I don’t pay for shi**y internet service

How many times over the past year have you been kicked off a zoom call and said “sorry, I got kicked off…can you repeat that?” It was frustrating and I kept thinking “I don’t pay for shi**y internet service.”  We relied heavily on technology for every aspect of our lives the past year or so; from telehealth to online classes to mobile menus/payments. It made life so much easier for everyone…right?

According to a McKinsey Global Survey, during COVID

“companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years. And the share of digital or digitally enabled products in their portfolios has accelerated by a shocking seven years”

In the below charts we can see how consumers interacting on digital platforms has accelerated globally.  Not only are customers moving towards a digital world, but companies are also moving increasingly towards providing more products and services that are digitized.

Much of our course explores how to enable and sustain digital transformation in companies. In this blog, I want to talk about the digital divide that exists amongst the very progressive digital transformation taking place in society today. Is everyone profiting from Digital Transformation? Is there a Digital Divide that still exists, even in a developed country like ours?

Story Time…

During the peak of COVID, I wanted to see my family for thanksgiving. So, there I was at 4 am, standing in line outside an urgent care in torrential rain, waiting to get a COVID test. There were at least 50 other people in line with me of various ages. When the doors opened, we were told we need to scan the QR Code and fill out an application on our mobile devices, we would then get called to come inside and take the test. The young people in line, like myself, took the link through the QR code and started filling out the application. However, I noticed a lot of the older people didn’t know how to open the link from a QR code, or they didn’t have smartphones. As a result, even though many older people came early and got in line, they ended up applying late after getting help from the clinic. The folks that came later ended up being able to get their tests earlier, while the older people waited extra-long in their cars to get the test calls. This is one example of how the digital divide became very evident during COVID.

So What?

Now think of the above story, and replicate it for Telehealth, for mobile payments, for mobile ordering, etc. It’s not just a divide of old and young, but also of rich and poor, urban and rural, educated and uneducated, etc.

When I think of the digital divide, I think of internet access. Broadband access enables populations to be more educated, have access to opportunities, and be part of today’s digital world. Considering how developed the US is, I would have thought access to the internet is not a barrier here. When I looked at the statistics, I was surprised. According to data collected by ITU, 50% of Rural America has no internet access. I wondered; how could this be? Why is this? So, I investigated it more.

5 basic factors dictate broadband access and affordability; Geographical Disparities, Competition, Profit based Discrimination, Technology deployment cost, and Socio-economic factors.

  1. Geographical Disparities – Where you live is directly tied to broadband access, even in the US. In rural areas, investment in broadband infrastructure is not profitable for companies, mostly due to population density being lower. Since there is limited infrastructure, the cost of providing internet services in rural areas is higher; as much as 80% higher than in urban areas. This leads to the high cost of subscription for customers in urban areas.
  2. Competition – The more Broadband provider options there are, the cheaper the subscription is. But if there are only a few options, especially in rural areas, then affordability takes a hit.
  3. Profit based Discrimination – Low-income, rural, minority groups have the short stick in the digital divide. Broadband companies know these groups are price-sensitive, and it also costs more to provide service in rural areas; it’s not worth it for these companies to target this group.
  4. Technology Deployment Cost – To deploy internet service to marginalized communities is expensive for the providers. Without the proper infrastructure and population density, a steady stream of profits is not guaranteed.
  5. Socio-economic factors – We know education leads to opportunities. In today’s world, the internet plays a huge role in education. Without broadband access, digital education will be lacking, and hence these marginalized groups will remain disconnected. Students who are studying may not be employed and will not be able to afford internet access. Older populations don’t see the value in it and may not adapt as easily or willingly.

To conclude…

We know education leads to opportunities. In today’s world, the internet plays a huge role in education. Without broadband access, digital education will be lacking, and hence these marginalized groups will remain disconnected. Students who are studying may not be employed and will not be able to afford internet access. Older populations don’t see the value in it and may not adapt as easily or willingly.

Having access to the internet is such a “normal” part of my life. I don’t think about it much, everyone around me can take out their phone and look something up at any moment. It’s hard to imagine a part of the US that is not like this. The world is moving towards digitization at an unprecedented rate; more digital products/services and users – may be broadening the digital divide. The five factors discussed in this blog are roadblocks to broadband access and affordability. Is there a way we can address the digital divide in United States? Could we use digital transformation and technological advances to somehow address this problem? Turns out, not only do I pay for Shi**y internet service, but I should also be grateful for it.

https://www.statista.com/chart/25549/households-with-internet-access-by-area-and-region/

https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever

https://www.sciencedirect.com/science/article/pii/S026427512031252X?casa_token=013WdH8MAFsAAAAA:aqMRaC0QC4ggupwkSFe5ndcDXDbjNdlw5R8YglkiKTndfqKXA9abLFXRImMPzduuCShE39JIXw

19 comments

  1. I pay for both shity wifi and shity data. I feel like the innovation in WIFI has stalled and while I’m glad I’m not on dial up or in an area with zero access, there if a lot of room for improvement. Data innovation has more room to run and that will be something is keep an eye on in the near future.

