Digital Divide 2.0

Let’s Stop Treating The Internet Like A Utility

By Kish Rajan

What do the iPhone, the “Internet of Things” and solar panels all have in common? They’re all fantastic technologies that make our lives better, and none of them were invented by utility companies.

They could have been. People consider phone companies to be utilities. Same with electric companies. But thanks to decades of heavy regulations, these sectors have had little to no incentive to innovate due to outdated laws and regulations that stifle rather than encourage investment and competition.

Those disrupters have been able to move quickly and build innovative new companies, thanks to the internet, which has arguably been the single largest engine for growth in this country since the auto industry.

It’s safe to say that the internet does not behave like a utility, but too often, it is treated as one. Until a few weeks ago, the same committee in the California Assembly that dealt with utilities also handled internet issues. The Utilities and Commerce Committee handled everything from ride-sharing issues to the transition to renewable energy. Last session it was overwhelmed by 140 bills.

Kudos to Assembly Speaker Anthony Rendon for spearheading a new alignment for that committee. It is now two different groups: the Communications and Conveyance Committee and the Utility and Energy Committee.

This new division more closely reflects the reality of the internet. It’s not a utility – it’s a technology.

It’s an important distinction.

The internet is often lumped in with utilities when it really shouldn’t be. Take the California Public Utilities Commission, for example. The PUC has oversight of California’s utilities – including the internet. Four years ago the Legislature concluded that the PUC was holding back the development of internet phone service. It moved oversight of that industry to the Legislature, and since then it has flourished.

Last year we were supportive of Assemblyman Mike Gatto’s efforts to disband the PUC (though his bill might have been a step too far). That bill ultimately failed, but it had the right idea. There are utilities and then there is technology, and the two shouldn’t be regulated in the same way.

That’s not to say that the Legislature should take a completely hands-off approach to the internet. We need regulations, but they need to be smart regulations that promote innovation, investment and competition.

Regulations should suit the demands of our technology-reliant world. They should promote broader access to fast internet, help close the shrinking digital divide and make sure our emergency systems are operating at the highest level of security and reliability.

The more we think about the internet as a utility, the more we’ll slow progress. And that’s not what anyone wants.

Kish Rajan is chief evangelist at CALinnovates and former director of Gov. Jerry Brown’s GOBiz initiative. He can be contacted at [email protected]

Originally published in the Sacramento Bee 

 

New Report Shows Californians Are More Connected Than Ever

California’s communications industry is currently in a period of astonishing growth, with the promise of an even brighter future to come. You might even call it a broadband boom. A recent study by Dr. David W. Sosa bears this out. Sosa is a principal at the Analysis Group, an economics consulting firm. His research shows that Californians are embracing the wireless lifestyle.

From 2008 through 2015, California’s total wireless subscriptions jumped by 9.5 million, or 29 percent. At the same time, broadband voice residential connections increased by 220 percent, or 4.9 million users. Meanwhile, legacy wireline users dropped by 36 percent. California’s embrace of broadband and wireless is helping keep the state at the center of the growing technology industry.

To read more about this topic, click here to read a recent op-ed by CALinnovates Chief Evangelist Kish Rajan.

Technology Can Help Heal This Divided Country

By Mike Montgomery

On Tuesday night, America was hit with an earthquake. It doesn’t matter whether you’re a Democrat or a Republican. What Tuesday showed is that we are a country that is even more deeply divided than many of us thought.

At the heart of that division is a schism between the haves and the have nots. People who feel they have been left behind by the government and the economy may not have been heard by pollsters but they made themselves heard loud and clear Tuesday when they voted for radical change at the top level of government.

While it may be an uncomfortable situation, those of us in the tech space need to talk about the role technology played in that divide.

Those of us living in the iPhone bubble may believe that things like online banking, video calls and streaming music are part of the everyday life of all Americans but that’s not true. We still live in a country that has a very real digital divide.

