Could COVID-19 finally make broadband universal in the US?Could COVID-19 finally make broadband universal in the US?
Microsoft's CEO sees a future of 'remote everything.' As a result, there's a growing consensus among lawmakers that Internet access is no longer a 'nice to have' but a 'need to have.'
June 24, 2020
It's becoming increasingly possible that the COVID-19 pandemic might finally create a real catalyst for universal broadband service in the US. And if lawmakers move forward on proposals to use government funding to cross the digital divide, the situation would undoubtedly put wide smiles on the faces of US Internet service providers of all shapes and sizes, as well as the equipment vendors supplying them.
"The Internet and its connectivity is our world. COVID-19 has certainly highlighted that need," said Mike Wendy with the Wireless Internet Service Provider Association (WISPA), a trade group that represents many of the fixed wireless Internet providers offering services in rural parts of the US.
To be clear, some lawmakers have long argued that broadband access is a necessity. But the pandemic is creating some consensus around the issue.
"This is now becoming bipartisan. That's a new trend," Wendy explained.
"One of the consequences of the COVID-19 crisis is that there is now a political consensus that the country needs to get networks everywhere, and to everyone, and use the platform better to deliver critical goods and services," wrote the Wall Street analysts at New Street Research in a recent note to investors.
"We need a clear plan for broadband for all," argued FCC Commissioner Jessica Rosenworcel – one of the agency's two Democratic commissioners – during recent Senate testimony.
"We believe bold action is needed," wrote AT&T's Ed Gillespie, the operator's senior executive VP of external and legislative affairs, adding that Congress needs to "establish a secure funding source for broadband connectivity for all Americans."
Such statements stem from the idea that the pandemic has fundamentally shifted Internet connections from the "nice to have" column to the "need to have" column. Microsoft's CEO certainly takes that position.
"We've seen two years' worth of digital transformation in two months," Satya Nadella said in April. "From remote teamwork and learning, to sales and customer service, to critical cloud infrastructure and security – we are working alongside customers every day to help them adapt and stay open for business in a world of remote everything."
But while there's increasing agreement about the necessity of Internet connections for all Americans, there's – shocker! – plenty of debate about how to get it.
Any discussion about universal broadband starts with a baseline question: Who already has it, and who needs it?
What's kind of incredible is that – in a world of instantaneous GPS and Google Street View – there is little consensus around who actually has broadband and who doesn't.
For example, Microsoft wrote last year that it counts 162 million Americans who do not use Internet services at broadband speeds. But the FCC estimates that just 18 million people lack access to broadband Internet service, and that one fifth of rural Americans do not have access to high-speed broadband.
Separately, a 2018 Pew Research Center study found that 15% of US households with school-age children do not have access to a high-speed Internet connection at home.
At issue here are both the definition of broadband and the maps showing where broadband services are available. Is 25Mbit/s enough to support a "broadband" connection? Should 5ms latency also be considered in the definition? And what if a "broadband" service is only available for $300 per month from a single satellite provider?
The mapping question is even more fraught with difficulties. The FCC currently relies on broadband coverage maps supplied by ISPs themselves, and some of those maps have been shown to be wildly inaccurate. Congress recently stepped in with the Broadband DATA Act, which requires the FCC to improve its broadband maps using more data sources – but it doesn't provide the $65 million that the FCC's chairman said is necessary to begin creating accurate maps.
In the meantime, some students in rural areas either don't have Internet connections at all, and therefore can't attend online classes, or they must head to a library or a McDonalds that offers free Wi-Fi so they can do their homework.
If the mapping problem seems challenging, the money problem could be insurmountable.
The digital divide exists because ISPs cannot recoup the cost of building networks in rural areas from the few customers they connect with such networks. And though technology is improving, the situation still leaves millions of Americans without many options.
States and the federal government have been working to address this situation with grants and programs like the Connect America Fund or the Rural Digital Opportunity Fund, which provide government money to operators that promise to build networks in rural areas.
Since the outbreak of the coronavirus, such programs appear to be breeding like rabbits. As noted by Telecompetitor, there are roughly half a dozen different proposals – ranging from Accelerating Broadband Connectivity legislation to the Rural Broadband Acceleration Act – wending through Congress with the goal of financing rural broadband.
Not surprisingly, companies and trade groups are on board with this trend.
"Millions of Americans with broadband connections have been able to navigate these difficult times by keeping connected," wrote wireless trade association CTIA in a recent report. "Those without broadband have faced more challenges, and Congress, policymakers and industry can and should do more. That means providing dedicated funding for education hotspots, providing the resources to expand broadband in rural areas, and ensuring Americans have equitable access to online opportunities."
AT&T specifically argued for a reform of the Universal Service Fund – which puts money toward rural broadband – as well as a program based on the Supplemental Nutrition Assistance Program (SNAP, also known as food stamps) that would involve the FCC directly issuing benefit cards to eligible households for broadband services.
But will the money for these efforts come from a general taxpayer fund, telecom-specific funds, spectrum auction proceeds or some other mechanism? This question will likely take on added complexity as the recession deepens.
It's likely that the debate on this topic will heat up amid a US presidential election year.
Indeed, President Trump has reportedly been mulling a $1 trillion economic stimulus proposal that would include a focus on rural broadband and 5G. Separately, Democratic presidential candidate Joe Biden announced a $1.3 trillion infrastructure bill last fall that included $20 billion for rural broadband.
Such proposals are not necessarily new. For example, former President Obama backed the FCC's National Broadband Plan in 2010. But what is noteworthy is how similar today's various broadband proposals are in an age of divisive, tribal politics.
"Unlike in 2010, there is now a political consensus that affordable, abundant bandwidth in every community and every home is essential for thriving in the emerging economy," wrote the New Street analysts. "Unlike in 2010, there is a recognition by a significant portion of the political leadership that the federal government should devote more financial resources to achieving the nation's broadband goals. Unlike in 2010, now there is an opportunity to influence policy at the beginning of a new term, when the political capital is highest and can be used to implement new, bold proposals."
The FCC's upcoming RDOF auction – set to initially allocate up to $16 billion for rural broadband – starts one month before the November presidential election. That event ought to provide insight into the political momentum behind universal broadband, and how such a trend might affect network operators, equipment suppliers and others tasked with carrying it out.
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