Comments Off

Georgia PSC five dollar fee for Lifeline impacts Georgia’s black citizens

There are a lot of “brothers and sisters” living here in Georgia, and the Georgia Public Service Commission rule imposing a five dollar monthly fee on recipients of free cell phones through the Lifeline program could have a disproportionate impact on blacks in Georgia, particularly as internet access and broadband adoption are concerned.

According to data from the U.S. Census Bureau, 31.2% of Georgia’s residents are black, more than double the percentage of all Americans.  Nationwide, 80% of black adults use the internet, according to a report issued yesterday by the Pew Research Council.  This compares with 87% of white adults that travel the information superhighway.

The gap is wider when you compare broadband adoption at home between blacks and whites.  Sixty-two percent of black adults have broadband internet access at home versus 74% of white adults, according to Pew.

The picture levels somewhat when considering wireless access to broadband internet.  According to Pew’s findings, 92% of blacks and 90% of whites own cell phones.  Ironically in households where income is under $30,000, 90% of black adults own a cell phone while 82% of adult whites in these households own a cell phone.  Black adults edge out white adults in smart phone ownership, with 56% of black adults owning a smart phone compared to 53% of white adults.  In addition, 10% of black adults indicate that while they have no broadband connection at home, they connect to the internet via their smart phones.

According to data from the Kaiser Foundation, 35% of blacks nationwide live in poverty.  In Georgia, that percentage rate is 33%.  In its federal lawsuit seeking to overturn the Georgia PSC’s rule, the CTIA cited a position taking by the Federal Communications Commission on imposing a minimum fee on Georgia Lifeline recipients:

“The FCC found that a minimum charge could potentially discourage consumers from enrolling in the program and could result in current Lifeline subscribers leaving the program.”

If we assume a close relationship between national data on adoption of broadband and internet access by blacks with Georgia’s black residents, a minimum charge would have a negative impact on broadband adoption and continued internet access by blacks in Georgia.  This means reduced access to mobile wireless health services and employment opportunities for a significant portion of Georgia’s black population.

In an economy that is not yet fully employing its labor resources, reducing access to broadband by continuing to impose this fee would be devastating to blacks.

Comments Off

Putting a face on the Joint Center report

The Great Recession of 2007 was a bitch. Getting separated, then divorced while raising a son on my own between 2007 and 2009 only compounded matters. Having had my fill of western Maryland, I decided to head south to Atlanta for the warmer climate and to take advantage of being closer to family. As any parent will tell you, the more support you have, the less stress when it comes to child rearing. Little did I know that I was heading into a perfect economic storm in the ATL.

Finding work was next to impossible. It reminded me of a lyric from a popular song back in the Virgin Islands: “Time so hard, deh dawg an’ all a look wuk.” Translation: Times are so hard, even the dogs are looking for work. That was the Great Recession in a nutshell. I thought 2002 was bad for professionals, but that was mild compared to 2007.

Rather than mope around and ask, “Why me?”, I decided it would be a great opportunity to change careers. I was always interested in political writing and using my broadband connection made the foray into online media. Initially I picked up a gig writing for Examiner.com. They literally paid pennies, but it was exciting to write about national politics, putting together fun content pictures and all. I looked forward to e-mailing what I wrote to friends and acquaintances, taking the opportunity to express myself and how I viewed the world.

Months later, a friend invited me to blog as part of an advocacy campaign. She was on my distribution list for the articles I wrote for Examiner.com so had first knowledge of what I could do. It was and continues to be a great opportunity.

Unlike most job seekers, I had no fear of the online world. I hadn’t physically submitted a resume to any potential employer since 2002, but today people are still getting used to the idea of having to electronically submit a job application. Take for example a job fair here in Atlanta that I covered back in 2011 for Politic365.com. Job seekers, mostly Black American, stood in line for hours in front of the Atlanta Technical College hoping to see a recruiter. When people got inside to speak to companies, they were hit with a rude awakening: Employers don’t accept job applications in person anymore at job fairs. They quickly refer you to their websites in order to submit one.

