According to U.S. Census data, in 2017 about 78% of Americans accessed the Internet at home over a fixed, terrestrial connection. Like most goods and services, adoption rises sharply with income. Only about 60% of households with annual incomes less than $30,000 have fixed broadband at home compared to 82% of homes with higher incomes. Overseas, many developing nations have extremely low Internet adoption rates. While much of our domestic policy discussion focuses on a lack of availability in more rural areas, the lack of adoption is as big a contributor, if not a bigger one, to the Digital Divide.
The Federal Communications Commission’s (“FCC”) Lifeline Program offers some help, providing subsidies to low-income Americans for broadband access. Millions of Americans (about 12 million) use the program, though almost all use the one-billion in total subsidies to get low-cost broadband connectivity via mobile wireless devices.
There are also significant private sector initiatives seeking to expand adoption. On the international front, Facebook’s Free Basic Initiative provides basic online connectivity for mobile service without data charges. This is an interesting way to bring more people online, particularly in less-developed nations.
But closer to home, Comcast’s Internet Essentials program offers qualifying households a fixed connection for $9.95 per month with the option to obtain a low-cost computer at $149.99. The program is hugely successful by any standard, connecting over eight million low-income Americans to the Internet at home (along with access to Comcast’s extensive nationwide Wi‑Fi network) and providing more than 100,000 low-cost computers. Significantly, over 90% of those served are first-time adopters. Moreover, Comcast has invested $650 million in digital literacy training and awareness program, directly affecting over nine million persons. The program, which offers billions annually in total discounts, receives no federal funding.
Until yesterday, Internet Essentials was available to low-income American homes in Comcast’s footprint that satisfied specific income-based criteria such as having a child in the National School Lunch Program and the receipt of HUD housing assistance. The program also serves low-income veterans and seniors. Comcast just announced that its low-cost broadband connections and computers are now available to all low-income Americans. Eligibility may be met using a huge array of low-income programs, providing easy access by low-income Americans to the program’s benefits.
According to Scherer and Ross’s seminal text in Industrial Economics, what society wants from its producers is good market performance. Good market performance is multidimensional and one such dimension is equity. While equity is difficult to define and subject to personal preference, it would be difficult to exclude a private company’s successful efforts to expand broadband access among low-income homes from the equity basket.
When thinking about expanding broadband adoption, the tendency is to look to the government to subsidize varied programs. Yet, subsidies are costly and often abused. Private entities, without the aid of (though sometimes frustrated by) government, are engaged in programs of their own to expand adoption. These programs are remarkably successful—connecting millions both in the U.S. and abroad. While pillaring the broadband industry is commonplace, some credit is due: Comcast’s expanded Internet Essentials program will expand adoption among America’s most needy citizens, helping all Americans reap the benefits of broadband access.