High-Speed Internet for Students in Low-Income Families – Overhaul the Universal Service Fund

In IP and Technology by Francis J. Gorman

High-speed internet service is essential to our economy and job growth. It is also essential for our elementary and high school students. Remote online learning due to the coronavirus pandemic has exacerbated the digital divide in education. The need to bring high-speed internet to low-income families will continue whether the schools are fully open or not.

The long-term implications of the digital divide in education are serious. Those who leave high school without high-speed internet experience will have limited job opportunities and lower incomes.

This article (1) summarizes the well-known educational “digital divide,” (2) states what is needed to bring high-speed internet to students in low-income families, and (3) calls for an overhaul of the billion dollar, yet ineffective, programs administered by the Federal Communication Commission (FCC) to provide high-speed internet to students of low-income families.

The Digital Divide

In 2015, the FCC defined “high-speed internet” or “bandwidth” as service with a download speed of 25 megabits per second (Mbps) and an upload speed of 3 Mbps. The definition is the same today, even though it is not enough. Most high school students know this and would want much faster speeds, like 100 Mbps. Problem is: there are high school students who do not know this because they cannot afford access to the internet. Unfortunately, there is no leadership or commitment now to provide it to them.

The digital divide has been studied for years, and there are many excellent studies about it. There is no question about the need.

In 2016, the Joan Gantz Cooney Center in New York published Opportunity for All? Technology and Learning in Lower-Income Families. The authors, Victoria Rideout and Vicki S. Katz, concluded that among families living below the median income level, one in five connect only through a mobile device. This is a hindrance for students trying to research and write papers or complete online work. Even with an internet connection using a computer for tablet, many families experience failing or inconsistent connectivity, use slow or aging devices shared by other family members, and cannot afford internet service subscriptions.

In April 2020, Carnegie Melon University and Massachusetts Institute of Technology published a working paper entitled Social Distancing and School Closures: Documenting Disparity in Internet Access among School Children. The authors, Ananya Sen and Catherine Tucker, found that poor and non-white children have lower access to the internet. The shift to remote online learning may harm students who are already experiencing disadvantages. Even in cities having a high broadband penetration, children who are low income, lack proper housing, or are Black or Hispanic lag behind their peers in terms of Internet access.

Closer to our area, in May 2020 the Abell Foundation published a report entitled Baltimore’s Digital Divide: Caps in Internet Connectivity and the Impact on Low-Income City Residents. The author, John B. Horrigan, found that 96,000 households in Baltimore City (40.7%) did not have wireline Internet service and that 75,000 households do not have either a desktop or laptop computer. An urgent recommendation for Baltimore City is to provide affordable home broadband subscriptions and digital access devices to low-income households, a challenge unlikely to succeed without substantial federal and state financial support.

The reasons are known, and the remedial steps have been published many times. Still the lack of reliable Internet access persists for low-income families. This is a national challenge that calls for a national response.

What Is Needed to Provide High-Speed Internet

Most students without high-speed internet students are in low-income families in underserved areas, urban and rural. Their families (1) cannot afford the price of monthly access, (2) cannot afford a computer, tablet, or similar device with the horsepower to download/upload digital files, and/or (3) live in houses or apartment buildings to which there is no infrastructure backbone (telephone DSL, cable, fiber), or no nearby strong wireless access point (including “hotpots”), for connecting to a modem and router in the home or for connecting wirelessly to the internet.

Use of smart phones is prevalent, even in low-income families. Eighty five percent (85%) of teenagers carry them. It makes sense to consider the use of smart phones in remote online education because all things tech are constantly evolving. However, as Horrigan concluded in the Abell Foundation report, smart phones are not a substitute for educational connectivity using a laptop or desktop.

Smart phones are certainly better than having no device, but they have significant disadvantages when used for student educational purposes. Beyond the expense that the public accepts, disadvantages for educational use include distraction, disruption, small screen and keyboard, and unsuitability for collaborative teaching and learning. Computers, tablets, and similar devices with adequate horsepower are the best practice today for remote learning.

Private initiatives by internet service providers (ISPs) are insufficient. In a word, they have failed to bridge the digital divide. Their programs are intermittent and not sustained. To the extent programs like Comcast’s Internet Essentials have been successful, they have reached only a small percentage of the students in need.

Non-profit organizations have local outreach programs that can get internet to families, but non-profits should not be expected to sustain a long-term, national program to bridge the digital divide. Efforts of non-profits are needed, valuable, and laudable. Hopefully, they will continue to solve local issues and, importantly, add their voices to the call for governmental leadership and an effective national program to bring high-speed internet to low-income families with elementary and high school students.

