A Successful Cyber Monday

By Brad

Courtesy of the Wall Street Journal comes some good news for the economy:

It is estimated that this year’s Cyber Monday will be the biggest online shopping day of the year for the third year in a row. According to research firm comScore, Americans are expected to spend $1.5 billion, up 20% from last year on Cyber Monday, as retailers have ramped up their deals to get shoppers to click on their websites.

The WSJ report also looks at what’s helping drive the increase in Internet sales. Not surprisingly, it’s great access to broadband:

With the growth in high speed Internet access and the wide use of smartphones and tablets, people are relying less on their work computers to shop than they did when Shop.org, the digital division of trade group The National Retail Federation, introduced the term “Cyber Monday.”

“People years ago didn’t have…connectivity to shop online at their homes. So when they went back to work after Thanksgiving they’d shop on the Monday after,” said Vicki Cantrell, executive director of Shop.org. “Now they don’t need the work computer to be able to do that.”

Somewhat ironically, this increase of home broadband access will probably lead to Cyber Monday becoming less of an event.

Access to Broadband Internet: Top Ten Areas of Saving 2012

By IIA

For methodology, and to see our reports from 2010 and 2011, visit here.

there's more...

The Cost (and Savings) of Doing Business

By Jamal Simmons

Yesterday, I had the pleasure of moderating a legislative forum held by Congressman Hank Johnson (D-GA) entitled “Beyond the Digital Divide: Capitalizing on the Technology Economy.”

Participants in the discussion included noted DJ and technologist Hank Schocklee; n4md founder James Harris; Kimberly Stewart, Chief Curator of the Be Blogalicious community and conferences; Howard Law School professor Lateef Mtima; Where Are the Blacks in Technology blog founder Kai Dupe; and Google executive Malik Ducard.

It was a lively discussion, with an emphasis on education and entrepreneurship — and how broadband access is helping to revolutionize both. On the education front, there was a focus on mobile apps, and how encouraging children at a young age to learn programming, math and app development helps them become entrepreneurs and prepare for the workforce of tomorrow. As for entrepreneurship, while everyone agreed broadband — whether it’s wired or wireless — is vital for small companies to compete in today’s technology economy, there was concern that the cost of access can act as an impediment to would-be startups.

This reminded me of something that may be overlooked by entrepreneurs as they take the plunge and embrace the power of broadband in their business — namely, the amount they can save in the long run by being connected. In fact, our recent “Start-Up Savings” report found that the average entrepreneur can save more than $16,000 in startup costs alone by utilizing a high-speed Internet connection.

Obviously, that’s a good chunk of savings for a business just getting off the ground. And as I told attendees of the forum, it shows that when it comes to competing in today’s economy — especially when investment capital continues to be tight — the benefits of being connected far outweigh the costs of connecting.

A Pre-Paid Connection

By Brad

Over at Light Reading, Jeff Baumgartner highlights a new idea aimed at bridging the digital divide:

The pre-paid model has worked wonders for the mobile market over the years, so why shouldn’t it be applied to U.S. broadband?

Wipro Ltd. is pitching the idea to the nation’s cable operators as they think about how to stoke broadband service growth. They’d like to tailor packages to lower-income consumers (or students), but without the associated risks of non-payments and bad debt.

“There’s sort of a hole out there that’s not being addressed,” says Stephen Snyder, the global head of business innovation for Wipro’s Global Media and Telecom unit. “It could open up a whole new revenue stream.”

Recycling to Increase Adoption

By Brad

John Eggerton of Broadcasting & Cable has a brief write-up of the latest program from the FCC aimed at closing the digital divide:

The FCC and its Connect2Compete public private partnership are launching a computer recycling and donation drive Tuesday.

Redemtech, the League of United Latin American Citizens, and the Latin American Youth Center are partnering in the effort to get broadband into the hands of more low-income families.

With the cost of equipment — and learning how to use that equipment — being a major barrier for many families without broadband, this has the potential to be a very cool program.

