Falling Prices Alone Will Not Achieve Universal Broadband Adoption USTelecom, Others Say

"It is curious that the FCC is proposing in its open Internet proceeding that only end-users, only consumers, can be charged for broadband access, no advertiser-supported broadband offerings allowed, no innovative business plans looking for ways to offer free broadband,” McCormick said. “Why? The irony is this -- an agency that was established to protect consumers from unreasonable costs is instead proposing to protect third-party commercial interests at consumers’ expense."

USTelecom is also “deeply concerned” about the reclassification notice of inquiry and its impact “on investment, on deployment and on job creation,” McCormick said. A majority of members of Congress and a growing list of newspaper editorial boards question the move, he said. “Prominent Wall Street analysts have warned of negative consequences if the FCC goes forward."

Federal policy “should encourage rather than discourage innovative business plans” aimed at making broadband affordable or free, McCormick said. “Government can play a role here.” USTelecom has encouraged the FCC to set pilot projects in a few cities across the U.S. to determine what kinds of offerings would attract non-adopters. “Is it a discount for a certain period of time?” he asked. “Is it accompanying digital literacy support? Could it be subsidized for the cost of a computer? This is the kind of data-driven process that could lead to significant insights.”

McCormick said price and access obviously matter. “But for many these factors are not determinative,” he said. “Simply addressing price is not a panacea. There is the issue of perceived value. Nearly 40 percent of those who choose not to have broadband say it’s because it’s simply not relevant in their lives. There are technology barriers. Consider that 95 percent of homes have access to broadband, but only 80 percent of homes have a personal computer."

The U.S. should be proud of its track record on broadband, McCormick said. “The United States is getting it right. The FCC’s own data show it,” he said. “The U.S. is … where the Internet was invented, it continues to be the home of Internet innovation. It is in the United States where routers, browsers and fiber optics were invented. It is the place where Internet commerce -- eBay and Amazon -- was born. It is where search engines developed, where YouTube originated."

Don Kent, chairman of Net Literacy said many questions remain about broadband deployment after stimulus dollars are spent. “The National Broadband Plan is our roadmap and the Broadband Technology Opportunities Program grants serve as a catalyst to advance broadband adoption, but once the money is spent, what then?” he asked. “How do we work together to make it sustainable so that Americans live richer, fuller and more satisfying lives and America remains the most competitive country in the world?"

The coming months will be critical, Kent said. “We've just injected seven billion stimulus dollars and are discussing the possibility of reorganizing the Universal Service Fund to help facilitate broadband build out and adoption, but we must carefully and responsibly spend tax payer dollars, funding from foundations and the contributions that are made from socially responsible corporations as if the money were coming out of our wallets or our own purses,” he said. “If we do not provide the return that we promise, broadband adopt initiatives will ultimately face the harsh glare of the media and broadband adoption programs, which most Americans agree are necessary and important, may be perceived in a different and less friendly light."

Price, the lack of digital literacy and insufficient broadband in schools stand in the way of broadband adoption, some panelists said. Comprehensive training solutions are important, said John Horrigan, FCC consumer research director. “The main dividing lines are age and people with disabilities."

While we are experiencing a tremendous burst of innovation in computer platforms, public policy needs to focus “more on helping citizens understand relevance, aligning their needs to Internet services and building institutional capacity to teach technology skills, and digital literacy” to close the skills gap, said Intel Manager Rick Herrmann. Each “child in our public school system needs to have access to high-speed broadband services both at home and at school."

There’s more of a digital lag, than a divide, among low-income consumers, Sonecon Chairman Robert Shapiro said. The affordability barrier is caused in part by the price of video-based applications, which require more bandwidth, he said. “The way you price the good is fundamental to the way it diffuses across the society.” Shapiro said adopting a pricing model that increases the gap “would be a profound mistake in public policy and violate everything we know about how these technologies spread and transform our lives.”