Regulatory Reform

Market Holds Great Promise for Closing Digital Divide

For the latest issue of Heartland’s InfoTech and Telecom News, I have an op-ed that looks at the “new digital divide” or the gap between those that have broadband internet access and those who do not. While some argue that deregulation has caused the digital divide, the reality is the opposite; the market has made broadband available to wide swaths of the population and continues to yield innovation and better service for millions of consumers. As I write in the column:

“History and evidence suggest that deregulation is what has given us one of the best broadband marketplaces in the world. Thanks to deregulation in the 1990s, broadband access to the Internet is now available to 95 percent of the U.S. population with ever-faster speeds available over cable, fiber, and satellite connections. This is quite an achievement for a country of our size.

Thanks also to deregulation, we now have a growing and dynamic wireless industry that increasingly provides consumers access to broadband. The number of consumers with broadband-capable smartphones continues to grow as new phones come onto the market and providers like AT&T, Sprint, T-Mobile, and Verizon roll out new, faster technologies, such as 4G. According to the Federal Communications Commission, approximately 68 percent of the population has four or more wireless broadband providers to choose from, as reported by Broadband for America.

Competition among providers is also strong, which yields numerous benefits for consumers. Most consumers can now choose between telephone, cable, wireless, and satellite providers for broadband service. In the wireless industry alone, Ev Ehrlich, an economist who served as under secretary of Commerce for Economic Affairs in the Clinton Administration, calls competition in wireless a “cage match among signal providers, device manufacturers, and service and content providers that is going nuts, as the phone in your pocket demonstrates, not to mention the tablet in your hands.” Consumers can now choose from among several data plans and phones to suit their needs. Additionally, consumers can easily switch providers as preferences change.”

But the fact that some people are without or cannot afford broadband cannot be ignored. My op-ed recognizes this problem and highlights just some of the market-based efforts underway to address the problem, especially for low-income families.

“In 2008, 88 percent of households with annual incomes over $100,000 were connected to broadband, while only 41 percent of households with annual incomes less than $25,000 had adopted it.  However, efforts are underway to help bridge this gap. For example, a new private sector initiative called “Connect-to-Compete,” offered by cable-based internet service providers like Comcast and Time Warner Cable, will give households with at least one child enrolled in the National School Lunch Program high-speed broadband access to the Internet (including modem rental) for only $9.95 per month.

Additionally, companies and non-profit groups such as Best Buy, Microsoft, and United Way are participating by offering discounted computers, software, and training to access the Internet through these new broadband connections. By some estimates, about 5.5 million homes will be eligible for this program.”

In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and…

+ Regulatory Reform In Depth