Connected Seniors

By Brad

A new study from Pew has some good news on the digital divide front:

As of April 2012, 53% of American adults age 65 and older use the internet or email. Though these adults are still less likely than all other age groups to use the internet, the latest data represent the first time that half of seniors are going online. After several years of very little growth among this group, these gains are significant.

The full study, “Older adults and internet use,” is available at Pew’s website (PDF).

Things Are Changing

By Brad

Over at Politic365, Kristal High digs in to the National Urban League’s report “Connecting the Dots: Linking Broadband Adoption to Job Creation and Competitiveness”:

The report explains that in 2010, 56 percent of African Americans had access to broadband at home, compared to 67 percent of whites, or an 11 percent difference.  But in 2009, the difference between those same groups was 19 percentage points.

These findings show that increasing numbers of consumers are discovering the limitless potential and possibilities brought by access to mobile broadband. It’s clear that broadband drives economic growth, job creation, and innovation in every industry—but for individuals and families, the benefits include better access to health care and educational opportunities, as well as the ability to find a job, network online, and obtain job training. And for one group that has traditionally had less access to this life-changing technology, things are changing.

The National Urban League’s report is available here (PDF).

Two Better Ways to Connect Everyone

By Jamal Simmons

There’s an old saying that the longest journey begins with a single step. It’s important to keep that saying in mind as we, as a nation, work to fulfill President Obama’s goal of bringing advanced wireless broadband services to all Americans.

The figures involved are staggering. At one point in 2009, the FCC offered an estimate that ubiquitous broadband could cost up to $350 billion — that’s almost 10 percent of the entire Federal budget for 2011 or about half the defense budget. Obviously, the government has other things to which it has committed money — Medicare, defense, education, housing – and money of this sort is simply not available for the asking, even if we were not living in times of large Federal deficits.

Even if $350 billion isn’t the right number, it is going to take a lot of money to be sure all Americans have equal access to the opportunities afforded by the broadband revolution.

Fortunately, there is a better way. Actually, there are two better ways.

The first is to harness the resources of the private sector. The good news is that private telecom companies are already eagerly playing their part in wiring America for the future. Telecom companies made tens of billions of dollars in investments last year alone, and much of that investment is focused on getting advanced broadband services (usually marketed as 4G) deployed in hundreds — soon to be thousands — of cities across the country. Those investments also promote wireline connections and maintain existing service for earlier wireless systems and networks.

The second better way is to focus on wireless rather than just wireline to make the connections of the future. America’s a big country and the best and quickest way to reach millions of Americans living in rural areas will be through advanced wireless services.  These will offer the same speeds and ease of access that Americans in cities and suburbs enjoy and the deployments can be achieved much more quickly. At the very least, 4G wireless gives us another tool to reach more Americans; at the best, it provides a solution that reflects the needs of rural America as well as urban dwellers checking their smartphones or tablet computers.

But that smallest step I mentioned earlier? That’s important, too.

The FCC has just announced a $300 million grant for broadband deployment to rural areas. That sounds like a pittance in comparison with the private investment now taking place, but as the Commission notes, it “expects that carriers will likely supplement the [government] funding with private investment.  While carriers are not required to participate, hundreds of thousands of Americans will gain access to broadband even if carriers only accept a portion of the money.”  For those hundreds of thousands, access to broadband will open a new world of opportunity for business, jobs, education, healthcare, and entertainment. It puts rural America on an equal footing for competitiveness, and that alone makes the FCC program worthy of our support.

But as the FCC recognized, not only is much more needed, but the lion’s share of effort and investment will come from the private sector. The director of the National Broadband Plan seconded this view in stating that “[w]e have to recognize that most of this [broadband deployment] is funded by the private sector, and we expect that to continue.”

In short, government has a vital role to play, but only with private sector investment can we reach our national goal of near ubiquitous broadband. That’s why, in a global marketplace for capital, it is so important to ensure that the right regulatory policies are in place to attract capital to telecom — and to America. Private sector network operators have proven they are willing to make bold investments, if federal policy makers do not put up regulatory barriers to investment. And with the right mix of regulatory policies, strategic investment by the government, and large-scale private investment, all Americans can have 21st-century high speed advanced broadband services.  It’s important for our economy and our future.

