I. Introduction
II. Defining the Digital Divide in the United States
- 2001
A. NTIA statistics – Fact Sheets
1. Rural areas
2. Lower-Income Americans
3. American Minorities
4. The American Uneducated
5. Americans with Disabilities
6. Single Parent Households
III. Universal Service Fund
A. Background – Now & Then (1934 & 1996)
B. Purpose
1. Universal Service Fund – to telecommunications carriers
2. The Lifeline Assistance Program
3. The Link-Up Assistance Program
4. The E-Rate Program
IV. Legal Disputes over the Universal Service Fund –
Why the Universal Service Fund is not adequately providing a bridge across
the Digital Divide
A. Telecommunications providers challenging the USF
1. Universal Service Fund Support being limited and restricted
2. Universal Service Fund being challenged as Unconstitutional
B. Customers challenging the USF
V. Compelling Interests
A. Why is this necessary – Now or Never
B. Why it should be done
1. Economic justification
2. Equity justification
VI. What can be done
A. Legislative Reform
B. Models for success
VII. Conclusion
There are two main reasons as a country of individuals we want to encourage our national and local governments to subsidize access to telecommunications infrastructure. The first, is the economic reason. As a nation with access to information infrastructure we will be better prepared as a nation to compete globally with other countries economies and hence have a better opportunity to stay competitive as one of the world’s leading economies. It will provide our nation’s businesses with increased access to a larger labor pool and provide greater access to experts. This will also provide our nation in the future with a better-educated workforce and society. But most of all, it will stimulate our current economy by giving more people an ability to become participants in our information based economy, which either way you look at it connects people. Either by giving people access to conduct business online or by providing the business sector with increased access to an increased customer base to sell their products to. Second, there is the policy reason. Obviously, this is the most familiar reasoning given for closing the digital divide. As a nation, it is arguable that for equity sake we should try to avoid leaving behind large portions of our nation’s population. People left behind by the digital divide in our country will be at a serious disadvantage. It is hard to describe what it really means to be disenfranchised. However, to be part of the information based economy disenfranchised is to be without access to online, banking, shopping, training, education, online services in general; without access, there will be no opportunity in the future to participate in society generally, through online group discussions, or feedback to companies about products, or even without access in the future to online voting. Hence, people left behind by the digital divide may in fact become the Digital Homeless, those people in our society left without a voice and much worse without a presence. It can be argued that these people will become “virtually” non-existent. However, the Digital Divide is only a new manifestation of the economic and educational gaps that have existed in this country and in the world in general long before there was an Internet or microchip. However, because this manifestation is certain to produce huge gaps in economic and education mobility, these people who are left behind may never have an opportunity to close this gap because as technology changes, these people will always be at least one step behind the progress in technology. However, the Digital Divide is not just characterized as it was in the past in terms of economic have-nots, it also includes people who can afford access but do not have (this) access because they live in rural areas. Arguments about equity, equality, and access to certain privileges is an Age-old problem, not likely to be solved any time soon or for certain not by one little subsidy program of the Federal Communications Commission. Therefore, arguing equity is not persuasive in times of government agency cut-backs, a decline in our nation’s economy, declining consumer confidence and the need to justify any government action in terms of economic ends. For there to be a case for the continuation of the Universal Service Fund and possible increased commitment, there must be an economic justification for this service and subsidy. In other words, how will we as a country be better off by supporting this program and what are the real economic gains that will be realized by this program? By the end of this paper these economic justifications will be crystal clear as to why we as a nation are better off or benefiting as a whole when we provide the whole nation access to Internet infrastructure and the policy reasons that follow will just be a cherry on top.
II. Defining the Digital Divide in the United States – in 2001 and the 21st Century
According to a report by the Commerce Department’s National Telecommunications and Information Administration (NTIA) entitled “Americans in the Information Age Falling Through the Net” (revised in November 1999), generated from relevant US Census data as it relates to Internet use, a Digital Divide does exist in America.1 The latest report by the National Telecommunications and Information Agency (revised in October 2000) defines digital inclusion as those households and individuals that have a computer and an Internet connection.2 Therefore, the Digital Divide defined in its broadest sense, is equivalent to the difference between those with access to the best information technology society has to offer and those who for some reason do not have this same access.3 The Digital Divide defined in its most simplest terms is equal to the gap between those with access to the Internet and Internet technology and those who for one reason or another are without similar access to the Internet or Internet technology. As of August 2000, 41.5% of the Nation’s 105 million households, or 43.6 million homes, had Internet access, or roughly 61.6 million US households were not connected electronically.4 That means over 60% of the entire United States household population are likely to be affected by the Digital Divide.
