For all intents and purposes, Google and Verizon’s recent legislative proposal should be viewed as a preemptive strike expressed out of frustration with the FCC’s slow progress on the classification of access services to the Internet. That change would recast internet access as an “Information Service”, instead of a “Telecommunication Service” as previously defined by the Bush Administration. Such a change would allow the commission, under current law, to enforce “Net Neutrality” policies on all service providers, potentially affecting all organizations and individuals using the Internet.
But it appears that Google and Verizon concede that ISPs do provide information services. A closer reading of the proposal reveals the real motive is to identify for the FCC three tiers of internet access, and suggest why each tier should or should not be regulated. In doing so, however, the proposal suggests how Google and Verizon would like the Internet to be perceived by regulators, a vision that could have long term effects on the future development of the global network.
A Myopic View
One major problem is that the Internet landscape envisioned by Google, Verizon, and now AT&T, is not only simplistic, but incomplete. For example, their vision does not account for other media platforms that now rely on much of the same technical infrastructure that supports the Internet. This vision also fails to acknowledge other services on those platforms that have already migrated to the Internet. These factors raise some important questions.
What will happen to Internet-based radio, television, web commerce, messaging, video conferencing, and other non-mobile wireless if the tiers are adopted? Will some services be reclassified and languish when access fees become too high? What about new services that rely on one or more of those platforms, such as social media, gaming, streaming video, and virtual reality sites? Each will need faster and more robust networks to operate. What will happen if the cost of high speed access is prohibitive to their business models? How do they fit into Google and Verizon’s tightly scripted world?
These questions and the potential effects on future services have been lost in the debate since the proposal was first made public. To understand the full impact of Google and Verizon’s proposal, we must go into greater detail regarding what exactly is at stake in the debate.
Reconceptualizing the Internet
Although we seem to be beyond viewing the Internet as the “Information Superhighway”, grasping its physical nature is still an elusive task. Conceptualization of the Internet, in fact, has become a contested terrain. Google, Verizon and others apparently view the Internet as a simple three tiered structure: “wireline” terrestrial based services, private services geared to specific groups of professionals and high end users, and mobile wireless services. But is that all there is?
A more accurate definition of the Internet may be as clichéd as a gigantic global network, but one of many networks, in fact, that include radio, telephone, television, messaging, video conferencing, and wireless networks in many different countries. The popular image of the Internet as “the web”, taken from the 1990’s graphic interface that gives form to different sites on the network, illustrates just how extensive and prominent we see that particular network becoming in comparison to others.
But if we strip down the Internet to its base elements, giving it no more and no less weight, we can then see it in context with other communication systems, which I call “meta networks”, as follows:
Radio - broadcast, satellite, web, cable
Telephone - land lines, long distance, cellular, VOIP
Television - broadcast, cable, web TV
Internet - web, social media, gaming, streaming video, virtual worlds
Messaging - e-mail, texting, instant messaging
Video Conferencing - private, public, business networks
Mobile\Wireless - wireless 3G, 4G, Wi-Fi, Wi-Max
All meta networks, including the Internet, share well known traits. Most communications networks, including many operating within the Internet, are owned and operated by commercial entities. Some networks are “closed” or “walled”, restricting the types of hardware and software applications that can be used on it. Other networks are “open”, with few or no restrictions on devices and applications. Some allow access at no cost to users, while others charge fees for access. Some networks restrict content, only allowing that which has been produced professionally, while other networks encourage users to contribute any content they choose. Most networks also support operations by selling advertising, the form dependent on the way content is delivered to consumers.
Another important trait of all networks in the 21st century is that each is supported by portions of the same technical infrastructure, made up of government allocated spectrum and commercial satellites in the atmosphere, and terrestrial fiber optic, coaxial cable, twisted copper pairs, and microwave systems. The sharing of infrastructure allows various forms of access to large numbers of users, but also makes all networks potentially vulnerable to actions that restrict access to it.
Potential Effects on Future Growth and Innovation
This is the problem faced by newer Internet-based services, or “sub networks”, which now may be exposed to restrictions if the Google-Verizon proposal is adopted by the FCC. These networks include social media, such as Facebook, Twitter, and LinkedIn; gaming networks, such as EA sports and Activision’s World of War Craft; video networks, such HULU and Netflix; and virtual reality networks; such as Second Life. The effects on their businesses can only be imagined.
