It’s not just an availability issue. While governments continue to invest in expansion of broadband infrastructure, high costs and poor digital literacy have hindered adoption of high-speed internet even where it is available. On the latest episode of Policy Outsider, guest Kevin Schwartzbach, a graduate research assistant at the Rockefeller Institute, shares his research on broadband policy and investment and discusses why gaps in access and adoption persist.

For more in-depth analysis, visit the broadband blog series below.

Guest: Kevin Schwartzbach

• Transcript

  Transcript was generated using AI software and may contain errors.

  Kevin Schwartzbach 00:04

  Broadband is no longer a luxury. It’s become a necessity in modern day life. It allows students to attend school remotely, it allows workers to work remotely. You know, I’ve been working remotely for the better part of a decade even before the pandemic and that wouldn’t have been possible if I didn’t have good internet. We wouldn’t be having this conversation right now if not for reliable broadband.

  Alexander Morse 00:29

  It’s also possible maybe even likely that you the listener, are listening to this podcast over broadband internet. Speaking of, thanks for tuning in to Policy Outsider presented by the Rockefeller Institute of Government. I’m your host, Alex Morse. You just heard Kevin Schwartzbach, a graduate research assistant at the Rockefeller Institute, who’s researched and authored several pieces concerning broadband accessibility, availability, and affordability. Kevin joins today to discuss the state of broadband in the United States, why it’s a necessity in modern life, the consequence of a digital divide, and what the federal government, states, and municipalities are trying to do to fill in the gap and connect communities to the internet. Coming up next. Last year, President Joe Biden passed the infrastructure investment and jobs act, which included $65 billion for broadband infrastructure at the Rockefeller Institute. We’ve had our graduate assistant Kevin Schwartzbach back researching policies related to broadband and why this is an important matter that’s receiving so much attention. And so we decided to invite Kevin here on the podcast today to talk about this, Kevin, thanks for joining.

  Kevin Schwartzbach 02:09

  You’re welcome. Thanks for having me.

  Alexander Morse 02:11

  We have broadband access and affordability and a lot of other questions that we want to get to, let’s start off with what are the different types of broadband.

  Kevin Schwartzbach 02:19

  So there are four different kinds of broadband fiber is the most reliable and offers the fastest speeds. But it’s also the most expensive, then there’s also cable, which is not as reliable, but also not as expensive. Then you have DSL, which is a tear down from that. And finally, you have satellite, which though it’s the most widely available, and often the only option in many rural areas. It’s also the least reliable and most expensive plans can range from $70 a month to $150 per month. In contrast, fiber costs about $63 per month on average.

  Alexander Morse 03:03

  Okay, so there’s four different types of broadband, each with benefits and drawbacks, whether that’s affordability or availability. According to your research, about 95% of people might have broadband available to them, but might not take it up and we’ll get into that a little bit. But you know, what, what makes broadband a public policy priority.

  Kevin Schwartzbach 03:28

  So as I’m sure most of your listeners are aware, an increasing portion of our lives, has moved online, whether that’s work or school or healthcare are many other facets of life. Broadband is no longer a luxury, it’s become a necessity in modern day life. It allows students to attend school remotely, it allows workers to work remotely. You know, I’ve been working remotely for the better part of a decade even before the pandemic and that wouldn’t have been possible if I didn’t have good internet. We wouldn’t be having this conversation right now, if not for reliable broadband. But it also makes it easier for job seekers to search for jobs and it enables patients to use telehealth services. There have even been studies that show that better broadband in an area can lead to more robust economic growth, and that having better broadband in the home can actually boost household income. And I think the COVID 19 pandemic has highlighted just how indispensable reliable broadband is. It’s more apparent than ever, as badly hit as the economy was at the beginning of the pandemic. Think about how much worse it would have been had people not been able to work remotely. If this pandemic hit 40 or 30, or even just 20 years ago, nearly every non essential worker would have been out of a job. It’s scary to imagine what it would have been like

  Alexander Morse 04:42

  many of us, myself included might take internet for granted. But really, throughout the pandemic it kind of showed that unless you were an essential worker, you might not have been able to access any of your work and while being sent home and possibly lose your job. And we witnessed that happen anyway and so have And everyone have access to affordable broadband certainly is a policy priority. You mentioned access to education or health care. What about digital literacy? How do you define digital literacy? And why is that important?

