How Increasing Broadband Competition Can Address the Adoption Gap

Much of the focus in policy circles has been on how to expand broadband access to those Americans without it. This is a worthy goal, but we should not lose sight of the magnitude of the other part of the digital divide: the adoption gap. FCC data shows about 35% or approximately 114 million Americans do not subscribe to broadband service at their homes. Cost is often cited as the leading factor for why Americans do not subscribe to broadband even when it is offered. Clearly, we need a strategy to address this gap, too. One reason broadband prices are too high for millions of Americans is a lack of competition. A new report from the Institute for Self-Reliance finds that two of the largest broadband companies – Comcast and Charter – maintain a monopoly over at least 47 million Americans. The report also found that the only alternative for an additional 33 million Americans in “competitive” duopoly markets is inferior DSL service. New competition is the most likely solution to drive down prices and provide greater satisfaction to American consumers. This new competition could come in the form of fixed satellite service or fixed wireless. While satellite is likely several years away from providing high-speed, low-latency service, fixed wireless is already a real solution in some parts of the country.

Even providers like AT&T acknowledge that the FCC’s low-income subsidy program, Lifeline, needs modernization. AT&T’s executive vice president of regulatory & state external affairs recently authored a blog comparing the success of the Supplemental Nutrition Assistance Program, also known as the “food stamp” program, to the relative ineffectiveness of Lifeline, which offers households a little over $100 per year to pay for broadband. That’s simply not enough to close the adoption gap for low-income families. Modernizing Lifeline to make it easier to use and expanding it to provide greater support for this lowest economic quartile of American families is a meaningful way to address the adoption gap. As more Americans have the buying power to purchase subsidized broadband, providers should have the right incentives to offer better service or to compete in areas where they may not otherwise be willing to invest.