Social distancing, work from home, shelter in place—these are all strategies employed in response to the COVID-19 epidemic. Americans who have jobs allowing them to engage in social distancing are very dependent on their Internet connection. That dependence is only going to grow as time goes on. As parents depend on the Internet for homeschooling, as businesses depend on employees being able to work from home, and as everyone depends on the Internet for public safety information, we need to recognize that our current Internet ecosystem is failing many Americans. And any infrastructure recovery effort that comes out of this situation should address the digital divide at its source: policy decisions that have left us at the mercy of a few, giant companies whose business concerns don’t include all Americans.
For however long this emergency lasts, an untold number of us will be forced to deal with the failure of our telecom policies to produce universally available, affordable, and competitive high-speed broadband options. Families with children who must simultaneously handle school closures and remote education while also working through video conferencing and cloud computing will reside in the two different Americas for broadband access. American households who reap the benefits of competition among ever increasing speeds with lowering prices and Americans who are forced to rely on obsolete infrastructure built from a bygone era or, worse yet, have no broadband options at all. Those two Americas still being split between what we call the “digital divide” in 2020 is a clear sign of failure in our current approach to broadband. It is imperative that we take it upon ourselves to forcefully bring an end to the inequality of access as part of any infrastructure recovery effort.
We Are Seeing the Digital Divide at Work, and Its Lines Are Drawn Where Fiber Access Exists
It could not be more clear: where there are upgraded networks—meaning networks that can deliver gigabit connections—those homes are able to handle the increase in Internet usage that social distancing requires. Where those networks do not exist—where Americans do not have choices for high-capacity services—social distancing is much harder on people, if not outright impossible.
Upgraded networks generally have had fiber infrastructure built by new, local, independent ISPs from both private and public providers. This new competition forced the old ISPs—often the usual suspects of AT&T, Verizon, and so on—to improve their own networks to keep pace. Not only did competition improve the quality of Internet service, it also improved the price.
But there are many Americans who don’t have meaningful access to choice for high-speed broadband. Some have no choice at all. Communities that rely on decades-old Internet infrastructure lack access to an Internet connection that can handle the demands of social distancing. And the fault of this will lie with the ISPs who used record profits and tax cuts on everything but upgrading their services. The fault will also lie with our federal and state governments, which failed to promote fiber through laws pushing universality or funding to simply have someone besides the large incumbents build it.
Those relying on older networks are those who can least afford to: low-income and/or rural Americans. The most expensive part of starting an ISP is the initial construction cost. The legacy ISPs serving low-income and/or rural populations with older infrastructure have long since paid off that cost, but they still charge through the nose because their customers don’t have alternative choices. And the number one reason people do not subscribe to broadband at all is excessive price. Because no one is offering better service, at a better price, there is no reason for these companies to upgrade their networks, leaving many Americans without the high-speed, reliable, competitively priced Internet service that we absolutely need, especially now.
The differences between competitive markets in the United States and noncompetitive ones is stark. Aside from higher prices and inferior infrastructure, even the COVID-19 oriented relief packages are dramatically different. For example, AT&T is waiving overage fees (a fraction of the excessive bill most people pay) and Comcast is offering 25 mbps/3 Mbps for free for two months to low-income users, but a fiber competitor called Sonic in San Francisco (a city with a fairly decent amount of competition) is offering free gigabit service for three months to families and seniors regardless of their income status.
High-Speed Affordable Broadband Is Essential for Everyone—and That Makes It a Sound Investment
What is tragic about the digital divide is that there are no good reasons for it to exist, let alone continue. It is profitable to serve all Americans, no matter what major incumbents like AT&T and Verizon may say. If the major ISPs universally converted their older networks over to fiber to the home, they would be net profitable in the long run. Contrary to assertions that smartphones and wireless plans alone are sufficient, nothing can truly substitute for a high-capacity connection in the home. As we are seeing right now, the more and more we do online, the less and less our phones and our outside-the-home options will be compelling replacements.
Our own analysis of the world’s fastest ISP demonstrates how the financials work for fiber networks. That ISP is located in the United States, built and run by the local government of Chattanooga, Tennessee. Once a portion of their network had subscribers, their revenue from $70 a month for gigabit service outpaced their costs for the entire network. In other words, after they reached a certain number of customers, their profits grew faster than their costs. That profit allowed them to stretch the network further and further. In fact, because of the unique nature of fiber wires, they were able to upgrade to a 10 gigabit network with only a tiny additional investment. Unfortunately—and predictably—the old ISPs stepped in and got states to ban local government broadband, crushing further expansion by this successful competitor. Extending fiber networks is perfectly doable, blocked only by the refusal of the big ISPs to do it themselves and their successful campaign to erect legal barriers to stymie alternatives.
