The Cost of Not Being Connected

By Brad

At the Huffington Post, Gerry Smith examines the digital divide. The whole piece (which mentions IIA’s own analysis “10 Ways Being Online Saves You Money”) is worth a read. Here’s a taste:

[B]eing disconnected isn’t just a function of being poor. These days, it is also a reason some people stay poor. As the Internet has become an essential platform for job-hunting and furthering education, those without access are finding the basic tools for escaping poverty increasingly out of reach.

“The cost of being offline is greater now than it was 10 years ago,” said John Horrigan, vice president of policy research at TechNet, a trade association representing high-tech companies. “So many important transactions take place online. If you don’t have access to high-speed Internet, you’re missing out on a lot.”

Progress in Broadband Adoption

By Brad

At GigaOm, Om Malik highlights a new report from Akamai on the state of broadband adoption in America:

In the third quarter of 2011, global broadband adoption (2 Mbps or higher) grew 1.6 percent to reach 66 percent. The United States now has 81 percent broadband adoption, the report says.

While over 80% adoption is good, we obviously have a ways to go until we achieve the goal of 100% access and adoption. (Oddly enough, Bulgaria currently leads in adoption with 96% of the population connected.)

Reforming Lifeline, Ctd.

By Brad

Yesterday, FCC Chairman Julius Genachowski announced the Commission was looking to reform its Lifeline program to better reflect the broadband age. Today the FCC published a handy fact sheet (PDF) breaking down its proposed changes.

Building for the Future

By Brad

After watching the series of GOP debates leading up to last week’s Iowa caucuses, New York Times columnist Thomas Friedman questions the lack of talk about building out America’s digital infrastructure:

[T]he critical questions for America today have to be how we deploy more ultra-high-speed networks and applications in university towns to invent more high-value-added services and manufactured goods and how we educate more workers to do these jobs — the only way we can maintain a middle class.

I just don’t remember any candidate being asked in those really entertaining G.O.P. debates: “How do you think smart cities can become the job engines of the future, and what is your plan to ensure that America has a strategic bandwidth advantage?”

Reforming Lifeline

By Brad

Earlier today, FCC Chairman Julius Genachowski announced the commission will be reforming and streamlining its Lifeline program to help encourage more broadband adoption. From the Chairman’s speech (PDF):

Altogether, our staff estimates that the reforms proposed in this Order could save the Fund as much as $2 billion over the next few years, keeping money in the pockets of American consumers that otherwise would have been wasted on duplicative benefits, subsidies for ineligible consumers, or fraudulent misuse of Lifeline funds.

These reforms would put the program on a firm footing for the future, so it can more effectively serve low-income consumers, including helping low-income consumers afford broadband.

Here’s video of Chairman Genachowski’s speech.

IIA Members: Hispanic Leadership Fund

By IIA

The Hispanic Leadership Fund (HLF), the newest member of the Internet Innovation Alliance (IIA), is a non-partisan advocacy organization dedicated to strengthening working families by promoting common-sense public policy solutions rooted in free enterprise, limited government, and individual freedom.

One such public policy solution is expanding access to affordable, reliable broadband Internet and bringing its unparalleled benefits to Hispanic communities across the United States. 

HLF realizes that expanding high-speed Internet in rural and urban communities is critical for the success of the next generation of Americans. From educational opportunities through distance learning, to improved health care options using telemedicine technology and much more, broadband access can revolutionize the way businesses and individuals fulfill their everyday needs.  Broadband has the potential to have widespread impact on nearly every consumer in America, and needs to the support of both public and private sectors policies that promote innovation and the expansion of this critical resource.

For small business growth in particular, HLF believes that access to broadband Internet is extremely important. According to the U.S. Census Bureau, Latino entrepreneurs were opening small businesses at a rate three times as fast as local businesses overall. A key component of entrepreneurship in today’s economy is using online tools to reduce startup costs and build, grow and maintain a successful business.

The IIA is proud to name the HLF as the Featured Member of the Week, and looks forward to working with them to achieve universal broadband to spur economic growth, increase opportunities for small businesses, improve education at all levels, and much more.

