In July, the Community Affairs Department of the Federal Reserve Bank of Kansas City released Disconnected: Seven Lessons on Fixing the Digital Divide, a report that touches on Internet access, adoption, and affordability. Overall, this is an insightful primer on the digital divide and how banks can help. 

The CRA and the Digital Divide

Banks have a responsibility to invest in disadvantaged communities under the Community Reinvestment Act. The report broadly outlines the state of high-speed Internet access, including the differences between rural and urban access problems, and explains why the digital divide remains so persistent.

Part of the problem is that our data on Internet access and adoption is woefully lacking. The report includes a section on how FCC data overstates coverage and compares it to the ways Microsoft has attempted to verify actual home Internet connections: 

“The FCC’s data measure availability of broadband while the Microsoft data measure broadband usage. The company shared its analysis with the FCC, which is looking at how it might improve its broadband measurements. While the FCC says 24.7 million Americans lack access to broadband, Microsoft found the actual number was 162.8 million.” (P. 26)

Another related problem that the report identifies is that the technology needed for high-speed Internet access seems to be constantly changing. Companies do not continue to invest consistently in rural or low- and middle- income communities, leaving both with last-generation networks. At the Institute for Local Self-Reliance, we've learned from years of research that fiber connectivity has the ability to meet current and future needs.

Closing the Digital Divide

Expanding high-speed Internet access can expand access to banking. The report notes that:

“Among low-income households, research by the Federal Reserve Bank of Kansas City shows that lacking Internet access has a higher correlation to being unbanked than a variety of other characteristics, including employment status and race.” (P. 11) 

Earlier this week, Presidential hopeful Elizabeth Warren released her Plan to Invest in Rural America, which contained a framework for improving broadband policy and expanding high-quality Internet access.

You can read her full plan on Medium.

Funding Needed, Spent Wisely

Some of Warren’s goals for proposed policy changes include:

• Passing federal statute that ensures municipalities have the right to invest in network infrastructure
• Ending anti-competitive behavior from big corporate Internet access companies that engage in activity designed to reduce competition
• Pass a Digital Equity Act, which will provide $2.5 billion over 10 years to states in order to help them develop digital inclusion projects

Warren’s plan also focuses on financing infrastructure development in rural areas, and creates some guidelines to address the problems with the current system. Her plan includes:

• Dedicating $85 billion to expand broadband networks with grant funds awarded exclusively to cooperatives, non-profit organizations, tribes, and local government
• Funding will be reserved for regions that are unserved, underserved, or where there is minimal competition
• Grants will only go to projects that offer one discount plan and must include a 100 Mbps symmetrical tier, along with specific requirements for low-income subscribers
• $5 billion will be earmarked for grants to projects that will benefit people on tribal Native American lands

Improving the FCC

Warren also wants FCC Commissioners who will restore network neutrality protections and improve mapping. By making changes in the FCC’s Office of Native Affairs and Policy, Warren plans to further attack the digital divide for indigenous people.

Read more of Elizabeth Warren’s Plan to Invest in Rural America at Medium.

Local communities continue to search for ways to tackle the digital divide and in San Francisco, the city is making strides by working with a local Internet access company. The City by the Bay and ISP Monkeybrains have adopted a new model to bring high-quality connectivity to residents in public housing. The approach not only creates new opportunities for people who were once denied economic and educational opportunities, but does so in a way that is financially self-sustaining. With modest maintenance and start-up costs, Monkeybrains and San Francisco has found a way to bring the same high-speed Internet access to low-income households at an affordable rate. Read our new report, A Public Housing Digital Inclusion Blueprint: Monkeybrains and San Francisco Deliver a Sustainable Gig, to learn how the partners found a way to shrink the digital divide in public housing facilities.

Download A Public Housing Digital Inclusion Blueprint: Monkeybrains and San Francisco Deliver a Sustainable Gig [pdf], here.

A few national ISPs offer programs for households considered low-income, but those services only offer slow and typically unreliable connections. The program that Monkeybrains and San Francisco has created provides high-speed Internet access to public housing units at no cost to the end user. In some cases, the ISP does receive a monthly payment of $10 per unit from building management. No matter what, each user receives the same level of customer service and support as those who pay standard monthly rates. From the beginning, the goal was to bring the same level of service to subscribers in public housing as Monkeybrains subscribers throughout the city.

Last year, city leaders in Hillsboro, Oregon, decided to pursue a Fiber-to-the-Home (FTTH) network for all premises after studying the possibilities since 2014. Crews have started construction and the city has now introduced the name of its newest utility, HiLight.