A. NTIA report “Americans in the Information Age Falling Through the Net” – Fact Sheets – Characterizing and Defining who exactly is part of the Digital Divide in America
Who are the people living inside the Digital Divide and more importantly among what groups is the Digital Divide expanding? According to the NTIA report although digital inclusion is rapidly increasing, “nonetheless, a digital divide remains or has expanded slightly in some cases.” 4 According the latest NTIA report “Toward Digital Inclusion” digital inclusion proceeds unevenly.5 ***to the Executive Summary the digital divide is growing for people with disabilities and “Large gaps for Blacks and Hispanics remain when measured against the national Internet penetration rate.”5 There are six basic categories of people that have lower Internet penetration rates and that are subsequently going to be affected by the Digital Divide, they are as follows: (1) People living in rural areas; (2) Americans living in Poverty; (3) Minority Americans; (4) the Uneducated; (5) Americans with Disabilities; and (6) Single Parent Households.
1. America’s Rural Areas
According to the July 1999 NTIA Fact Sheets Rural Areas magnify the ‘Digital Divide.’6 According to this report rural areas lag behind the national average in computer and Internet access, regardless of income level. People living in urban areas are 50% more likely to have Internet access than those earning the same income in rural areas.7 According to the latest NTIA report as of 2000, only 38.9% (this is a 75% increase from 1998 when only 22.2% of rural households had Internet access) of all rural households have Internet access.8 That means that of the +54 million living outside metropolitan areas (rural areas) according to the 2000 US Census Bureau Statistics, roughly +32 million (32450322) Americans living in rural areas are without Internet access.9 This represents roughly over 11 percent of the entire US population without Internet access.10 This is a sharp increase from 1997 when only 14.8% of rural households had online access.11 This increase shows that programs like the Universal Service Fund are working, however, there is still 60% of rural households without Internet access, which represents over 10% of our entire nation’s population that is without access simply because of where they live. Although there are some that argue that people living in rural areas are not entitled to Internet access because of the lifestyle tradeoffs, in other words it is simply their choosing not to have Internet access because they want to live in secluded areas of the country. This argument is persuasive because there are some people without Internet access (in any group) who simply do not want access. In 2000, of the “never-connected” households who actually had a computer, 30.8% stated that their most dominant reason for not being connected was because they “didn’t want it.”13 This is a significant percentage of Americans and any statistic that represents the Digital Divide or Americans without Internet access, will always be skewed by those Americans who simply do not want it. However, this does not indicate the whole problem because of those who do not access the Internet and have a computer or other means to access the Internet there are those Americans living in rural areas who would like to have access and can afford it but do not have access to the appropriate infrastructure that will provide them with Internet access. This is the exact problem of the Digital Divide, not to force people to have the Internet in their homes but rather, give access to those people who want it, can afford it but cannot access the Internet, mainly because of the high cost of providing these rural geographic areas with basic infrastructure. This argument would also be more persuasive if the Internet was just a luxury item, but it is not in fact the Internet is fast becoming an essential resource tool that people must incorporate into their everyday lives to become successful or even just maintain.
2. Americans with Lower-Incomes
In the United States there are roughly 32.3 million Americans living below the poverty line.14 Obviously, one of the most significant determinations if not the most significant determination for household Internet access continues to correlate closely with income.15 Income level is a strong determinant of a person or household’s Internet access.16 Only 12.7% of Households with less than a $15,000 income have Internet access.16 Therefore, roughly +28 million Americans living in poverty are without Internet access. That is almost exactly one-tenth of the American population without Internet access mainly because they cannot afford access. In fact, even among all households with computers 24% indicated some cost problem for their reason for never accessing the Internet.17 For Persons making under $25,000 generally cite cost as the primary reason for not using the Internet at home, while those earning more than $25,000 are more likely to say they “don’t want it.”19 This indicates a fundamental problem stemming from the confusion around the Digital Divide. For those individuals that can afford Internet access and simply do not want it, are wrongly being classified into groups within the traditional use of the term Digital Divide (either those who can afford it, and want it but have no access because of where they live, or those who want it but cannot afford it). The concern should be more over with those people who want Internet access but because of cost cannot acquire this access because they must make fundamental survival decisions, like that between the need to spend money on food, shelter, health care or a computer or Internet access and those who because of where they live telecommunications carriers have determined that the area they live in is not a cost effective area to supply this necessary infrastructure (this could be a poor area that would not provide enough customers). Obviously, no telecommunications program will be able to solve the quandary of solving the Age old problem of poverty, because some will argue that there will always be a poverty class in a capitalistic economy, however, because the poor are without access and make-up a significant portion of the American population, these statistics are relevant for the simple fact that the poor make up a part of the Digital Divide in America. However, one positive indication programs designed to help poor Americans gain access to the Internet, in the form of public access facilities, the poor are more likely to use community access centers, however, public resources available to date have not alleviated the significant gap between rich and poor, in terms of Internet access.21 Also, the poor living in rural areas (that are also minorities) are most likely to suffer lack of Internet access.