  Kevin Schwartzbach 05:16

  Sorry, I hate to do this. But yeah, I think I actually want to tack on a little bit to the end of that last answer, because I think it’s important to introduce the fact that there are millions of people that don’t have internet. And that’s why it’s a private investment hasn’t been enough. And that’s why it’s a public priority. Even though broadband is so integral to modern day life, millions of people, as many as 42 million, according to one estimate, don’t even have the option to purchase fixed terrestrial broadband, which is fiber or cable or DSL, because they live in areas that aren’t wired for it. And millions more technically have the option to buy it, but haven’t done so. Mostly because they can’t afford it. But also for other reasons, as well, I’m sure we’ll get into private investment has not been enough, even though is Private Internet service providers have invested over a trillion dollars since the advent of the Internet, there are still gaps in access. And that’s why we need public policy to fill in the gaps, whether that’s additional funding or other types of policies that we’ll get into.

  Alexander Morse 06:18

  So you mentioned that private investment has been over a trillion dollars since the advent of the internet, but it hasn’t reached everyone. So I take that to mean that there’s physically not the infrastructure available for some folks to get access to it. Is that right? That’s correct. But then for the folks who may have the option to purchase internet, you know, maybe don’t do so because of affordability concerns, because internet is largely expensive for a lot of consumers.

  Kevin Schwartzbach 06:44

  So I like to divide access into the topics of availability, which is whether or not someone has the option of purchasing broadband, and adoption, which is whether or not they actually do purchase broadband. Because that distinction is really important, because even though 95% of Americans have access, or I should say 95% of Americans have fixed terrestrial broadband available to them, only 69% of households have actually adopted broadband. All right.

  Alexander Morse 07:19

  And so for those people that are left behind that either don’t have broadband available in their area, or simply don’t adopt it, what are some of the implications of that? You know, in your research, you use the term digital literacy. And folks without these internet options might lack that. And so could you define what digital literacy is? And you know, how that can impact their lives?

  Kevin Schwartzbach 07:41

  Yeah. So digital literacy is often defined as the ability to use information and communication technologies to find, evaluate, create and communicate information, requiring both cognitive and technical skills. So put simply, it’s basically whether people can use all of these fancy new technologies that we have, whether they know how to use a computer, whether they know how to surf the Internet, whether they know how to check their email, and whether they know how to use all that to be productive, whether that be in their personal lives or in the workplace. So that’s one of the major reasons that people decide not to adopt broadband. But probably the biggest reason I would say is affordability. Roughly half of households that haven’t adopted broadband, have not done so because they cannot afford it. According to one estimate, the average subscription to internet in the US is $68 per month, and that figure could be much higher in rural areas,

  Alexander Morse 08:39

  considering the current state of the economy, inflation hitting everyone a little bit harder. $68 That’s not cheap. That’s not cheap for any household.

  Kevin Schwartzbach 08:49

  No, and you’re struggling to put food on the table or pay rent at $68. For what seems like too many a luxury, which as we discussed, it’s not but you know, it seems like when you’re budgeting that seems like one of the things that you might be able to cut, but as we’ll get into, it’s definitely something that household should try to avoid. But it can be difficult when it’s $68 a month.

  Alexander Morse 09:10

  Yeah, you’re right, it is difficult. And, you know, while may be important for families to try to budget for it, you know, many families simply can’t. And so that’s going to create some sort of digital divide.