Each of these services are beginning to incorporate applications requiring faster processor response time and greater bandwidth. As a result, there is the possibility that these and future networks in each space would be identified under the Google – Verizon proposal as “proprietary” services requiring higher access fees. These fees would be passed on to consumers in the form of more expensive hardware and software costs, creating disincentives to user growth. Once the numbers of users go down, operating margins would shrink and capital would begin to dry up. This would limit future development, and ultimately restrict expansion of the business itself. The cumulative effect on lost business revenue and jobs is not the message that should be sent during a recession.
The problems may grow worse if the migration of these services continues in the mobile and wireless space. Social media on mobile devices is clearly booming, as are gaming, video, and even virtual worlds. Besides the use of handheld devices for access, many new 3G and 4G devices and other plug-ins allow access to Wi-Fi hotspots and wireless networks that could charge more restrictive fees for bandwidth hungry services.
Critics who suggest that social media users and gamers will always pay the higher fees miss the large issue of why consumers use these services in the first place. These new sub networks are not simply diversions from work or school, but important destinations for social interaction, leisure activity, and professional referrals, associations that are an integral part of the lives of many adults in the critical 18 to 48 age groups. Tampering with this demographic category could damage the possibilities for advertising and other business in the coming years.
Time to Look Beyond Short Term Solutions
Placing a ceiling on new services that represent core areas of innovation on the Internet is probably not what Google or Verizon have in mind. The issue for Verizon and other ISPs is the future costs of providing network access to those services. For Google it’s important to lock in current access rates and hold down future costs to deliver Android applications that are now very marketable.
Their legislative agenda, however, only provides short term solutions for each company, and does not address the long term issues of sustained growth and job development in an economy increasingly dependent on the Internet. To those cynical enough to suggest that businesses are selfish and will only plan for the short term, I would point out both Google and Verizon’s long term strategies for development proposed in the early part of this decade.
The FCC, of course, is not immune to such limited vision. Net neutrality alone will not insure either growth or jobs. Nor will inactivity and attempts to reach “consensus” be the answer in the dynamic environment in which we find ourselves today. The best solution will be a combination of investment by telecommunication and application providers in better infrastructure, and selective and light handed regulation by the FCC that will guarantee that all businesses and user groups have equal access to the Internet and its various services.
Let’s hope that such a solution will be part of the negotiations that will take place in the future.
Tuesday
Wednesday
Episode 13 - Google and Verizon Propose a Future for the Internet
As the global network expands, different corporations seem to be positioning themselves to exploit different classes of services. We saw the first group, including AT&T, Verizon, Comcast, and Time Warner Cable, emerge around 2004 as the internet’s broadband service providers. By 2006 Google and Apple were taking advantage of high broadband usage to place content providers on an equal footing. In 2010, as a stalemate between large distribution and content companies developed, there is now the first proposal by representatives of both camps on how the internet should be governed.
In August 2010, Google and Verizon proposed a controversial legislative agenda to the FCC. The proposal recommends that the commission recognize three classes of internet service: 1) traditional wired broadband network access that should not impose different fees for faster connections, and be regulated to preserve the Internet’s “open” nature; 2) proprietary networks that can charge higher rates for premium services, much like cable and satellite companies, and; 3) wireless mobile services, which are to be left unregulated, presumably to encourage more investment.
Reaction to the proposal has been pointed, especially since the FCC was already holding “discussions” for several months with Google, Verizon, and their competitors on “Net Neutrality”, the policy for open and non-discriminatory access. Commentators from the traditional media, the developer community, and advocacy organizations have all weighed in on a number of points and with a variety of opinions. Major corporations also seemed divided on the proposal: AT&T supported it, while social media giant Facebook did not.
Google’s adoption of net neutrality, we recall, is part of a series of revisions to its business model since the search and advertising business began leveling off in 2005, and increased since the hiring of Eric Schmidt in 2007 as CEO. Verizon has also adopted net neutrality principles to distance itself from other telecom providers, notably AT&T, in part to share in the open source market revealed by Google and other companies. The 2010 Google-Verizon proposal suggests that Google may now feel that carriage with Verizon, or another large internet service provider, may be a better course of action than building its own high speed networks.