3. American minorities
With the exception of Asian-Americans whose Internet penetration rates are rapidly increasing22, the digital divide between “Whites” and most minorities continues to grow.22 Although, income, education and geographic area are the primary factors for determining an individual’s or household’s Internet access, race or ethnic origin still plays a significant role in a household’s access to telephone, computer and Internet access.23 However, with the combination of race and living in rural areas, the digital divide is even more pronounced.24 Minority groups living in rural areas, have experienced significantly lower penetration rates, 19.9% for Blacks and Hispanics.26 However, because these two groups as a whole have lower incomes and lower education levels than the national average, it is clear that being an African-American; having a Hispanic / Latino origin or being Native-American makes you part of a group that is likely to be significantly affected by the Digital Divide.28 However, this gap is less pronounced when income and education are not a factor. Household’s earning above $75,000 are most likely to have Internet access (78.6% for Whites, 70.9% for Blacks, 63.7% for Hispanics, and 81.6% for Asian American households).29 Because this gap is less defined at higher income levels, this suggests that if prices of computers and Internet access continue to drop, the gap between information rich and poor may also begin to narrow at low-income levels.30 Large gaps for Blacks, Native-Americans, and Hispanics remain when measured against the national average Internet penetration rate. It is hard not to overstate the effect the Digital Divide will have on Blacks, Hispanics and Native Americans, especially because, substantial disparities have continued to widen, both when comparing Blacks and Hispanics against the national Internet penetration average and when comparing them against Whites. Finally, Native American households and individuals may be doing the worst among any American minority group because they are most likely to be poor, be uneducated and live in rural areas. Because of these facts, Native-Americans are steal dealing with basic communications needs. The telephone penetration rate for Native Americans is 76.4%, well below the national average of 94.1%.31 Native-Americans are more likely to say where is my telephone line before they ask for Internet broadband access.
4. The Uneducated
Level of education plays a key role in determining a person’s or a household’s likelihood of owning a computer or using the Internet.32 People with college degrees are the most likely to have Internet access at work or home. Among households headed by someone with post-secondary education, 69.9% had Internet access. At home, those with a college degree or higher are over eight times more likely to have a computer and twenty-six times more likely to have home Internet access.33 Despite the Internet being a powerful educational resource tool, the data shows that only those who have already attained educational success are using the Internet in large numbers, consequently, Americans with less education, who could perhaps benefit from the Internet’s educational value, are being left behind.34 However, because there is such a high correlation between education and income levels it is hard not to speak about one without the other; but because the latest NTIA report have presented evidence that both income and education are independently associated with Internet access35, it is worth mentioning that people who are less-educated are more likely to be affected by the Digital Divide.
5. American’s with Disabilities
The Americans with Disabilities Act defines a person with a disability to be one who has a physical or mental impairment that substantially limits one or more of major life activities.37 There are 45,416 million Americans with disabilities, that is 21.8% of the entire population.38 Of this group 60% have never used a computer.39 However, physical or mental limitations and technological innovations in hardware and / or software rather than lack of access to telecommunications infrastructure may account for the major reason for lack of Internet access among this group. However, because they comprise a significant portion of the population whom might be significantly affected by the Digital Divide they as a group are worth mentioning.
6. Single Parent Households
Family structure plays a significant role in predicting a household’s Internet connectivity regardless of income, or holding race constant.40 The NTIA 1999 study shows that family households without two parents have lower phone and computer ownership, as well as Internet access.41 Two-parent households are nearly twice as likely to have Internet access as single-parent households (60.6% for dual-parent, compared to 37.7% for male-headed households and 30% for female headed households).42 However, because this type of household represents a significant portion of the modern households in this country, it is worth reporting as a separate category; but because this and other categories are not mutually exclusive, one must always be aware of the overlap in categories and the importance of the correlation in most categories to one another. An example is that computer penetration drops dramatically at the lowest income levels for almost all-household types.43 The people doing the worst in terms of Internet penetration are a combination of the above stated groups, those who are poor, uneducated, minorities that live in rural areas and are single-parent households.
III. Universal Service Fund
A. Background – Now & Then (1934 & 1996)
In the preamble of the Communications Act of 1934, although it did not textually cite the term universal service, the concept was established with the following words “as to make, so far as possible, to all the people of the United States… [a] Nation-wide… communication service with adequate facilities at reasonable charges.”45 The Communications Act of 1934 in general was an Act designed by Congress to gain control over the telecommunications industry by granting AT&T a monopoly so that it “could serve all customers at reasonable rates, regardless of the cost of serving consumers in different regions.”46 However, the term universal service did not become officially codified until the Telecommunications Act of 1996.47 This was an important first step because before 1996, universal service meant different things to different people and was an unclear “goal of telephone regulation … since the 1960’s.” 48 However, the 1996 Act was passed primarily in response to “implement a competitive market system in place of the prior monopolistic system.” 49 Although the 1996 Act did not specifically define universal service, it did mandate that the FCC establish a Federal-State Joint Board to make recommendations to implement the Universal Service program.50 This although the source for much confusion, allows the FCC to be flexible in terms of changing telecommunications technology, by taking “into account advances in telecommunications and information technologies and services.” 51
B. Purpose
The main purpose of Universal Service can be found in the text of the Act (47 USC §254 (3)) – “consumers in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including … advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates for similar services in urban areas.”52 The FCC offers universal service support to: (1) telecommunications carriers in rural, insular, and high cost areas, where telecommunications services are often more expensive to provide; (2) low-income consumers, through the Lifeline Program (which provides monthly reductions in service charges) and [the] Link Up program (which provides reductions in initial connection charges); and (3) schools, libraries, and rural health care providers.53 Basically, the USF focuses primarily to four different categories of situations where the Fund is likely to help support, they are: schools and libraries; rural health-care providers; low-income customers; and high cost areas.
