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More Wireless Broadband Is What Consumers Want, U.S. Needs to Close the Digital Divide

For the United States to be competitive with other nations, and to end the digital divide, the Treasury should invest what's necessary to build out and sustain fast national wireline and wireless services.
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Susan Crawford is a heroine of mine. Not only is she a distinguished telecom policy scholar, she's one of the very few who has focused on the digital divide.

Her recent New York Times commentary "The New Digital Divide" accurately points out that the nation is at risk if we don't close the disparate access to broadband along the lines of race and class. The Minority Media and Telecommunications Council (MMTC) has declared that broadband access, adoption, and informed use is the #1 civil rights issue in the digital age, and that without broadband a person living in the digital age is doomed to second class citizenship.

MMTC is not alone. Last month, the United Nations declared that access to broadband is a basic human right, analogous to access to food, clothing, and shelter.

History teaches us that the remedies for structural disparities in society must be crafted with the interests of the beneficiaries foremost in mind, and with accurate, verifiable factual assumptions. In the 1960s, every socially conscious person understood that second class education, health care, and housing were both immoral and economically unsustainable.

But what should be the remedies? How does a community implement school integration without bus rides that deprive children of sufficient sleep? Can healthcare be equalized without training physicians to be aware of their unconscious prejudices that translate into racially disparate treatment patterns? Can housing be desegregated without also planning for desegregation of the nearby schools and workplaces?

Equalizing access to broadband is a civil rights matter of the greatest importance. And, with the greatest respect, Professor Crawford takes us part of the way toward the answer - but not all the way there. Her analysis, while substantially correct, contains two errors.

First, she mistakenly identifies wireless as a big part of the problem of the digital divide when, actually, it's much more a part of the solution.

And second, while she correctly recognizes that shared networks lead to lower prices and hence more affordability and higher rates of adoption, her argument comes several years too late. The networks are already being built out, so requiring a network owner to let competitors get onto its network would amount to confiscation of an investment after it has been made, without advance notice. That's hardly the way a nation should manage an incentive-building industrial policy.

First, wireless.

Professor Crawford's thesis is that there are "two separate access marketplaces: high-speed wired and second-class wireless. High-speed access is a superhighway for those who can afford it, while racial minorities and poorer and rural Americans must make do with a bike path." Noting that cable broadband is faster than wireless or DSL, Professor Crawford concludes that those who "can afford only connections over their phone lines or via wireless smartphones" can "expect even lower-quality health services, career opportunities, education and entertainment options than they already receive."

Certainly it's true that minorities, low income families - and young people - have disproportionately cut the cord or adopted wireless rather than having a cord in the first place. The statistics are well known and have been covered quite extensively. The Pew Internet and American Life Project reported that in 2010, minorities, especially African Americans and Hispanics, are not only connected through mobile access, but they are the most active users. African Americans and Hispanics are also the most likely to take full advantage of the functions of their mobile devices.

Further, the same Pew Internet study found that our nation's youth have also capitalized on the utility of mobile Web, as 18- to 29-year-olds are the leading users of mobile data applications. They did that because wireless offered something wireline didn't - mobility - and because wireless, although slower than cable wireline, is usually less expensive and is recognized as a cost effective method of connection, according to this And certainly a smartphone is less expensive than a desktop computer.

But it doesn't follow that because wireless is slower, or the wireless device's screen is smaller, that a wireless user is automatically a digital second class citizen. For example, Professor Crawford asserts that "few people would start a business using only a wireless connection," but the fact is that thousands of business owners do just that - and are able to stay in business because wireless service costs don't drain their bottom lines. According to another article, wireless Internet will continue to play a significant role in business in the future.

The reality is that wireless is strategically important as a means of connecting to the digital age. Yes, it is true that everyone would like to see faster speeds. However, DSL service, or a wireless connection on a laptop, offers virtually everything cable broadband offers except the speed required to download huge video files very rapidly. No child is going to fail to turn in her homework because she has a 1GB connection and not a 4GB connection.