Google is not the only company changing due to the internet. Many of America’s largest corporations are making similar moves, including Best Buy, Clear Wire Communications, Verizon, AT&T, and most major banking institutions. It is no coincidence that a major focus is on mobile services. There is evidence from many sources, including the Obama Administration and research organizations, such as Nielsen and ComScore, which note the growing number of mobile users over commercial wireless networks.
In light of these developments, the consensus of government and industry opinion suggests that a major retooling of communications and global commerce strategies is taking place. These strategies include more wireless mobile connectivity, visual display of goods and services on high definition smartphones and handheld devices, such as an IPad, and better use of social media on those same devices.
Such strategies will be much easier to implement, Google and Verizon imply, if distinctions are made by the FCC among types of services and the relative costs to provide those services. In the end, Google’s and Verizon’s purpose in offering the proposal may be to point out different classes of services, and to propose how each of those services should and should not be regulated.
The problem with this proposal, even if the FCC adopts it, is that it probably won’t work. There is historical evidence that suggests new technology will often force such regulatory schemes to become irrelevant. For example, wireless telegraphers and radio companies in the early 20th century, with the backing of the American government, kept broadcast radio in limbo until the late 1920’s and 30s when improved sound quality made entertainment programming universally popular. Television broadcasters in the 1960’s and 70’s lobbied the FCC into relegating cable television to a duplication service, until satellite services made cable more competitive in the 1980’s.
A similar pattern seems to be occurring in the internet period. Telecommunication providers and web application companies hoping to protect proprietary and wireless networks from oversight may eventually confront innovations that make some networks obsolete. This may already be occurring if we consider services offered by Skype (global video and voice calls), Dell and HP (handheld devices), Facebook (social media with video and voice), and the growing number of independent open source applications, ironically encouraged by Google’s Linux based platforms. These examples do not include companies in China, India, Brazil, and Russia, which have the capability to develop hardware and software as cheaper, more efficient alternatives.
In the new reality that is the internet, technical innovation will usually trump whatever regulatory scheme is set up to control the marketplace. It is only a matter of time, and if history is any yardstick, that time frame seems to be getting shorter and shorter.
Let’s put this latest development in a larger context.
• Google and Verizon’s proposal would have been impossible if the internet service provider market had remained concentrated in the hands of a few companies. In other words, there has to be a breakdown of consolidation and monopoly practices, which go back more than a century in the United States, for open networks to emerge. This may have already begun. The FCC’s push for net neutrality is a further step.
• In addition to less consolidation, new technology continues to erode traditional market barriers. We saw examples with the introduction and development of cable television, then with the evolution of the internet: both were instances in which newer technologies can allow circumvention of distribution and content production to take place, in each case through the introduction of interactive capabilities. Google, Verizon, and others are able now to contribute to this tradition.
• The internet provides the unprecedented case in which interactivity encourages content production, an area that was controlled by professionals employed by the largest companies. This is also a change from the past, previously dominated by the “broadcast model” of radio and television. Again, new technology, in the form of the global network and software applications that service narrower interests over new devices like smartphones, speed this creative activity along.
• Despite the introduction of new technology, regulation should not be disregarded. Government oversight often cuts different ways. It can be heavy handed to support national interests and policies, as we saw with the regulation of wireless telegraphy and early radio by the Navy in the early 20th century. Regulation can also be more subtle and selective, as we saw in the earlier discussion of broadcast radio and television through the 1990’s.
• Government oversight of technology may also be absent when the pace of innovation is faster than regulatory agencies can respond. We saw this in the early history of the telephone industry around 1870, with wireless telegraphy in the 1890’s, and most recently, as the FCC attempts to formulate its policy of Net Neutrality. Google and Verizon are filling the void left by a lack of oversight.
• All of this suggests the need for government authority over all internet activity, but light handed enough so that the needs of users are served, while investment will not be discouraged. The Google-Verizon proposal, flawed as it may be, could then be viewed as an opportunity to better define what “open” and “neutral” really mean, not only for different types of services, but also different classes of users.
