Jun 10, 2021 9:00 AM

Political Bickering Prolongs the Digital Divide

Democrats and Republicans alike need to be honest about how much broadband for all will cost. They can make Big Tech help pay for it.

Vice President Harris Holds Meeting On High Speed Internet

The digital divide unites strange bedfellows. Satya Nadella frets about it; his company, Microsoft, finds that half the country isn’t using the internet at speeds capable of maintaining a half-decent Zoom call. In Nadella’s home state of Washington, Republican congressperson Cathy McMorris Rodgers shares his concern, even though she’s introduced legislation prohibiting municipalities from building their own networks to help bridge the divide. She is no fan of President Joe Biden and Joe Biden is no fan of the divide either. Joe Biden is, however, a fan of municipal networks.

Among Democrat and Republican proposals alike, a nice round number continually pops up on what it should cost to give all Americans access to, and full use of, digital technologies: $100 billion. Spectacular as this sum is, it is also spectacularly off the mark and a mirage.

But if we’re honest about how wide the digital divide really is, we can begin the creative engineering needed to bridge it.

A $100 billion budget over eight years to close the digital divide—echoing a $94 billion proposal from Democrats in Congress—was one of the key pillars of President Biden’s original American Jobs Plan. Since negotiating with Republicans, the Biden team has backed down to a more modest $65 billion. The problem is, $100 billion was already inadequate. This figure is drawn from a 2017 FCC estimate of what it takes to give broadband access to every American. But the FCC grossly undercounts those without broadband internet, incorrectly mapping out fewer than 14.5 million disconnected people. The more reliable “manual” check by the research firm BroadbandNow puts the number at 42 million. And, of course, according to Microsoft, the number of people not using broadband—either because of inadequate access or equipment, or because it is too expensive—is much higher. Even acting FCC chair Jessica Rosenworcel acknowledges the undercount and has commissioned a proper mapping of broadband nationwide.

Let’s take that 42 million count alone. Applying the FCC’s cost structures, my Imagining a Digital Economy for All (IDEA) 2030 research team analyses that the government needs to spend at least $240 billion. Far from shrinking the budget, the Biden team must raise it even more.

One complication is the rural-urban divide within the digital divide. Both Democrat and Republican proposals emphasize lack of internet access in rural areas, where they’re keen to pick up voters. However, three times as many urban households as rural households lack broadband subscriptions. While the rural gap is because of the high costs and low revenue potential of building infrastructure in sparsely populated, spread-out areas, urban households generally lack broadband because it’s unaffordable. This means we need to not just build out infrastructure but also lower the price of broadband access.

The renewed attention on racial justice might offer a way to direct more resources to the urban divide. The harsh reality is that the digital divide mirrors a racial divide, with cities such as Detroit, Philadelphia, and Cleveland as prime case studies. Nationwide, there's a 14 point gap in broadband access between white and Black households with school-going children. Black households have lower access to higher-pay, technology-enabled occupations; no wonder Black communities were disproportionately affected by the pandemic and the economic downturn. If these conditions persist, with increasing automation and remote work, the majority of Blacks and Hispanics could be locked out of 86 percent of jobs by 2045. The digital divide sits at the center of numerous pressing racial inequities in health care, education, job security, and well-being.

Though Biden has prioritized racial justice, can he expect some support from Republicans to ease the way? On the surface, it would appear that bridging the digital divide is a bipartisan priority, again partly due to a shared incentive to win over rural voters. Some Republicans even argue that the current compromise budget of $65 billion on the Biden plan essentially adds up to $100 billion when you include what’s already “in the pipeline” and passed by Congress. Regardless of whether this is funny math, it seems remarkable to find this much harmony in Washington, DC, in 2021, on both the problem and the money for a solution.

High hopes need to be kept in check. With negotiations over the overall Biden infrastructure proposal unfolding, House Republicans have put forward a far more threadbare counterproposal of under $25 billion, replete with cherrypicked quotes from “experts” trashing the original Biden plan. And of course negotiations over the entire infrastructure plan were called off this week when it was clear that the Republicans were not willing to budge. Besides the fights over “how much,” more disagreements lurk over the “how.” The Biden plan envisions internet access as a utility with municipal and other public solutions. This may not be practical, as it would require overturning Republican-supported bans on municipal networks in 18 states. And local governments have other priorities. Some experts, such as former FCC commissioner Blair Levin, also suggest that the economics don’t support the idea that such networks can offer meaningful competition and drive prices down. Meanwhile the incumbent internet access providers, the cable and telecom industry—with support from Republicans—oppose public solutions.

Bridging this even deeper divide will require creative ways to enhance three key ingredients: money, access infrastructure, and execution.

Use a “Romer” Tax to Find More Money: The gap between the current compromise of $65 billion and the “true” need of $240 billion leaves a $175 billion shortfall. Why not turn to the industry that stands to benefit the most from connectivity, Big Tech? The Nobel laureate economist Paul Romer has recently suggested taxing the some $120 billion in revenues that the industry earns from targeted digital ads every year. Maryland has already adopted the idea and other states are considering it. A tax rate of, say, 19 percent could help close the $175 billion budget gap over eight years.
Leverage Big Tech’s Access Infrastructure: Why not encourage the tech giants within regulatory crosshairs—Facebook, Alphabet, Amazon, and Apple—to offer favorable deals on their own internet access infrastructure? Facebook Connectivity offers low-cost wireless connections in dense urban areas and high-altitude platforms for connecting remote areas. Alphabet has a project for fiber deployment. Amazon plans to deploy over 3,000 low-earth orbit satellites, to offer broadband, as does Apple. These companies would have an interest in cooperating if there is an expectation that it might help reach a favorable settlement with lawmakers and regulators on the numerous antitrust and other issues on the table.
Orchestrate Public-Private Partnerships: Given the impasse between Democrats who believe in internet access as a public utility and Republicans backing a private solution, a more pragmatic approach would be for the federal government to organize bids to solicit the best public-private partnership solution for each gap area. It can set state targets and tie subsidies, grants and additional incentives for state and local governments to hit them. Many examples show the way: a coalition including DTE Energy Company, the Skillman Foundation, and the Detroit school district; Google partnering with the state of California to connect 100,000 rural households; Microsoft, among others, including NGOs, in East Cleveland.

The digital divide has sliced through national politics since President Bill Clinton’s 1999 State of the Union address. “We have got to do this, and do it quickly,” he said. Two decades on, the divide stubbornly persists and its impact is profound. Seventy percent of children in the Kansas City school district lacked internet access at home. Sixty percent of West Virginia’s urban residents do not use broadband internet. Residents of the poorest zip code in Shelby County, Tennessee, could not sign up for vaccines because 70 percent of them lack internet access. (Ninety-six percent of them are Black.) The digital divide has gained fresh PR post-pandemic. It is time we use this opportunity to finally acknowledge its depth and complexities, and took action to bridge it once and for all. And that calls for much more than the spectacularly large but mere sum of $100 billion.

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