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Microsoft Believes the Broadband Gap Can Be Closed

We live in a world that is becoming more digitized with each passing day. 

“Cloud computing combined with new productivity, communication, and intelligent tools and services enable us to do more, do it more quickly, and in ways that were simply unimaginable a generation ago,” says Brad Smith, president of Microsoft.

Being a part of this new era means a high-speed broadband connection is a necessity. Yet, roughly 25 million Americans don’t have access to that connectivity – around 19 million of those people live in rural communities.

While the FCC and the USDA have provided more than $22 billion in subsidies and grants to telecommunications over the past five years to improve coverage in rural America, those efforts have done little to move adoption.

“Despite these efforts, the country’s adoption of broadband hasn’t budged much since 2013,” says Smith. “This inability to build out the last mile of the 21st century’s digital infrastructure has exacerbated the country’s growing prosperity and opportunity divides – divisions that often fall along urban and rural lines.”

Without a proper broadband connection, he continues, communities can’t start or run a modern business, access telemedicine, take online classes, digitally transform their farm, or research a school project online. 

“You see this dilemma play out in the U.S. Bureau of Labor Statistics employment data, which shows the highest unemployment rates are frequently located in the counties with the lowest availability of broadband,” says Smith. 

For example, in Washington state he shares a tale of two counties. Although King and Ferry County each has a total area of about 2,300 square miles, that’s where the similarities end. In King County, which has a population of a little over 2 million, the unemployment rate is around 3.2%. In Ferry county, where the population is around 7,600, it’s a very different story. 

“Month after month, Ferry county has the highest unemployment rate in the state, which is always in the double digits,” explains Smith. “In January, it often reaches 17% even 18%. It’s a very different place when people don’t have the opportunity to work year-round. As a nation, we can’t afford to turn our backs on these communities as we head into the future.”

What Microsoft has learned is that there is a Ferry county in every state.

The gap can be closed

In the summer of 2017, Microsoft called for a national effort and set an ambitious goal – to eliminate the country’s rural broadband gap by July 4, 2022. 

“Closing the broadband gap will require a focused and comprehensive solution that combines private sector capital investment in innovative technologies with targeted financial and regulatory support from the public sector,” Smith explains.

Through its Airband Initiative, the company has been working for the past 17 months to bring broadband access to 2 million unserved Americans living in rural communities.

“During this time, we’ve accomplished and learned a lot,” he says. “First, we’ve learned that wireless technology can become the bridge that spans this broadband divide – a strategy supported by the adoption patterns for technologies since the early 1900s.”

Whether it’s landlines, electricity, cable, or broadband, Smith explains that wired technologies typically plateau at 70% penetration in the U.S., and requires decades of additional work and a vast amount of public money to close the remaining gap. 

“For example, even after 25 years, electricity and cable TV hadn’t climbed above 70%,” he says. 

In comparison, radio and color broadcast television achieved near-universal adoption within 25 years, both of which involved wireless technology. 

“More recently, the pace of adoption for cell phones neared 100% in about 14 years and in just eight years for smartphones,” Smith explains. “Broadband adoption not only lags both of these technologies, but is slower than the adoption of radio, more than 70 years ago. This history of wired technology adoption doesn’t bode well for laying fiber optic cable to the distant reaches of our nation.”

While 5G looks to provide a vital advance for many parts of the country, given the nature of the spectrum on which the technology relies, Smith says it’s not likely to soon reach the rural areas that currently lack access to broadband. For example, 13% of Americans using mobile devices still can’t access 4G technology today.

It’s also why Microsoft continues to believe TV white spaces technology can be the differentiator in bringing connectivity to rural America. 

“We’re confident that using a mixed model that combines wireless technologies including 4G and TV white spaces, traditional fiber-based connectivity, and satellite coverage can dramatically reduce the cost and time of extending broadband access to rural communities across America,” he says. “Using this approach, we’ve already struck partnerships in 16 states that will bring broadband connectivity to more than 1 million rural residents who currently lack access.”

Second, forging effective partnerships with telecommunications providers and other groups will accelerate progress.

“It’s the small- and medium-size companies in the very communities that we strive to connect who are closing the country’s broadband gap,” Smith notes. “We see this entrepreneurial and innovative American spirit in an emerging TV white spaces ecosystem that has taken root. We are working with a consortium of component and device makers producing affordable, innovative TV white spaces technology for internet service providers (ISPs) and consumers. We are supporting ISPs by providing some funding for upfront capital costs for broadband infrastructure projects with the possibility of recovering our investment through revenue sharing. We then reinvest those funds in subsequent projects to further expand coverage.”