Notes
NYT Editorial, http://www.nytimes.com/2010/08/14/opinion/14sat1.html?_r=1&partner=rssnyt&emc=rss
Google-Verizon Statement, http://googlepublicpolicy.blogspot.com/2010/08/facts-about-our-network-neutrality.html
NPR, For the Record, http://www.npr.org/blogs/therecord/2010/08/13/129176208/you-ve-got-to-change-your-don-t-be-evil-ways
Ars Technica, http://arstechnica.com/telecom/news/2010/08/a-paper-trail-of-betrayal-googles-net-neutrality-collapse.ars
Public Knowledge, http://www.publicknowledge.org/blog/theres-only-one-internet
PC World, http://www.pcworld.com/article/202970/googleverizon_net_neutrality_pact_5_red_flags.html?tk=fv_rel
Nielson, http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=133965
ComScore, http://www.mobilemarketingwatch.com/local-mobile-search-stats-up-14-to-17-3m-users-mobile-web-leads-apps-growing-8602/
White House Wireless Memo, http://www.whitehouse.gov/the-press-office/presidential-memorandum-unleashing-wireless-broadband-revolution
AT&T supports it, http://blogs.wsj.com/digits/2010/08/13/no-shock-att-backs-wireless-exemption-from-net-neutrality/
Facebook does not, http://voices.washingtonpost.com/posttech/2010/08/silicon_valley_criticizes_goog.html
Google business model revisions, http://www.smallbizdr.net/2010_04_01_archive.html
Radio programming, http://www.smallbizdr.net/2007/10/episode-2-rca-and-emergence-of-american.html
Cable breaks out, http://www.smallbizdr.net/2008/01/cable-breaks-television-monopoly.html
Internet control breaks down, http://www.smallbizdr.net/search?updated-min=2008-01-01T00%3A00%3A00-08%3A00&updated-max=2009-01-01T00%3A00%3A00-08%3A00&max-results=4
In August 2010, Google and Verizon proposed a controversial legislative agenda to the FCC. The proposal recommends that the commission recognize three classes of internet service: 1) traditional wired broadband network access that should not impose different fees for faster connections, and be regulated to preserve the Internet’s “open” nature; 2) proprietary networks that can charge higher rates for premium services, much like cable and satellite companies, and; 3) wireless mobile services, which are to be left unregulated, presumably to encourage more investment.
Reaction to the proposal has been pointed, especially since the FCC was already holding “discussions” for several months with Google, Verizon, and their competitors on “Net Neutrality”, the policy for open and non-discriminatory access. Commentators from the traditional media, the developer community, and advocacy organizations have all weighed in on a number of points and with a variety of opinions. Major corporations also seemed divided on the proposal: AT&T supported it, while social media giant Facebook did not.
Google’s adoption of net neutrality, we recall, is part of a series of revisions to its business model since the search and advertising business began leveling off in 2005, and increased since the hiring of Eric Schmidt in 2007 as CEO. Verizon has also adopted net neutrality principles to distance itself from other telecom providers, notably AT&T, in part to share in the open source market revealed by Google and other companies. The 2010 Google-Verizon proposal suggests that Google may now feel that carriage with Verizon, or another large internet service provider, may be a better course of action than building its own high speed networks.
Google is not the only company changing due to the internet. Many of America’s largest corporations are making similar moves, including Best Buy, Clear Wire Communications, Verizon, AT&T, and most major banking institutions. It is no coincidence that a major focus is on mobile services. There is evidence from many sources, including the Obama Administration and research organizations, such as Nielsen and ComScore, which note the growing number of mobile users over commercial wireless networks.
In light of these developments, the consensus of government and industry opinion suggests that a major retooling of communications and global commerce strategies is taking place. These strategies include more wireless mobile connectivity, visual display of goods and services on high definition smartphones and handheld devices, such as an IPad, and better use of social media on those same devices.
Such strategies will be much easier to implement, Google and Verizon imply, if distinctions are made by the FCC among types of services and the relative costs to provide those services. In the end, Google’s and Verizon’s purpose in offering the proposal may be to point out different classes of services, and to propose how each of those services should and should not be regulated.
The problem with this proposal, even if the FCC adopts it, is that it probably won’t work. There is historical evidence that suggests new technology will often force such regulatory schemes to become irrelevant. For example, wireless telegraphers and radio companies in the early 20th century, with the backing of the American government, kept broadcast radio in limbo until the late 1920’s and 30s when improved sound quality made entertainment programming universally popular. Television broadcasters in the 1960’s and 70’s lobbied the FCC into relegating cable television to a duplication service, until satellite services made cable more competitive in the 1980’s.
