Closing the American Digital Divide this decade

Getting the job done in time

Making digital equality a reality this decade

The digital divide has never been so apparent as during the COVID-19 pandemic. Workers transitioned to work from home, students were forced to learn from home, and patients and caregivers turned to telemedicine. Digital access to information and services often determined success or failure. Large, unsatisfied demands in underserved rural and urban areas were exposed, particularly among minorities. If access to broadband technology was once nice-to-have, it’s now clear that broadband technology is essential if all members of our society are to have equal access to opportunity. Government, business and community stakeholders agree that we must act to close the broadband gaps soon. This paper explores the challenges of bringing broadband to various areas, the technologies available and suggests the best routes for achieving the goal of broadband for everyone by 2030.

Introduction

The pandemic accentuated the digital divide priorities

The pandemic accentuated the need to more quickly enable remote work in employees’ homes; support remote education in students’ homes; and connect small and medium businesses that are outside the fiber footprint. The North American digital divide is multifaceted and it encompasses mobile as well as fixed broadband.

Choosing the right technology to close the divide

There’s clear consensus between society, business and policy makers about closing the digital divide. But what’s the best approach to get it done? To close the broadband divides this decade, not the next, we must take a holistic approach that includes 5G fixed wireless along with fiber and satellite. Smart and selective use of 5G can help deliver needed connectivity more quickly than fiber and more universally than satellite.

Choosing the right technology to close the divide infographic

American fiber realities for consumers and businesses

69 .2%
fiber lit large business buildings
14 .2%
fiber lit small business buildings
16 .4 %
residential fiber penetration
~ 1 .5% YOY
growth in fiber penetration
~ 2 % YOY
growth in small fiber lit buildings
4 .8% YOY
growth in large fiber lit buildings
Source: OECD and Vertical systems 2021

There’s no doubt that fiber delivers both speed and bandwidth. But building out fiber networks is a slow and expensive process. Fiber deployments in the U.S. have so far yielded modest results. Only 16.4 percent of all fixed broadband lines in the U.S. are fiber-based today. For comparison, consider that South Korea achieved 83.9 percent by 2020.

Business fares better. In 2020, almost 70 percent of larger U.S. business buildings were served by fiber, though only 14.1 percent of small U.S. business buildings were. At the current growth of 1.5 to 2 percent of U.S. households and small business buildings are multiple decades away from closing the digital divide with fiber.

Three new technologies for three different purposes

We have some good options for expanding coverage to underserved areas: Fiber, 5G and Low Earth Orbit Satellites. All three technologies offer attractive paths to closing the digital divide. Each has its own advantages and disadvantages in terms of performance, deployment times and coverage in remote areas.

Three new technologies for three different purposes infographic

Fiber: Great performance, slow to the finish line

There’s no doubt that fiber delivers both speed and capacity. But building out fiber networks is a slow and expensive process, with different starting points for different segments.


In 2020, almost 70 percent of larger U.S. business buildings were served by fiber, growing at a pace were all these buildings can be connected with fiber this decade.


But only 14.1 percent of small U.S. business buildings are connected by fiber, with penetration growing at ~2% per year.


Residential fiber deployments in the U.S. is similar with 16.4 percent of all fixed broadband lines in the U.S. are fiber-based today. For comparison, consider that South Korea achieved 83.9 percent by 2020.


At the current growth of 1.5 to 2 percent of U.S. households and small business buildings are multiple decades away from closing the digital divide with fiber.


5G: Best of both worlds?

 

5G deployments in the U.S. have progressed rapidly. 5G now covers more than 90 percent for mobile services in low band spectrum and reaches 165 million people on existing mid-band spectrum. The long reach version of 5G mmWave has been proven for fixed wireless access, delivering 1Gbps of sustained downlink speed.


With its combination of low-, mid-band and mmWave, 5G is the only technology that can be used to close both the mobile and fixed digital divides with the same infrastructure.


