Broadband costs too much for some people. Fixing that won't be easy

When the novel coronavirus forced schools to shut down last March, Maegen Wagner, a single mother living near Reading, Pennsylvania, was thankful for at least one thing: She didn't need to worry about how she'd pay for internet service. 

Since her divorce in 2017, the 39-year-old mother of two children had been enrolled in Comcast's Internet Essentials program, which offers low-income families broadband access for only $9.95 per month. While money was already tight before the pandemic began, things got even worse for Wagner when she lost her assistant teaching job just as remote learning classes resumed in the fall. 

Wagner applied for unemployment, but it took months before she began receiving checks. 

"This whole pandemic has been a struggle, to be honest," she said. "I don't know what we would have done if I also had to worry about a $100-a-month bill for internet service. There's no way I could have paid that." 

Going to a public Wi-Fi hotspot at a library or community center wouldn't have been an option for her family, Wagner added, because her daughter, who has Down syndrome, also has health issues that put her at risk of serious complications from COVID-19. 

"She's been hospitalized six times for pneumonia as a result of the common cold," Wagner said. "I wasn't going to risk taking her to a public place for anything, so we would have been stuck without Internet Essentials."

For every Wagner family helped by a low-cost broadband plan, there are many others left hanging when it comes to broadband. The need has become especially obvious over the past year as the COVID-19 pandemic forced everything from family gatherings to classes and business meetings to go online. Federal and state governments have earmarked billions of dollars to build out fast internet service, but most plans don't address one of the biggest reasons people don't have broadband at home: They can't afford to pay for service. 

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There's no precise data on how many people don't have broadband because they can't pay for it. A 2020 Cost of Connectivity study by the New America Foundation's Open Technology Institute determined the US has the highest average monthly internet prices when compared to other countries in North America, Europe and Asia. And a Pew Research survey from April 2020 found that roughly half of Americans with lower incomes worried about paying their broadband and cellphone bills over the coming months. In early 2019, Pew said that 44% of adults with household incomes below $30,000 didn't have home broadband. 

It's often Black, indigenous and other people of color who are hurt by the high prices of internet in the US. Lack of high-speed home internet access disproportionately affects children of color, according to a joint study last year from the Alliance for Excellent Education, National Indian Education Association, National Urban League and UnidosUS. And redlining -- the practice of refusing to give someone a loan or insurance because they live in an area considered to be financially risky -- has expanded to internet service.

"There are real affordability problems in the US," said Josh Stager, senior counsel at the Open Technology Institute, the tech arm of the New America Foundation think tank that pushes for policy and regulatory reforms. His group's report went so far as to call the situation an "affordability crisis." 

There is hope the situation may soon change. President Joe Biden, in his $2 trillion infrastructure plan unveiled last month, initially pledged $100 billion over eight years to make sure every American has broadband access. He said affordability would be a big part of that. And then in mid-May, the government introduced a $50 Emergency Broadband Benefit to get people online. Since the initial infrastructure proposal, Biden has cut his broadband proposal to $65 billion, which matches an amount that's been proposed by Republicans.

In the meantime, companies like Microsoft and Starry have been working to provide internet in poorer areas of the country, while local governments, nonprofits and various other organizations have found ways to make service more affordable. 

"Once the pandemic started, it became painfully obvious that internet connectivity is a utility, and it's not just necessary to get through the pandemic but to get through modern life in America," Stager said. "And the reality -- that so many people are struggling with affording the service, not access -- became undeniable."

What's being done to solve the problem

For millions of Americans, the digital divide exists because they live in a rural part of the country where broadband infrastructure isn't available. Policy makers have tried for years to bridge the gap between the digital haves and have nots. Billions of dollars have been spent to build new infrastructure. 

A lower-profile -- but also sizable -- problem is that broadband service may be available but is simply unaffordable. When it comes to affordability, little has been done to address this issue in recent years, say critics. 

"The Republicans under [President] Trump talked about solving both the broadband availability problem, as well as the adoption issue," said Blair Levin, author of President Barack Obama's 2010 National Broadband Plan and a former Federal Communications Commission official who served in the 1990s during President Clinton's term. "But when you look at the actual record, almost all of the efforts and all of the money was designed to address the first issue and nothing was done to address the second."

Then the pandemic hit, shedding a light on the inequities between people with and without access to high-speed internet. Students without internet service haven't been able to attend school. And adults who can't go into offices have been unable to work remotely.  

"The pandemic shows the scope and scale of the need for affordability solutions," said Kathryn de Wit, who directs the broadband access initiative for the Pew Charitable Trust. "The fact is some Americans just can't afford broadband connections even when they are available. And that's true of rural, urban and suburban communities." 