1. Universal Service Fund – to Telecommunications carriers
Although, certain customers benefit from the Universal Service Fund (USF), only companies that provide telecommunication services may draw money directly out of the USF, which helps defray the cost of delivering discounted service to customers.54 The purpose of this program is produce lower rates in rural, insular, and high cost areas through the USF subsidy program because the costs to provide telecommunications services in these high cost areas are normally very expensive to provide to these regions. This program is not designed to target customers, like low-income customers, but rather it targets high cost areas in order to help subsidize the high costs associated with providing telecommunications infrastructure and services in these rural, insular or other high cost areas. The federal universal service program is funded by all providers of interstate telecommunications services.55 Therefore, all telecommunications must contribute to the fund and those that provide service to these high cost regions are eligible to draw on the USF in order to help subsidize the high cost of providing service and infrastructure to these insular and high cost areas.
2. The Lifeline Assistance Program
The federal Lifeline program provides between $3.50 and $7 a customer to telecommunications providers to help them reduce eligible consumer’s monthly charges.56 The Lifeline assistance program is targeted to mainly low-income customers. To qualify a customer must meet specific state established criteria, and those customers in states that do not participate in the Lifeline assistance program may still qualify if they are enrolled in one of the following federal programs: Medicaid, Social Security Income, federal public housing assistance; or Low-Income Home Energy Assistance Program.57
3. The Link-Up Assistance Program
The Link-Up program offers eligible low-income customers either a reduction in the initial connection charges a telephone company charges (either half of cost or $30 whichever is less) or a deferred payment plan that waives any interest payments.58
4. The E-Rate Program
The main purpose of the E-Rate Program is to provide affordable access to telecommunications services for all eligible schools and libraries, particularly those in rural and economically disadvantaged areas.59 Basically, this program is designed to bring every school and library into the Information Age.60
IV. Legal Disputes over the Universal Service Fund – Why the USF is not adequately bridging a bridge across the Digital Divide
A. Telecommunications providers challenging the USF
1. Universal Service Fund Support being limited
The best way to illustrate the specific reasons why the Universal Service Fund is not adequately connecting people or bridging a sturdy bridge over the Digital Divide is through the legal disputes that have challenged the Universal Service Fund. In Iowa Utilities Board v. F.C.C., 218 F3d 756 (D.C. Cir. 2000) a telecommunications provider sued for USF support, however, the federal court in that case held that Universal Service Fund support is not available to all telecommunications providers. To qualify a telecommunications carrier must be classified as a “common carrier.” The FCC has determined that to be a Common Carrier a telecommunications provider must hold themselves out to all potential users and must allow customers to transmit intelligence of their own design and choosing. Once a telecommunications provider can show that they are a common carrier then they are eligible for Universal Service Fund support. The Universal Service Fund gives common carriers either: an amount equal to the aggregate discount given to customers (a reimbursement); or an offset against the carrier’s obligation to participate in or contribute to the Universal Service Fund. Although it is arguable that the USF needs to be limited, there is a concern that if too many restrictions and limitations are placed on USF support, then the overriding purpose to lay telecommunications infrastructure, will be delayed or hindered. Limitations and restrictions placed on the Universal Service Fund is a major problem, if there are too many limitations put on USF support or the restrictions on USF support are too burdensome to be received, telecommunications infrastructure will not be provided to the people being left behind in any time efficient manner (time is of the essence). If the limitations placed on the USF are too burdensome then USF will not be an effective regulatory tool to overcome the Digital Divide. The precise nature of the burdensome effects of the limitations placed on the USF is concisely articulated in a Federal Communications law journal, 52 Fed. Comm. L.J. 117 at 123, which stated that under the current system, USF support is only available to telecommunications carriers in only seven states.61 It is undisputed that more than seven states are in need of USF support.
2. Universal Service Fund being challenged as Unconstitutional
In another case involving a telecommunications carrier, a telecommunications carrier challenged the USF as unconstitutional, inter alia. In Alenco Communications v. F.C.C., 202 F3d 608 (5th Cir. 2000), the telecommunications carrier challenged the required USF contributions as an unconstitutional taking. The court held that the FCC’s orders tailored to achieving universal service and local competition was not a cognizable, unconstitutional taking that is mandated by the Telecommunications Act of 1996. The court articulated that the primary goal of the FCC under the Telecommunications Act of 1996 towards Universal Service is making Universal Service work from a monopoly to a competitive market, which means that not all carriers are guaranteed success under the USF. Further, the court stated that the USF is designed to help customers not carriers (by giving customers lower prices and higher quality telecommunications services). It is understandable the resistance of telecommunications providers who are fighting to maintain profits and success and are faced with the prospect of failure because they must contribute to the USF. This concern was articulated in a Federal Communications Law Journal article that claims that the USF is a hidden unconstitutional tax.62 It is argued in this article that Congress cannot delegate but has delegated to regulatory agencies its powers to levy taxes.63 These constitutional and legal challenges over the USF exhibits telecommunications carriers resistance towards contributing the USF, which actually works to place limitations and restrictions on the USF even though these suits and arguments are not ultimately successful.
