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Rethinking How We Fund Connectivity

By Samantha Schartman-Cycyk

The past few weeks have forced many people and organizations, including the Marconi Society, to think deeply about the systems within our society that perpetuate racism and continued barriers to opportunity. While the Marconi Society’s expertise is not in those systems, it is centered squarely on the lack of connectivity and the lack of access to computers and broadband that is symptomatic of and perpetuates this structural racism. The organization also has deep knowledge about how federal funding is allocated to mitigate these disparities and how we can fix this flawed system to ensure connectivity for the people who need it most.

Racism, like poverty is multi-faceted and complicated.  Our society attempts to manage or lessen the effects of this complication through many lenses, from government assistance programs, to social opportunity programs, scholarships and educational assistance and philanthropy to name just a few. None of this is enough, but we feel it is instructive to look to these support systems for opportunities to do better.

Today, according to the report, The Economic State of Black America in 2020, by the Joint Economic Committee of the US Congress, “the median wealth of Black families ($17,000)—is less than one-tenth that of White families ($171,000).”  Acknowledging that the federal poverty level for a single person household in 2020 is $12,760 and $17,240 for a two-person household,  it is not surprising to learn that many Black families rely on government assistance programs to get by.  It is also not surprising that (according to the 2018 Census numbers) while Black households account for less than 13% of the overall population, they make up more than 19% (7,108,924 individuals in households) of those without Internet access at home.

Digital Exclusion is a fact of poverty and the economic disparities in the US disproportionately affect black and brown individuals and families while exacerbating existing digital divides.  In addition, the COVID-19 pandemic has further widened the wealth gap, increasing barriers to connectivity – particularly around access and cost – for those with the fewest resources.

Currently, the US does not qualify Internet access as a utility and so the responsibility of providing access has fallen to the free market. Internet Service Providers (ISPs), which are businesses, make market-driven decisions about where to provide and expand service – leaving many (37,695,856 individuals in 2019, to be exact) without access to or ability to afford the  Internet at home.

The US Federal government attempts to lessen the impact of these decisions through grant and loan programs. A significant driver of resource allocation for these programs,  however, is the controversial FCC 477 data set.

A report by BroadbandNow reviewed the FCC’s 2019 477 data and found that the agency significantly undercounted the number of Americans that remain unserved and that the actual number of unserved population was twice as large as the FCC claimed.

Why is the data set so inaccurate?  The issue stems from the fact that the FCC 477 data is self-reported by the ISPs, as opposed to being validated by a neutral third party.  In addition, the methodology is inherently inaccurate because it determines whether or not a specific location is served based on whether an ISP serves at least one single home within a census block.  If the ISP can point to a single home, the entire census block (which can consist of several square miles) is deemed to be 100% served.  We know, and many have documented, that this is often not the case – particularly in densely populated low-income urban areas. A good example of this overcounting can be found in a report published by the National Digital Inclusion Alliance about AT&T’s “Digital Redlining of Cleveland”.

With the FCC greenlighting $20 billion in federal funding to expand rural broadband deployment in February of 2020, there is a very real concern that allocating this funding based on inaccurate 477 data could lead to overbuilding in areas that already have broadband while  leaving other areas unserved or underserved.

A new effort to independently identify and validate broadband availability and the quality of service is imperative.

With this in mind, the Marconi Society is partnering with Measurement Lab (M Lab) at Penn State University and Google to create the first-ever open and accessible broadband mapping platform.  The goal of this project is to empower local stakeholders with the tools needed to establish eligibility for federal funding from which they can increase broadband access by pinpointing existing gaps in connectivity or service quality and directing resources in their direction.  We are currently looking for sponsors to help us finalize the mapping platform and make it available to all interested users.

Since the majority of federal funding initiatives focus on rural areas, states are left to figure out how to bridge the digital chasms for millions living in un-and underserved urban deserts. How then, can the US direct support towards the millions lacking connectivity in our nations’ low-income urban centers?

In 2019, I led a research effort that became the report Connecting Cuyahoga.  This work  identified the social and fiscal return on investment (ROI) for county government to support digital inclusion training and connectivity for social service benefits recipients (those receiving benefits through SNAP, Medicaid, or TANF). I found that, because more than 50% of benefits recipients were unconnected, most managed their benefits and enrollment in these programs over the phone or in person in offline transactions.  This produced long wait times, and additional costs associated with taking time off from work and paying for public transportation or parking to travel downtown to speak with a case worker in person. Between the costs to both the county and to the resident, the value of moving these transactions to the much less costly online environment became clear.

My research team found that the average cost to the county of an offline transaction was $17.11 while the average cost of an online transaction is $3.91 – more than $13.00 per transaction in savings. Extrapolate these savings across the millions of people using assistance programs – often enrolled in multiple programs – and the multiple times each year that they need to re-certify or update information through these programs and you can see how the cost savings stack up cumulatively over time.

Earlier this year, the NTIA (in their Broadband USA volume 5, issue 6 June 2020 newsletter) announced that the US Department of Health and Human Services Temporary Assistance for Needy Families (TANF) Program offered States the flexibility to fund access to computers and the Internet, using current year TANF funds stating “A State may use Federal TANF funds or State “maintenance of effort” (MOE) expenditures to purchase computers, provide training and cover the cost of Internet access for eligible, needy families.” Additionally , the US Department of Agriculture clarified that States may use Supplemental Nutritional Assistance Programs (SNAP)  Employment and Training (E&T) Program funds for laptops and other associated equipment such as Wi-Fi hot spots that a participant would need to access distance learning content if the SNAP E&T program is providing services virtually.

These moves to expand the guidelines around the eligible uses of federal assistance program funding indicate a willingness to explore how these programs can further strategically support benefits recipients.

The Marconi Society is building on this research in partnership with the Benton Institute for Broadband & Society and the NTIA by collaborating on a whitepaper that will identify which policies and practices at the federal and state levels would need to change in order to catalyze digital inclusion investment at the county and community levels. We are currently looking for sponsors to partner with us to continue our research and to bring a county level program pilot forward that will prove the return on investment model over 2-3 years. Demonstrating how digital inclusion training and connectivity support can serve as a change agent, leading to increased online management of government assistance programs and the related cost-savings that result, could both create lasting and accumulative returns for thousands of community residents as well as lay the groundwork for future program modernization and smart city initiatives.

Furthering this trend to allow, for example, Medicare to reimburse Internet and device costs alongside the telehealth devices which they already cover could create far-reaching impacts.  Or those receiving Medicaid and SNAP benefits could obtain an additional subsidy and training, if needed, in exchange for online program management – like many companies offer financial incentives for enrolling in paperless billing.  Data shows that this approach not only benefits the individual by making program benefits easier to manage but also reduces the period of time an individual relies on these services.  The fiscal returns to counties and states will more than pay for the initial investment over time.

In sum, the Marconi Society supports a two-pronged approach to addressing rural and urban divides and contextualizing digital inclusion within federal and state level programs by:

  1. Improving the data by which federal rural broadband infrastructure funding is allocated to ensure that resources are assigned to places representing the greatest need.
  2. Expanding how government assistance program funding can be used to include reimbursement of Internet access and device costs for benefits recipients.

This approach will begin to create a systems level answer to the systemic problem underlying the lack of connectivity experienced by millions of Americans.