A survey released yesterday by the Pew Internet and American Life Project has me wondering if broadband providers have been put in the position of Doctor John Faustus, having to be in league with a regulatory devil in order to attain the very resources needed to meet its mobile broadband needs. The Federal Communications Commission has touted for the last four years its social policy of making broadband services available to 100 million households; the number of households for a list of reasons that has not adopted broadband services.
The FCC finds less that socially acceptable anything less than universal access e.g. 100% connected. Broadband carriers have recommended public policy for garnering spectrum based in part on the FCC’s goal of universal broadband, but the FCC seems to overlook (as usual) the consumer side of the market in terms of what consumers are demanding and according to Pew, that demand is not 100%.
Fifteen percent of American adults do not use the Internet at all, and an additional nine percent may use it at work, but do not use it at home. Among the Internet non-users, 34% fail to see the relevance of the Internet, either having no use for the Internet, seeing it as a waste of time, or too busy to use it. In addition, 32% of non-users question the usability of the Internet finding themselves too old to use it, concerned about their privacy, or thinking themselves physically unable. Some non-users cite affordability or lack of access to the Internet to even bother to adopt Internet use.
The FCC is aware of these barriers to consumer demand and the wireless industry, in my opinion, has gone along with the FCC’s zeal to get the unimpressed online whether or not the unimpressed consumer sees that broadband as being important to their daily lives. The problem with this zeal is that it serves as premise for unnecessary regulations, notably net neutrality. “More transparency is needed to ensure consumers adopt broadband”, says the FCC. “Without broadband, consumers won’t get a job”, says the FCC.
The FCC should not be about playing Madison Avenue nor should broadband providers feel relegated to being the FCC’s national broadband plan cheerleaders. Internet access providers have been meeting the needs, whether by dial-up, wired broadband, or wireless broadband for two decades. Those with higher levels of education and income have always driven and will continue to drive demand for access to the information markets via broadband. The primary focus should be on removing bottlenecks to spectrum and barriers to rights-of-way.
By removing these barriers we may see decreases in broadband rates as more service gets to those willing and able to pay for it. We shouldn’t stubbornly pursue the stubborn 15%.
Alton Drew serves as a managing director of The Drew Fonza Project, a public policy research and consulting firm. He provides public policy analysis for municipal bond investors, private equity firms, hedge funds, investment banks, industry associations, and individual investors. Visit http://www.drewfonza.com to purchase reports on political environments surrounding municipal bond issues or to request a customized report. E-mail him at email@example.com.