Reactions to the FCC

By Brad

In the wake of the FCC releasing its un-finalized Staff Report on the AT&T and T-Mobile merger, Geoffrey Manne of Forbes writes:

As everyone knows by now, AT&T’s proposed merger with T-Mobile has hit a bureaucratic snag at the FCC. The remarkable decision to refer the merger to the Commission’s Administrative Law Judge (in an effort to derail the deal) and the public release of the FCC staff’s internal, draft report are problematic and poorly considered. But far worse is the content of the report on which the decision to attempt to kill the deal was based.

Over at the Wall Street Journal, columnist L. Gordon Crovitz calls the proposed deal between the two telecom companies a “private-sector solution to a government-created problem” — specifically, a lack of spectrum for wireless:

We live in an era when innovation in technology requires more regulatory humility. If a company wants to serve consumers better by risking its capital to buy spectrum through an acquisition, it should be allowed to proceed. Company executives can then be blamed if they either underinvest or overinvest in spectrum. FCC lawyers should stick to writing briefs.

So long as regulators apply rules for mature industries to new technologies, we will have problems such as spectrum scarcity and industries kept artificially inefficient. Until regulators change their ways, blame a meddling FCC when calls get dropped on your mobile phone.

Meanwhile, on their blog, the the Small Business and Entrepreneurship Council (who are also IIA members) are disappointed in the White House:

The President and the FCC say they want to see mobile broadband deployed throughout the nation. Mr. Obama certainly needs the jobs that come with broadband investment for his re-election effort. Yet, the administration works to stop a merger that would help to achieve these goals.

And Nicole Palya Wood, Legislative Director of fellow IIA Member the National Grange is confused by the FCC’s stance that investment in expanding broadband won’t create jobs:

Two weeks ago, the FCC created a new $4.5 billion broadband fund and the National Grange celebrated this reform of the Universal Service Fund for dedicated broadband. What I find confusing is that the FCC claimed this investment in wireline broadband to 7 million new potential customers, would create “approximately 500,000 jobs and $50 billion in economic growth.” However, their staff report on the merger rejects the argument by AT&T that an investment of billions to deploy 4G mobile broadband service to 55 million more Americans over the next 6 years would help to create jobs. Does that mean that once again, it is okay for big government (armed with my tax dollars) to come in riding on the white horse of job creation, but when big business tries to do it somehow the increased commerce they create disappears?

An Uptick in Broadband Adoption

By Brad

Via Om Malik of GigaOm, some good news on the broadband adoption front. According to new numbers from the Leichtman Research Group, Internet providers — with cable companies leading the charge — added over 600,000 new broadband subscribers during the third quarter.

Disappointing Actions From the FCC

By Bruce Mehlman & Jamal Simmons

The Internet Innovation Alliance has publicly supported the proposed merger of AT&T (one of our members) and T-Mobile due to the real potential the merger will have for accelerated deployment of broadband services and delivery of high-speed connectivity to parts of our country that are currently underserved or have no broadband service whatsoever.

We believe the wider delivery of 4G LTE AT&T projects will be enabled by the merger will generate billions in new private investment and created tens of thousands of jobs when America needs them the most, along with a range of new opportunities in rural communities and enhanced education, health care and small business.

Thus we are disappointed by the reported opposition of FCC Chairman Julius Genachowski and the Commission staff to the proposed transaction. Moreover, we were surprised and disappointed by the agency’s decision to release publicly documents and the Staff Report on the application after AT&T has withdrawn the transaction from the FCC, an action described today as “unprecedented” by nominee Jessica Rosenworsal.

It was reported the Staff Report was released without even providing an opportunity for the parties the basic opportunity to see or address it first. It is extremely troubling that such procedural short cuts and attendant media attention may prejudice their efforts to reach an accommodation regarding the transaction with the Justice Department.

The FCC will clearly need to address any transactions proposed in the future, on their own merits, irrespective of the Staff Report about the withdrawn transaction. So we fail to see how the FCC’s public release of the Staff Report serves any constructuve purpose or enhances public confidence in the Commission’s future considerations.