    1. Ahh the good old dial up days haha

  2. I think you thoughtfully addressed the 5 factors that dictate broadband access and affordability. I wonder if you think SpaceX’s Starlink proposal is a viable option? Or if there are still obstacles to overcome? There are also debates going on right now about including broadband investments in infrastructure funding. While I don’t believe that will completely solve this dilemma, it could help close the gap.

    1. Yes! Starlink proposal could be a good solution. At least it would be one step forward and hopefully they could figure out, over time, how to resolve the high latency.

    2. FCC is investing pretty heavily in allocating funding to different private companies (https://www.fcc.gov/auctions/ruralbroadbandauctions) to extend service to rural areas, in some cases even pulling companies from bankruptcy (Windstream as one example). I think more investment in Satellite internet rather than hardwired broadband is faster, more reliable, and ultimately will be more cost efficient.

  3. I have a different perspective on this. I have never been unsatisfied with my internet connection nor do I believe that this internet access disparity is a problem. I would argue that the 50% of rural Americans without internet are self selecting to a certain extent. It’s not like they are oblivious to what the internet is and the benefits it offers. Additionally, there are benefits to gaps in internet access such as privacy and mental respite. Going forward, I think it would be insightful if you were to dig into the underlying motivations behind the disconnected 50%.

    1. Agreed, many people choose not to use the internet. The distinction is having access and choice and not having access and hence no choice at all. I am focusing more on the access conversation rather than choice. Maybe the 50% is too high of a number, I could compare what that % looks like with different data sources, this was just based on data collected by International Telecommunication Union. Looking at many articles and scholarly reviews, it seems it is an issue. There is a example for San Antonio here for example: https://sanantonioreport.org/study-san-antonio-among-worst-connected-u-s-cities/

    2. Chris, I need to catch up with you because in Boston I have the worst internet I’ve ever had… Beyond that though, when I worked on the Hill in DC I travelled a lot with our congressional staff visiting areas that had limited to no broadband access. It is a very real issue that a lot of us are not aware enough about. Often times people cannot afford the internet service being connected to their house OR cannot afford to move out of the dead zone area they live in. I think it diminishes a lot of people to categorize it as self selecting. Obviously, I’m sure you didn’t intend for that, but I just wanted to help clarify!

  4. Kanal great post, it got me to research just how many Americans are not using the internet. According to a recent Pew Research Study 7% or 17.9 million of the 255 million people over the age of 18 living in the U.S. as of July 1, 2019 are not using the internet daily. There are a number of factors causing this many of which you mentioned; like household income and education level but surprisingly the biggest factor was age. Also surprising to me, was there are no statistically significant differences in non-internet use by gender, race and ethnicity, or community type (urban, suburban, rural).

    As I toyed with this idea, I thought of my own grandparents and the effort it took to teach my grandmother how to FaceTime! Moral of the story, I think we can all be more patient. The good news is the overall percentage of adults not using the internet has shrunk considerably since 2000 at 48% to 15% in 2015 and finally today at 7%.

    Info on study: https://www.nasdaq.com/articles/meet-the-17.9-million-americans-who-dont-use-the-internet-2021-04-23

  5. Its interesting. When I did a quick Google search to confirm these numbers (they seemed a bit high to me), the estimates varied wildly. FCC said 6% of US population and 25% of rural lacked, whereas a Microsoft study said that half of the ENTIRE US population lacked broadband. Those are pretty wide margins, which leads me to believe that sides are skewing the data to fit a particular agenda. nice post, though.

  6. I went through a period over Summer where I tried my hardest to avoid using any source of technology outside of work and school. It wasn’t until the third month where I built a habit of not pulling out my cell phone to search something that was completely unnecessary. Replying to an email or text message can wait, watching the latest sports highlights or reading the scores could wait, and doing an assignment offline was very much possible if I just read the material from the syllabus. We overly rely on the Internet for so many areas in our lives, and I think it’s taken away from our ability to critically think for ourselves and have strongly help opinions. We’ve come to the point that we read and steal someone else’s perspective, and it doesn’t align with our principles and values. Viewer’s of CNN and FOX would NEVER think of the scripts that the hosts read in the evening, but because that’s what we’re used to, it’s I watched this last night and he said blah blah blah and I agree with him. We shouldn’t have to agree with anyone else, but that’s what technology has done. Though we at times have poor service and poor connection, we’re fortunate we have the technology and capability to instantly pull out a device and search something. I believe had the entire population be given the access to broadband, we’d be in a much worse place. Definitely some pros and cons to this topic, but I really enjoyed the read.