A Double Shot of Reports

By Brad

There are two new reports worth checking out today. FIrst up, a look at the benefits of broadband for businesses courtesy of Connected Nation:

• Nearly one in three businesses (32%) earn revenues from online sales. This translates into more than 2.4 million U.S. businesses

• Broadband-connected businesses bring in approximately $300,000 more in annual median revenues than non-broadband adopting businesses

• An estimated 4.4 million U.S. business establishments have websites, including more than 2 million businesses with fewer than five employees

• Teleworking also continues to have an impact in the marketplace, with 24% of rural businesses and 35% of non-rural businesses currently allowing employees to telework or telecommute

• Minority-owned businesses in the U.S. account for $49 billion in annual sales revenues from online sales (or 12% of total online sales in the U.S.). A large percentage of minority-owned businesses report using broadband to handle some or all of their business functions (79%, compared to 76% of all businesses on average)

Connected Nation’s full “2012 Jobs and Broadband Report” is available on their website (PDF). It’s worth digging in to.

Also worth checking out is “Connecting the Dots: Linking Broadband Adoption to Job Creation and Job Competitiveness” (PDF) from the National Urban League, which examines where the digital divide persists in America, and highlights how expanding access helps drive employment and opportunity in the African America community. From the report’s findings:

• Overall broadband adoption gap is narrowing: In 2010, the home broadband adoption gap between African Americans and white Americans was 11 percentage points—in 2009, this was 19 percentage
points (56% for African Americans and 67% for white Americans in 2010).

• Target broadband adoption efforts at high school dropouts and households below $20,000 annual income: This group has persistently low broadband adoption—38% of African American and 51% of white American high school dropouts adopted broadband in 2010.

• Close broadband adoption gaps by linking it to jobs: Segment of African American population with low adoption has the most interest in using broadband for jobs—77% of African Americans and 17% of white American high school dropouts used broadband to search for jobs in 2009.

• African Americans are underrepresented in broadband jobs and businesses: African Americans were 8% of broadly-defined STEM occupations in 2010 and made 0.23% of revenues in information sector businesses in 2007. Broadband adoption can be leveraged to change this.

Erasing Gains in Bridging the Digital Divide

By Brad

Over at FoxNews Latino, Kristian Ramos examines the negative effects America’s coming spectrum crunch could have on the Hispanic community:

While [Hispanic broadband adoption] gains are impressive, a looming spectrum crunch could stagnate some of the growth Hispanics are currently seeing in accessing the internet. Cost has always been an inhibitor of access for Hispanics and the Internet. We are currently at 80 percent of spectrum capacity. Mobile Media carriers are already putting caps on their Internet service, which translates into extra fees to use wireless capabilities on smart phones.

To ensure that Hispanics are able to engage in mobile activism we need to make sure their access is not diminished in a spectrum crunch. Jonathon Spalter, president of Mobile Future, said in an address to the Minority Media and Telecom Council that even with these new caps the possibility that we will run out of spectrum soon is very real. The loss of easy access to spectrum would quickly erase the gains made in bridging the digital divide.

Ramos’ full piece is definitely worth checking out.

The Cost of Not Being Connected

By Brad

At the Huffington Post, Gerry Smith examines the digital divide. The whole piece (which mentions IIA’s own analysis “10 Ways Being Online Saves You Money”) is worth a read. Here’s a taste:

[B]eing disconnected isn’t just a function of being poor. These days, it is also a reason some people stay poor. As the Internet has become an essential platform for job-hunting and furthering education, those without access are finding the basic tools for escaping poverty increasingly out of reach.

“The cost of being offline is greater now than it was 10 years ago,” said John Horrigan, vice president of policy research at TechNet, a trade association representing high-tech companies. “So many important transactions take place online. If you don’t have access to high-speed Internet, you’re missing out on a lot.”