For older job seekers especially, it was a surprise. Adding to the hardship must be the disproportionate amount of Black Americans whose only access to the Internet is via a smart phone. Smart phones are not designed for filling out job applications online or submitting resumes over the Internet.

The Joint Center for Political and Economic Studies’ research has shed light on how important it is for today’s job seeker to have access to broadband. It is ironic that employers have erected the use of technology as a barrier to entry into today’s labor market and that hurdling those barriers also requires use of the same technology.

I do not share the Center’s press for some government policy to address the barrier. It is tempting to argue that there is a failure in the market for laptops or personal computers, but it is difficult to draw that conclusion where the consumer opts for a $600 smart phone and a $60 a month data plan. Have American consumers with no broadband and computer at home been kept out of the laptop/wired broadband-at-home market or have they chosen to stay out?

As the labor market continues to erect these technical barriers to employment, we will need more than government policies that promote literacy skills or call for more computers in a library. Wireless companies discontinuing subsidies of smart phones would be a start. Removing the subsidies will temporarily drive smart phone prices up and force consumers to consider a choice between a smartphone and data plan or a laptop and wired broadband service.

Until a change in consumer behavior induced by changes in pricing occurs, Black Americans will continue facing technology obstacles to job searches.

Comments Off

With minorities creating disproportionate amount of tweets on Twitter, how will ads look?

Twitter recently filed papers for an initial public offering earlier this week to become the last of the three prominent social networks to raise capital on a yet to be announced public stock exchange. Twitter is reportedly trying to raise up to $1 billion to put toward working capital, operating expenses, and capital expenditures.

According to the Pew Research, some 15% of online adults use Twitter, with 8% using it on any given day. Twenty-eight percent of online African American adults uses Twitter, with 13% using the social network on nay given day. In addition, 26% of online users age 18-29 are using Twitter.

Pew also notes there is a high correlation between Twitter usage and mobile technology usage. If you’re tweeting, it’s a good chance you are using a smartphone. Specifically, 16% of smartphone users are using Twitter on their smartphones. African American and Latinos, demographic groups known for their disproportionate use of smartphones, will more likely lead in the use of Twitter via mobile devices.

Eighty-five percent of Twitter’s 2012 revenue came from advertising, according to an analysis done by Forbes.com. That amounted to $269 million out of a total of $317 million in 2012. Granted, social media is a different beast from traditional media, but there may be concerns about discrimination in advertising if Twitter follows the poor lead of its broadcast brethren. So far that concern hasn’t been raised by advocates for fairness in advertising, and I don’t see who would be responsible for addressing the issue, should it become one. For example, the Federal Communications Commission has no jurisdiction over social networks, but the Federal Trade Commission does flex its muscle on issues of competition in markets, privacy and advertising, so Twitter may wish to nip discrimination in advertising very early and avoid one regulatory nagging point.

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 broadband investors, 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 impacting your telecom investments or to request a customized report. E-mail him at alton@drewfonza.com.

Comments Off

Are progressive ideals about broadband out of touch with realistic needs of minority communities?

The following piece was originally published on 28 August 2013 by Politic365.com. Yours truly is the author

If progressives ever had as a goal the expansion of broadband to minorities, that goal must have fallen off the agenda. Just as the Republican Party seems hell bent on impeaching the current President, advocates for net neutrality seem equally as hell bent on overthrowing a few incumbent broadband providers of their own. But if the David v. Goliath view of the market for broadband services is the approach progressives and net neutrality advocates prefer to take, then advocates for expanding broadband into minority communities should start looking for another model to follow.

Black Americans trail white and Hispanic Americans in broadband availability in the home, according to the Pew Research Center’s Internet and American Family Life Project. Overall, 66% of adult Americans had access to broadband in the home. Fifty-six percent of Black American adults had broadband access in the home while 67% of white adults and 66% of Hispanic adults had broadband in the home.

This is significantly lower that the Federal Communications Commission’s goal of universal access to broadband access by all American households by 2020. According to the FCC’s national broadband plan, approximately 100 million Americans do not have broadband at home.