B. Customers challenging the USF
This same article brings up the second issue that consumers are actually paying the USF fees, and thus consequently have the right to challenge the USF in court. In this article it brings up the second issue that consumers in urban and moderate to low cost regions are the one’s who are actually paying for the Universal Service Fund and are consequently not receiving any of the benefits.64 It is argued that because consumers are not being told about this contribution it is a hidden unconstitutional tax. In Evans v. AT&T, 229 F3d 837 (9th Cir. 2000), this concern was articulated by a private citizen / consumer who brought suit against his telecommunications provider for unconstitutionally passing on their USF fee obligation to their customers without telling them, through an assessment fee. The court dismissed the case because the filed-rate doctrine bars any federal or state claim from attacking a common carriers collection of the USF assessment that is in compliance with the terms of filed tariffs (schedules of charges). Although in each of the indicated cases, the corresponding suits were dismissed, it illustrates the resistance by telecommunications providers, private consumers, and even scholars toward making these required contributions to the USF. However, even if these arguments are not successful on the merits they do have the affect of limiting and restricting the application, discussion, and growth of the Universal Service Fund.
VI. Compelling Interests
A. Why is this necessary – Now or Never
The main focus over the Digital Divide as it relates to the Universal Service Fund is over those people who are supposed to be benefiting from this program but remain unconnected. The best way to put the Digital Divide in its true perspective is through results. Who remains unconnected in America strictly by the numbers: There are roughly 39% of Americans in rural areas connected to the Internet. However, this means that over 60% of rural households are without Internet access that represents over one-tenth of the American population. Thus over 32 million Americans remain unconnected because they live in rural, insular or high cost areas, this represents a fundamental goal of the USF; to provide telecommunications providers with USF support in order to provide these high cost areas with telecommunications infrastructure. Next, there are roughly 28 million Americans without Internet access because they cannot afford access.65 This represents almost exactly another one-tenth of the entire American population that are likely to be left behind across the Digital access gap. This is also, another group who should be directly benefiting from USF support, yet only 12.7% of this group is connected to the Internet. That represents over 87% of this group who should be benefiting from USF support but are not. These last two groups, although not exclusively independent groups represent one-fifth of the American population who are supposed to directly benefit from USF support, yet remain unconnected. Uneducated Americans represent another group that is very likely to be left behind by the Digital Divide. Although the USF does not identify this group specifically as a target for USF support, the E-Rate program represents an ideological commitment by Congress and the FCC not to leave any student behind. Although minority Americans, Americans with disabilities, and Single parent households are not identified as groups that directly benefit from USF support, unless they are also within the above categories, Americans within these groups are very likely to be left behind by the Digital access gap and represent a significant portion of the American population. Therefore, taken in whole there is currently one-fifth of the American population that could directly benefit from USF support yet remain unconnected. Obviously, that number of Americans is probably larger, because of the Americans who may be included in more than two or three categories but are not identified as a direct beneficiary of USF support. An example is a single parent minority household, which represents a significant portion of the American population, which may not directly qualify under the Lifeline assistance program. However, because there is no specific statistics representing these groups, it is best just to stick to the basic facts of the Digital Divide. The basic reality of the Digital Divide in America is that over 60% of American households are without Internet access, that is over 168 million Americans currently without Internet access. Assuming that of the 168 million Americans without Internet access, 31% simply do not want it, that still leaves over 115 million Americans who are without Internet access and may want it.66 There is also, one-fifth or over 50 million Americans who could directly benefit from USF support yet remain without Internet access.
1. Now or Never
The whole nature of the problem of the Digital Divide is that those who remain without access may never catch up. In other words, those who are affected by the Digital Divide are most likely never to catch up because of the nature of the ever-changing telecommunications technology. Those who are classified in the Digital Divide now are most likely to always be one step behind, in technology, skill, education, in resources, etc. Therefore, time is of the essence with the problem of the Digital Divide.
B. Why it should be done
There are two compelling Interests for the continuation, justification, and expansion of the Universal Service Fund, the economic reason, and the equity reason. Obviously, in the United States we are based on a capitalistic economy, therefore, equity arguments are not convincing when there is a need to justify agency budgets on compelling economic benefits and interests. Therefore, I will start with the economic justification as to why the Universal Service Fund is necessary for the United States to maintain or even increase funding for this program.