The FCC plays an essential role in advancing the goals of the National Broadband Plan, which it adopted and which is supported by the Administration, many in Congress, and the IIA. That role requires identification and advancement of critical policies, such as USF and spectrum reforms. It also requires the integrity of the FCC’s process to ensure all supplicants, large and small, receive a fair and even opportunity to make their case and to amend their petitions, unprejudiced by leaks to the media or prior analyses which may bias the consideration of prior or future applications.

Expanding Broadband, Creating Jobs

By Brad

On October 6, the FCC unveiled its Connect America Fund, an overhaul of the Universal Service Fund aimed at expanding broadband access. Last Friday, the commission released its rules on the program, and as Sara Jerome of the National Journal reports, the focus of the release was heavy on jobs messaging:

The Federal Communications Commission says that its plan to bring broadband Internet to the countryside will produce 500,000 jobs over the next six years.

The FCC voted last month to spend billions to subsidize broadband businesses in the countryside. The money is not a new outlay—it previously went to the landline operations at rural phone companies.

The agency released the rules for redirecting the spending to broadband on Friday. The effort will overhaul the so-called “high-cost fund,” which is about $4.5 billion, so that it goes toward broadband instead of telephone. This fund is part the agency’s larger, $8 billion universal service system that also includes communications subsidies to get technology in schools and to provide service for low-income people in cities.

More info on the FCC’s broadband expansion effort is available on their website.

IIA Members: Japanese American Citizens League

By IIA

Founded in 1929, the Japanese American Citizens League (JACL) is the oldest and largest Asian American civil rights organization in the United States. The JACL monitors and responds to issues that enhance or threaten the civil and human rights of all Americans and implements strategies to affect positive social change, particularly to the Asian Pacific American community. Today, one of those issues is access to high-speed broadband Internet.

A 2011 Pew Internet study found that 87% of English-speaking Asian Americans use the Internet, and 80% use broadband Internet at home — the highest usage rates of any minority group. Asian Americans also rank higher than any other racial group in their usage of mobile Internet. Looking to our future, JACL believes a continued commitment to the adoption and expansion of access to this critical tool is essential to continue to propel Asian Americans — and all Americans — towards prosperity.

As members of the Internet Innovation Alliance, JACL supports IIA’s mission of achieving universal broadband access not only to Asian Americans, but to all Americans. As our society becomes increasingly more dependent on high-speed Internet, prosperity and equality in our nation depends on access to broadband Internet. 

The Japanese American Citizens League is a national organization whose ongoing mission is to secure and maintain the civil rights of Japanese Americans and all others who are victimized by injustice and bigotry. The leaders and members of the JACL also work to promote cultural, educational and social values and preserve the heritage and legacy of the Japanese American community.

Good Read of the Day

By Brad

In a nice op-ed for the Penn Patriot Blog, Marian Barnett, an education advocate and a mother of four, shines a personal light on the benefits of broadband access in education

As a homeschooling mom, I think that one of the most exciting educational applications of wireless broadband is that it can easily transform any setting into a classroom and any occurrence into a learning experience. The technology makes it possible to access more information about a museum exhibit, a zoo animal, a menu item, an overheard foreign language, or a bug in the backyard—and because it’s wireless, kids don’t have to go inside and sit at a desk in order to gain that knowledge.

Barnett’s full op-ed is worth checking out.

The Online Education Gap

By Broderick Johnson

In 2009, 64% of American households had a broadband connection. In 2010, that number bumped up to 68%.

I’m not pulling these numbers out of a hat. They’re courtesy of a new report from the Department of Commerce’s Economics and Statistics Administration (ESA) and the National Telecommunications and Information Administration (NTIA). Entitled “Exploring the Digital Nation: Computer and Internet Use at Home,” the report looks at not just percentages of households connected, but more importantly, reasons why households may not be online.

On the percentage front: Given the economic and social benefits of having a connection to the Internet, both the 2009 and 2010 numbers are still far too low. Still, a % bump is a % bump, and the trend line is certainly encouraging; as the report highlights, just three years ago the number of households with a connection was a paltry 51%.