A similar pattern seems to be occurring in the internet period. Telecommunication providers and web application companies hoping to protect proprietary and wireless networks from oversight may eventually confront innovations that make some networks obsolete. This may already be occurring if we consider services offered by Skype (global video and voice calls), Dell and HP (handheld devices), Facebook (social media with video and voice), and the growing number of independent open source applications, ironically encouraged by Google’s Linux based platforms. These examples do not include companies in China, India, Brazil, and Russia, which have the capability to develop hardware and software as cheaper, more efficient alternatives.
In the new reality that is the internet, technical innovation will usually trump whatever regulatory scheme is set up to control the marketplace. It is only a matter of time, and if history is any yardstick, that time frame seems to be getting shorter and shorter.
Let’s put this latest development in a larger context.
• Google and Verizon’s proposal would have been impossible if the internet service provider market had remained concentrated in the hands of a few companies. In other words, there has to be a breakdown of consolidation and monopoly practices, which go back more than a century in the United States, for open networks to emerge. This may have already begun. The FCC’s push for net neutrality is a further step.
• In addition to less consolidation, new technology continues to erode traditional market barriers. We saw examples with the introduction and development of cable television, then with the evolution of the internet: both were instances in which newer technologies can allow circumvention of distribution and content production to take place, in each case through the introduction of interactive capabilities. Google, Verizon, and others are able now to contribute to this tradition.
• The internet provides the unprecedented case in which interactivity encourages content production, an area that was controlled by professionals employed by the largest companies. This is also a change from the past, previously dominated by the “broadcast model” of radio and television. Again, new technology, in the form of the global network and software applications that service narrower interests over new devices like smartphones, speed this creative activity along.
• Despite the introduction of new technology, regulation should not be disregarded. Government oversight often cuts different ways. It can be heavy handed to support national interests and policies, as we saw with the regulation of wireless telegraphy and early radio by the Navy in the early 20th century. Regulation can also be more subtle and selective, as we saw in the earlier discussion of broadcast radio and television through the 1990’s.
• Government oversight of technology may also be absent when the pace of innovation is faster than regulatory agencies can respond. We saw this in the early history of the telephone industry around 1870, with wireless telegraphy in the 1890’s, and most recently, as the FCC attempts to formulate its policy of Net Neutrality. Google and Verizon are filling the void left by a lack of oversight.
• All of this suggests the need for government authority over all internet activity, but light handed enough so that the needs of users are served, while investment will not be discouraged. The Google-Verizon proposal, flawed as it may be, could then be viewed as an opportunity to better define what “open” and “neutral” really mean, not only for different types of services, but also different classes of users.
Notes
NYT Editorial, http://www.nytimes.com/2010/08/14/opinion/14sat1.html?_r=1&partner=rssnyt&emc=rss
Google-Verizon Statement, http://googlepublicpolicy.blogspot.com/2010/08/facts-about-our-network-neutrality.html
NPR, For the Record, http://www.npr.org/blogs/therecord/2010/08/13/129176208/you-ve-got-to-change-your-don-t-be-evil-ways
Ars Technica, http://arstechnica.com/telecom/news/2010/08/a-paper-trail-of-betrayal-googles-net-neutrality-collapse.ars
Public Knowledge, http://www.publicknowledge.org/blog/theres-only-one-internet
PC World, http://www.pcworld.com/article/202970/googleverizon_net_neutrality_pact_5_red_flags.html?tk=fv_rel
Nielson, http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=133965
ComScore, http://www.mobilemarketingwatch.com/local-mobile-search-stats-up-14-to-17-3m-users-mobile-web-leads-apps-growing-8602/
White House Wireless Memo, http://www.whitehouse.gov/the-press-office/presidential-memorandum-unleashing-wireless-broadband-revolution
AT&T supports it, http://blogs.wsj.com/digits/2010/08/13/no-shock-att-backs-wireless-exemption-from-net-neutrality/
Facebook does not, http://voices.washingtonpost.com/posttech/2010/08/silicon_valley_criticizes_goog.html
Google business model revisions, http://www.smallbizdr.net/2010_04_01_archive.html
Radio programming, http://www.smallbizdr.net/2007/10/episode-2-rca-and-emergence-of-american.html
Cable breaks out, http://www.smallbizdr.net/2008/01/cable-breaks-television-monopoly.html
Internet control breaks down, http://www.smallbizdr.net/search?updated-min=2008-01-01T00%3A00%3A00-08%3A00&updated-max=2009-01-01T00%3A00%3A00-08%3A00&max-results=4
Episode 12 - Users in the Age of Web 2.0
Let’s now attempt to evaluate what effects Google’s recent moves to advocate for faster internet speeds, to become more vertically integrated, and to be less dependent on large telecom providers will have. As we asked earlier: How will users be affected by faster and more open internet access? Will policy changes and market maneuvers by large service providers, like Google and Verizon, improve the Internet on the whole?
