Monday, October 05
Is There a Digital Divide?
This Friday, the FCC is hosting a workshop about the “digital divide” among American households with respect to broadband usage.
A recent research study that I conducted with two colleagues of mine, Mark Dutz and Robert Willig, reached a number of conclusions that should help to inform that workshop.
First, we found continued evidence of a significant digital divide. For instance, while 82 percent of Asian households in 2008 were connected to home broadband, only 57 percent of African-American households were connected. While 83 percent of college graduate households were connected at home, only 38 percent of households with less than high school diplomas had adopted home broadband. And while 84 percent of GenY households between ages 18 and 24 were connected, only 43 percent of senior households aged 65 and over had adopted it.
Second, some good news: among those who are connected to broadband at home, there is no significant valuation gap based on race, although there are valuation gaps along other lines. Among households that are connected to home broadband, blacks/African Americans, Asians and whites/Caucasians have similar valuations of broadband at home. However, there are significant differences in how much broadband is valued according to age, level of education, and income. For example, younger GenY and “GenX” heads of households (44 years of age and younger) value broadband much more than older householders (45 years of age and older).
Third, the more people experience broadband at home, the more they value it. For example, households’ valuations of higher-speed broadband depend on their experience with broadband: those who are connected to broadband at home value higher speeds over 40 percent more than those who have only home dial-up connections. These data would suggest that the more Americans experience broadband, the higher will be demand for it.
Finally, we estimated that consumers receive more than $30 billion of net benefits from the use of fixed-line broadband at home, with broadband increasingly being perceived as a necessity. For example, people appear unwilling to cut their broadband even when they lose their jobs, based on their need for connectivity as reflected in the significant jump upwards in the use of job boards and career information sites during the economic downturn. From a technical perspective, we observe a progressive decline over time in the own-price elasticity of broadband, from -1.53 in 2005 to -0.69 in 2008. In other words, in 2005 a 10 percent rise in the overall price of broadband would have led to a 15.3 percent decline in the quantity demanded, but by 2008, a 10 percent rise in the price of broadband would lead to only a 6.9 percent decrease in the quantity of broadband demanded. This result indicates that broadband is progressively being perceived by those who are using it as a household necessity. Such a finding is consistent with a recent survey of what Americans consider as a “necessity” or a “luxury.” The survey found that 31 percent of Americans consider broadband Internet a “necessity”. This puts broadband Internet ahead of “dishwasher” or “cable or satellite TV” in the necessity rankings.
— Jon Orszag
The federal government actually has set aside $350 million for mapping out national broadband coverage. However, this mapping isn’t expected to be complete until 2011 - long after the broadband funds will have been spent.
Luc Ceuppens, “The “Digital Divide” Is An Opportunity For Those With Vision,” Technological Reparation [blog]. August 26, 2009.
More facts about broadband.
Friday, October 02
According to Broadband Census, NTIA officials are considering changing the rules of the broadband stimulus program. Specifically, eliminating the third round of comments in order to give applicants more time once the Notice of Funds Availability is released.
As with music and journalism, the multi-billion dollar video games industry is facing changes due to the spread of high-speed Internet. Already, Sony has started making the shift to download-only games with its new handheld device the PSP Go, and now OnLive, a new service that kicks traditional game discs to the curb in favor of “cloud gaming” has received a jolt in funding from the likes of Warner Bros. entertainment and AT&T. Reports the Wall Street Journal:
OnLive has developed technology that it says will allow consumers to play graphically rich videogames without owning high-end PCs or consoles like the Xbox 360 and PlayStation 3 that are normally required for such titles. Instead OnLive plans to run games on powerful remote servers in data centers and pipe high-definition game graphics over the Internet to consumers, who can play them on low-end PCs and Macs or through an inexpensive OnLive device connected to their televisions.
Questions remain about whether OnLive will be crippled by bandwidth issues—certainly a concern, given the amount of data-intensive services already challenging Internet providers. But traditional video game stores such as Gamestop, which count on the used games industry for a substantial amount of their revenue, are surely paying close attention to OnLive’s progress.
In an editorial for Network World, Johna Till Johnson worries that net neutrality regulations could wind up doing much more harm than good. She writes:
Unfortunately, by imposing legislation designed to keep things that way, net neutrality proponents run a real risk of destroying the very Internet they want to protect.
Here’s why: Internet usage continues to grow dramatically—between 50% and 100% year over year. That’s not a problem in the core, which has more capacity than it needs for the foreseeable future. But access circuits (both wired and wireless) are bandwidth-constrained—and excruciatingly expensive to upgrade (ask Verizon how much it has spent on FiOS). Net neutrality prohibits carriers from recouping those costs by charging differentially based on type of content or quality of service.