But while tracking the increase in household adoption is certainly valuable, ESA and NTIA’s report packs its real punch in the examination of why. From the report:

Here is what we know: Households that do not subscribe to any Internet service — dial-up or broadband — cited as the main reasons a lack of need or interest (47%); lack of affordability (24%); and an inadequate computer (15%).

That first number should jump out at you (and not just because I bolded it). In this day and age, 47% —nearly half — of those who are not connected feel they don’t need or just plain aren’t interested in being online at home. While many of them truly have no interest in a home connection (perhaps they only want to be on a computer at work), such a high percentage suggests that one hurdle to closing the digital divide is education.

Obviously we can’t — and shouldn’t — try to force people who are genuinely uninterested in being connected to embrace the Internet. And certainly, mobile broadband can replace the need for a home broadband connection for many, as adoption rates in the African American and Hispanic communities have shown.

But if a lack of technological savvy is keeping people from joining the digital age, that is something America should be correcting, by public or private means. Why? Well, ESA and NTIA’s report words it perfectly:

A digitally connected population, which helps foster innovation, economic growth and social communication, is critical for U.S. competitiveness in a global economy.

It’s hard to argue with that.

Boomer Adoption

By Brad

According to new numbers from Nielsen, 62% of mobile users age 25-34 now own a smartphone. Given the popularity of Apple’s iPhone and the Android operating system, that number isn’t too surprising. More surprising, however, is the demographic in second place when it comes to smartphone adoption. From Nielsen:

After younger adults, the segment with the second fastest-growing smartphone penetration rate is those aged 55-64. Smartphone penetration among this older group is only 30 percent, but it jumped 5 percent this quarter.

The full report is available at Nielsen’s website.

Bad News of the Day

By Brad

Like a number of states, Louisiana received a stimulus grant to build out broadband access. Unfortunately, the state will now be returning the $80 million it received. As The Washington Post’s Cecilia Kang reports:

The NTIA’s grant to Louisiana Broadband Alliance was intended to create a fiber optic network stretching 900 miles to the most economically distressed areas of the state. Six state agencies said they would coordinate on the project, which was to provide access to schools, libraries and health care facilities.

But the project didn’t meet the NTIA’s deadlines, and the state changed plans and didn’t give enough technical and financial details to ensure the project would be completed.

“We have worked closely with the state throughout the last several months to rescue this project but have now concluded that we have to move on,” said Assistant Secretary of Commerce Lawrence Strickling, who heads the NTIA.

Highlights From the FCC

By Brad

Last week, the Federal Communications Commission revealed the Connect America Fund, a major effort to bring the Universal Service Fund into the digital age. You can read our statement on the commission’s actions here, and below are some of what the FCC’s members had to say.

Chairman Genachowski:

“Over the next year, the Connect America Fund will bring broadband to more than 600,000 Americans who wouldn’t have it otherwise. Over the following five years, millions more rural families will be connected. And today’s Order puts us on the path to get broadband to every American by the end of the decade — to close the broadband deployment gap which now stands at close to twenty million Americans.”

Commissioner Copps:

“What we are doing today is repairing two broken systems and putting in place a more credible and efficient framework that will benefit consumers, carriers and the country. We are approving a framework for allocating limited resources to mitigate serious communications shortfalls.”

Commissioner McDowell:

“In trying to encapsulate what the FCC is accomplishing today, I’ve turned to one of North America’s best telecommunications policy minds, none other than the Great One, Wayne Gretzky. Without any of us realizing it, by implication he predicted what we would do today when he said, ‘A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.’ Today, the FCC is repurposing the high cost program to support unserved consumers’ use of communications technologies from where they are to where they going to be — in both a technological and geographical sense.”

Commissioner Clyburn:

“An underlying theme of today’s reforms is shared sacrifice for the common good. After all, we are talking about the people’s money. We are accountable to them, and I am confident that the adjustments being made to the legacy USF support, and the funding mechanisms being adopted for the new Connect America Fund, are sensible. These reforms will put both the USF and ICC regimes on a sounder footing, so we may better accomplish our goal and Congress’ mandate to serve more Americans with advanced communications networks — no matter where they live, work, or travel in this great nation.”