Studies from the Pew Research Center show that people who earn less money and are less educated also have less access to the internet. While 88% of adults earning more than $150,000 per year have broadband at home, only 45% of those earning under $30,000 a year have the same access. Ninety percent of people at the top income level have smartphones compared to 53% of those at the bottom.

As more and more of the services that people rely on move online, those at the bottom are truly being left behind. They have less access to things like employment websites, online education and new banking options. Without fast access to the internet they are increasingly isolated.

Then there’s the very real problem of job displacement. While technology has made many things easier in our lives, it’s also made a lot of jobs redundant. By 2020 robots will have replaced an estimated 5 million jobs, according to the World Economic Forum. Those people who feel that the jobs they once relied on are deserting their communities — they’re right.

But here’s the thing. I also believe that technology can help solve these problems. Knowing the benefits that come from more people having access to the internet we can put policies in place to close the digital divide. We need policies that encourage states to upgrade their infrastructures to bring broadband to everyone.

We need to accept the reality that the economy, and with it the future of work, is changing fundamentally and it’s not changing back. We can’t pretend that we’re headed for a resurgence of reliable factory jobs.

Instead, let’s enact policies that train people for the jobs of the future. Let’s have a minimum wage so that those in the growing service industry earn enough to take care of their families. And let’s seriously consider things like wage insurance so that when people move into jobs that have less consistent income, they can still count on steady earnings.

But let’s also make sure that at a state level, we don’t overcorrect and put so many regulations in place that we chill new businesses. If the economy is going to grow, we need to encourage our tech entrepreneurs to continue to come up with new ideas that are going to drive the economy of the future.

These ideas are not liberal or conservative, they’re common sense. They are ideas that people on both sides of the aisle can, and should, come together to support.

With the election behind us, it’s time for both sides to work together to heal the problems we saw so nakedly exposed on Tuesday night. Our future depends on it.

Goodbye Payphones, Hello Progress

by Kish Rajan

If Clark Kent wanted to turn into Superman in California today, he’d struggle to find a phone booth. Across the entire state there are only 27,000 payphones left, down 70% from 2007.

It’s no big surprise that the payphone is going the way of the dodo bird. According to the Pew Research Center 92% of American adults own cellphones. If you’re desperate to make a call and find yourself with a dead battery, chances are good you’re going to ask a friendly stranger to borrow their cell phone before you’re going to search out a payphone.

Late last month, Gov. Jerry Brown signed a bill into law that acknowledges the demise of the payphone. SB 1055 puts an end to the Payphone Services Committee and the Payphone Service Providers Committee Fund which was being used to, among other things, “fund programs to … educate consumers on matters related to payphones.”

Let that sink in for a second. As a state, until a few weeks ago, we were still spending money to educate people about payphones — something the vast majority of citizens don’t want or need.

That’s pretty emblematic of how the legislature works when it comes to telecom. There are lots of outdated laws and committees and funds on the books but change comes incredibly slowly.

That’s why the death of the payphone committee is a small but symbolic step.

California should turn its attention to fixing other policies that keep outdated technology tethered to our streets and our homes even when we as a population have moved on.

Read the full post on Fox and Hounds here.

Why Clinton And Trump Need To Talk About Technology At The Next Debate

Technology is central to our lives. But you wouldn’t know it by listening to the candidates.

By Kish Rajan

This week’s debate between vice presidential candidates Mike Pence and Tim Kaine was the second time we’ve seen candidates come together on the national stage to discuss the issues. For the second time, technology was basically left out of the conversation.

I guess that shouldn’t have come as a huge surprise. This year’s election, more than any other I can remember, has been more about emotion than substance. The most important issues seem to be getting pushed to the sidelines in favor of personal jabs.

But I can’t help feeling disappointed. These debates have been a real missed opportunity. Tech is quickly becoming the driver of our economy. According to the government’s Bureau of Labor Statistics, STEM jobs are growing at 13% per year, faster than any other sector. Tech jobs pay some of the highest wages, and for every new tech job, 4.3 more jobs are created in other fields thanks to the multiplier effect, according to the Bay Area Council.