At the center of Johnson’s concern is the way carriers currently peer for free with one another—an agreement that could go away if regulation gives them no choice but to start charging for bandwidth. And that, ultimately, could end up hurting the very “garage innovation” net neutrality is intended to help. Writes Johnson:
So your hypothetical penniless entrepreneur will need to decide whether to spend those precious funds to reach Verizon’s users, or those from AT&T—because he won’t be able to afford both. Reaching all users, everywhere, will only be financially viable to behemoths such as Amazon or Google, which already pay for connections to all major networks.
Agree or disagree, Johnson’s editorial illustrates just how complex this issue will be for the FCC as it moves forward.
The FBI has issued a warning for all those addicted to social networking sites like Facebook and MySpace:
According to the Internet Crime Complaint Center (IC3), there has been an increase in the number of hijacked social networking accounts reported to www.ic3.gov.
One of the more popular scams involves online criminals planting malicious software and code onto to victim computers. It starts by someone opening a spam e-mail, sometimes from another hijacked friend’s account.
When opened, the spam allows the cyber intruders to steal passwords for any account on the computer, including social networking sites. The thieves then change the user’s passwords and eventually send out distress messages claiming they are in some sort of legal or medical peril and requesting money from their social networking contacts.
So far, nearly 3,200 cases of account hijackings have been reported to the IC3 since 2006.
Before you freak out, however, the FBI goes on to note that in general social networking sites are safe to use, and then offers some tips to help ensure you won’t fall prey to scams:
Adjust website privacy settings. Some networking sites have provided useful options to assist in adjusting settings to help protect your identity.
Be selective when adding friends. Once added, contacts can access any information marked as viewable by all friends.
Limit access to your profile to only those contacts you trust with your personal information.
Disable options, such as photo sharing, that you might not regularly use. You can always enable these options later.
Be careful what you click on. Just because someone posts a link or video to their wall does not mean it is safe.
Familiarize yourself with the security and privacy settings and learn how to report a compromised account.
Each social networking site may have different procedures on how to handle a hijacked or infected account; therefore, you may want to reference their help or FAQ page for instructions.
Thursday, October 01
MIT’s Technology Review takes a long and interesting look at Julius Genachowski’s recent proposal for net neutrality regulations on wireless Internet and asks whether wireless Internet can, in fact, really be neutral:
Defining and regulating “fairness” as it pertains to wireless Internet traffic is inherently difficult, says Mung Chiang, a Princeton electrical engineering professor working on broadband access algorithms. “The notion of congestion—what is it, how often it happens, who is to blame—it’s much harder to define in wireless networks,” compared to landline Internet connections, he says. “Who is going to take the blame when somebody close to a tower transmits signals that may wipe out others, even if this person may not be downloading movies?”
Another issue is the fact that deploying wireless technology takes time and money, and that until new regulations are formalized investment could be slowed to a crawl:
However the FCC chooses to define Net neutrality, Chiang says the specter of regulation hangs heavy over wireless Internet businesses. “As with other industries, uncertainty is worse than anything,” he says. “Deploying towers, digging up roads, and standardizing new equipment is a very long-term, capital-intensive thing. If people don’t know what is going to happen until litigation sets precedents, that will be a big deterrent to capital expenditures, and that generally is a concern.”
A new report from the FCC (via Information Week) pegs the cost of truly universal broadband in America as high as $350 billion. While that might inspire some sticker shock, according to the agency the total reflects providing service at 100 Mbps or higher. The lowest figure is estimated at $20 billion.
While both numbers are well above the $7.2 billion earmarked for national broadband in the federal stimulus, the FCC says universal broadband would create major economic benefits that could eventually out-pace the cost of bringing high-speed Internet to all of America.
After 11 years, the United States is giving up some of its control of the Internet. Reports the Wall Street Journal:
“This reflects the globalization of the Internet,” said Rod Beckstrom, chief executive of the body, called the Internet Corporation for Assigned Names and Numbers, or Icann. “By America relaxing some control and inviting other countries to have an active hand, that increases the possibility that the global Internet will remain unified,” Mr. Beckstrom said in an interview.
Instead of reporting to the U.S., Icann now will go under regular review by a series of panels, including representatives from other countries and fields. But management of the domain-name system, also known as the root, won’t change, at least for now. The Department of Commerce has a separate contract with Icann, which expires in 2011, to manage the technical aspects of the root.
Icann was established during the Clinton administration and tasked with overseeing “important Internet governance decisions” related to architecture and addressing.
Tuesday, September 29
Today is the FCC’s Open Meeting on the current state of a national broadband plan. The meeting is being streamed live, and related documents have been provided should you wish to follow the meeting from your computer.