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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.

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Noting during Hispanic Heritage Month how Broadband helps weave our social fabric

Posted October 3rd, 2013 in Broadband, Hispanics by Alton Drew

The following was originally published on the Internet Innovation Alliance’s blog and was written by Mario H. Lopez, president of the Hispanic Leadership Fund.

“Hispanic Heritage Month began in 1968. Two decades later, it was officially recognized when it was enacted into law by President Reagan.

Since that time, America’s Hispanic community has experienced significant economic and social advancement. Given IIA’s mission to advocate for the expansion of broadband service across the country, I’d like to focus on the inroads that have been made in the Hispanic community with respect to broadband access and adoption.
According to Pew, 68% of Hispanics now own a cellphone, and of that number, 60% mostly use their phones to go online. That’s not too surprising; Hispanics have for years been among the most active adopters of mobile broadband, and as smartphones have proliferated wildly, that rate of growth should continue.

As for home broadband connections, however, the numbers are less promising. In its May survey, Pew also found that a little over half — 53% — of Hispanic households had high-speed Internet. That’s compared to 74% of whites, and 64% of African Americans.
Given the importance of broadband to access education, economic opportunity, tele-medicine, and employment, our nation should rededicate itself to encourage additional investment in next-generation wired and wireless networks throughout the country. These networks help power the devices we use today, and will use tomorrow.

Mobile broadband has greatly benefited the Hispanic community. Yet, mobile broadband represents just one part of the solution needed to achieve universal high-speed Internet access connectivity for all—irrespective of one’s geographic location or social status.
Achieving the goal of bringing every American into the digital age, won’t be cheap. But as with bringing universal telephone service to every household a century ago, it can be achieved when government allows for the creation of an economic environment that allows innovation and ingenuity to flourish.

America has always had a strong, and diverse, social fabric. It’s one of the reasons why we celebrate Hispanic Heritage Month. And communications has been key to creating that social fabric. We are connected as a nation, and together we can ensure everyone in America can remain connected, no matter how we communicate.”

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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.

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MMTC to present range of issues impacting spectrum and minorities

In preparation of an article for Politic365.com, yesterday I had the most insightful conversation with the co-founder and president of the Minority Media and Telecommunications Council David Honig. Entry into the media marketplace by members of the minority community is a top priority of the MMTC. For this reason, the MMTC is hosting tomorrow a forum on the spectrum crunch and how this crisis in the airwaves will impact minority communities.

We are hitting a wall on spectrum, Mr. Honig said to me and it’s going to have an impact on minority consumers and entrepreneurs. For consumers we’ll probably see degradation in services, particularly more dropped calls. As spectrum, like any resource, becomes scarcer, we’ll probably see higher prices. One can argue that all consumers, no matter their race, will see price increases, but for minorities there may be a greater negative incidence from an increase in cell phone rates.

For example, Black unemployment is around 13.8%, much higher than the national average of 8.3%. According to the Pew Research Council, White median household wealth is around $113,149 compared to Black household wealth of $5,677. The average income for Black households is $44,780 compared with White households who have an average income of $73,439.

Hispanics households, while having average household income of $51,540, have a household wealth of $6,325, according to Pew Research. The unemployment rate for Hispanics is also above the national average at 10.5%.

For minority entrepreneurs attempting to mitigate the damage of the last recession via self employment, entering the broadband, telecommunications or media markets with little equity or capital makes success even harder. Facing increasing spectrum’s increasing factor cost of production only adds to the burden.

Given MMTC’s knowledge and expertise with broadband and spectrum issues, the forum should provide attendees with great and useful policy insights.

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Will minorities benefit if the FCC lets the market work?

The Minority Media and Telecommunications Council’s Latoya Livingston wrote an insightful blog post on how increasing available spectrum can help entry into the digital economy. Check out her post here.

Ms. Livingston’s article raises two important points. One, why is the FCC afraid of allowing a market strategy such as consolidation do the work that it is not equipped to do? Second, why does the FCC not recognize that growth in the wireless sector does not necessarily mean having a certain number of carriers in the sector?

If you want wireless services produced and distributed at lower costs, you need to allow for scale whenever possible. As wireless services improve with the additional spectrum, entrepreneurs will bring innovative products that enhance the use of wireless networks.

It’s okay to let the market stumble and find itself. We can’t afford to have the FCC trying to hold the industry’s hand every step of the way.