States also have internet access programs. Some are robust, some not; some focus on low-income families with students, some not. Maryland’s recently announced $15 million plan focuses on rural areas and will rely on wireless signals to provide access in homes and apartment buildings. The strength of wireless depends on the distance it must go, can be affected by other signals in the air, and is vulnerable to unauthorized interception. It cannot match a wired infrastructure in terms of reliability. While Maryland’s wireless plan will provide internet access to some who do not have it now, state initiatives are not a substitute for an effective national plan.

Student watching online lesson at home during quarantine. Video conference with teacher on laptop computer. Distance and e-learning education concept. Modern technologies in education, teaching

Overhaul the FCC’s Universal Service Fund

The most effective national response is to overhaul the current FCC programs intended to get high-speed internet connections to families and students unable to afford the costs.

Telecommunication carriers regulated by the FCC contribute to the Universal Service Fund (USF), a funding mechanism for current internet access programs. Many telecommunication carriers are also ISPs. Each carrier contributes to the USF based on its telecommunication revenue and a quarterly contribution percentage established by the Universal Service Administrative Corporation (USAC). Billions of USF dollars are collected and spent each year on defined programs. The USF has the scale of financial resources that is needed to bring high-speed internet to low-income families.

The current USF program expenditures tilt towards rural areas. The emphasis has been on paying for installation of infrastructure backbone to schools and libraries – not to families and students. Thousands of low-income families and students in poor, dense, urban areas have not been a priority.

The only FCC internet program for low-income families is Lifeline. It provides only $9.25 monthly towards an internet subscription, which today costs at least $50.00 per month for 100 Mbps service. Moreover, the eligibility requirements eliminate thousands of low-income families. To be eligible for Lifeline, a family of four cannot have an annual family income more than 135% of the federal poverty levels, which is $35,370.00. In other words, a Lifeline-eligible family of four must be in poverty or near poverty. Low-income families that are not in or near poverty are left out. No wonder Lifeline expenditures are decreasing, down over $400 million from 2017 to 2019.

The FCC has no program that addresses the cost to schools and families of buying computers or other suitable devices for students. This burden is being shouldered at great expense by local school districts, already cash-strapped to adequately pay teachers and maintain school buildings.

The USF does not meet the needs of students in low-income families. The USF is managed for the FCC by the USAC. These entities are invisible to low income families. Two of the studies discussed at the beginning of this article do not even mention the FCC, USAC, or the USF.

What would the elements of a new national program to bring high speed internet to elementary and high school students in low-income families look like?

  • mandate that ISPs offer FCC-approved, low-cost, high-speed internet access subscriptions.
  • provide vouchers to students in low-income families that can be given to school districts and used by their schools to purchase computers or similar devices from an approved list.
  • subsidize two-thirds of the monthly subscription access fee for families having an annual income of less than 175% of the federal poverty levels ($45,850 for a family of four) and a student in school as certified by the school.
  • continue to extend high-speed internet infrastructure backbone and increase strong, high-band wireless access points in underserved areas, all with new urgency to poor urban areas.
  • provide computer and internet training to students and teachers.

The current formula for the USF will not generate sufficient funds over the long term, even if there is no overhaul and expansion of FCC programs. Moreover, the USF as it is now will not be able to fund a new and robust national program to bring high-speed internet to students in low-income families.

The contribution base is restricted to telecommunication carriers’ revenue from only phone service, but telephone revenue is decreasing. Revenues from internet services are not included in the USF contribution base. As a result, USF disbursements are shrinking, from $8.8 billion in 2017 to $8.1 billion in 2019. The reality is that telecommunication carriers contribute nothing because they pass on the contribution assessments to their landline and cell phone customers.

The USF contribution base should be increased by including revenues from companies that profit substantially from high-speed internet but contribute nothing. Companies that profit handsomely from high speed internet — search engines, browsers, streaming services, social media, online retailers more than ten million in revenue, one-way VoIP information services, for example – should be required to contribute to the USF.

The annual 2019 sales revenues from just five companies that profit from high-speed internet (Google, Microsoft, Facebook, Amazon, and Netflix) would add $656 billion to the contribution base, increasing it to roughly $1 trillion. Applying a 2% company contribution percentage would produce an annual USF fund of $20 billion, more than double the amount disbursed in 2019.

Committed leadership from the White House, Congress, and industry can produce a new national program that provides high-speed internet to all low-income families with elementary and high school students, regardless of where they live. Let’s begin again, now.

Frank is Of Counsel to the firm. His practice focuses on technology and intellectual property and other business-related matters. fjgorman@gw-law.com @HeadsUpTRmarks