Jamal Simmons From Nashville

By Brad

Our Co-Chair Jamal Simmons recently appeared on WKRN-TV’s “This Week with Bob Mueller” to talk about IIA and the goal of bringing broadband access to everyone. Check it out.

Boucher on Fox News

By Brad

Our Honorary Chairman Rick Boucher recently appeared on Fox News to talk about how broadband is today’s light bulb, and how it’s in America’s best interests to ensure everyone has access to the digital economy. Here’s video of the appearance:

Connecting All of America

By Brad

With the FCC currently working to overhaul the Universal Service Fund to reflect the digital age, a new paper from Georgetown University’s McDonough School of Business examines the effect increased broadband access would have on rural communities. Authored by Jeffrey Macher and John Mayo, “Achieving Rural Universal Service in a Broadband Era: Emergent Evidence from the Evolution of Telephone Demand” finds that increasing the availability of broadband is “not only a tremendous equalizer to rural areas, but also especially beneficial to rural areas by ameliorating or eliminating the economic challenges of geographic isolation and economic specialization.”

To connect rural areas, Macher and Mayo focus on wireless broadband, which when it comes to buildout is relatively cheaper for rural areas than wired connections. But the authors also caution that unless policies are enacted that ensure wireless broadband is continued to grow — specifically, the allocation of much-needed spectrum resources — the buildout to every corner of America will be drastically slowed, if not outright impeded. As they write:

[E]ven with the relative advantages of wireless broadband in rural areas, spectrum constraints have slowed the private sector’s ability to deploy wireless broadband in sparsely populated areas. This lag is especially lamentable in light of the high demand for mobility by rural consumers.

Macher and Mayor state they are encouraged by the recent focus on spectrum by policymakers. They also encourage the approval of the merger of AT&T and T-Mobile, writing:

[T]he accelerated deployment of broadband promised by the merger may not only facilitate the ability of the mobile telephone industry to better satisfy demand in rural areas, but also serve as an important platform and lubricant for future economic growth in these areas.

The full paper is available on the McDonough School of Business website. You can also download a copy of our rural broadband infographic, “10 Ways Broadband Helps Rural Communities.”

IIA Members: Labor Council for Latin American Advancement

By IIA

As Hispanic Heritage Month draws to a close, the Internet Innovation Alliance’s featured member of the week is the Labor Council for Latin American Advancement (LCLAA), who has been an advocate for expanded broadband access and the benefits it would provide for the Latino community.

LCLAA was founded in 1972 to promote the participation of Hispanic trade unionists in a more responsive labor movement. The LCLAA seeks to provide a voice for Latino working families nationally by working with a coalition of leading Hispanic organizations to maximize support for economic and social policies that are essential to advancing the interests of Hispanics.

Research by the Pew Hispanic Center shows that although Latinos and African Americans lag behind in technology use and Internet access, they are more likely to utilize their cell phone to access the Internet. According to LCLAA, in order “to overcome the digital divide in our nation, promoting the expansion of high speed broadband is critical for Latino and low-income communities who increasingly rely on mobile technologies to access the Internet.”

LCLAA also included a panel “Expanding Internet Access: Broadband’s Role in Creating Jobs and Closing the Digital Divide” at their recent “We Are One/Somos Uno” Educational Conference in San Juan, Puerto Rico from August 4-6, 2011. The panel featured Norelie Garcia, associate vice president of federal public affairs for AT&T and Debbie Goldman, policy director and research economist for the Communications Workers of America. http://www.lclaa.org/index.php/newsletter_august_11/lclaas-monthly-newsletter-august” title=“Norelie and Debbie discussed”>Norelie and Debbie discussed how expanding Internet access is a critical element to create jobs, promote economic growth, and improve education, health care, and public safety.

The IIA is proud to count LCLAA as a member and thanks them for all their work tirelessly advocating for universal broadband access.