Is Santa Cruz Ready for $94B Universal Broadband?

After approving the $1.9 trillion stimulus plan known as the American Rescue Plan, schools took a few minutes to celebrate the $7 billion designated to help students get internet access. Democrats are now proposing a $94 billion package to deploy high-speed broadband nationwide. We were never more aware of the Digital Divide than during 2020 with the pandemic. According to FCC acting chair Jessica Rosenworcel, as many as 17 million students are victims of the homework gap with up to a third of Black, Latino, Native American, and Alaska Native students lacking high-speed internet access at home. In our tri-county (i.e., Santa Cruz, Monterey, San Benito), roughly 10-18% of households lack internet access. In 2020, several outstanding local organizations rallied to help including Cruzio, MBEP, Digital NEST, and Santa Cruz Tech Exchange. Now what?

$94 Billion to the Rescue?

Steve Blum and James Hackett have been working tireless to close the Digital Divide. We asked how much of federal funds would help us locally.

Steve Blum: I'm not excited about this bill. It's consistent with past bills that have been introduced on an annual basis and have gone nowhere. Although the amount of money on the table looks impressive, there's no reason to think that $94 billion will be the final amount, in the unlikely event that it passes in anything like its current form.

But let's suppose it does. Most of the money – $60 billion – would be distributed by the Federal Communications Commission, presumably using the same reverse auction process it used for the recent first round of the Rural Digital Opportunity Fund (RDOF) program, and used, in part, for the past Connect America Fund (CAF) program, both of which were supposed to fix the same problem targeted by this bill.

CAF was largely a failure. Most of the money went to incumbent telephone companies which have stalled and/or gamed their broadband upgrade obligations in much of the U.S. RDOF did not go as planned, either. Most of the subsidies were provisionally won by fixed wireless operators. The FCC is reviewing those awards now, in light of the implausible claims made by most of those operators. Instead of the fiber to the premise systems the FCC thought it was incentivising, at best we'll get marginal increases in the availability of wireless broadband with little in the way of infrastructure upgrades.

Some of the money in the bill will go toward subsidising service for low income consumers, similar to the covid program enacted last year. It would be a benefit to households that qualify, but it's being run through the incumbents. There's no reason to think that it will result in any improvements in broadband infrastructure or service availability.

The bill looks good. It's getting good press. But if it becomes law it will reinforce the problems caused by the existing broadband monopolies/duopolies in the U.S., not solve them.

James Hackett: As an independent ISP, Cruzio supports any efforts from the federal government to address issues of digital equity. I share Steve’s caution. In addition to accessibility, funds can be used to subsidize service where broadband exists but may not be affordable. Affordability is often overlooked.

We applaud the new Emergency Broadband Benefit. Often federal and state funds pass over affordability issues and fail to address this need. For example, in the Pajaro Valley School District over 80% of families live below the poverty line and struggle to afford broadband; however 95%+ of the geographical area is classified as “served” and is ineligible for most funding like the RDOF program Steve refers to.

This is why Cruzio started the Equal Access initiative with Santa Cruz COE, Community Foundation Santa Cruz County, MBEP, and the CCBC. We’re working on a grassroots level to connect at-need families in Santa Cruz and are expanding the initiative to Monterey County soon.

For reference, here’s the letter Cruzio and CCBC sent to the FCC in support of new funding:

High-speed internet access is a basic necessity for all of our residents. Low income families are struggling. Their priorities are food and rent, and they require internet services that are free or very low cost. We applaud the creation of the Emergency Broadband Benefit Program as a new tool to address issues related to the digital divide and appreciate the opportunity to give input.

Firstly, we would urge you to prioritize independent, regional providers who are best placed to achieve maximum impact of these funds. Local ISPs have far better existing relationships with local municipalities and other community organizations and a better track record of converting funds into direct benefits for their communities. In addition, they are concerned about access and affordability – not just profitability as in the case of the larger providers. In Santa Cruz County, local ISP Cruzio Internet and Community Foundation Santa Cruz County have launched the innovative Equal Access Santa Cruz program to provide direct service subsidies to families in need. Other similar initiatives have been developed across the country and we recommend targeting funding towards these established programs.

Regarding eligibility for the program, it is our strong belief that internet service will be more affordable and more quickly available if the Commission does not make it a requirement that the provider offer phone service. Limiting eligible providers in this way will only reduce competition and will not be in the best interest of the low-income communities that need service the most.

We also recommend exploring the idea of tying eligibility to existing programs in local communities, for example school lunch programs and affordable housing coupons. Removing additional eligibility requirements will reduce friction and increase accessibility. In our area, Equal Access Santa Cruz has partnered with the local County Office of Education in just such a way to rapidly prequalify eligible households.

In terms of technology, we recommend ensuring the program be open to wireline and wireless providers. In many areas where the need is greatest, particularly in hard to cover rural areas, Wireless Internet Service Providers (WISPs) offer by far the best broadband coverage and service quality.