To answer these questions, we must first benchmark where high speed Internet in the United States now stands. Then we can assess how these changes might have an effect on internet usage, which is at the center of current debates.
U.S. Internet Benchmarks
The International Telecommunications Union currently ranks the United States 19th in cost for service, behind France and Austria, among nations that use the internet. According to the latest FCC report, approximately 95% of Americans now have access to broadband, although the method of calculating this statistic has been questioned. High speed access, however, has been about equal in urban and rural areas since 2008.
Several factors play a role in determining how people use the internet, including location, the quality of services offered, cost, access to computers, and education. In fact, these variables often tend to maintain a “digital divide” among different groups of users. For example, the Commerce Department estimates that only 37% of Latinos and 46% of African-Americans in the United States are on-line, while 65% of Caucasians and 62% of Asians use the internet regularly. The differences are even more pronounced when considering household income: 38% of U.S. families earning less than $25,000 per year are on-line, while 83% of families earning $75,000 or more use the Internet.
The resulting separation in classes of internet service, researchers from Pennsylvania State University predict, will have a direct effect on educational and business opportunities for those who have and those who do not have access to broadband services.
Access by students as a prerequisite for future jobs is also highlighted in a study by the University of California, Berkeley. That research suggests that wired broadband access is usually not affordable to large numbers of Latinos and Africa-Americans students, while the extra cost of mobile internet access is also becoming prohibitive. The study also found that access determined by affordability is evident when inner city school districts and non-profit organizations are forced to reduce technology budgets, limit computer access in libraries due to staffing cuts, and neglect maintenance and upgrades during a recession.
As a result, effective access to broadband internet services, including mobile wireless services, is closer to 35% of the population in the United States at present, largely because wired broadband and mobile internet services are more affordable to middle class users who live in urban areas where the fastest services are available.
An Ambiguous Future
So to answer our questions: First, while the speed and openness of most ISP service is improving for Americans, service costs remain relatively high and apparently out of reach for many users. This creates a division between those who can afford and those who cannot afford broadband services. Secondly, policy and industry changes have not permeated traditional social barriers, especially economic status, race, and education, which influence adoption and continue to hold back user numbers. Third, there remains an assumption by policy makers and industry leaders, similar to supply side economists that faster and more robust internet services will eventually “trickle down” to less affluent users as investment in broadband continues. As a result, there seems to be less motivation to bring faster internet access to lower income groups.
There is also a fourth conclusion. What works for Google today may not work for Google and others tomorrow. Such is the “hit or miss” character of current initiatives to improve the internet. The evolving nature of the global network, especially issues related to internet regulation, also makes it difficult to assess, much less predict, whether current policy initiatives and business strategies will have long term benefits for users. We are even less sure whether present inequities preventing some population groups from fully utilizing the internet will ever be overcome.
We can, however, use our perspective outlined in the previous chapters to compare developments by current policy makers and large corporations with those throughout the history of media development in the United States. Those insights should provide a clearer picture of what the internet landscape might look like in the near future. For without such historical comparisons, we cannot hope to understand what we observe in today’s sound bite, video clip, hyper speed news cycles in any context and with any accuracy. That will be the task of our next chapters.
Notes
International Telecommunications Union – Country Rankings: http://www.itu.int/net/itunews/issues/2010/03/26.aspx
US Department of Commerce Report: http://www.ntia.doc.gov/reports/anol/index.html
Free Press: FCC Ignores the Digital Divide: http://www.freepress.net/files/broadband_report.pdf
Penn State Report: “Small Business and Broadband: Key Drivers for Economic Recovery”,http://comm.psu.edu/about/centers/institute-for-information-policy/smallbusiness.pdf
U.C. B. Report, “Disconnected: a Community and Technology Needs Assessment of the Southeast Los Angeles Region”, http://clpr.berkeley.edu/pages/news.html
“Broadband Internet Regulation and Access: Background and Issues”, CRS 2006 report: http://www.au.af.mil/au/awc/awcgate/crs/ib10045.pdf
To answer these questions, we must first benchmark where high speed Internet in the United States now stands. Then we can assess how these changes might have an effect on internet usage, which is at the center of current debates.
