Bad News on the Broadband Front

Announcing a national priority and making private sector investments apparently isn’t enough to improve broadband penetration across the United States.

A fall 2009 survey by the FCC found that 65% of Americans had broadband at home. A February 2012 survey came up with an identical number. Why? According to a report from TechNet, that last third of non-adopters (older, less educated and poorer) is a difficult audience to reach. Add in the recession — 9% in the latest survey said they had to cut back or cancel Internet service due to economic troubles — and the picture begins to clear.

The10-page TechNet report is here, with some brief analysis below by the State Science & Technology Institute:

The study identifies several reasons behind the plateau and calls for better coordination among policymakers and private stakeholders to improve adoption rates. Meanwhile, some states have big plans in the works to improve their broadband networks, including governors in Hawaii and New York pushing for funding to expand Internet access to underserved areas. Ohio’s governor is taking a different approach in hopes of attracting new employers and cutting-edge researchers with a $10 million state-led initiative boasting broadband speeds that officials say would far exceed the rest of the nation.

The TechNet report finds the number of Americans with broadband at home has remained around 65 percent since 2009 when the National Broadband Plan was implemented under the American Recovery and Reinvestment Act (ARRA). At the same time, smartphone adoption and apps usage has grown significantly. However, this is not because smartphone users are swapping broadband service at home with smartphone usage; rather, connected individuals are increasing their access while others are left behind. A society more "digitally excluded," the authors contend, contributes to a smaller domestic market for tech goods and services and a less innovative economy.

Coordination and assessment is seen as key to pushing past the plateau. A clearinghouse for best practices that assembles program information would help local authorities better understand broadband opportunities and help states understand what other states are doing, the report finds.


Broadband in America: Alternatives to GONs Needed

Widespread broadband access is a noble goal. The question comes down to how expansion of current networks takes place. The Coalition for the New Economy wants to make sure such investments are both effective and efficient.

Read its latest study, released earlier this week. The group’s press release is below:

The Coalition for the New Economy today (Monday) released a study by Dr. Joseph P. Fuhr, Professor of Economics at Widener University in Chester, PA. The study outlines the complex and problematic history of government-owned broadband networks (GONs) and looks for alternatives for achieving universal broadband access.

“Policymakers around the country are hurriedly trying to find ways to extend high-speed broadband access to all Americans,” said Fuhr, “This is a noble goal, but in their haste some local lawmakers have made bad business decisions, opting to build public networks that often leave taxpayers deep in the red.”

The report cites several case studies that show GONs:

  • Do not meet their stated goal of universal service;

  • Fail financially because they lack clear, sustainable business plans, based on realistic cost-benefit analyses;

  • Are often duplicative;

  • Create an unfair playing field between the public and private sector; and

  • Are so costly they crowd out spending on other essential social services, including law enforcement, healthcare and education, as well as stifling innovation.

Fuhr says, “At a time of declining local revenues and rising budget deficits, taxpayers have the right to scrutinize how their local leaders are spending precious tax dollars. They deserve to know GONs are simply not the best, fairest or most cost-efficient way to achieve universal broadband access.”

In his study, Fuhr outlines a more effective way to extend broadband access, advising municipalities to explore public-private solutions. “For example, reducing the tax and regulatory burden on private telecommunications firms could be enough to compel these companies to invest in, and bring jobs to, underserved areas,” Fuhr says.

The Coalition for the New Economy (CNE), which commissioned Fuhr’s study, is dedicated to ensuring that all Americans have access to innovative technologies and that policies are fair, fiscally responsible and will allow for increased access and adoption.