At the same time, tech is decimating some industries and forever changing the nature of work. As technology makes everything from buying our groceries to writing news stories easier, traditional jobs are being lost and they’re not coming back. This is something our leaders need to face head on.

In the first debate, Hillary Clinton made a glancing reference to the power of innovation to create new jobs, but it was far from enough.

There’s a lot at stake in this election. In order to help grow the technology industry and protect workers, we need to modernize tax policies, come up with new strategies for education and workforce development, increase access to capital to start new businesses and reform regulations. These issues need to become part of the conversation.

Immigration is top of mind for many tech entrepreneurs but not in the way the candidates talk about it. Silicon Valley doesn’t want to keep immigrants out; it wants to let them in. The leaders in the Bay Area want to make it easier for entrepreneurs and engineers to cross our borders so new companies can be founded and others can hire the best and the brightest, no matter what country they’re from.

Then there is the sharing economy — I call it the Personal Enterprise Economy — which is growing in leaps and bounds. Companies such as Uber, Airbnb and Task Rabbit are remaking the economy in incredibly fundamental ways. A job is no longer for life; that’s just reality. These new companies are opening up new opportunities for people who may be underemployed or who just want more flexibility to control their own work life.

That doesn’t mean we don’t need regulations here to protect both workers and consumers. The choices the government makes about those regulations will have an enormous impact on whether or not this industry and its workers thrive.

And this new, tech-driven, future of work means that we need to rethink things such as tax breaks and benefits. Obamacare was a good start in that it gave everyone the chance to get health care without having to stay beholden to a specific employer. But we need to go further. More benefits need to be portable, sticking to the worker not the employer. We need to talk about things like wage insurance and evolving our tax code to reflect the changing nature of work.

There’s also the digital divide, a serious problem that is rarely publicly discussed among elite politicians. While at the top end of the economic scale people have access to iPhones, lightning-fast broadband and the newest whiz-bang wearables, too often people at the bottom are struggling with dial-up service if they have any access to the internet at all.

In order for this lower-income group to thrive, they need to be able to have steady broadband access, not just to be able to keep in touch with loved ones and take advantage of growing entertainment opportunities. This is much-needed technology that will allow them to apply for jobs, get online training and access benefits that are increasingly going digital.

Closing this divide needs to be a priority for our government. It would be great if our next president acknowledged this and talked about ways to fix the problem.

Technology can help create new jobs and move the economy forward but it can also leave people behind in its wake. We need to be dealing with both sides of the issue.

There are two more debates on the schedule. I’ll be watching next Sunday’s town hall closely to see if the candidates talk more about technology. I hope they will. Personal insults and clever one-liners are great for reality TV. But they don’t help much when it comes to leadership.

The Demise of Google Fiber Shows There Are No Easy Answers in Telecom

By Mike Montgomery

When Google rolled out its fiber business in 2012, it was an appealingly easy solution for a difficult situation. Like a fairy godmother solving all of our problems with a sweep of her wand, Google was going to bring blazing fast 1 gigabit speed to homes across the country and, for as little as $70 per month, people were going to get access to Autobahn speeds previously only dreamed of on our American Superhighway.

With its fat wallet of cash, Google seemed well-positioned to do the expensive work of buying failed municipal broadband networks as well as building some of their own new networks, tearing up roads and sidewalks and laying its fiber in select neighborhoods. Kansas City, where Google piloted the fiber program, suddenly seemed poised to become the next internet startup hotspot.

But now it turns out the task was too much even for Google. The Wall Street Journal is reporting that Google’s parent company, Alphabet, is “rethinking” its fiber rollout plans in the face of mounting costs.  Confronted with the reality of today’s regulatory environment, the company appears to now be leapfrogging the morass entirely, jumping ahead to advanced wireless technologies – which could deliver speeds up to 10 gigabits per second – viewed by many as the broadband “game changer” for connectivity and speed.

