Central Planning Won’t Close the “New Digital Divide”
Recently, there has been much bandwidth consumed discussing the “New Digital Divide” and what to do about it.
Law professor Susan Crawford wrote an essay for the New York Times entitled “The New Digital Divide,” which calls attention to what she sees as a gap between those with high-speed Internet and those without it. “Increasingly,” she wrote, “we are a country in which only the urban and suburban well-off have truly high-speed Internet access, while the rest – the poor and the working class – either cannot afford access or use restricted wireless access as their only connection to the Internet.”
Crawford’s solution to the new digital divide is simple: more regulation. According to Crawford, “Over the last 10 years, we have deregulated high-speed Internet access in the hope that competition among providers would protect consumers. The result? We now have neither a functioning competitive market for high-speed wired Internet access nor government oversight.”
Competition Is Strong
There is no question that broadband is important to personal success and economic sustainability in the 21st Century. However, central planning, as Crawford suggests, would not improve broadband deployment or adoption.
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.
‘Best Left to the Market’
Given the competition that exists among broadband providers today, one can confidently assume that we will see more choices and services for broadband in the future. It’s surprising that Crawford actually suggests more centrally planned regulation as the answer given that it has eliminated competition, redirected investment, and stifled innovation in the past. Deregulation has resulted in a host of new services, better products, and lower prices for consumers. Clearly, if the goal is to continue to promote broadband, the best course of action for government at all levels is to stay out of the way of the marketplace.
Of course, broadband adoption remains a legitimate policy concern. 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.
There is no denying that broadband is important to the future success of this country. However, it’s market competition and technology that have made broadband so dynamic and important. We cannot say with any certainty how we will connect to or use the Internet in the future. But deciding what happens is best left to the market, not more central planning and regulation as Crawford suggests.
“The New Digital Divide,” Susan Crawford, The New York Times, December 4, 2011: http://www.nytimes.com/2011/12/04/opinion/sunday/internet-access-and-the-new-divide.html
“Broadband for America: Issues,” Broadband for America: http://www.broadbandforamerica.com/issues
“Susan Crawford on the Digital Divide,” Ev Everlich, Ev Everlich’s Everday Economics, December 5, 2011: http://www.evehrlich.net/2011/12/susan-crawford-on-the-digital-divide/