  7. So glad you are highlighting this topic! In today’s day and age I think many assume that internet access is ubiquitous – especially in the US. I was personally shocked to find out about the disparity between rural and urban, and socioeconomic neighborhoods, when I interned with a telecom company, and how adversely that can impact access to everything from education to jobs and healthcare in an increasingly digitizing economy and society. With the transition to 5G, we may actually see this divide deepen due to the shorter propagation characteristics of 5G: shorter wavelengths means more towers or small cells to ensure the coverage areas are sufficiently blanketed so there is no interruption of service, which means more investments in costly infrastructure. To do this for the entire country is not economically feasible. Instead, many in rural areas are indeed left with satellite options as some of the comments alluded to. But satellite is still pretty expensive and has its own reliability issues. A colleague had mentioned to me that this is similar to telephones in their infancy – government regulation (the Communications Act of 1934) extended telephone lines to all rural areas to ensure that service was ubiquitous. It will be interesting to see what happens with the infrastructure bill and any other impending legislation in this realm.

  8. Kanal, I love the topic that you chose. I also struggled with internet and data providers for a while. I live in downtown Boston, so the rural factor should not apply to me. As far as I know, I only had two options, Xfinity or Starry, in my building. I think these two options are really limiting for someone that lives in a city area, and to be honest, I pay for what I get (lousy internet at a low cost). However, I am a price-sensitive customer, and if I spend more money, I probably will not relate to this article as much. The good news is that companies like SpaceX, with their Starlink satellite internet constellation, are changing the way the internet is brought out to rural areas.

  9. Great story to start off the blog; it captured my attention. McKinsey also had some good content with regards to the top industry trends for our new digitized world on top of this, but your blog reminds me of another widening gap between digitally mature and evolving businesses. The COVID-19 crisis has intensified existing trends, widening the gap between those at the top and bottom of the power curve of economic profit. Like you mentioned, this similar gap between internet access users (“the top” so to speak) and marginalized groups(“the bottom”) may have also widened further as a result of COVID-19 crisis, and is worth discussion in class.

  10. I appreciate your critical look at the multiple digital divides out there. The shift to remote work and remote school for my three kids definitely made me realize what a critical utility high-speed internet is for all of us. And we did have to upgrade our service both in terms of throughput and also adding a mesh network to extend the reach of our wifi through out the house. It’s an investment but it’s a requirement for all of us. I remember setting up the wifi when my wife and I bought our house in 2008 and I actually could count the number of devices we had connected at that time (was something like 6 or 7?) I look at my eero mesh app now and I have no idea what a bunch of the devices are — it’s crazy.

    And I also think your take on the age divide with tech and COVID is spot on — I saw it play out from afar with my parents when they contracted breakthrough COVID cases this summer. They had such a resistance to testing and I tried to walk them through how I arranged free drive-thru testing up here in MA (they’re in Florida) but I definitely think they encountered tech hurdles. They do have a smart phone but as my brother reported, “They really only know how to answer the phone with it.”

    (my parents are quite advanced in age I should point out, both in their mid-80s)

  11. Kanal- this was a great read! I clicked on your article based on the title as I sit in a coffee shop near my house with internet access. My internet has been out for hours with no sign of returning. This was of course the one day I am working from home this week. As you mentioned, my lack of access to my email, canvas, even my TV, shows how reliant I personally am on the internet. One thing we talk a lot about is how regulation lags behind technological advancement in many cases. I wonder if regulations in the US will try to combat the profit-based discrimination that you described.

  12. Thanks for this post! There are several government initiatives on the table currently that would categorize internet as a utility, like electricity, water, and gas. The movement towards having several necessary services as only online resources or having the analog process be the exception helps to create the argument that internet is a basic need to be functional in the current era of processes. I would be skeptical to broadly categorize any group of people without internet as self-selecting into that experience. Instead, I would be interested in the history of the neighborhoods and how redlining played a role in their property values. Very fortunately, I live on campus where the internet is generally well-tended to, but the phone service is a whole other thing.

  13. Catchy title, and good break down of a well researched topic. In my past experience in telecom companies wanted to provide services to rural areas, but the ROI was so low they had a hard time prioritizing that work against other more profitable projects. In some cases the Canadian government came in and subsidized the expansion of both fiber and non-fiber to rural places in British Columbia and Alberta. In other cases (see merge of Shaw / Rogers) it was more of a marketing pitch than actual action: https://www.computerweekly.com/news/252497901/Canadas-Rogers-and-Shaw-announce-26bn-merger

  14. This was a great read, Kanal, and an important topic you addressed. Unfortunately, bridging the digital gap is not a focal point or an issue you hear from leaders in the private and public sector. Yet, it’s so important and can make all the difference in combatiing inequality. I had the opportunity to serve in AmeriCorps as a community organizer in Dorchester, where I use to train lower income groups on how to apply for a job, use the Microsoft Office Suite, and create a social media account. This experience opened eyes and it helped me understand the challenges people in underserved communities face each and every day. However, I do think there’s a strong case for businesses to target low income neighborhoods or buccolic towns to not only bridge the digital gap but also turn them into customers by adding more price sensitive services to their product line up. Although, today’s deeply polarized environment does not allow room for business leaders to expand their customer based and target those who are less fortunate or educated. All in all, I think your blog highlights one of many solutions to alliviate poverty.

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