Policy makers have reacted to address the crisis. States have used money allocated in the initial COVID stimulus bill passed last summer to get broadband infrastructure deployed and to help offset the cost of service.

Then in December, Congress passed another COVID-19 relief package that specifically provided a direct benefit or subsidy to people unable to pay their broadband bills. The Emergency Broadband Benefit, or EBB, is supposed to help American families financially hit by the coronavirus pandemic. This temporary program, which launched earlier this month, is administered through the FCC and gives eligible households a $50-a-month subsidy ($75 a month if you live on tribal lands). It also provides a one-time $100 payment toward a device to connect to the internet. More than 900 broadband providers, including the nation's largest ones, such as AT&T , Comcast and Verizon , are participating in the program.

Once President Biden took office this year, Congress allocated an additional $7.17 billion as part of the $1.9 trillion American Rescue Plan passed in March to reimburse schools and libraries participating in the FCC's E-Rate program that have provided students and teachers with devices to connect to the internet for remote learning. This includes equipment like Wi-Fi hotspots, modems, routers and laptops that schools and libraries can lend out to students and teachers outside of the classroom. While it's not a direct subsidy for home broadband service, the money could help some families, who otherwise couldn't afford service, get connected to the internet.  

The FCC also still administers its Lifeline program, which is paid for through the government's Universal Service Fund to provide a direct subsidy for phone and broadband service directly to individuals who qualify due to low income. The Lifeline program launched under President Ronald Reagan. 

But most people agree that the $9.25 subsidy alone isn't sufficient to cover the cost of broadband. The Open Tech Institute's July report on broadband affordability estimated that the subsidy covers only about 13% of the average monthly costs for fixed home internet service in the US. The FCC has also acknowledged that Lifeline is underused. It estimates that only 26% of eligible households participate in the program.

To subsidize or not to subsidize?

If the early days of the EBB program are any indication, there is big demand for a more substantial subsidy. In the first week of the program, more than 1 million households signed up, the FCC said Thursday. 

"The high demand we've seen for the Emergency Broadband Benefit Program demonstrates what many of us already knew to be true -- too many families are struggling to get online, even in 2021," FCC acting chair Jessica Rosenworcel said in a statement. 

Some civil rights and consumer groups are joining with the broadband industry to push Congress to make the broadband subsidy permanent. Groups such as the National Urban League, American Association of People with Disabilities, the National Black Caucus of State Legislators are teaming up with broadband companies like AT&T, Comcast, Charter and Verizon in a coalition they're calling Broadband Equity for All to ask Congress to create a "predictable, dependable, long-term broadband benefit program."

But long-time consumer advocate Gigi Sohn, who served as an adviser to former FCC Chairman Tom Wheeler, warned that policy makers should proceed with caution when it comes to making something like an EBB subsidy permanent. 

"I agree a permanent subsidy is needed," she said. "But it can't unjustly enrich companies or incentivize them to keep their prices high."

She also agrees that Congress needs to find a sustainable way to fund the subsidy. 

"We can't require advocates for low-income individuals to come hat in hand to Congress every year for appropriations," she added.

At least one state, New York, is trying to mandate that service providers offer affordable service tiers for broadband to low-income individuals. In April, New York Gov. Andrew Cuomo signed into law legislation that would force broadband providers in the state to offer a $15-a-month service to low-income customers.

The industry immediately pushed back, filing a lawsuit earlier this month in federal court seeking to block the law on the grounds that the state is overstepping its authority to interfere with broadband rates.

The law comes as most major internet service providers already offer their own low-income options for consumers.

What the private sector is doing

While the government has tried to bridge the digital divide, companies have offered their own programs to make internet more affordable. One of the biggest is Comcast's Internet Essentials program that connects low-income families like Wagner and her children. During the pandemic, Comcast expanded the $9.95 program and made it easier for people to qualify. After facing outcry about speeds too slow for students to attend at-home classes, Comcast boosted the internet speeds to 50Mbps down and 5Mbps up from 25Mbps down/3Mbps up pre-pandemic. 

Other ISPs offer their own low-cost programs for families that can't afford the higher, regular pricing. That includes the Access from AT&T program, the Spectrum Internet Assist offering and Verizon's Fios service that's discounted for people who participate in the government Lifeline program. 

For some people, though, programs like Internet Essentials have too many barriers to be helpful. If a family has outstanding debt owed to Comcast within the past year, it wouldn't qualify for the program. Comcast has waived that requirement through June 30, but after that, it may become harder for people to sign up for service. And for other people who qualify financially but don't have digital literacy skills, the signup process can be confusing. 

