The results of the 2021 American Community Survey (ACS) were recently released, providing important information about the causes of the digital divide and how to fix it. The ACS asks a variety of internet-related questions `including whether the household subscribes to fixed broadband such as fiber, cable, or DSL. According to the ACS, 75% of households, and 82% of individuals have fixed broadband subscriptions. To put it another way, 25% of households and 18% of individuals do not have access to the internet through fixed broadband. This is an unacceptably high number.
On the other hand, the FCC’s broadband deployment data shows that as of June 2021, fixed wired broadband of at least 25/3 (25 Mbps download and 3 Mbps upload) is available to 94.3% of the American population. Or to put it the other way, only 5.7% of the American population does not have fixed wired internet of at least 25/3 bandwidth available. If we add in fixed wireless, the “unavailability” percentage goes down to 2.4%. (We are using ‘access’ to mean actually signed up for broadband services, and ‘available’ to mean that fixed broadband subscriptions are locally available for purchase).
This difference—between 25% of households and 18% of individuals without fixed wired internet access, and the 5.7% of the population without fixed wired internet availability—can be called the adoption gap. ‘Adoption’ refers to the willingness, or lack of willingness, of households and individuals to sign up for broadband when it is available.
It used to be more appropriate to call it the affordability/adoption gap, but for several reasons price has become a much less important issue. For one the Affordable Connectivity Program (ACP)—a permanent program that replaces the temporary Emergency Broadband Benefit program–provides a $30/month subsidy for eligible low-income families and individuals, which includes anyone who in a household earning less than 200% of the federal poverty guidelines, or participating in any of a number of assistance programs such as SNAP or Medicaid. And since many providers now offer $30/month basic internet plans, the cost of getting online has effectively fallen to zero for many low-income households as long as the ACP funding holds out.
In addition, government data shows a substantial decline in the price of internet access in recent years, even without subsidies. For example, the BLS reports that the producer price of residential internet access has fallen by almost 10% over the past five years. This decline in broadband prices has continued even through the inflationary surge of the past year. As the result of all of these factors, the latest NTIA Internet Use Survey (collected November 2021, before the ACP became active) showed that only 18% of households without internet access at home cited cost as a reason for being offline. Indeed, in the NTIA survey, 58% of the offline households “express no interest or need to be online.”
The exact size of the adoption gap is subject to dispute, as in most things telecom. But it’s clear that most states have a substantial number of people who have the opportunity and means to subscribe to fixed broadband, and choose not to. Some of them may be quite happy using their smart phone and a cellular data plan as their main access route. But for many other people, lack of digital literacy or a lack of credit cards or bank accounts may be important issues keeping them from making use of online government services or private sector transportation, shopping, entertainment, work or education opportunities.
How can the adoption gap be closed? First, we know what won’t work: Building expensive new networks in areas that already have high-speed broadband. If low-income households already can get “zero-cost” high-speed internet if they want, but choose not to, then laying costly fiber in their neighborhood won’t make a difference to their adoption.
Instead, that money should be funneled into programs to improve digital literacy and show, step-by-step, how to get online and utilize government and private resources. But by themselves, such programs are not enough, since adoption is driven by financial inclusion as well. In a data-driven economy, access to the internet becomes less valuable to someone without a credit card or a bank account, since it’s much harder to use online services such as ecommerce and ride-sharing. Indeed, it’s possible that the people who express no interest in being online are actually responding to these other obstacles.
In many ways, we’ve done the straightforward part of closing the digital divide: A massive investment in physical capital, funded mainly by the private sector, combined with the latest healthy dollop of public money to fill the gaps. Now it’s time to focus on building out the rest of the social and financial online infrastructure, to include everyone. Investment in human and social capital is as important as investment in physical capital.