Rural areas have a demand for technical skills

The Internet Innovation Association, a broadband advocacy group, citing research by National Public Radio and Harvard University, found that when it comes to training that will get rural residents further ahead economically, rural residents place a higher priority on computer and technical skills.  Twenty-five percent of respondents cited computer and technical skills followed closely behind by 24% saying that a first or more advanced degree would best help a rural resident keep or find a better job in her community.

Coming in at 17% were writing and research skills, presentation and public speaking, and skills for starting a business.

This data seems in line with the observation that the United States is moving further into an information economy.  These skills are increasingly necessary for workers seeking to make a living in an economy where extraction, production, and storage of knowledge is a process taking place more and more online.  To be a competing port of call in the information trade, rural residents will have to garner these skills on varying levels.

What should state and local law and policy makers be doing?  They should first continue to encourage deployment of infrastructure necessary for carrying additional “load”, to use an electric grid term.  With more rural residents learning computer skills, the United States will need the digital capacity that can accommodate more digital workers.  A continuously minimum regulatory infrastructure is key.  State and local governments should bear in mind that broadband infrastructure requires significant amounts of investment.

USTelecom reports that $1.6 billion has been invested in broadband since 1996, the year that the Communications Act was amended to reflect a public policy that encourages advanced communications.  This investment has paid off not only in terms of  more advanced communications infrastructure, but with the addition of edge providers such as Netflix, Facebook, and Amazon.

Law and policy makers who are sincerely mindful of the need for an economy that can accommodate demand for digital workers should always remember that investment and a light touch regulatory scheme works.


Capital. The true digital divide

A couple early morning thoughts on the digital divide.  So far the digital divide narrative has occupied two schools of thought that are not necessarily opposed to each other.

Race and the Digital Divide

The first school of thought revolves around race.  Given that within the black American community there is a higher level of poor households, affordability is keeping blacks from accessing the internet via high-speed broadband infrastructure.  If blacks do not have the income to sustain a broadband business model, then internet access providers are less likely to deploy facilities in poor neighborhoods.  Lack of deployment in these neighborhoods may result in a barrier to valuable information that may lead to greater economic opportunities, according to advocates seeking to close this gap.

Rural Communities and the Digital Divide

The second school of thought revolves around rural communities.  The argument is that lower population density as compared to urban areas makes deploying broadband access facilities in rural areas more expensive.  In addition, terrain, such as that faced by internet access providers in mountain states, has traditionally added to the problem of higher costs to provide broadband access facilities.

An Overlooked Divide

There is another divide, one that is often overlooked and it has to go to what is known as “first-mover advantage.” The real value generated by the internet is the ability to extract, analyze, package, and distribute information, and have that information be available digitally forever.  The focus on a gap between facilities deployed in black neighborhoods versus facilities deployed in white neighborhoods or the gap between rural community deployment versus urban community deployment goes to seeking out new suppliers of information.  The civil right veneer that has been placed over the broadband racial divide hides this supply-side characteristic from the policy debate.  It has also created the opportunity for the political left to craft an electoral package that can be sold to voters.

It is the other side of the equation, the production side, that, in my opinion holds more value.  When we look at the history of the internet, particularly the period when the internet was commercialized, its players included white venture capitalists; Web 1.0 internet service providers, i.e. AOL, CompuServ, Mindspring, etc.; and dial-up access providers such as BellSouth.

Black Americans could always access information from analog sources, i.e. television; print media; or word of mouth, but the efficient extraction, cataloging,  indexing, aggregation, and distribution of information via the internet were the domain of companies invested in and managed by whites.  As whites continued to level their first-mover advantage, this gap between producer/owner of capital and consumer continued to grow.

Capital not only seeks a vacuum, it also seeks a return.  Returns from investing in black or even rural communities were not going to be as high as returns invested in affluent neighborhoods, neighborhoods whose residents probably owned shares in the very companies that commercialized the internet in the first place.  Closing the “digital divide” means first closing the capital divide.

What will Government Do Next?

Government will do nothing from a capital perspective to close the digital divide. The Federal Communications Commission has a number of universal service funding initiatives designed to encourage mobile and fixed broadband deployment in rural areas; to facilitate the delivery of health care via broadband; and to reduce the costs incurred by low-income consumers for accessing and maintaining high-speed broadband service.  By subsidizing the consumer demand for broadband services, the Commission hopes to encourage the delivery of broadband services.  But again, the focus is on consumer demand, not bridging the capital gap.

The philosophical underpinnings of the American economy, where capital is to flow freely to its best use may prohibit government from taking any concrete action for closing a capital gap.  If blacks or rural residents had sufficient capital to purchase, construct, or maintain broadband access facilities, using their intimate knowledge of their communities to distribute services, we might see a decrease in the gap.  We should expect that government will stay on a path of incentivizing capital investment in infrastructure development versus trying to repair capital discrepancies via a capital transfer.