Google Fiber is a well-intentioned idea. We need more people to have better internet access so they can get the most out of the growing digital economy. Work is increasingly being done over the internet as companies move to cloud technology. Even applying for a job now usually requires internet access. Watching TV, shopping, and connecting with loved ones are all things increasingly being done online. Those who don’t have access or are operating from networks in need of modernization are at a severe disadvantage in today’s digital world.

But as Google is discovering, laying new miles of fiber is far from easy.

Read the full article here.

In Tech-Driven Economy, FCC Needs to Step Up

By: Mike Montgomery

It’s clear that technology is a key driver of prosperity in today’s modernizing economy. Trillions of dollars in economic activity flow through the networks which make up the internet, making America’s digital economy the envy of the world. Networks are redefining the services people consume and the income people derive. For example, according to a Pew survey, 72 percent of Americans have used a sharing or on-demand service.

That’s why the Federal Communications Commission has never been more important. From last year’s Net Neutrality rules to current proceedings about set-top boxes, internet privacy and business services, FCC rules are shaping the future of the internet – and the broader economy that it fuels. Whether you agree or disagree with these regulations, everyone agrees they will have a profound impact.

That is why it’s so disconcerting to see the FCC disconnected from the economic impact of its decisions. In a report he published in July, the FCC’s very own former chief economist, Gerald Faulhaber, Ph.D., raised alarms about the agency’s dangerous turn away from economic analysis in its decision making.

In the report, Dr. Faulhaber asks: Why do the U.S. Department of Labor, the U.S. Environmental Protection Agency and the Consumer Financial Protection Bureau all conduct stringent cost-benefit analyses on their decisions while the FCC does not?

The FCC has simply become too important to the economy for it to fail to explore the economic impact of its decisions. For example, numerous economists warned the FCC that its decision to impose so-called Title II regulations on internet service providers, which treats today’s advanced broadband access in the same way as telephone services from generations ago, will have a negative impact on investment and innovation while not solving the issue we all want addressed: how to ensure that internet traffic is treated fairly across networks, regardless of where it comes from. Yet, when issuing its Open Internet Order, the FCC conducted no economic analysis of the impact its proposed rules would have on consumers, innovation or investment.

How is that possible?

The problems continue. The FCC is currently facing a major backlash from Congress, Hollywood and many innovators for its proposed new technology standards for set-top boxes.

Read the full article here.

How We Can Close California’s Digital Divide

By: Kish Rajan

California is the center of technological innovation. Our state is home to tech companies that are changing people’s lives all over the world. But there is still a small sliver of Californians, about 1.3 percent of the population, who live in areas where there isn’t access to the Internet, according to a recent study.

And about one in five people who have access don’t use the Internet. There are many different reasons why people don’t go online. According to a study by the Pew Research Center, 34 percent of adults who don’t use the Internet say they don’t find it relevant to their lives. Another 32 percent say they find the Internet too difficult to use.

This points to a real problem. The Internet today is about so much more than cat videos and social media. Don’t get me wrong — those things are great. But people can now use the Web to apply for jobs, sign up for health care and stay in touch with loved ones. People who believe the Internet is irrelevant, or too difficult to use, are increasingly isolating themselves from their communities and society as a whole.

This is the modern digital divide or as we call it, Digital Divide 2.0. Almost everyone has access to the Internet. Even people who may not have a broadband line to their house can access the Internet through their schools and libraries. According to a recent study by James E. Prieger, an associate professor of economics and public policy at Pepperdine University School of Public Policy, access isn’t the biggest problem. He writes: “… the main barrier to increased adoption is not access but the value proposition for consumers.”

So what can be done to improve the value proposition of the Internet for the select few who are abstaining? One good fix would be to modernize our communications policies to focus on closing the Digital Divide 2.0. California’s communications laws actually encourage people to stay isolated on phone lines, which keeps them shut away from a wide world of information. We have to re-imagine the goal of communications policy, which in the 1950s began and ended with making sure people had access to a phone.

Read the full article here.

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