How Much Would The US Have To Invest To End Digital Divide

Closing the digital divide in the United States has been a discussion for more than a decade. But the pandemic really brought the issue to the forefront. Politicians are motivated and seeking practical solutions, and some industry experts have estimated $20 billion at a bare minimum.

The Digital Divide

The digital divide refers to the gap that exists among Americans when it comes to the availability and affordability of internet access. During the pandemic, a photo of two young girls sitting outside a Taco Bell in order to do their schoolwork went viral because lockdowns were illuminating and intensifying the problems. Politicians on both sides of the aisle are motivated to overcome these issues, but there is, of course, great debate over how America should overcome it and how much we should spend.

The FCC defines broadband as any internet service that guarantees 25 Mbps download and 3 Mbps upload. There are 12 million American households that do not have access to broadband and no internet at all in many cases. These homes are often in rural areas. However, affordable access is a problem in urban areas. There are 30 million households in America that have access but cannot afford it.

Availability and Affordability

Affordability and availability are the two core components of the digital divide. The U.S. has in the past put greater focus on availability, but it is clear based on the statistics above that closing the affordability gap would affect more Americans. Consider that only 3% of American homes have no access to internet at all, which means that closing the affordability gap would have a transformative effect.

Broadband Subsidies

Broadband subsidies may be the most effective way to close the affordability gap. During the Biden administration, the FCC introduced the Emergency Broadband Benefit. The EBB provides a $50 subsidy to low-income homes, but it a temporary program with a currently finite resource pool.

There is also the Lifeline program, which is more permanent. But currently, only 27% of the more than 33 million eligible households participate. This is widely believed to be due to the program providing only a $9.25 subsidy. The ACA wants to increase that subsidy moving forward but estimates that it would need at least $50 billion and as much as $200 billion over the next decade in order to do that.

Broadband Deployment

The number of homes without access to broadband internet is significant, and the current major internet service providers in the U.S like Spectrum internet. do not have much financial motivation to expand into those areas. Government funding will be necessary, and estimates range from $20 billion to almost $190 billion. It is unclear, however, how Starlink has been accounted for. Starlink is the new broadband satellite internet service from SpaceX. In 2022, it will be able to provide broadband internet to most rural homes in America, at which point the problem transitions from availability to affordability.

The Road Ahead

The Biden administration wanted $100 billion for broadband deployment. It got $65 billion, which is not enough but will help get broadband Internet to many more Americans. The EBB has made a significant difference, but it will only last until the end of the pandemic—at best. The Lifeline program looks to be the best path forward, but it is going to need a $50 billion budget at a bare minimum.