Understanding the Broadband Access Gap

Understanding the Broadband Access Gap

Studies find that students with access to a computer and the internet at home are 6 to 8 percent more likely to graduate from high school. Image courtesy of San José Library, Creative Commons (image cropped and sharpened from original). Americans’ access to high-speed internet has increased dramatically since the start of the new millennium. According to the Pew Research Center, the percentage of Americans with broadband access at home rose from 3 percent in 2000 to 70 percent in 2013. At the same time, the percentage of Americans with dial-up internet access fell from 34 percent in 2000 to only 3 percent by 2013.

However, major disparities in broadband access exist. As a 2013 White House report states, low-income people — those most likely to be served by HUD — disproportionately lack access to high-speed internet at home. Ninety-three percent of families making more than $100,000 have broadband access at home compared with only 43 percent of families making under $25,000. As HUD Secretary Julián Castro asserted in his September 16 keynote address at the Bipartisan Policy Center’s 2014 Housing Summit, “This disparity simply isn’t right.”

Pew reports that broadband access is also closely correlated with educational attainment and age. College graduates are far more likely to have broadband access than Americans without high school degrees (89 percent and 37 percent, respectively). In addition, 80 percent of Americans aged 18 to 29 have broadband access compared with 43 percent of those aged 65 or older. A geographic divide is also evident: 70 percent of urban Americans use broadband at home compared with 62 percent of rural residents. Also, whites are more likely than blacks or Hispanics to have access to broadband at home.

What Drives the Digital Divide?

For some Americans, broadband access is not even an option. In 2011, the Federal Communications Commission (FCC) determined that 7 million U.S. housing units lacked access to broadband infrastructure. Households in the nation’s least densely populated areas are the most likely to lack access to broadband. Unfortunately, according to the FCC, the present cost of serving these areas exceeds expected revenues. As a result, private investment alone is unlikely to provide access to these homes.

Affordability plays a major role in deterring people from adopting broadband. A 2012 FCC report estimates that in the United States, the average broadband plan with a download speed of 1 to 5 megabits per second — a comparatively low-end plan — costs about $35 per month. According to a U.S. Department of Commerce study, 28 percent of surveyed households without broadband cited cost as the primary barrier. The cost of both computers and broadband connections can serve as deterrents to access, as Connected Nation reported in 2011. Similarly, a 2010 Social Science Research Council report on low-income broadband adoption notes respondents’ concerns with lack of consistency and transparency in billing for internet access.

Several sources, such as Pew, indicate that a substantial portion of Americans without broadband access are not interested in using the internet. As ICF International and the National League of Cities note, “After access and affordability, potential adopters must perceive the economic, social, and political advantages of adopting broadband service.” A lack of digital literacy can also deter people from adopting broadband at home. On the other hand, the Social Science Research Council’s study of low-income broadband use finds that “most respondents viewed broadband connectivity to be of paramount importance.” The report comments, “In most cases, non-adopters talk about the Internet as a concrete, immediate need.”

A 2010 FCC paper, “Broadband Adoption and Use in America,” explains the divide by identifying four similarly sized yet distinct categories of Americans without home broadband. The “Near Converts” are youthful, own computers, and are primarily deterred by the cost of broadband. “Digital Hopefuls” want to get online but lack both digital literacy and financial resources. The “Digitally Uncomfortable,” by contrast, have resources and computers but “lack the skills to use them and have tepid attitudes toward the internet.” Finally, the “Digitally Distant” are older and typically lack interest in the internet and digital literacy.

The Impact of Access

The current gap in home broadband access has serious consequences for people’s well-being, employment opportunities, and educational success. One report, for example, estimates that internet use reduces the incidence of depression among the elderly by 20 percent.

A frequently cited 2008 analysis by the Board of Governors of the Federal Reserve System asserts that after controlling for other characteristics, students with access to a computer and the internet at home are 6 to 8 percent more likely to graduate from high school. The authors suggest that, as expected, access to technology makes it easier for children to complete their homework — and that access might also reduce “non-productive activities” such as truancy and crime. Critically, the analysis only uses data up to 2003. The growing use of technology and cloud-based services in education since that time has likely made access to broadband even more important for children.

Americans without ready access to the internet can find themselves effectively shut out of many job opportunities. For example, according to the FCC, more than 80 percent of Fortune 500 companies post job openings only online and require online applications. Many of those companies, such as Wal-Mart and Target, are major employers of lower-income workers.

Gaps in access can also have important ramifications for the workforce as a whole. A recent economic analysis finds that increased home and workplace broadband adoption could produce “billions and billions of additional economic gain to society each year.” For example, a 2010 study from the Phoenix Center for Advanced Legal and Economic Public Policy Studies estimates that access to broadband reduces by 50 percent the odds that jobseekers will leave the workforce due to discouragement. Although dial-up access also likely reduces the odds that workers will stop seeking new jobs, the effect is smaller.

Community Broadband and Cell Phones Aren’t Enough—and Speeds Matter

As Pew relates, about 10 percent of American adults lack home broadband but have smartphones. The FCC also finds that 6 percent of Americans lack an internet connection at home but are able to access the web through their workplaces or at libraries and community centers. These options, however, are only limited alternatives to home broadband access because they often lack privacy and sufficient availability. For example, as Secretary Castro commented in his keynote, “When the Bronx Library Center opens up every morning, dozens of people are already lined up to use one of the free computers.” Pew notes that smartphones are often inadequate for many activities such as writing a résumé or filing taxes. Moreover, 3G and 4G mobile data speeds are often slower than typical broadband speeds.

On that note, research has also demonstrated that connection speed significantly affects the social benefits of home internet access, even when comparing different types of broadband services. As Pew also notes, broadband generally refers to internet connections with speeds faster than dial-up connections. An Ericsson economic analysis comparing speeds among Organisation for Economic Co-operation and Development nations asserts that increases in broadband speed have a statistically significant relationship with household income.

A Commitment To Closing the Gap

HUD is taking steps to close the home broadband gap, including a formal partnership with the FCC. Moving forward, Secretary Castro has made home broadband a top priority for HUD. As he declared in his keynote, “The time has come for our nation to finally close the digital divide so that every child has the chance to succeed in the 21st-century global economy.”