But even that hasn’t worked entirely. Because we need the Internet. And in a reversal of the classic movie quote, we’re already there, so we will build it. In the state of Utah, where residents had been left behind by incumbent ISPs, and where the state law banning community broadband remains, a handful of cities collectively started building universal open access fiber as a workaround. To butcher another movie quote, we will not be ignored.
Rather than build broadband, they built fiber infrastructure, and allowed small private broadband companies to sell services off the network. Demand is so high for the services from these neglected communities, that more than enough money is being made. In fact, they’ve made enough to pay for the entire construction effort. This is allowing the network (called Utopia Fiber) to rapidly expand and complete universal fiber deployments on schedule, all while giving people nearly a dozen broadband options at competitive prices.
In response to COVID-19, they are currently experiencing a record number of new subscriptions from the people of Utah who need more capacity to stay home for long periods of time. Everywhere in the country we continue to see pockets of success, from the 7,000-member People’s Rural Telephone Cooperative in Kentucky to nearly 100+ other small rural cooperatives deploying fiber to the home.
All of this shows not only that building fiber networks could have been done everywhere, for everyone, years ago, but also that it would have been profitable. So why have our big ISPs failed us?
The answer lies in their investor expectations and the companies’ lack of willingness to engage in long-term investments versus faster short-term profits. Fiber networks are big investments that generally need 10 years or more to fully pay down the construction costs. Similar to when you buy a car, it comes with a big down payment, but eventually you have paid it off and just have maintenance costs. The difference here is that unlike your car, which depreciates after you buy it with higher maintenance costs over time, a fiber network will grow in value and usefulness because advancements in technology will allow it to get faster without any new down payments for construction. It is also expected to be useful for around 70 years after it is built. It’s a future-proof investment—the old ISPs just lack an interest in the future.
Since the old ISPs have proven unwilling to invest in what we need, no relief package or infrastructure package should defer to them on what to do. We should conclude that, after billions in tax breaks and federal deregulation by the FCC, that they are content with leaving people using decades-old infrastructure forever. After all, it is not like companies like AT&T are afraid of spending money when it comes to buying other companies, as their merger debt is an eye popping $171 billion (which is less than it would cost to give every single American a fiber connection).
Ending the Digital Divide Depends on Federal and State Infrastructure Plans That Deliver High-Speed Internet to Everyone
The unnecessary hardships many Americans face to maintain their daily lives are the inevitable result of relentlessly low expectations pushed by the big, old ISPs. They’ve set the bar so low in hopes that the public and the government would just accept a fraction of what Americans deserve from the broadband carrier industry. This has resulted in too many policymakers engaging in rhetoric about the importance of broadband, rather than putting forth policies that would give every American affordable 21st century-ready Internet access as a matter of law. It is time for policymakers to back up their rhetoric with action.
EFF supports universal deployment of fiber optics and open access policies that would promote competition and affordability not as a pipe dream, but because we’ve seen the proof. Other countries are further along, giving us proof of concept.
So here’s what we know: we need to be willing to invest, both with dollars and with our laws, in the goal of connecting everyone by a specific date. We need to also refocus our laws in remedying the lack of competition in the broadband access market. Our own engineering analysis shows that a broadband access network that is all fiber will be more than ready for advances in applications and services for decades to come, including massive increases in usage needs. Countries like South Korea that long ago completed their universal fiber build did so because the government’s telecom policy drove that result.
As we noted in comments to the federal government and in our home state of California, the absence of a policy effort from government to push for guaranteed universality of fiber will continue the digital divide problem and worse yet replace it with a “speed chasm” of broadband choices. That means allowing the current state of affairs in the United States to continue is a choice. Let the hard lessons we are learning in real time today be the reason we finally commit to getting everyone connected in the aftermath.
The absence of universal access to high-speed, affordable Internet has made social distancing, working from home, remote education for children, and connecting with loved ones unnecessarily difficult. As Congress, the state governments, and local governments work to provide relief to Americans and the economy, any Internet infrastructure spending needs to remember this lesson.