Progress in Broadband Adoption

By Brad

At GigaOm, Om Malik highlights a new report from Akamai on the state of broadband adoption in America:

In the third quarter of 2011, global broadband adoption (2 Mbps or higher) grew 1.6 percent to reach 66 percent. The United States now has 81 percent broadband adoption, the report says.

While over 80% adoption is good, we obviously have a ways to go until we achieve the goal of 100% access and adoption. (Oddly enough, Bulgaria currently leads in adoption with 96% of the population connected.)

Stat of the Day

By Brad

Half a billion.

That’s how many people are now online in China, according to Reuters.

Reforming Lifeline, Ctd.

By Brad

Yesterday, FCC Chairman Julius Genachowski announced the Commission was looking to reform its Lifeline program to better reflect the broadband age. Today the FCC published a handy fact sheet (PDF) breaking down its proposed changes.

Reforming Lifeline

By Brad

Earlier today, FCC Chairman Julius Genachowski announced the commission will be reforming and streamlining its Lifeline program to help encourage more broadband adoption. From the Chairman’s speech (PDF):

Altogether, our staff estimates that the reforms proposed in this Order could save the Fund as much as $2 billion over the next few years, keeping money in the pockets of American consumers that otherwise would have been wasted on duplicative benefits, subsidies for ineligible consumers, or fraudulent misuse of Lifeline funds.

These reforms would put the program on a firm footing for the future, so it can more effectively serve low-income consumers, including helping low-income consumers afford broadband.

Here’s video of Chairman Genachowski’s speech.

An Uptick in Broadband Adoption

By Brad

Via Om Malik of GigaOm, some good news on the broadband adoption front. According to new numbers from the Leichtman Research Group, Internet providers — with cable companies leading the charge — added over 600,000 new broadband subscribers during the third quarter.

Some Good News Out of Ohio

By Brad

Via Cincinnati.com, the “2011 Residential Technology Assessment” from the organization Connect Ohio finds that while the state’s digital divide is still in place — especially among the poor — the gap is closing:

Statewide, home broadband adoption increased to 66 percent from 55 percent in 2008. The 2011 rate is above the national average of 63 percent.

While the report also finds a third of Ohio homes still don’t have access — despite 80% owning a computer — it’s good to see the state moving in the right direction.

More Than Access Needed

By Brad

At the Huffington Post, Navarrow Wright of Maximum Leverage Solutions (and an IIA Broadband Ambassador) argues that providing broadband access isn’t enough:

[S]ome recent studies point to the uptick in wireless adoption as a tell-tale sign that the digital divide has closed, and all is right as rain when it comes to broadband adoption. However, what people fail to realize is that that kind of use is still largely limited to consumption. All too often, though we may download apps and ringtones, and watch volumes of YouTube videos for hours on end, we’ve still yet to transition to being content creators online, working with web environments to bolster our daily ambitions and economic prospects.

Why are we so often consumers and not producers, you might ask? The answer it simple—it all goes back to the value proposition of being online. Most of us have access but don’t understand the value of using the Internet for social, political and economic gain, of adopting and using the technology to our best benefit.

Wright’s entire opinion piece is worth checking out.

Wireless Explosion

By Brad

Via Gautham Nagesh of The Hill, new numbers from the FCC show that broadband growth was flat last year:

The latest data show fixed-location Internet connections grew just 1 percent (from 81 million to 82 million) during the first six months of last year, the lowest number of households to sign up for broadband access since 2000.

While that 1% number is certainly disappointing, there’s a bright side: mobile broadband adoption grew by a whopping 27% during the same period.

Broadband Fact of the Week

By IIA

Only 47 percent of Hispanics access broadband at home.

— “Expanding Opportunities in the Hispanic Community: Solutions for Increased Broadband Access,” National Hispanic Caucus of State Legislators, October 7, 2010.

Learn more facts in our ever-expanding Broadband Fact Book.