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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 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.

Media Matters for America misses the minority consumer welfare argument

A blog post on Media Matters for America’s website spent so much time emphasizing an alleged and tenuous conflict of interest involving Henry Rivera and AT&T that it completely missed the very significant issue of what a failure to approve AT&T’s acquisition of T-Mobile USA would mean to minority access to the Internet.

Pew Research found that while 59% of adult Americans go online via wireless devices, blacks and Latinos are more likely to own a cell phone (87%) versus whites (80%). In addition, 64% of African Americans and 63% of Latinos access the Internet via wireless devices.

This data supports Mr. Rivera’s view that AT&T’s acquisition of T-Mobile should be approved. Since T-Mobile is not in a position to expand its 4G network, blacks and Latinos would not enjoy the benefits of expanded 4g coverage, at least in the short run.