  Kevin Schwartzbach 09:21

  So there are all the benefits that we discussed above. But the digital divide, which you mentioned, that refers to the gap and access to and use of the Internet and other information technologies between different population groups. And that’s different racial groups, different income groups, different geographic groups. And I’d like to get into some of those because the adoption rates vary tremendously across different demographics and geographic regions. According to survey data from Pew white adults are more likely than black adults and Hispanic adults to have adopted broadband their adoption rates are 80% 71% and 65%, respectively. But also geographically, adults living in urban areas have an adoption rate of 77%. suburban areas that 79%. But in rural areas, it’s only 72%. But the largest disparities are actually found between those with different levels of education and income, the gap and adoption rates between adults with a college degree who have a 94% adoption rate, and those with a high school degree or less, we have a 59% adoption rate, that’s 35 points, it’s a much more significant gap. Also, the gap between those making over $75,000 per year, which is 92%, and those making under $30,000 per year 57%, is also 35 percentage points,

  Alexander Morse 10:47

  it sounds like you’re highlighting the two different policy problems of affordability and digital literacy, right. So folks with a higher education might be more aware or already using the internet. And folks with a higher income are able to budget for broadband or internet versus folks without an education without a higher education and folks making less money.

  Kevin Schwartzbach 11:09

  Right? Yeah, if you don’t have access to those benefits in the first place it it’s kind of a vicious cycle in terms of, you know, not having the skills, the digital literacy skills necessary to have a high paying job, you’re less likely to be able to afford internet and know how to use it in the first place. So it kind of just goes around and around. And, you know, that can compound over time. The digital divide means that, you know, among certain demographic and geographic groups, fewer people have access to the benefits provided by broadband. And in general, those groups of people are marginalized in other ways, too. So not having access to broadband. And the benefits of broadband can compound existing inequalities, or at the very least, it is a missed opportunity for narrowing other gaps in society.

  Alexander Morse 11:56

  So we have this missed opportunity. This is where government programs and intensives can help, you know, fill that gap. And so starting at the federal level, what have been some policies that you’ve researched, that can help address the broadband issues.

  Kevin Schwartzbach 12:12

  So universal broadband access has been a goal of the US federal government since the Telecommunications Act of 1996. So that’s nearly was 25 years ago, almost 30 years ago. And since 2009, the when the great recession hit, the US government has spent roughly $85 billion on various broadband policies. But most of that has been spent on grants and loans to private sector, ISPs, internet service providers, so that they can deploy broadband infrastructure, which increases availability. Unfortunately, though, the US government hasn’t really spent much on adoption, which is its own issue, as we’ve discussed. So as far as federal policies go, the main thing that they have done is throw money at the issue, which, you know, does go a long way, but it’s not necessarily sufficient. I don’t want to sell those efforts short, if you look at the trends over time, more and more people do have access to internet, which I think is an achievement. But that doesn’t mean there isn’t still a far away to go.

  Alexander Morse 13:20

  Now, when you say the federal government hasn’t done much in the way of adoption, what do you mean by that?

  Kevin Schwartzbach 13:25

  So as we discussed earlier, there are several reasons why people might decide to not adopt broadband. And the federal government hasn’t really targeted those reasons very much until relatively recently.

  Alexander Morse 13:41

  Now, is that is that addressing costs of internet or is that communications of availability? Is it something else?

  Kevin Schwartzbach 13:48

  So I think it’s it’s all of the above. As I discussed earlier, the main reason people don’t adopt broadband is because it’s not affordable to them. And historically, the federal government hasn’t invested that much in affordability programs. In 2021, in the wake of the pandemic, the government created the $3.2 billion emergency broadband benefit through the F FCC, and that provides money monthly, or I should say it provided monthly benefits of up to $50 to households making under 200% of the federal poverty line, or $75, to households living on qualifying tribal lands. But that was really the first major effort that the federal government undertook to increase affordability. There were other efforts before that, but they were relatively minor compared to the $3.2 billion dollars that the emergency broadband benefit got. And subsequently, the EB B as we call it was replaced by the Affordable connectivity program, which is a longer term FCC program that received 14 point 2 billion dollars from the infrastructure investment and jobs act, which, you know, we can call the IGA for the sake of brevity. But it only offers subsidies of up to $30 per month. In terms of other efforts for addressing other reasons for non adoption, there have really been very few programs and policies over the years that target those reasons. Only recently, did the IGA include something called the Digital Equity Act, which among other things, creates provisions for digital skills, training and education to low income populations. And that’s really some of the one of the first times that we’ve seen the federal government target, digital literacy in particular.

