While the US government and telecommunications industry have been engrossed in the race to 5G, much of the United States is still in a slow crawl to regular home Internet service. It’s a mistake with economic consequences, and unfortunately the coronavirus pandemic could provide the harshest evidence of that.
Americans all around the country are being advised to stay home to slow the spread of the disease. That means adults and children are powering up their computers, laptops and tablets to work and study remotely for the time being, if they can. It’s part of a nationwide social-distancing effort that could go on for weeks or even months, as experts aren’t sure how the health crisis will progress from here. What may be more certain is that the near shutdown of the country’s economy will expose and perhaps exacerbate the digital divide that exists between wealthier cities that have reliable Internet access and the many rural towns that don’t.
Only 63% of rural Americans have a broadband Internet connection at home, compared with 75% of Americans overall, according to a survey conducted by the Pew Research Center early last year. That gap is only a slight improvement on the 16-percentage-point difference that existed 13 years ago. In a separate Pew study in 2018, about a quarter of rural respondents cited access to high-speed Internet as a major problem, a far higher proportion than people living in urban areas or suburbs.
The digital divide tends to be talked about in terms of being a wealth divide, which it absolutely is. But in rural communities, frustration over internet access is also notably shared across different income and education levels, Pew has found. So even as parts of the country are given no choice but to work from home, many that should have the ability don’t. In a similar vein, suburban kids using iPads to attend digital classes or learn from online tutors won’t have the same interruption to their education as children in rural or less well-off areas, where a greater burden may in turn be placed on parents.
There’s also a problem within the problem: Nobody really knows exactly how many rural Americans are without high-speed Internet, leaving it to guesswork through surveys. That’s due to a lack of useful coverage maps showing what areas have broadband access. During a panel last July about rural broadband challenges, Eric Koch, a Republican state senator from Indiana, said that when a broadband provider "serves” an area, that might mean one customer or a thousand. There’s also a disagreement over what "access” even means. The US Federal Communications Commission measures it in terms of those with minimum Internet download speeds of 25 megabits per second and at least 3 megabits per second for uploads. About 21 million Americans couldn’t access such connections as of 2017, according to the latest data available from the FCC. Faster speeds of 100 Mbps – which is what households using multiple devices really need – were deployed to only 58.6% of the rural population, compared with 88.5% of the United States overall.
What makes this all the more maddening is that the country’s broadband problem has been willfully overshadowed by the fascination of late with 5G, the faster next generation of wireless networks that is being rolled out by carriers such as Verizon Communications Inc, AT&T Inc and T-Mobile US Inc. FCC Chairman Aji Pai was giddy in throwing his support behind T-Mobile’s takeover of Sprint Corp last year, citing the 5G possibilities and asking for weak concessions in return. The deal brings together the two low-cost carriers in an already highly concentrated market that’s trying to regain pricing power over consumers.
"Carriers and the FCC are so obsessed with the next thing (5G), they’ve not ensured that everyone who needs access to the network can get it or afford it,” Gigi Sohn, a distinguished fellow with the Georgetown Institute for Technology Law & Policy and a former FCC official, said in an email March 19.
Even with 5G, more densely populated areas are being prioritised, where there are more structures upon which to affix the boxes that serve as mini cellular towers. Delivering 5G to smaller towns is more costly and cumbersome relative to the amount of customers that would be served, which means there’s little incentive to build there.
The FCC will say there has been much progress made in closing the digital divide and that lots more work is being done. But it hasn’t been happening nearly quickly enough, and now a pandemic has paralysed the country. Where you live could determine how you come out on the other side of it.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News. – Bloomberg
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