The importance of broadband connectivity goes beyond merely accessing social networks such as Twitter and Facebook, platforms where Black Americans and Hispanics are over-indexed. Access goes directly to issues significantly impacting the economics of minority communities, namely obtaining employment and remaining competitive in business. Go to a job fair and more than likely in lieu of a job application being handed to you, recruiters will instead ask you to go home, log on to a prospective employer’s website, and fill out an application there. This means that well over 40% of Black and Hispanic Americans will less likely be able to apply for jobs because they lack access to broadband from home.

In the case of entrepreneurs, remaining competitive is contingent on broadband access. Go to any Starbucks and not only do you see, graduate students needing a boost of caffeine while researching papers or the unemployed conducting job searches, but business owners that have turned their favorite coffee houses into their offices on the fly. Why? In addition to the coffee, using a coffee house’s WiFi keeps them in touch with clients while meeting prospects or business partners over a latte.

Black unemployment has traditionally doubled that of whites and in the post period of the 2007 recession this is no different where black unemployment stands at 12.6%. In addition, the number of employed blacks as a percentage of the black labor force is also lower than whites. This is not to insinuate that broadband access will be the great equalizing catalyst in today’s economy, but as President Obama has noted during his affordable college education bus tour, this is the knowledge economy, and a knowledge economy requires broadband access.

So what type of policy has to be implemented that would facilitate increased access by minority communities to broadband services? Definitely not the current policies as proposed by advocates of over-regulation of the broadband markets. This over-regulation, which includes net neutrality rules and treatment of broadband providers as public utilities would only drive up the prices paid for broadband according to Everett Ehrlich, president of ESC Company, an economics consultancy.

In a recent essay Mr. Ehrlich concluded that applying rules that required equal treatment of traffic across a broadband provider’s network combined with regulating broadband providers as if they were electric companies does nothing to address barriers to broadband adoption, including indifference and absence of computers at home. Rather, consumers may see prices increase if, under a public utility model, prices or rates of return are set by regulators leading to increased disincentives to introduce innovative services or upgrade aging networks.

Instead, progressives should reconsider their David v. Goliath agenda and pursue a course that promotes greater wireless carrier access to radio frequencies that lead to improved coverage and quality for wireless customers. In addition, continue with the universal service reforms that would provide further incentives to broadband providers to deploy more broadband networks resulting in greater consumer access to broadband services.

The current progressive agenda of increasing regulations on a carrier’s network management practices because they are perceived as “too big” or threatening to regulate a 21st century Internet access provider as a slow 20th century telephone company won’t increase broadband adoption.

Comments Off

Cities Should be Hubs of Expertise

Posted June 1st, 2012 in African Americans and tagged , , by Alton Drew

I had the honor of participating today on a panel during the National Conference of Black Mayors conference here in Atlanta. The discussion focused on the spectrum crunch and underserved communities. Moderating the discussion was Dr. Nicol Turner Lee. My fellow panelists included Jamie Hastings of CTIA: The Wireless Association, and Nilda Gumbs, representing the National Cable & Telecommunications Association.

Spectrum is not exactly a topic filled with caffeine, but I thought Ms. Hastings and Ms. Gumbs did a great job explaining the coming crisis and the impact a shortage of spectrum would have on a city’s ability to attract commerce.

I believe the conference understood the commerce angle. The conference highlighted the importance of international commerce with its round table on the African Diaspora and representatives from Africa, the Caribbean, and Latin America including Columbia, Cote D’Ivoire, Haiti, Jamaica, Nigeria, Senegal, and Uganda.

My message was simple. Cities need to view themselves as hubs of expertise. If there is anything that we can sell to our friends in Africa, the Caribbean, and Latin America, it is our expertise. This knowledge economy means that cities should focus on growing and harvesting its college-educated talent and use broadband technology to create and sell intellectual property and content.

Just like the port cities that built harbors from which to launch trade, cities should invest in harbors for spectrum, which would include infrastructure including towers and antennas. They should promote the need for increased spectrum in their cities and advocate for the streamlining of regulations that bar entry into their local markets.

It heartened me that a conferee came up after the discussion to ask where he could find more information on spectrum and that the NCBM had the foresight to learn more about the issue.