  Alexander Morse 15:45

  Yeah, it’ll be pretty fascinating to research those investments and those programs and see what kind of effect they have on reaching a greater population. Yeah, totally. We’ve covered the federal government there. And largely, it’s been investments into building out infrastructure. Moving on down to the state level, what are some policies that have been enacted by different states or programs or investments that are either have been shown to be successful or are new and we’re tracking.

  Kevin Schwartzbach 16:12

  So in my first piece on broadband, I divided state policies into five different categories for promoting broadband. The first is creating strategic plans, mapping initiatives or broadband offices. And that’s really the most basic thing that a state can do. A strategic plan is essentially a plan that evaluates the broadband needs of a state and suggests policy solutions to address those needs.

  Alexander Morse 16:41

  So basically, like a task force commission, exactly, yeah, it

  Kevin Schwartzbach 16:46

  is basically assessing the problem and figuring out what needs to be done to address it. Part of that sometimes are mapping initiatives, which is basically mapping where broadband is available and where it’s not. In order to address those needs, you need to be able to know where you’re supposed to be looking in the first place. And then finally, there are broadband offices or task forces, which are which have the sole purpose of promoting and facilitating broadband deployment in their state. Many of these initiatives focus on deployment in rural areas. And while all these state authorities have essentially the same goal, they differ in how they go about achieving that goal. Some authorities focus on collecting data, others focus on creating mapping initiatives, others focus on procuring federal funding, and others even actively work with local ISPs with public private partnerships, which we’ll get into a little bit more. The second category I outlined or was funding and tax incentives to encourage investment by private internet service providers. And that’s essentially what the federal government has done only done at the state level. In general states have spent far less than the federal government per capita on on deploy on broadband deployment. But there are exceptions. New York, for example, had the new New York broadband program that spent $500 million on deploying broadband and it showed some promising results according to the state, which maybe you want to take those numbers with a grain of salt. But according to the state, 98% of residents have access to broadband. And I think that’s really important, because states have a better idea of the needs in specific communities than the federal government does, because they’re a little bit closer to the problem. The third category is construction of publicly owned broadband infrastructure. And that’s less common. That’s a less common method among states, but it is really common among municipalities. So municipalities often operate what is known as a municipal broadband network. And that’s a publicly owned and operated broadband infrastructure. But there are also many hybrid public private partnership models throughout the country. And in those some are all of the broadband infrastructure is owned by a public entity, such as municipality are a public utility. But it’s operated by a private ISP, those are often called public infrastructure, private service models. And those are also more commonly found among counties and municipalities and they are among states. The fourth category is rights of way laws and other efforts at enabling infrastructure access. And this one’s a little complex, a little nuanced, but essentially, these are policies that make it easier for ISPs to build infrastructure. And then the last category is promoting broadband adoption and addressing affordability and awareness. And as we’ve discussed that something that has been done less so than addressing availability but Some states are, are focused on addressing those issues. In New York, for example, they passed the law in April of 2021. That requires ISPs to offer a $15 per month broadband plans low income New Yorkers. Unfortunately, it’s being held up in court. But it is an example of an effort that state is starting to take to address adoption, as opposed to just availability.