Equity Matters

Throughout the process of exploring municipal network possibilities, community leaders in Hillsboro have kept digital equity high on their list of priorities. In order to meet one of their goals — to bring high-quality connectivity to lower income neighborhoods — one of the first areas of the city where HiLight will deploy is in Southwest Hillsboro and the premises around Shute Park. Connectivity rates in these areas are the lowest in Hillsboro, where many residents qualify as lower income.

In order to expedite deployment, the city has decided to start construction in the South Hillsboro area, a section of town where new roads and homes are being built. By taking advantage of the current excavation, the city’s dig once policy will ensure conduit goes in the neighborhood now, which will greatly reduce the cost of deployment. Hillsboro will also install conduit whenever roads are excavated in other areas of town to prepare for future deployment.

By late 2019, HiLight should be connecting residents and businesses to the network. They plan to take an incremental approach to connecting all areas of the city and will strategically consider locations of businesses, busy travel corridors, and schools as they decide where to expand. Hillsboro will invest approximately $4 million toward deployment per year for the next seven years and anticipate subscriber revenue will cover operating costs.

Schools as A Building Block

Susan Crawford has published the right book at the right time. Fiber: The Coming Tech Revolution -- And Why America Might Miss It, makes a compelling case for local organizing around better Internet networks upon which the future will be written. 

The book revolves around several communities that will be familiar to anyone following community networks - cities like Chattanooga and Wilson, many of whom are members of Next Century Cities. Even people with only a casual interest in how to achieve the best Internet access will recognize some of the community names in Susan’s latest book. 

As someone who has tracked these networks closer than most, several of the anecdotes were new to me and sufficiently powerful that I - literally - had to restrain myself from cheering while finishing the book on a flight. So it works well both for someone unfamiliar with the technology or movement as well as for those of us who have worked from within it for many years. 

Susan dives right into the tech and marries it to the purpose:

Those hair-thin fiber strands, capable of carrying billions of phone calls simultaneously, plus advanced wireless communications that depend on that fiber extending into the last mile, will make possible virtually unlimited, cheap communications capacity wherever you are—which in turn will give rise to new businesses, new transport capabilities, new ways of managing our use of energy, new forms of education and health care, new ways of earning a living, and new forms of human connectedness. For these things to happen, both fiber and advanced wireless technologies need to be widely and competitively available. Without these basic pieces of open infrastructure in place, your country will be missing out on the future being lived and built elsewhere.

Speaking of purpose, this next paragraph is the type of prose that I think sets Susan apart from other writers on these issues.

Ever since the term “5G” came on the scene, the big ISPs have dedicated themselves to expanding hype about what the technology will accomplish, especially in rural areas. In a recent NBC News Signal segment, Dasha Burns took a look at rural and urban connectivity, the digital divide, and considered the demands and limitations of 5G.

She provides a simple explanation for why 5G can only have a limited impact in rural areas. She also touches on some of the issues that create parallels between the situation for people in urban areas who might not have access to 5G when it finally arrives. To address the urban component of digital equity, Burns went to Newark, New Jersey, and met with students who, due to economic limitations, rely on public access to the Internet.

Burns visits rural Minnesota to check out RS Fiber and talks with one of the many local people in the agriculture industry, a crop consultant, that needs high-quality connectivity from the broadband co-op. We get a peek inside the RS Fiber headquarters. For more on the rural Minnesota cooperative, download our 2016 report, RS Fiber: Fertile Fields for New Rural Internet Cooperative.

Check out the 5:25 minute video:

People in Arkansas who depend on Medicaid for healthcare typically don’t have the option to sign-up for affordable health insurance through their jobs. Sometimes they aren’t able to find full-time positions that offer healthcare or they don’t earn enough to afford the premiums in addition to covering life expenses for their families. With so many people offline, either because they can’t afford to pay for connectivity or because they live in areas where there is no connectivity, Arkansas seems like a poor choice for mandatory online reporting of anything, especially activity that dictates eligibility for Medicare. 

State leaders didn’t see it that way, however, when they implemented the policy in June. Medicaid recipients who are able to work must now go online to report at least 80 hours per month of activity; if they fail to do so, they lose access to the state's expanded Medicaid program. The activity can include volunteer work, job training, or several other categories of activities. While the issue of attaching work requirements to Medicaid eligibility has already been deemed arbitrary and capricious by a U.S. District Court in Kentucky, the lack of Internet access appears to be contributing to Arkansas’s dubious efforts to trim its enrollment.

Lack of Coverage Complicates

In a state where at least 30 percent of the population has access to only one Internet service provider (ISP) and approximately 20 percent depend on their smart phones for Internet access, the only way to report the new work-related requirement is online. Under the guide of cost savings, the state has not established any other method for reporting for those who don’t have access to the Internet.