Thursday, July 29, 2021
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President Joe Biden and the bipartisan group of lawmakers announced agreement on the details of a once-in-a-generation investment in US infrastructure, which will be taken up in the Senate for consideration. The Bipartisan Infrastructure Deal includes a total $550 billion in new federal infrastructure investment. The deal’s $65 billion investment ensures every American has access to reliable high-speed internet with an historic investment in broadband infrastructure deployment, just as the federal government made a historic effort to provide electricity to every American nearly one hundred years ago. The bill will also help lower prices for internet service by requiring funding recipients to offer a low-cost affordable plan, by creating price transparency and helping families comparison shop, and by boosting competition in areas where existing providers aren’t providing adequate service. It will also help close the digital divide by passing the Digital Equity Act, ending digital redlining, and creating a permanent program to help more low-income households access the internet.
The Biden Administration and the U.S. Congress are contemplating spending tens of billions of dollars on policy interventions to increase the deployment of broadband networks with the objective of increasing broadband adoption. While several proposals are on the table, it appears that there are two types of subsidies under consideration: (1) subsidies for new network deployment to unserved areas; and (2) subsidies for the construction and operation of government-owned networks in possibly already served areas for the purpose of reducing prices by increasing “competition.” Other policies to reduce price, including rate regulation, are also being considered. Though the “best” mixture of funding across the options presented here is a complex issue, much headway may be made by quantifying two empirical relationships: (1) the relationship between adoption and network availability; and (2) the relationship between adoption and broadband service price (i.e., the own-price elasticity of demand). Here I use data on broadband, adoption (for fixed services including cable, DSL, and fiber) and an index of broadband prices to estimate both relationships. Other things equal, the data suggest that a home newly-passed by a broadband network has a very high probability of adopting broadband, not unlike the average adoption rate (about 85%). Expanding broadband availability to unserved areas will have a potent effect on adoption. The data are much less encouraging about expanding adoption through pricing policies.
Washington seems poised, yet again, to try to address broadband infrastructure by throwing billions of dollars at it to be managed at the national level, and already there is a chorus of voices demanding that access to broadband be “free.” All this will ensure the effort fails. What’s needed is a recognition that the only approach that can succeed is a novel combination of public-private partnerships at the local level. The important recognition is that cities are not monolithic. Broadband is a neighborhood issue, driven by different socioeconomic factors that must be addressed. Three business models need to be employed The traditional business model, where service providers charge customers a fee, will suffice for areas already wired and returning a profit. An ad or sponsorship model, where base stations are sponsored by companies, will probably develop into a workable alternative. And finally, there is a model joining governmental and philanthropic/charitable support, where there is a need for ultra-low or no-cost service. This overall approach requires the right level of government providing leadership that is transparent and responsive but has the heft to be an effective facilitator or coordinator. Accountability requires an articulated goal.
[JJ Koch is a Dallas County commissioner and an attorney with expertise in the field of legal technology. Todd Furniss is CEO of gTC Group, a private equity firm based in Dallas.]
Windstream CEO Tony Thomas revealed he’s no fan of the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF) program implementation and he is among many now calling for USF reform. “It was a mess, why was it a mess?” said Thomas. “There’s lessons hear that we should learn.” Thomas says the auction didn’t properly vet bidders at the beginning of the process, as the FCC does with wireless spectrum auctions. Rather for RDOF, Thomas says all of the vetting of bidders is scheduled to take place at the end of the process, when it will be too late to do anything about unqualified bidders. Thomas says future RDOF type auctions should follow the process of spectrum auctions, where bidders are required to put a deposit down that equates to the investment they’re willing to make prior to the actual auction. Thomas is also calling for USF reform to help fix the affordability problem with broadband. He said that the FCC's Emergency Broadband Benefit Program that was created during the pandemic to help subscribers pay for internet service should be enacted permanently and maybe become a part of the USF program. In order to fund programs like that within USF, Thomas joined a growing chorus of industry insiders calling for the contribution base of USF to be expanded to edge providers like Netflix, Google, and Facebook. Thomas believes the momentum is here now for this reform, citing the recently introduced FAIR Act.
Over four million households have enrolled in the Emergency Broadband Benefit Program, the nation’s largest broadband affordability program to date. The $3.2 billion subsidy program initiated by Congress provides a temporary $50 to $75 discount on eligible households’ internet bills during the duration of the pandemic. “We’ve made terrific progress," said Acting Chairwoman Jessica Rosenworcel, "but the [Federal Communications Commission] remains committed to building on this initial momentum so we can connect as many families as possible and help those struggling to get online.” Since the program’s inception, the FCC has found creative ways to increase awareness and educate consumers, providers, advocates, and more about this program. Over 1100 broadband providers have agreed to take part in the Emergency Broadband Benefit program. The benefit is available to eligible new, prior, and existing customers of participating providers. Customers can sign up by contacting a participating provider, enroll online, or sign up via mail.
