How misguided policies maintain the digital divide

According to the 2015 Broadband Progress Report from the Federal Communications Commission (FCC), nearly 20 percent of Americans lack access to advanced broadband, living in the “digital divide.” Causes vary, from remote rural access to urban poverty to flawed public policy, but the central issue remains: too many Americans remain underserved by Internet providers and thus unable to participate in a way of life enjoyed by the majority of Americans. 

International Business Times reporter Kerry Flynn compellingly documented this and put a face on divide sufferers. “For now,” Flynn writes, “accessing the Internet is difficult for many who need to use it in their daily lives. Jaime Mullin [sic] works as a private investigator. But she doesn’t have a computer at home. Instead, she relies on her phone, provided paperwork and the telephone book.”

{mosads}While the divide slowly closes – down 3 percent since last year – troubling public policies still hinder its elimination.

For instance, as of June 12, 2015, the FCC is now regulating the Internet like a utility telephone service. Appeals to halt the rules were all denied. It is part of its supposed larger mission to guarantee a free and open Internet whereby companies cannot block, slow or prioritize content. But the Internet is not a telephone, nor is it a utility, and treating it as such only hurts those it seeks to protect. It raises compliance costs on providers and reduces investment – the key for expansion of services. In a way, it guarantees stagnation, and as a result, perpetuates the divide.  

“The FCC’s decision two months ago to adopt President Obama’s plan to regulate the Internet is already [hurting the Internet],” FCC Commissioner Ajit Pai recently wrote, documenting the case of an Illinois provider. “As a result of the regulatory uncertainty and costs created by the FCC’s decision, KWISP plans to delay network upgrades [sic], new tower construction that would have brought service to unserved areas, and capacity upgrades that would reduce congestion for existing customers.” Since more than half of rural Americans lack adequate broadband access, hurting companies through antiquated, onerous rules and regulations is the wrong path.

These same misguided principles have already had an adverse effect on rural wireless offerings. The recent case of Dish Network in the FCC’S auction of wireless spectrum is a prime example. Spectrum, of course, is the invisible resource that enables ALL wireless communications. As the New York Times reported, “Dish Network bid for licenses through a newly formed vehicle that claimed to be a ‘very small business’ under the [FCC] rules and was entitled to a 25 percent discount.” Dish used two companies — Northstar and SNR — defined as “small businesses”, to bid and undercut actual small businesses seeking spectrum. There are efforts to reverse the travesty now.

In a letter to the FCC following the auction, a group of small providers wrote decrying the actions of Dish. “For example, GRC explained that it is attempting to find innovative ways to build out its wireless network to its customers in rural Missouri…because providers like GRC continue to be outbid by large carriers disguised as ‘very small businesses,’ GRC and other rural carriers are losing out on spectrum that would provide a complimentary service to an already established landline system.”

Indeed, like the utility-style regulations of the Internet, misguided policy by the FCC facilitated Dish’s actions, which contributed to the digital divide. So too has a recent court case.

A judge recently reduced the amount Samsung owes Apple for the infringement of Apple’s patent for the “rounded rectangle” shape of the phone. While this a small win for Samsung, it was a loss for consumers as the merits of Apple’s case still remain. According to research from PEW, urban Americans rely on wireless communications to access the Internet, predominately on low-cost phones offered by Samsung – not Apple. The court decision serves as an example of the dire need to increase patent quality through the modernization of policies by the USPTO, so that companies are fighting it out in the marketplace, not the courtrooms.

Unlike many of our nation’s most pressing issues, including the more macro goal of completely closing the digital divide, solutions to these troubling examples are available. Congress must legislate to overturn the FCC’s Internet regulations. Further, the FCC must reject the Dish discount and reform the small business program to ensure participation by real small businesses. Finally, Congress should work with the USPTO to ensure it has the support it needs to follow through with its dedication to better ensure patent quality. While too many Americans will still remain unserved by the Internet, these simple solutions can help in closing the digital divide.

Coursen is founder of the Status Group. He formerly served as majority communications counsel for the Senate Commerce Committee and advised the Ronald Reagan and George H.W. Bush administrations.

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