1. Economic justification
Why are we better off as a country economically when we provide the “whole” country with access to infrastructure? There are five basic economic justifications for the continuation and even expansion of the Universal Service Fund. First, there is the increase in interstate commerce and commerce in general; and an increased access by businesses to a larger customer base. Out of the over 115 million Americans without access to infrastructure, who might want it, there will undoubtedly increase consumer spending over the Internet. This will also, help businesses communicate more efficiently with their customers so that they can gain feedback which will help businesses be more efficient in meeting customer demand. Second, it will provide businesses with an increased access to labor pool, including increased access to experts. One of the traditional limits of the labor pool available to businesses is geographic location. To work for a business, the labor pool must be within reasonable commuting distance to the business. The Internet eliminates geographic barriers between labor that is able to conduct work over the Internet. This means that businesses can expand to other areas of the country and have only a few employees in a certain region that would work from home, a remote office or even on the road, yet still communicate with their employers while working. In addition, businesses will no longer be limited to the experts within their geographic regions. In other words, businesses could hire consultants, experts, etc. without having to fly them in every time they need to a problem solved. Obviously, the elimination of geographic boundaries is a distinguishing quality of the Internet as a whole. Third, the United States labor force will be more skilled and educated, in order to work over the Internet, which will in turn make the United States as a workforce more competitive globally. Fourth, by giving US businesses an increased access to different areas of the country that might not have been cost effective to communicate or sell to in the past. This is not just limited to an increased access to customer base, but rather an increased access to suppliers, distributors, retailers, etc. This will have the effect of making businesses more efficient in terms of acquiring resources, supplying demand and acquiring access to retailers not available before. Relying on electronic transfer of information will also, make businesses more efficient in terms of inventory, supply chain economics, and meeting demand with less waste. Finally, there is the cumulative effect on the nation’s economy. With increased access to advanced telecommunications infrastructure, which will provide businesses with an increased access to a larger customer base, larger labor pool, more suppliers and retailers, and becoming more efficient in their daily business practices; these cumulatively and individually will all have their own positive, stimulation effect on the United States economy. This will also, make us as a nation better prepared to compete globally in an information based global economy.
2. Equity justification
The Equity justification is the Age-old debate between why we are better off morally and socially as a country by helping the disenfranchised “rise above” what they are not able to do by themselves for one reason or another. Providing the poor, minorities, the disabled, single parent households and people living in rural areas with an opportunity to become participants in our information based culture has definite advantages in pursuing democracy because it increases participation not only politically but culturally as well. It is also, arguable that we should avoid leaving behind over 60% of the countries household population, merely for sake of equity. However, allowing such a significant portion of our population to be defined as disenfranchised by the Digital Divide has three very persuasive political and equity arguments. First, in times of economic recession and depressions, having such a large portion of the population will lead to political unrest, and ultimately economic instability. Second, by increasing government access to its citizens through feedback, political and culture participation will help the government operate more efficient, help increase the dialogue between citizens and politicians , which may help further the political and social debate over many of the extremely hard problems facing government today. Examples are increased access to opinion on genetic biological advancement regulation; Privacy problems; crime; etc. Finally, there is the basic reality of not disenfranchising people. People without access to the Internet will become the cyber-homeless; cyber-serfs and even “virtually” non-existent. Without access to the Internet, people will not be able to participate fully in society. It will be necessary to have a computer and Internet access to accomplish routine daily activities and conversely without such access, going the bank, shopping, getting educated, working, and even voting will become very burdensome without Internet access. To exist and have a presence in the future a person will undoutebly need a “virtual” presence.
VII. Can the Universal Service Fund with existing programs adequately provide an sturdy bridge across the Digital Divide, for those affected by the Digital Divide (those within the six stated categories); What can be done?
One of the main counter arguments is that such subsidies will really not cure the Digital Divide nor cure the problem facing minorities, the poor, single parent households, disability problems, or the uneducated. Further, arguments against the USF expansion or continuation are: that rather than subsidizing telecommunications infrastructure we should subsidize the poor or minorities directly; others argue that people living in rural areas do not deserve infrastructure access because they make a lifestyle choice by living in rural areas; others argue that we should let the market solve these problems. Although, such arguments have merit, they miss the fundamental distinction, because they merely see such regulation and subsidies as addressing merely social inequalities. However, this misses the main premise of this paper that providing such access does not just benefit these particular groups of people, it directly benefits the United States as a whole both economically and socially.
A. Legislative Reform
First and foremost, Congress must readdress this problem and decide how important and significant this problem really is in this country. Obviously, this problem is not just a national concern but a global concern. Our National Government has responded to this problem by requiring the National Information and Telecommunications Agency (NTIA) to specifically study and address this problem, by setting up a website specifically addressing this problem.67 However, under the current USF program which has been limited to seven states, Congress must readdress the problem by not over emphasizing successes and downplaying problems. If over 60% of American households are still without Internet access, obviously a tremendous gap is beginning to form, even if 30% of that 60% do not want Internet access, that still leaves over 100 million people who would want Internet access but have to resources (either physically or monetarily) to connect to the Internet. Congress needs to address the limitations and restrictions that are beginning to define the USF and possible recommit to the USF or establish alternative programs that will address this problem sufficiently and avoid the constitutional challenges that have plagued the USF and FCC and hindered the development and implementation of the USF programs.