Alternatives that seek to remove those barriers have popped up around the country. Some of those companies are partnering with Microsoft and its Airband program. Originally launched in 2017 to bring high-speed internet to rural communities using unlicensed TV wireless spectrum, Microsoft over the past year has expanded Airband to some cities by working with internet service providers and community organizations already in place. Instead of TV white space, they use fixed wireless, satellite and even fiber connections, depending on the location. And they all offer inexpensive -- or sometimes free -- internet for low-income subscribers. 

"If you think about the digital divide … the first problem is getting access to areas that don't have any options," said Vickie Robinson, general manager of Microsoft's Airband Initiative. "In urban centers, it's a different problem. Oftentimes there [is] at least one existing option for broadband access, but it's not accessible ... because of affordability challenges."

In LA, Microsoft has partnered with low-cost internet provider Starry and the Housing Authority for the City of Los Angeles to provide internet service to people living in the city's affordable housing communities. Through the program that launched last year, residents get six months free of 30Mbps down/30Mbps up service through the company's Starry Connect digital equity program. The service costs $15 a month afterward. 

Instead of tying service to an individual -- which traditionally has required ISPs to perform credit and background checks -- Starry provides service based on an address. If someone lives in one of LA's public housing apartments, that unit and whoever resides there can get Starry service. The six free months is only for residents during the initial launch period.

The $15 monthly service price includes all equipment, installation, 24/7 customer support, no data caps, no long-term contracts and no extra fees. Within LA, there are now 1,000 households connected through Starry Connect, and the company is still working to roll out service in additional public housing communities. Since Starry Connect first launched with the Boston Housing Authority in 2018, the program now covers more than 30,000 units of public and affordable housing in the US. 

Providing affordable internet is Starry's core mission, and most of its customers pay $50 a month for 200Mbps symmetrical speeds. Those plans help subsidize the Starry Connect $15 monthly rate, as does what it calls the "special sauce" of its "technology efficiency." By using fixed wireless to provide service, Starry says its network is less expensive to run than building fiber directly to a home -- but it's still pricey to install the wired connection to each apartment unit in a building. To fund "the last 10 feet" of its network buildout, the company relies on grants from partners like Microsoft. Offering Starry Connect in a facility doesn't cost the public housing operators anything. 

Public-private partnerships

Where the Housing Authority in LA comes in is helping make residents aware of the service -- and giving Starry permission to operate in the facilities and use its buildings for its equipment. When signing up for service, a resident in public housing sees Starry Connect listed as an option. Many people likely don't even know they're on an affordable internet program, said Virginia Lam Abrams, Starry's senior vice president of government affairs and strategic advancement. The company designed the process that way on purpose. It reduces the friction in getting people to sign up for service and preserves the dignity of the subscribers, she said.

"When you have to kind of ask somebody to reaffirm three different ways that they are poor enough to deserve access to service, it really is just a terrible, kind of soul-crushing experience," Lam Abrams said. "By removing the whole prove-to-me-that-you're-poor threshold, I think you bring a lot more people to the door [who] are willing to say 'yes, I'm going to sign up for the service.'"

As Microsoft and Starry have shown, private industry working alone often isn't enough to truly provide affordable internet. The program would have much more difficulty getting started -- and being accepted by users -- had the companies not worked with the Housing Authority in LA.

Before Starry, "most of our sites were not really covered by anyone," said Jenny Scanlin, chief development officer for LA's Housing Authority. While $15 may seem reasonable to some residents, it's still too pricey for others who have no source of income. Scanlin hopes that the US Department of Housing and Urban Development will one day allow HACLA and others to cover the cost of internet service for public housing residents who can't afford it.

"If it's something that their children need and they need, [residents] will find the money for it," she said. "But it's not going to be easy." 

Trashonda Brown, a lifetime resident at the HACLA Nickerson Gardens, is one of Starry Connect's new subscribers. Before Starry installed service at the public housing complex, the 39-year-old and her 20-year-old daughter relied on their phones for connectivity. None of the major internet service providers offered connections in Nickerson Gardens' 1,066 apartments. And even if they served the units, it's likely many people couldn't have afforded the monthly fees. 

"Where we're living at, we're basically in poverty," Brown said. "If [Starry Connect's internet service] could be $9, I'd take that, but it's better than $50."

As for Wagner, the Pennsylvania single mother, she said that without Comcast's low-cost broadband service, she would have been forced to make difficult decisions for her family during the pandemic. 

"If I would have had to pay the full cost of internet, I would've had to choose between keeping my kids online for school or buying essentials, like shampoo or soap," Wagner said.