America's broadband adoption challenges

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Anna Maria Kovacs

Kovacs

The FCC has announced the results of its second "Measuring Broadband America" report: those American consumers who have adopted broadband are using connections that run at an average speed of 14.6 megabits per second (Mbps), up from 10.6 Mbps in 2011. That is good news. As Chairman Genachowski points out in his statement:

"Very fast broadband bandwidth and very high capacity are essential for the innovations of today, and strong continued improvements in speed and capacity are essential for the innovations of tomorrow. We cannot realize the immense potential economic benefits of cloud computing without broadband abundance—the ability to quickly and cheaply move large amounts of data through the Internet. What's at stake is our global competitiveness, and the power of innovation to create jobs."

But while high-speed broadband is available to consumers in all but the most remote parts of America, roughly a third of American households have not adopted it. There is a digital divide—those who are older, poorer, or less well educated are less apt to have a broadband connection than the rest of us. Cost is one issue, but the most significant factor is that non-adopters don't see the relevance of broadband to their lives, according to the Pew Research Center's April 2012 report on "Digital Differences."

To its credit, the FCC—with the support of wireline, wireless and cable companies—has made great efforts to bridge the divide. The FCC is in the process of transforming the Lifeline program so that it will provide subsidies to those who cannot afford to adopt broadband without them. Chairman Genachowski and Commissioner Clyburn have also worked with industry on programs to enhance digital literacy and address affordability for specific groups such as school children. Commissioners have made it clear in many speeches that it is important for all Americans to adopt broadband, for their own sake and for the sake of the American economy.

But there is another broadband adoption challenge in this country. America's largest corporations still use many connections that run at roughly one-tenth the speed of the average consumer broadband connection. While two thirds of American households see the value of using lines that run at 15 Mbps, the largest enterprises' networks still include many connections that run at 1.5 Mbps. These companies, and the competitive carriers who serve them, insist that they will need to continue to use those slow links for years to come. In fact, they are asking the FCC—in its special access proceeding--to help perpetuate their use by re-regulating them.

The FCC cannot credibly argue that American global competitiveness will be damaged unless every senior citizen living on a small fixed income has a 15 Mbps broadband connection, while accepting at face value the contention that corporations need no more than a 1.5 Mbps connection. The ability to move corporate data quickly has to be at least as important for the success of cloud computing as the ability to move consumer data.

Thus, the FCC has two broadband adoption challenges--consumer and corporate. It has worked hard on adoption by consumers, but so far it has not even acknowledged that there is a corporate broadband-adoption problem.

As the FCC moves forward with the special access proceeding, it must first and foremost ask why America's largest corporations are using connections far too slow for household use. Then, it must ask what it will take to persuade these enterprises to convert their entire networks to high-speed broadband. Finally, it must make good use of the bully pulpit from which it is preaching the benefits of broadband to the poorest consumers to preach it to America's richest corporations.

Anna-Maria Kovacs is a Visiting Senior Policy Scholar at Georgetown University's Center for Business and Public Policy. She has covered the communications industry for more than three decades as a financial analyst and consultant.