Why Low-Income Families Need Cheaper Broadband

  • The White House has announced a new federal plan to provide high-speed service at a steep discount to low-income consumers. 
  • Experts say the plan could help 40 percent of the country connect to broadband and help bridge the digital divide. 
  • The plan would cost qualifying households no more than $30 per month.
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A new federal plan to provide high-speed service at a steep discount to low-income users is a desperately needed step to help close the digital divide, experts say. 

The White House announced that twenty Internet providers, including AT&T, Comcast, and Verizon, have agreed to provide the cheaper service. The plan would cost qualifying households no more than $30 per month. Officials estimate that the program will cover 48 million homes or 40 percent of the country.

“A low-cost broadband option is absolutely essential in the digital era, as millions of Americans continue to work and learn from home,” Tyler Cooper, a research director at Fair Internet Report, told Lifewire in an email interview. “A stable, affordable connection is no longer a luxury, it is a prerequisite for modern living, and the Affordable Connectivity Program is a vital step in keeping people online around the country.”

Cutting Costs

Parent and child using a smartphone

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The Affordable Connectivity Program will offer plans that provide download speeds of at least 100 megabits per second download speeds. The program is part of the $1 trillion Infrastructure Investment and Jobs Act, setting aside 65 billion to connect people to broadband. Most of the money will go to states and territories to build broadband infrastructure, but $14.2 billion will be for the subsidy program. 

The White House asked internet service providers to reduce prices or raise speeds to offer eligible households a high-speed internet plan at a reduced price. According to the fact sheet, the administration wants providers to provide a high-speed program that brings download speeds of at least 100 Megabits per second everywhere that the provider’s infrastructure is capable of it. 

“That’s fast enough for a typical family of four to work from home, do schoolwork, browse the web, and stream high-definition shows and movies,” according to the fact sheet. “In addition, the Administration asked providers to offer such plans with no fees and no data caps.”

For example, as part of this initiative, Verizon lowered the price for its Fios service from $39.99/month to $30/month for a plan that delivers download and upload speeds of at least 200 Megabits per second, and Spectrum doubled the speed of the $30/month plan it makes available to ACP participants from 50 to 100 Megabits per second for downloads.

Jeff Luong, the president of Broadband Access and Adoption Initiatives for AT&T, told Lifewire in an email interview that affordability is one of the keys to solving the digital divide, along with access and adoption. He said that the ability to afford broadband could open up new options for low-income families. 

“Having access to high-speed internet is a job creator, a path to learning, and an avenue to advancement,” Luong added. 

Closing the Digital Divide

A program in Texas that distributes modems through libraries shows how the new federal program could work. Through $30 million from the American Rescue Plan Act, the Harris County Public Library is providing 40,000 Inseego 5G mobile hotspots, powered by T-Mobile, for Harris County residents with no, or only slow speed, home internet service.

Dan Picker, the chief technical officer at Inseego, told Lifewire in an email interview that having access to high-speed broadband for many low-income families isn’t about streaming and gaming. He said the lack of a sufficient and reliable broadband connection can hurt a child’s education.  

“Many job opportunities rely on the ability to leverage a home internet connection. Furthermore, human service agencies and health providers rely on virtual communication with clients to provide services,” Picker said. “In fact, the US Dept of Health and Human Services has concluded that populations with worse internet access also tend to have higher rates of chronic conditions and worse health outcomes, suggesting that they may be particularly vulnerable to the consequences of lapses in care.”

Many job opportunities rely on the ability to leverage a home internet connection.

But not everyone thinks the new federal program will be a panacea. Dirk Gates, the president of Tarana, a company that develops fixed wireless access technology, said internet providers must be encouraged to source the most cost-effective infrastructure with the least time to deploy to upgrade and expand their networks. 

“The nontrivial costs not covered by stimulus funding will necessarily be passed along to consumers, and long installation timelines create large opportunity costs from the continued absence of faster, more affordable, and more available service,” Gates said. 

Policymakers also need to foster more competition in the broadband marketplace, Gaters said.  “Local monopoly behavior clearly plays a considerable role in high prices for often subpar service,” he added. “It’s imperative that customers in each region have the option to choose from multiple internet providers, so fair and healthy competition can drive down prices.”

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