Chicago Fed Insights

Bridging the Digital Divide: Challenges and Recommendations

February 3, 2021

A panel of experts advocated for a range of critical actions to address the digital divide in a virtual Project Hometown event on January 28, hosted by the Federal Reserve Bank of Chicago. Events in this series are part of a broader effort by the Chicago Fed to help our communities overcome the challenges associated with the Covid-19 pandemic and bring about a more inclusive recovery.

In opening remarks, Mike Berry, policy advisor in the Chicago Fed’s Community Development and Policy Studies Division, asked, first of all, “What do we mean by the digital divide?” We mean that there is a division in the country in terms of access to high-speed internet and devices to connect to broadband, as well as widespread digital illiteracy, he said. Also, internet subscription costs are a big obstacle for many people. To frame the discussion, Berry provided key points from a Benton Institute for Broadband and Society report (“Broadband for America Now,” by J. Sallet, October 2020): “Community and economic development experts have long noted that digital exclusion has significant implications for the economic mobility of less-resourced communities, households, and businesses, in both urban and rural settings.” He added that “the strains on our public education system since March [2020] may have impacts lasting a generation or longer.” For example, the report indicates that about 90% of the over 50,000 students in predominantly Black Detroit Public Schools couldn’t participate in online learning, at least initially, because of a lack of internet service, computers, or both. Digital exclusion has also impacted access to government stimulus benefits, he said, and lack of connectivity has created barriers to working from home, shopping and banking online, and connecting with friends and family remotely as people shelter to avoid infection. Also critical for today’s job market, Berry remarked that “digital literacy is a critical gateway in the path to living-wage employment.”

David Oppedahl, a senior business economist in the Chicago Fed’s Economic Research Department, moderated the event. He started off the discussion by asking each panelist to provide their perspectives on the current state of the digital divide and its ramifications.

Roberto Gallardo, director of the Purdue Center for Regional Development, said that the current state of digital exclusion is “not sustainable.” He stressed that the digital divide is not only a social equity issue, it’s also a ”community and economic development issue.” Gallardo remarked that the Covid-19 pandemic has helped to increase awareness of the problem of digital exclusion and marginalization. However, he said that measuring the extent of the digital divide is difficult because the data on broadband access and digital inclusion are not standardized. According to the center’s measures of digital distress, 20-25% of U.S. households rely on only cellular data or have no household internet access (that number rises to about 35% in rural areas). Census data show that nearly 36% of households making less than $35,000 per year were without internet access, Gallardo added.

Gigi Sohn, a distinguished fellow at the Georgetown Law Institute for Technology Law and Policy, remarked that the digital divide is “a national emergency” and that bridging this divide is “vital for full participation in society.” Sohn reported that as of January 2020, “about 141 million Americans did not have access to robust broadband.” Sohn sees this largely as a problem of public investment and oversight, as well as “accountability for the broadband sector generally.” She explained that affordable access was a significant barrier for people of color and those with low incomes. “The primary reason people don’t have internet access is because they can’t afford it,” she said, reporting that the U.S. has some of the highest prices for broadband access in the world, with an average cost of $70 per month. Sohn explained there are currently many unmet digital access needs, including supports for people with disabilities, those requiring help with online job applications, and individuals looking to arrange Covid-19 vaccine appointments.

Matt Schmit, director of the Illinois Office of Broadband, mentioned that his office addresses the digital divide from a “well-rounded, holistic perspective.” He said that “we need to do everything that we possibly can to get devices into the hands of households and our young learners and folks who are working from home and wanting to participate in 21st century applications, like telehealth or remote learning.” Schmit explained that 1.1 million people in Illinois lack computers at home, including young learners. There is also a need for “digital skills building and programming,” including for our senior population, he added, “because not everyone is ready to take full advantage of the internet.”

Joshua Edmonds, Detroit’s director of digital inclusion, said that broadband in the United States is “in a state of disarray.” For example, 46% of his city’s population remains without high-speed internet. Still, he says he is optimistic, given the number of leaders working on the problem. Affordability is a big issue in Detroit, he emphasized, but it’s more complex than just paying a bill. He said he hopes to increase funding sources to address digital inclusion in Detroit, and noted that there has been interest on the part of financial institutions seeking Community Reinvestment Act credit to help address the digital divide, although no specific plans are as yet in place.

Highlighting possible solutions, Sohn suggested there should be an office of broadband connectivity in the White House. Addressing the digital divide requires an “all-hands-on-deck approach,” she said, with the collaboration of many federal agencies. She is hoping Congress will pass the Accessible, Affordable Internet for All Act, which would maintain a $50 per month broadband benefit for low-income households after the pandemic. She supports the benefit because “the free market in broadband does not work.” She also said, “I’d like to see the states reestablish their authority to oversee the broadband market.” Sohn is encouraging the philanthropic sector, consumer advocacy groups, and communications industries to collaborate. She added that over the past ten months, industry has “finally admitted that they’re either not willing or not able to solve this problem themselves.”

Gallardo spoke of the need to build local capacity, as well as to get funding at the local level and obtain better data. He also stressed the importance of incentivizing the private sector to expand their broadband networks. Schmit said, while he is thankful for the mapping of broadband access provided by the FCC, it is “significantly flawed,” and therefore the states, including Illinois, need to take up mapping. Schmit also emphasized strengthening partnerships, including at the regional level, and he noted the benefits of using a “train the trainer” model to build out local capacity to address digital exclusion. Edmonds emphasized the importance of taking a holistic approach to finding solutions to address the complexities of the problem—from access to computers and high-speed internet to education and tech support, among others.

When asked to highlight some success stories, Sohn said that while there are no communities in the country that have closed the digital divide, Chattanooga, Tennessee has had success in building out broadband areas and has helped all school-age kids in need with free connectivity. Gallardo relayed that his center has helped communities voice their views, including in Indiana, and has provided mechanisms to counterbalance the power of broadband providers. Edmonds and his team are responsible for the creation of Detroit’s sustainable digital inclusion strategy, and they successfully raised $30 million last year. Their funding efforts support areas such as remote learning for public school students and telemedicine initiatives. Edmonds said his department is working with partners in industry. They are also leveraging community participation to propose solutions that can be put into action using Connect 313 funds. Schmit, who oversees the administration of the Connect Illinois Broadband Grant Program (which has $400 million available) said he views Illinois as “getting it right on the broadband front.” His office is working with communities and providers around the state to get everyone connected by 2024.

In conclusion, Edmonds expressed that coordinating all of the interrelated aspects to address digital exclusion will require “endurance.” Gallardo reinforced this point by saying that “we need to slowly but surely move forward to not get overwhelmed.” The panelists agreed that bridging the divide will take time and will require coordinated efforts at the local, regional, and federal levels. Oppedahl wrapped up the discussion with a few final thoughts: “Even though the digital divide continues to be a challenge, it sounds like there are solutions in the works and more in the pipeline.” He added that closing the digital divide is “really key to the future, both for the economy and for our own quality of life as individuals.”

The views expressed in this post are our own and do not reflect those of the Federal Reserve Bank of Chicago or the Federal Reserve System.

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