And while it's correct that a child can't do homework on a smartphone and an adult can't write a resume on one, there are wireless devices like tablet computers that do have the ability to support these functions through apps and programs. A laptop with WiFi or a wireless card certainly can provide functionality virtually comparable to that of a home desktop computer. And while 3G wireless isn't fast enough to support fat video files, 4G is, and wireless carriers are rapidly transitioning their 3G customers onto 4G.

To be sure, it would be highly desirable for the nation to gravitate to very high connection speeds. Industry needs that - as the National Broadband Plan recognized in advocating for very high speeds in high tech urban areas and reasonably high speeds elsewhere.

But it doesn't follow that high priced very fast speed is the best marker of digital access and opportunity - any more than ownership of a Corvette is necessary to provide first-class access to transportation. A Malibu will do just fine and, for many, fast and safe public transportation is even better. Past a certain point, speed is a luxury, not a necessity. That point is reached at the speed that enables virtually all of the public services broadband provides - job searches and applications, health care advice with video support, online education, online journalism, and civic engagement. The National Broadband Plan put that speed at around 100 megabits per second, and that seems reasonable.

To be sure, society could choose to subsidize very high speed services, and if that can be done for the same (or lower) cost than subsidizing lower speed services, that's wonderful.

But there's only so much money available to subsidize anything these days. The Universal Service Fund (USF) also needs to subsidize rural buildout, broadband connections to schools and libraries, and Lifeline service for the poor.

As this summer's Pew Social and Demographic Trends study recently found, African Americans face a 20:1 wealth gap, and Hispanics face an 18:1 wealth gap. And therein lies the real core of the digital divide: a computer usually must be purchased out of wealth, not income, and about half of African American and Hispanic families have no positive net wealth or savings - they are living month to month, scraping by. Thus, how to break the digital divide is really an issue of how to break the cycle of poverty itself.

One way to do that is to support technologies, like wireless, that offer all or nearly all of the benefits of fast home broadband service but at a far lower price point - thus enabling adoption and generating economic value that, over time, translates into savings. A family with a mobile device not only saves the difference in the cost of wireless versus wireline service - it also saves, every day, on transportation costs, on entertainment costs, and on telephone bills. The entire savings, in a year, can easily support the price of a laptop - thereby curing the very problem Professor Crawford identified in her commentary.

Finally, let's turn to Professor Crawford's contention that the solution to high prices lies in confiscating assets instead of subsidizing buildout.

Pointing to the United States' low rate of wired Internet access among developed countries, Professor Crawford suggests that "the answer to this puzzle is regulatory policy" and, specifically, requiring fiber optic network owners "to sell access to parts of their networks to competitors and regulated rates, so that competition can lower prices."

Her economic analysis is spot-on accurate. As the long distance and local telephone markets have proven over the past generation, competitive access sure does lower prices to consumers.

But for broadband, the nation may be too late for this remedy. The carriers have already invested billions in building out their networks on the reasonable assumption that when they're built out, they will own them and will be competing only against one another, rather than having to share them with competitors. Companies considering the risks and costs of building out any network would hardly be likely to do so if they see the government requiring similarly situated companies to allow their investments to be confiscated after the fact, and without advance notice.

Other nations didn't get high broadband penetration, access, speed, low prices and high adoption rates by building out multiple fiber networks to the same dwellings, or by requiring network owners to share facilities with competitors. Instead, they did what the United States should have been doing and still should be doing - investing in the buildout of truly world-class broadband service. In 2008, when the broadband stimulus was under consideration in Congress, civil rights and public interest organizations like MMTC and Free Press fought for a subsidy in the $50B range. Unfortunately, Congress appropriated only $7B for buildout and adoption combined - a fraction of the need. And here we are three years later, still faced with the same digital divide. The solution is the same as it was in 2008: subsidize what the market is unable to pay for on its own.

Fast, affordable nationwide broadband service is a public good of the highest priority. For the United States to be competitive with other nations, and to end the digital divide, the Treasury should invest what's necessary to build out and sustain fast national wireline and wireless services.

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