About one-fifth of paid workdays will be supplied from home in the post-pandemic economy, and more than one-fourth on an earnings-weighted basis. In view of this projection, we consider some implications of home internet access quality, exploiting data from the new Survey of Working Arrangements and Attitudes. Moving to high-quality, fully reliable home internet service for all Americans (“universal access”) would raise earnings-weighted labor productivity by an estimated 1.1 percent in the coming years. The implied output gains are $160 billion per year, or $4 trillion when capitalized at a 4 percent rate. Estimated flow output payoffs to universal access are nearly three times as large in economic disasters like the COVID-19 pandemic. Our survey data also say that subjective well-being was higher during the pandemic for people with better home internet service conditional on age, employment status, earnings, working arrangements, and other controls. In short, universal access would raise productivity, and it would promote greater economic and social resilience during future disasters that inhibit travel and in-person interactions.
The World Data Lab (WDL) has developed a global measurement framework of internet poverty to measure the number of people left behind in the internet revolution. People who can’t afford a basic package of connectivity—set at 1.5 gigabytes per month at a minimum download speed of 3 megabits per second (equivalent to 6 seconds to load a standard web page)—are internet-poor. WDL estimates that there are around 1.1 billion people living in internet poverty today. They found that almost anyone living in a rich country can afford to use the internet—even if the price might be rather high. By contrast, the price plays a crucial role in poor countries. At least in the short term, people in developing regions depend on an affordable pricing scheme for them to be able to access the internet. In particular, WDL's results show that poor countries with cheap internet (below $15 per month), are able to connect a much larger proportion of the population than poor countries with expensive internet. Only 13 percent of the population in poor countries with cheap internet live in internet poverty. Conversely, poor countries with expensive internet have 67 percent of their population in internet poverty. Of the 4 billion people who live in countries with an average per capita spending of below $11 per day, 3.4 billion have access to cheap internet by WDL's definition. Only 7.5 percent, around 588 million people, live in poor countries with expensive internet. This group of people must be the focus for eliminating internet poverty.
[Jesús Crespo Cuaresma is a Professor of Economics at Vienna University of Economics and Business. Homi Kharas is Senior Fellow of Global Economy and Development at the Center for Sustainable Development. Katharina Fenz is the Lead Data Scientist at World Data Lab, and Marco Fengler and Leo Saenger are Research Analysts at World Data Lab.]
The Jack, Joseph and Morton Mandel Supporting Foundation and David and Inez Myers Foundation are donating $20 million to DigitalC, a non-profit internet service provider (ISP) focused on bridging the digital divide in Cleveland, Ohio. The foundations feel that DigitalC provides the best avenue toward connecting Cleveland, according to Jim Kenny, spokesperson for the nonprofit ISP; DigitalC also says the foundations’ money serves as a challenge to organizations in the private sector and government to also contribute. Just under 1,100 Cleveland residents currently receive internet services from DigitalC. Cleveland has about 170,000 households, and the non-profit ISP will design their network to cover 130,000, CEO Dorothy Baunach stated. DigitalC would need $60 million to cover most of the city, along with helping people get online and adopting devices. Teaching digital literacy would also be necessary, and DigitalC is ready to help people find educational and telehealth services among others. They expect the project to ideally finish by the end of 2022.
T-Mobile is introducing a new prepaid promotion with incentives for customers on other prepaid MVNOs to switch to Metro by T-Mobile, including waiving switching fees, a discount on an unlimited plan with 5G, and a trade-in offer for a new 5G phone. In other words, it’s doing exactly what it told regulators it wouldn’t do when it acquired Sprint a year ago. It is a direct pitch to lure Boost Mobile customers to T-Mobile’s prepaid brand—the same customers it was ordered to sell to Dish with the intention of setting the company up as a fourth wireless carrier to replace Sprint. It’s also what Dish warned might be coming in a plea to the Federal Communications Commission earlier this year. The promotion appears to specifically appeal to Boost customers on Sprint’s old CDMA network — a network T-Mobile owns and operates and announced it would be shutting down on an unusually aggressive timeline. This leaves many Boost customers in need of a device upgrade by January 1st, 2022, which T-Mobile is happily offering to facilitate if they switch to Metro.
- Increasing meaningful transparency
- Enhancing oversight and accountability
- Pushing for consistency and objectivity
- Exploring competition issues so innovation is unleashed, not quashed
“Guided by our Big Tech Accountability Platform, we are releasing discussion draft bills for Big Tech to be transparent, uphold American values for free speech, and stop their abuse of power that is harming our children," stated Ranking Committee Member Cathy McMorris Rodgers (R-WA). "Our goal is for these drafts to lead to concrete legislation. Every Republican member of the Energy and Commerce Committee is leading on solutions, and I’m grateful for their hard work to drive meaningful and needed change.”
Benton (www.benton.org) provides the only free, reliable, and non-partisan daily digest that curates and distributes news related to universal broadband, while connecting communications, democracy, and public interest issues. Posted Monday through Friday, this service provides updates on important industry developments, policy issues, and other related news events. While the summaries are factually accurate, their sometimes informal tone may not always represent the tone of the original articles. Headlines are compiled by Kevin Taglang (headlines AT benton DOT org) and Robbie McBeath (rmcbeath AT benton DOT org) — we welcome your comments.
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