B. The Internet a truly democratic tool – free Internet
By giving infrastructure access to all Americans, not forcing or actually giving every American the Internet, but rather just giving them access if they want to pay for it, the Internet market will solve many of the economic problems by itself. Many people argue that by just giving poor people access to infrastructure will not close the Digital Divide because these people are forced not to buy Internet access but rather spend their limited income on food, shelter, education or healthcare expenses. This is a fallacy that is actually justifying the status quo of placing external restrictions on the poor. Poor people will be able to afford such access through free-Internet services. Advertisers are craving for the possibility of access to an increased customer base and possibility of increased data mining on all of America. Almost every service on the Internet can and is already being provided for free, if the individual is willing to consent to voluntary submissions of their personal data, or if the individual is willing to put up with a barrage of advertisements or both. That is what is so great about the Internet it not only provides businesses with prospects of increased consumer base or increased efficiency nut also helps the poor through free Internet services and insular minorities and traditionally disenfranchised groups by giving them on-line support groups and resources.
C. Models for success
1. National Models
There are a whole host of successful past National regulatory subsidy programs that attempted to regulate in order to unite the nation. However, seven programs help mirror and are analogous to the USF situation, by just giving access to one thing or another. One of the earliest is Congress’ effort to subsidize the railroads. Congress gave subsidies to the Railroads to help decrease travels rates, which helped encouraged travel, which in turned gave the whole country national access to railroads. Another, is the Interstate Highway Initiative. Although this was done as a military subsidy, in order to the military access to highway travel to travel more efficiently in case of a military emergency, it is an example which provides access to interstate travel and as a country we were better off for it. This also, helped spur the growth of the automobile industry, which will mirror a spur in the growth of Internet services and technology as there is an increased in customer base. National subsidy efforts to give access to public education is obviously one of the most successful subsidy programs that also had a dual role of accomplishing equity concerns yet provided the Nation with a better educated workforce, which economic justifications are indisputable. Fourth, there is the Communications Act of 1934 which, although AT&T as a monopoly did not address rural concerns, AT&T was given a monopoly and in combination of rural cooperatives was successful in providing the nation with a 94% telephone penetration rate. The similarities between telephone communications and advanced telecommunications (Internet) access are obvious. Fifth, there was the National subsidy program of distributing radio and Television licenses in an effort to get TV and radio into as many communities as possible, which was an obvious success, in terms of how many people watch and use television and radio for their information, entertainment, and news. Sixth, there was the National program to subsidize electricity, by helping subsidize providers in laying electric lines in rural and similar high cost areas, in an effort to get people into the electronic age. Parallels between trying to get people into the electronic age and the Information Age are obvious. Finally, there is the National program to subsidize Postal rates, which gave people the opportunity to send something across town as across the nation. All of these National subsidy programs parallel the USF efforts. They provided both an economic and a social rationale and justification for supporting these programs. The common theme behind all of these programs is not giving people these things for free but just giving them access to the service at a reasonable cost. This is and should be the extended goal of the Universal Service program.
2. International Models of success
Probably the single most successful international program is the Costa Rican project, which has provided every student with an email account. There are other countries like Sweden, and Finland which have done a great job at providing their country with access to telecommunications infrastructure, however, these and other countries like Japan, Israel, and Malaysia, efforts are not very convincing models for the United States because they are based on socialistic principles rather than capitalistic principles, and because those countries are so much smaller.
VII. Conclusion
The main focus over the Digital Divide as it relates to the Universal Service Fund is over those people who are supposed to be benefiting from this program but remain unconnected. There are over 115 million Americans who are unconnected to the Internet and could benefit in one why or another from Universal Service. The United States would be better off economically, socially, and in the long term by supporting the continuation and the extension of the USF. The Internet as a resource will solve four of the six categories of the Digital Divide by itself, so long as these groups have access to the Internet. Once they have access, then groups that find cost a major factor, will have access via free Internet sites, such as the poor, single parent households, the uneducated, and minorities. The Internet can educate the uneducated. The Internet can include minorities by giving them support groups and additional resources that will make them feel part of society. With stimulation in the Internet economy, technology companies will find ways to include the disabled through advances in hardware and software that will give this group access. And Finally, people who can afford the Internet but live in rural areas will allow people to stay at current businesses, take longer vacations, address family concerns, and maintain a higher quality of life by giving them access to the Internet while still being able to work in remote geographic locations. The worst problem is those who believe the problem of the Digital Divide is overblown, 115 million Americans is not overblown. Those who believe that equity concerns are not sufficient justifications to subsidize such a program, such re-examine their irrational fear of inclusion, rather than giving false pre-text reasons for non access, because the economic justifications are crystal clear and the parallel to similar national subsidy programs which made the United States better off as a country as a whole, not only socially, but economically stronger as well. Finally, the wonderful tool the Internet is, will elliminate cost and geographic concerns. The first step is to lay the infrastructure, just give the access not actually give people the Internet, and things will take care of themselves. Inclusion!
