November 28 2011

Internet Access on Cyber Monday

Nicole Kurokawa Neily

 

An estimated 122 million shoppers will participate in "Cyber Monday" today. But should this number be higher?

According to a November report by the Department of Commerce's Economics and Statistics Administration, only 68 percent of American households have access to broadband internet - certainly, a number that has grown over the past few years, but is far from the renewed “information superhighway” that President Obama promised us in 2008. Even after $7.2 billion in stimulus funding was thrown at the problem, we’re only a tiny bit closer to full access (64 percent in 2009, versus 68 percent in 2010).

Part of the problem? First and foremost, the government just does a piss-poor job picking winners and losers (case in point: Solyndra). The same thing’s been going on with the internet world. Recently, an $80 million internet grant to Louisiana was revoked for missing deadlines and failing to provide deliverables –and in addition, the Washington Post noted that “The cable industry’s lead trade group, the National Cable and Telecommunications Association, released a study last spring that showed that some major USDA stimulus broadband grants and loans were overlapping with existing services.”  What kinds of jokers are evaluating these programs, anyway?

Another part of the problem? People don’t necessarily want internet at home. Of the people who don’t have broadband internet at home, the ESA report found that a full 47 percent of them cited “lack of need or interest.” So the federal government spent stimulus money on people who don’t necessarily want to be helped. Brilliant.

How, then, to get individuals the services they need, IF THEY WANT THEM, without burdening other taxpayers?

Three words: The. Private. Sector.

Companies have an incentive to expand their customer base – more sales! – and the market signals to figure out where to expand, what infrastructure to invest in, and how to price those services in a way that covers their costs while still appealing to customers (think about it: even if you want internet, you probably won’t pay, say, $1000/ month for it.) Companies may engage in advertising or educational campaigns to reach those people who don’t think they need service and convince them of its utility – and if those people still don’t want the internet, no problem – no further investment has to be made!

Now, if only we could get that $7.2 billion back… I know a deficit that needs closing.

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