arstechnica: Broadband’s Double-digit Growth Coming to an End

From Now On It's All Business

As of Spring 2006, 72 percent of home internet users had broadband connections. With a peak market around 85 percent (the rest say they don’t want or can’t afford broadband), we’re pretty much there.

To be sure, the term broadband covers a lot of ground with enormous differences in technical specifications and end-user experience from one service to another. So, assuming you have options, it’s worth asking around to see who delivers the best/fastest service. But if you’ve been waiting to launch that web-based strategy until the technology is there, the technology is there. So are the customers, whose number and quality aren’t likely to increase much from here out.

What is likely to increase is the level of service to customers. From now on, almost wherever you live, broadband customers will be won and retained on the basis of speed, functionality, reliability, security, responsiveness and price.

Or cunning. A flurry of internet lobbying and legislation in 2006 appears to have as its goal nothing more noble than attempting to stake out an anticompetitive advantage. Not unlike the fast talking 1920s candidate whose stump speech to under-educated Florida voters included the charge that his opponent was the associate of known homo sapiens, some of the language is meant to confuse. It certainly seems to have baffled Alaska’s Ted Stevens, chairman of the Senate Committee on Commerce.

So . . . caveat emptor and all that.

At the end of June 2006 c|net’s Molly Wood joined the Internet Neutrality debate with a directness that may help clear up the hazy congressional debate. Here’s hoping anyway.

Supposing for the moment that Congress and/or the courts make sense of all this, access to the information superhighway is now open to all but the poor and the disinterested. We can set aside the disinterested who, should they become interested, will join the conversation one at a time as perceived need, easy access, low cost and technological transparency (internet use that seems no more complicated than a phone call) converge.

That leaves the poor. Poverty has increased throughout the decade, affecting about 13 of every 100 US citizens. Depending on where you live, it probably won’t help to simply look around you. Those 13 people tend to be clustered rather than evenly distributed through the population. The Appalachian region, for example, is one long poverty cluster (make your own joke here).

Appalachia is a band of 406 counties stretching down 13 US states from New York to Mississippi. In 2006, 77 of of those counties are designated as distressed by unemployment and poverty rates at least 150 percent of the national averages and per capita market income less than 67 percent of the national average. Appalachia is home to about eight of every one hundred Americans.

A 2001 report from the congressionally chartered Appalachian Regional Commission notes that between 1996 and 2000 the number of tech-related jobs rose by just 21 percent in exurban Appalachian counties. Nationwide, the increase in tech jobs from 1996 - 2000 was + 53%. Let’s not assume those Appalachian counties fared any better than the rest of the nation when the tech bubble burst – especially given their already scarce access to new economy tools.

Up-to-the-minute details on internet infrastructure are not easy to come by. In 2001 (as per the ARC report) only 63 of 406 Appalachian counties had any cable modem service whatsoever; just 28 counties had more than three DSL Telephone Central Offices. 260 counties had none. In 2006, with 72 percent broadband saturation, the region still lags behind.

There is a difference in wages between workers who use computers and those who don’t – this common sense argument has been batted around since the 1980s. Now a US Bureau of Labor Statistics paper, dated June, 2006, puts numbers on it:

Using the Canadian Workplace and Employee Survey and controlling for individual and establishment fixed effects, we find that within a year of adopting a computer, the average worker earns a 3.6 percent higher wage than a similar worker who did not adopt a computer. Returns are even larger for managers and professionals, highly educated workers, and those with significant prior computer experience. Employees who use computer applications that require high cognitive skills earn the highest returns.

Without overstating the case, let’s just say that poor people are unlikely to have significant prior computer experience when they get to work.

A May, 2006 Pew survey of home broadband adoption found just 21 percent of people living with household incomes under $30k claimed to be broadband subscribers. A September 2004 US Department of Commerce study (A Nation Online) found 7.5 percent of those with family incomes under $15k (and only 9.3 percent of those with family incomes under $25k) lived in broadband households. It would appear that $32/month (the average 2006 cost of broadband in the US) still seems like a lot of money to someone making less than $8 an hour.

In July 2006, Salon’s Andrew Leonard wrote:

Technological progress and the use of computers in the workplace aren’t going away; if those factors truly are the major force behind growing wage inequality, then that problem is just going to get worse, absent a sustained push from the government to direct Marshall Plan-scale resources into education.

A laptop in every K-12 pot, anyone?

Or how about this… How about if American businesses took on the challenge of putting every student in every public school in Appalachia in front of a computer for an hour every school day? But why stop with Appalachia? How about if, at the end of every school year, students with exemplary attendance records got to take a computer home with them? How about if we just, for goodness sake, look down the road and see how much money there is to be made – by everyone – if we leverage all this technology and bandwidth to help our children prepare to contribute when they get to work? Come on! This isn’t rocket science. It’s business.

Post a Comment

Your email is never published nor shared.