1 NTIA website – Americans in the Information Age Falling
through the Net - www.ntia.doc.gov/ntiahome/digitaldivide/
2 www.ntia.doc.gov/ntiahome/fttn00/contents00.htm – Executive
Summary
3 DigitalDivide.gov/about.htm – Closing the Digital Divide
4 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#25
4 www.ntia.doc.gov/ntiahome/digitaldivide/ – Executive
Summary
5 www.ntia.doc.gov/ntiahome/fttnoo/Falling.htm#2.1
5 ibid.
6 www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/rural.htm
– rural areas magnify the Digital Divide
7 ibid.
8 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#2.1
9 www.census.gov/population/estimates/metro-city/ma99-03a.txt
– represents 1999 population estimates of people living in non-metropolitan
areas – 54,083,870
10 www.census.gov/ - Population clock as of 3/16/01 =
283,803,928
11 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#2.1
13 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#25 –
Figure I-17 – Reasons for US households with a Computer/ Web TV never accessing
the Internet, Percent Distribution, 2000.
14 www.census.gov/hhes/poverty/poverty99/pov99hi.html
or at www.census.gov/hhes/income/income99/99tablea.html
15 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#2.1
16 www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/income.htm
16 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#2.1
17 ibid. – Figure I-17 – Reasons for US Households with
a computer/web TV never accessing the Internet, Percent Distribution, 2000
– 17.3% - “cost, too expensive”; 6.7% - “computer not capable.”
19 www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/income.htm
21 ibid.
22 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#36 –
Asian Americans have the greatest Internet penetration at 58.8% in 2000.
22 www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/racial-divide.htm
23 www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/african-americans.htm
24 ibid.
26 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#36
28 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#2.1
29 ibid.
30 www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/african-americans.htm
31 www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/native-americans.htm
32 www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/education.htm
33 ibid.
34 ibid.
35 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#2.1 -
Education
37 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#61 –
Disability – definitions – citing the ADA on footnote (18).
38 ibid. – Table III-1 Disability Status of Persons 16
and above 1999 – difficulty with walking; vision problem; hearing problems;
difficulty using hands; or learning disability.
39 ibid. – Internet access and computer use among people
with disabilities
40 www.ntia.doc.gov/ntiahome/digitaldivide/factsheets/single-parents.htm
41 ibid.
42 www.ntia.doc.gov/ntiahome/fttn00/Falling.htm#2 – Household
type
43 ibid.
45 quoting 53 Fed. Comm. L.J. 117 at 119, which is citing
the Communications Act of 1934, ch. 652 §151, 48 Stat. 1064. (FN5)
– by Emily Dawson.
46 quoting 50 FCLJ 255 at 257 – which is citing at FN13
– West, supra note 9, at 166. – by Nicole L. Millard
47 47 USC § 254 – Universal Service
48 quoting 49 FCLJ 1 at 21- who is quoting on FN123 –
Mueller, supra note 17, at 355. - by Thomas G. Krattenmaker.
49 quoting 53 FCLJ 177 at 120 – citing FN7 – Lapointe,
supra note 2, at 71 – by Emily Dawson
50 www.fcc.gov/ccb/universal_service/joint.html – What
is the Federal-State Joint Board on Universal Service?
51 49 FCLJ 1 at 22 – FN129 – citing Id. sec. 101(a),
§254(c)(1), 110 Stat. At 72 (to be codified at 47 USC §254(c)(1))
– by Thomas G. Krattenmaker.
52 47 USC § 254 (3)
53 www.fcc.gov/cib/consumerfacts/lowincome.html – Overview:
Universal Service
54 www.universalservice.org/faqs/ - What is the Universal
Service Fund
55 www.fcc.gov/cib/consumerfacts/lowincome.html – What
is Lifeline?
56 ibid.
57 ibid.
58 ibid. – What is Link Up?
59 www.fcc.gov/learnnet/#us
60 ibid.
61 53 FCLJ 117 at 123 by Emily Dawson – FN28 – only Alabama,
Kentucky, Maine, Mississippi, Vermont, West Virginia and Wyoming are eligible
for USF funding under the new forward looking cost model. Citing “FCC approves
Increase in Universal Service Funding, Comm. Daily, Oct. 22, 1999 FN13.
62 50 FCLJ 255 – by Nicole L. Millard – Universal Service,
… A hidden tax?
63 ibid. at 270
64 ibid. at 268
65 refer to endnote 16
66 This is assuming that the 30.8% of households who
had a computer but indicated they “did not want” Internet access – applies
to all sectors of American society – more specifically Americans without
a computer and would want Internet access – refer to Endnote 13.
Although this assumption is probably not correct because those with a computer
and that do not want Internet access, probably see the Internet as a luxury,
while those without a computer will probably see the Internet as a necessity,
so even if they do not want it they will get it because it is a necessity.
67 DigitalDivide.gov/about.htm – Closing the Digital
Divide