Three Policies To Address The Digital Divide

The coronavirus pandemic has laid bare many of the inequalities in America, including the differences in access to broadband Internet. Three policies that can help: (1) allow cities to provide their own broadband; (2) expand and reform Lifeline; and (3) provide tax incentives to firms that subsidize their employees’ broadband. The first of these policies stimulates the “supply” of broadband, while the second two stimulate “demand.” Together, these policies should help reduce the digital divide.

On point #2, the Lifeline program, which was modernized to include support for broadband in 2016, provides $9.25 per month subsidies for broadband or phone connections to low-income households. The small subsidy is not enough for something as important as broadband, and should be increased. Jon Sallet from the Benton Institute has suggested the subsidy be increased to $50 a month and recipients be allowed more choice in how they can spend the subsidy.

[Robert Seamans is an Associate Professor at New York University’s Stern School of Business. In 2015-2016 he served as a Senior Economist on President Obama's Council of Economic Advisers where I worked on a wide range of policies relating to technology, innovation and entrepreneurship.]