  Alexander Morse 20:25

  So it sounds like of these categories between states and tying in the federal government here, a lot of it is investment, a lot of it is trying to target individuals or families that might be low income and need assistance, affording internet, but also, when we get down to the more granular level of states and local governments, it’s trying to map out where the gaps are, what the costs are, and then come up with ideas and programs to to fill those last remaining gaps. And so you talked about the public private partnerships, and you talked about the municipal owned broadband infrastructure, what’s stopping local governments from really getting involved in these kind of initiatives?

  Kevin Schwartzbach 21:08

  Well, I think there’s two things that are stopping local governments. The first is more of a logistical concern, I would say, not every government has the resources to implement a municipal network. Not everyone necessarily has a need for a municipal network. But in cases where there are needs for it. Unfortunately, at the state level, many states 17 states have some form of legal restrictions on municipal broadband, while six others have more limited restrictions. And some of these restrictions are outright bans. But in other cases, states are just putting up roadblocks that make it effectively impossible for municipalities to build and operate their own networks. And the reason that this is the case is that many state legislators in the states receive funding from incumbent ISPs who would make sense that they don’t want another competitor entering their market. And in many of these cases, these private ISPs already face little or no competition. So they want to keep it that way. So they donate money to state legislators to try and advance their agenda. Right. And

  Alexander Morse 22:19

  so for these areas that only have one or maybe two ISPs. It’s effectively serving as a monopoly, which is driving up the costs of internet, which is keeping some consumers out of the broadband market. Yeah, that’s correct. tying it back to the beginning of the conversation is that, you know, some of these problems are public policy problems. It’s something that governments and local governments state governments that, you know, they really do have policy levers that they could try to pull. But it’s it’s

  Kevin Schwartzbach 22:50

  there’s a lot of opposition. Yeah, in certain cases, certainly, in the case of municipal broadband, I think, you know, you have seen a lot of opposition to that. And, you know, I think there are critiques of municipal broadband. But it’s not the kind of thing that should be outright banned. I think one thing that municipalities should do is conduct feasibility studies before they try to implement a municipal broadband network. In many cases, municipalities will find that it doesn’t make sense for them to, to do it. For example, in Seattle, they conducted a feasibility study, and they concluded that Seattle, the municipality wouldn’t be able to finance or build out the network, even though there was significant interest. In other cases, the feasibility studies will shape the type or scope of a network that a municipality decides to build. For example, in Golden, Colorado, the study that they commissioned, recommended that the city first deploy what’s known as a fiber backbone, which is the for the core fiber infrastructure that connects key facilities. But it doesn’t provide fiber to the home or FTTH, as it’s known. So the study suggested deploying the fiber backbone before developing a city wide network, in a sense to try and test the waters and kind of not build it all at once, but build it over time.

  Alexander Morse 24:17

  feasibility studies are certainly a good recommendation before you start laying cable into the ground and spending millions 10s of millions, hundreds of millions of dollars. You know, I like to stick on this municipal broadband idea a little bit. We’ve talked about some of the opposition or some of maybe the critiques of it. What are some successes that have used either a public private partnership or a wholly owned municipal broadband infrastructure?

  Kevin Schwartzbach 24:42

  Well, I think one of the best known examples of municipal broadband is that of Chattanooga, Tennessee. In 2010, the city on utility EPB became the first provider in the country to offer gigabit internet service which is 1000 megabytes per second. So very Fast is the first provider in the country to offer gigabit internet service throughout its entire service area. And today, it’s the largest municipally owned FTTH network in the country. And one of only several ISPs nationwide that offers speeds of up to 10 gigabits, which is extremely rare and, you know, not necessarily something an individual needs in their home. But for larger institutions, speeds of that nature could could be useful. And even for lower speeds, it offers competitively priced plans that are often the same or cheaper than private market competitors, and regularly earns top marks and customer satisfaction. So you know, people somewhat notoriously tend to hate their internet providers. And that’s just not the case with EPB.