5G will also allow multiple service providers to compete in a geographical area for mobile services, and for fixed wireless access to compete with DSL and cable alternatives.


Fixed 5G wireless access will make closing the divide for residential access as well as for small business buildings possible this decade.


Satellite service: Universal coverage, but limited capacity

Low Earth Orbit (LEO) Satellite systems are attracting a large increase in investments tailored for different continents. Four providers serving the U.S. have obtained FCC licenses for broadband services: SpaceX-StarLink, Amazon-Kuiper, One Web and TeleSat.


Satellite services are best suited to provide mobile and fixed broadband in remote areas where fixed and mobile broadband infrastructure is costly to build.


The competition between multiple satellite providers using incompatible technologies is a disadvantage. The lack of terminal interoperability across service providers limits the potential to reach economies of scale.


Lessons from the pandemic

In most people’s minds, closing the digital divide simply means providing broadband internet access to consumers. COVID-19 revealed the true societal and economic cost of a digital divide. The pandemic has been a crucible that exposed weaknesses across many facets of society including the demand-driven gaps in broadband connectivity. By looking at these gaps, we can derive insights for shaping a practical strategy for closing the digital divide.

Remote/hybrid work is the new normal

Remote/hybrid work is the new normal

The pandemic is also driving fundamental shifts in where we will work in the future. During COVID, employees have been forced to working from home. Supporting remote and hybrid workers with consistent broadband capabilities is vital to attract workers, whether in urban, suburban or rural areas.

Connected schools and unconnected students

Connected schools and unconnected students

The pandemic unveiled fundamental shortcomings in connecting students for remote education and homework at home. Fifteen million K–12 students lacked access to devices or broadband. Nine million lacked both device and broadband access—equivalent to 30 percent of all K–12 students nationwide.[1] When the pandemic shifted the need from schools to personal computers and broadband at home, students and teachers were left without enough resources.

[1] Closing the K-12 digital divide in the age of distant learning, BCG and Common-Sense Media, June 29, 2020

A prescription for remote healthcare

A prescription for remote healthcare

Healthcare comprises a third area driving expansion of broadband access. The era of telemedicine is no longer the future; it’s today. The pandemic has forced both caregivers and care receivers to embrace virtual counseling. During the pandemic, 30.1 percent of all medical visits were done via telemedicine. And telemedicine requires reliable and consistent broadband.

SMBs and digital transformation

SMBs and digital transformation

The American small-and-medium-sized business landscape is experiencing a large transformation, with record numbers of businesses closing and new businesses starting. To accelerate the digital transformation of all small and medium businesses, we must accelerate their access to new broadband technologies, beyond fiber connected buildings.

Remaining American digital divides to close

Based on the study, we conclude that closing the digital divide in rural areas entails focusing first on town/ micropolitan areas and towns/villages along highways. We should leverage aerial fiber when possible, rather than digging.

To accelerate the build of both fixed and mobile broadband across one infrastructure, we should consider 5G Fixed Wireless as a fixed broadband option. At the same time, we must also take the longer view. In areas with very high uptake and/or broadband usage, we should prepare to further extend the fiber grid to smaller radio cells or fiber over the next decade.

Remaining American digital divides to close chart

Unconnected share of the U.S. adult population (%), Source: PEW Research 2021

Remaining fixed digital
divide to close
21-28%
Remaining mobile
digital divide to close
11-20%
Difference between fixed
and mobile divides
5-12%
Where do we go from here?

The digital divide will be closed through many small infrastructure efforts rather than in one big battle. We won’t be able to get fiber to all Americans this decade, but all Americans can get great fixed and mobile broadband through a combination of fiber, 5G, and satellite services.

Closing the digital divide is a complex, multi-faceted challenge but this study helps clarify the path we should take to get the job done in time.

Download the report

Blogpost

Closing the American digital divide this decade requires a mix of fiber, 5G and satellite services. Do you know how they should be combined?

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