A political focus on subsidizing telecom infrastructure is just so easy. There are multiple photo opportunities (at the announcement, the cheque presentation and the system activation), happy mayors, happy voters. It gets to be portrayed as economic stimulus, direct job creation and consistent with progress on digital economic development.
But while it may feel satisfying politically, I question the effectiveness of continued broad government subsidies based on geography, rather than taking a more focused approach based on need.
That is what drives my view that our attention needs to turn to subsidies with more precise targeting aimed at those who can’t afford a computer or the connectivity. The approach to date has been trying to level the prices charged in urban and rural markets, without regard to whether that price point is consistent with increased rates of adoption. As an aside, I wonder if there are studies that show that subsidized infrastructure in rural Canada increases broadband adoption more than targeted income-based subsidies would have.
It is within this context that I read an OpEd by Susan Crawford in the weekend New York Times. The piece opened with a paragraph that has since been changed. Here is how the original read:
FOR the second year in a row, the Monday after Thanksgiving — so-called Cyber Monday, when online retailers offer discounts to lure holiday shoppers — was the biggest sales day of the year, totaling some $1.25 billion and overwhelming the sales figures racked up by brick-and-mortar stores three days before, on Black Friday, the former perennial record-holder.
This has since been changed, realizing that Cyber Monday wasn’t the biggest shopping day of the year – just the biggest on-line shopping day:
FOR the second year in a row, the Monday after Thanksgiving — so-called Cyber Monday, when online retailers offer discounts to lure holiday shoppers — was the biggest online sales day of the year, totaling some $1.25 billion and overwhelming the sales figures racked up by brick-and-mortar stores three days before, on Black Friday, the former perennial record-holder.
Both versions continue “Such numbers may seem proof that America is, indeed, online.” But the correction results in the entire opening making no sense. As mighty as the sales were on Cyber Monday, they were only about one-tenth the volumes of sales on Black Friday. In what way did this overwhelm the sales figures of brick-and-mortar stores? I just wrote about Digital corrections. Having the premise of the article destroyed by the opening inaccuracy, it is tough to read through the rest of the piece – at its core, the OpEd was a tired argument for strong government intervention in the communications marketplace.
A blog post by ITIF research fellow Richard Bennett does a great job destructing Professor Crawford’s “old-school analysis.”
Her vision of future applications is utterly pedestrian. She says: “Within a decade, patients at home will be able to speak with their doctors online and thus get access to lower-cost, higher-quality care” without acknowledging that doctors already use e-mail, can use video calling in many cases, and have been reachable by phone for several generations.
Similar misguided calls for “structural separation” have also been heard in Canada – ignoring a regulatory framework that already enables competitors to access facilities and services from the facilities-based carriers. A competitive services marketplace continues to ignore the challenge of connecting households that don’t even have a computer.
Solutions for bridging the digital divide need to look beyond the myopic focus of infrastructure. How do we address adoption among identifiable groups – the most glaring being low income households? That should be a broadband target for the coming year.