U.S. Internet Benchmarks
The International Telecommunications Union currently ranks the United States 19th in cost for service, behind France and Austria, among nations that use the internet. According to the latest FCC report, approximately 95% of Americans now have access to broadband, although the method of calculating this statistic has been questioned. High speed access, however, has been about equal in urban and rural areas since 2008.
Several factors play a role in determining how people use the internet, including location, the quality of services offered, cost, access to computers, and education. In fact, these variables often tend to maintain a “digital divide” among different groups of users. For example, the Commerce Department estimates that only 37% of Latinos and 46% of African-Americans in the United States are on-line, while 65% of Caucasians and 62% of Asians use the internet regularly. The differences are even more pronounced when considering household income: 38% of U.S. families earning less than $25,000 per year are on-line, while 83% of families earning $75,000 or more use the Internet.
The resulting separation in classes of internet service, researchers from Pennsylvania State University predict, will have a direct effect on educational and business opportunities for those who have and those who do not have access to broadband services.
Access by students as a prerequisite for future jobs is also highlighted in a study by the University of California, Berkeley. That research suggests that wired broadband access is usually not affordable to large numbers of Latinos and Africa-Americans students, while the extra cost of mobile internet access is also becoming prohibitive. The study also found that access determined by affordability is evident when inner city school districts and non-profit organizations are forced to reduce technology budgets, limit computer access in libraries due to staffing cuts, and neglect maintenance and upgrades during a recession.
As a result, effective access to broadband internet services, including mobile wireless services, is closer to 35% of the population in the United States at present, largely because wired broadband and mobile internet services are more affordable to middle class users who live in urban areas where the fastest services are available.
An Ambiguous Future
So to answer our questions: First, while the speed and openness of most ISP service is improving for Americans, service costs remain relatively high and apparently out of reach for many users. This creates a division between those who can afford and those who cannot afford broadband services. Secondly, policy and industry changes have not permeated traditional social barriers, especially economic status, race, and education, which influence adoption and continue to hold back user numbers. Third, there remains an assumption by policy makers and industry leaders, similar to supply side economists that faster and more robust internet services will eventually “trickle down” to less affluent users as investment in broadband continues. As a result, there seems to be less motivation to bring faster internet access to lower income groups.
There is also a fourth conclusion. What works for Google today may not work for Google and others tomorrow. Such is the “hit or miss” character of current initiatives to improve the internet. The evolving nature of the global network, especially issues related to internet regulation, also makes it difficult to assess, much less predict, whether current policy initiatives and business strategies will have long term benefits for users. We are even less sure whether present inequities preventing some population groups from fully utilizing the internet will ever be overcome.
We can, however, use our perspective outlined in the previous chapters to compare developments by current policy makers and large corporations with those throughout the history of media development in the United States. Those insights should provide a clearer picture of what the internet landscape might look like in the near future. For without such historical comparisons, we cannot hope to understand what we observe in today’s sound bite, video clip, hyper speed news cycles in any context and with any accuracy. That will be the task of our next chapters.
Notes
International Telecommunications Union – Country Rankings: http://www.itu.int/net/itunews/issues/2010/03/26.aspx
US Department of Commerce Report: http://www.ntia.doc.gov/reports/anol/index.html
Free Press: FCC Ignores the Digital Divide: http://www.freepress.net/files/broadband_report.pdf
Penn State Report: “Small Business and Broadband: Key Drivers for Economic Recovery”,http://comm.psu.edu/about/centers/institute-for-information-policy/smallbusiness.pdf
U.C. B. Report, “Disconnected: a Community and Technology Needs Assessment of the Southeast Los Angeles Region”, http://clpr.berkeley.edu/pages/news.html
“Broadband Internet Regulation and Access: Background and Issues”, CRS 2006 report: http://www.au.af.mil/au/awc/awcgate/crs/ib10045.pdf
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