  Alexander Morse 25:52

  So for local governments, where it makes sense, introducing a little competition, and really improving the infrastructure, improves access, and affordability to residents, which would then improve maybe some of their life outcomes. We’ve talked about education, already access to health care, improve their digital literacy to then improve their standing, their economic standing, possibly,

  Kevin Schwartzbach 26:18

  yeah, I mean, there haven’t necessarily been a ton of studies that link municipal broadband directly to all those downstream results. But intuitively, that does make sense. There was one study conducted in 2020, that looked at EP B’s municipal fiber optic network that we just talked about. And the study found that the municipal network generated a Realized economic value of $2.69 billion dollars over a 10 year period, which exceeded project costs by over $2.2 billion. That’s when you include things like job creation, productivity gains, and increased access to telehealth services. So, you know, it’s a little complex in terms of what you want to measure when you’re considering benefits from a fiber network or from a benefits you want to consider from a broadband network. But this one study decided to include those factors. And when considering those factors. It had a tremendous realized economic value that was really above and beyond what anyone was expecting. But in general, it’s hard to draw a conclusion that any and all municipal networks would have the same effect. It really depends on the unique circumstances of each municipality, which, again, is why feasibility studies are so important.

  Alexander Morse 27:38

  Sure, that makes a ton of sense. And I’m glad you brought up that example, on the return on investment, it can make a lot of sense for where it makes sense to do it. Now, Kevin, we’re running out of time here. And so I just wanted to leave the floor open to you. What would you like policymakers to get out of this conversation, looking forward to next steps to improving broadband access.

  Kevin Schwartzbach 28:00

  So I think one of the big things that policymakers can take away, especially at the state level is to get out of the way of municipalities that are interested in investing in their own networks, by overturning the restrictions that exist. There was one study conducted in 2020, that looked at the impact of three different state level policies on broadband availability. One of those policies was restrictions on municipal broadband. And they found that state level restrictions on broadband was associated with a decrease in broadband availability. Second, I think policymakers should really be focused on adoption, not just availability, I think availability is definitely something that needs to be focused on. And, you know, the i j, a dedicated billions and billions of dollars to that, but some some portion of the $65 billion dollars should be dedicated towards adoption efforts, especially when it comes to affordability, which is the main reason that people who technically can adopt broadband have not. And the third one is that states and localities can look to their counterparts to see which strategies have been effective, because they don’t need to reinvent the wheel. As we’ve discussed, there have already been a plethora of different policies that have been tried out. And as a general rule, it’s hard to say that any one policy is going to work across the board. It really depends on the unique circumstances of each state and each locality. But states can look to other states and see what what has worked in those states.

  Alexander Morse 29:36

  And I also recommend that they read your research from the Rockefeller Institute. I appreciate that. Well, Kevin, thank you so much for joining us. The nuanced conversation involves some technical complexities, and so we’re happy to have you break it down to talk about the importance of of digital literacy and the impacts that divide can have and then what policies the federal, state and local governments have thought about or try To pursue, we really appreciate it. Thank you

  Kevin Schwartzbach 30:02

  My pleasure.

  Alexander Morse 30:13

  That was Kevin Schwartzbach, graduate research assistant at the Rockefeller Institute. He’s written four pieces for the Institute on broadband funding and different policies states and local governments have pursued to provide affordable internet access to everyone. I encourage you to check them out by visiting the links provided in the episode description. If you liked this episode, please rate, subscribe, and share. It will help others find the podcast and help us deliver the latest in public policy research. All of our episodes are available for free wherever you stream your podcasts. Special thanks to Rockefeller Institute staff Joel Tirado, Heather Trela, and Laura Schultz for their contributions to this episode. Thanks for listening. I’m Alex Morse. Until next time.

  Policy Outsider is presented by the Rockefeller Institute of Government, the public policy research arm of the State University of New York. The Institute conducts cutting-edge nonpartisan public policy research and analysis to inform lasting solutions to the challenges facing New York state and the nation to learn more at rockinst.org or by following RockefellerInst, that’s I-N-S-T on social media. Have a question, comment or idea? Email us at [email protected].

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