The coronavirus pandemic has underscored the digital divide in the US and heightened the disadvantages faced by people who lack home internet connections, prompting a bipartisan effort to expand access to broadband through federal subsidies, according to The Wall Street Journal.
In life during the pandemic, internet connectivity has increasingly become a prerequisite for access to medicine, employment, groceries, education, and religious services. But 27% of US adults still don’t have home broadband, despite long-running federal efforts to expand access, according to data from the Pew Research Center. Lack of access is most pronounced within the communities most vulnerable to the impacts of the pandemic: For instance, 44% of US adults with annual incomes less than $30,000 lacked home internet, as did 41% of all US adults older than 65, per Pew Research Center data.
In response, US lawmakers including Sen. Shelley Moore Capito of West Virginia — who noted many in her state could not access telemedicine due to lack of internet access — have advocated for the rapid expansion of federal broadband subsidies.
Near-term efforts to expand connectivity would likely focus on making internet access more affordable. Cost is one of the biggest barriers preventing those in the US from gaining internet access, but it is also one of the easiest barriers to address in the short term through federal funding. The Federal Communications Commission (FCC) has already extended accessibility programs such as E-Rate, which supports internet access for schools and libraries, as well as Lifeline, which subsidizes phone costs for low-income consumers.
Traditional home broadband providers stand to gain millions of subscribers through expanded subsidies. However, as broadband technicians have adopted social distancing tools to limit exposure, the rate of home installation has slowed. Providers who can find ways to continue onboarding new customers will unlock a long-term opportunity, considering that there will likely be little political appetite in the future to roll back subsidies and curtail internet access.
Long-term measures would likely include subsidies to expand home broadband infrastructure, which presents an attractive opportunity for regional broadband players and satellite connectivity providers. In January 2020, the FCC launched a $20.4 billion fund aimed at expanding rural broadband access over the next decade.
The immediate connectivity needs of rural communities could prompt an accelerated rollout timeline with additional funding, which could help address the limited supply of telecom technicians. Increased funding presents a boon to regional broadband providers, many of which serve customers in so-called “high-cost areas.” But the challengers in this market — namely, satellite-based connectivity services — have an opportunity to demonstrate that satellite connectivity can scale faster than traditional broadband infrastructure.
One such company, SpaceX, which applied to qualify for rural broadband subsidies, aims to launch its commercial service in the US by mid-2020. Overall, the scale of a potential federal program could reshape the US broadband market by accelerating the momentum of providers that are able to deliver connectivity under challenging operational circumstances.
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