driven by private capital. Echoing Levin, Walden states that U.S. companies invest three times as much in broadband compared to their EU peers. Walden’s closing statement provides a good summary of the panel, “We have limited money, so let’s partner to make sure broadband is accessible and affordable.”

Notes: #

¹ See page 56 of NUL January 2021 Report (PDF).  “If between 80% and 90% of all households have access to at least one available fixed terrestrial service, however, then between 29 to 32 million households, or approximately 69 to 78 million people, do not subscribe to broadband at home for reasons other than network availability.”

² RDOF locations are not included in this 19M figure. Many anticipate an infrastructure bill to include approximately $65B for broadband deployment. Cartesian estimates the cost to upgrade all locations to gigabit service as between $117B-$198B.

³ NUL’s plan has many ideas to streamline processes for accessing available funds, including better search capabilities and integration of state-specific programs. It points out that there are 59 direct and indirect federal programs, located in more than a dozen federal agencies, that support broadband deployment efforts. Another interesting idea it advances is to give Native Tribes control over the spectrum above their lands.

Author Ken Pyle, Managing Editor

By Ken Pyle, Managing Editor

Ken Pyle is Marketing Director for the Broadband Forum. The mission of this 25+-year-old non-profit “is to unlock the potential for new markets and profitable revenue growth by leveraging new technologies and standards in the home, intelligent small business, and multi-user infrastructure of the broadband network.”

He is also co-founder of Viodi, LLC and Managing Editor of the Viodi View, a publication focused on the rural broadband ecosystem, autonomous vehicles, and electric aviation. He has edited and produced numerous multimedia projects for NTCA, US Telecom and Viodi. Pyle is the producer of Viodi’s Local Content Workshop, the Video Production Crash Course at NAB, as well as ViodiTV. He has been intimately involved in Viodi’s consulting projects and has created processes for clients to use for their PPV and VOD operations, as well authored reports on the independent telco market.

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