When Microsoft launched its initiative, a white spaces network connectivity device cost more than $800. Today, similar, and even higher-quality, and more capable devices cost less than $300. 

“As the price of new technology falls and demand rises, these prices will continue to fall, which is a critical goal, and the market will become self-sustaining,” he says.  

Once a community gains access to broadband, Microsoft partners, like the National 4-H Council and the National FFA, will provide hands-on learning, through an extensive network of volunteers and professionals, to help these communities participate and thrive in the digital economy.

Lastly, Smith points out that an effective solution to this problem requires targeted but limited public sector help. This needs to start, he believes, with acquiring more accurate federal data to measure the problem because, as Smith notes, “We can’t solve a problem that we don’t understand.

“There is strong evidence that the percentage of Americans without broadband access is much higher than the FCC’s numbers indicate,” he continues. “We’ve seen this over the past 17 months in many places and in many ways, including by talking directly to the people who live in rural America like the people in Ferry county. Their real-world lack of broadband access differs sharply from the picture too often painted by inaccurate data in Washington, D.C.”

In addition, the more Microsoft has examined alternative data sources, the more it found additional reasons to doubt the federal government’s broadband data estimates. For example, Smith says the Pew Research Center has been tracking internet usage in this country since 2000 through regular surveys.

According to its latest data, 35% of Americans (roughly 113 million people) report that they don’t use broadband at home. 

“While availability (estimated by the FCC) and usage (estimated by the FCC) are different, the significant gap between these two numbers raises important questions,” Smith explains. “It has led us to do more detailed work ourselves based on Microsoft’s data sources, with substantial review by our data scientists and analysts. Their work suggests that the Pew numbers are far closer to the mark. All of this leaves us with the inescapable conclusion that today there exists no accurate public estimate of broadband coverage in the United States.”

However, Microsoft is seeing signs that help is on the horizon. It is encouraged by the recent strides the FCC has taken toward collecting better data. While he acknowledges we still have a long way to go before we gain a full picture of the broadband problem, he also recognizes that the agency has made it a priority to count and connect every community across the United States.

Not done yet

While Microsoft has made significant progress, it too knows there’s a lot more to do to bring broadband to every American. That’s why it is raising the bar it set for itself and encouraging the federal, state, and local governments to do the same. 

“A year and a half ago, we announced that Microsoft’s Airband Initiative would bring broadband access to 2 million people by July 2022. Given our early progress, today we are raising our goal and increasing our commitment. We will pursue work to extend broadband access to 3 million Americans in rural areas by July 2022.” 

By this time next year, the company plans to expand its initiative to reach 25 states. Within these states, Microsoft will not only pursue Airband infrastructure projects but expand the work it is doing to offer skills training in rural communities. It will also continue to advocate for public policies to accelerate the investment in TV white space technologies needed.

“As we deepen our commitment to bringing broadband to rural America, we believe the country can raise its ambition as well,” Smith says. “It’s time to look at how the country spends public money and retarget a small portion of those funds in ways that will close the broadband gap more quickly.”

To date, nearly 90% of the money spent by the federal government on rural broadband has been spent on laying fixed lines, primarily fiber-optic cables – a solution that comes with a price tag that is at least three to four times more than wireless technologies. 

“We think there is a better way. If the federal government reallocates just a small additional fraction of public money toward incentives for TV white spaces devices, it will help accelerate adoption, bring costs of devices down, and help the ecosystem lift off. None of this funding would go from the government to Microsoft, but it would be available to the telecommunications partners whom we are working to assist,” he says.

Moving faster will also require updating federal regulations governing the use of TV white spaces to free up this often unused and plentiful spectrum for rural broadband. 

“Specifically, we are encouraged by the FCC prioritizing broadband and hope it will provide the regulatory certainty needed for rural America’s success,” Smith notes. 

It will also require that we continue to expand partnerships to spur the economic growth and the social equality broadband can bring. This includes new applications, solutions, and ventures across the private sector to help boost yields and lower costs on farms, expand telemedicine to military veterans, and turn local libraries into hubs of digital learning, explains Smith.

“And above all, this requires speed – internet speed. We all need to move faster. It took 50 years to electrify the nation,” he says. “The millions of Americans waiting for broadband don’t have the luxury of time.”

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