Is Cyber Security Glitch a Damper on Broadband?

I’ve never been too keen about OnStar. You know that service where you can call your wife up while she is in the middle of a business meeting and ask her to start the car because you locked your keys in the trunk? It just seems to be the antithesis of the argument that given the sophistication of Internet hacking and our concerns about cyber space pirates violating privacy, we would – at the same time – give power to a satellite 23,500 miles above Earth to open our car doors, start our engines, and allow some thief to take a joy ride.

You would also think that an administration riding the “consumer has privacy rights” horse all the way to a possible second term would make sure that its departments take extra caution protecting consumers from cyber attacks. That’s the first impression I had when I read an article by Lisa Rein for The Washington Post that discussed how a number of utility companies are ill-prepared for cyber attacks on our nation’s smart grids.

According to Rein, a number of utility companies receiving federal funding had deficient security plans that would have helped protect their smart grids from attack. Of the 99 grants awarded by the U.S. Department of Energy for smart grid development projects, 36 recipients did not take all required steps necessary for warding off cyber attacks.

Cyber attacks are defined as computer-to-computer attacks that undermine the confidentiality, integrity, or availability of a computer or information resident on it.

A smart grid refers to an energy delivery model where homeowners and businesses that use clean air technologies to provide energy for their homes and businesses can actually sell their excess supply of energy to their respective energy companies.

In addition, consumers, using wireless broadband technology, can communicate with the grid in order to turn certain appliances on and off, determine peak and off-peak hours for energy consumption, or determine which type of energy-generating plants, i.e. solar, wind, nuclear, etc., is providing the lowest cost energy.

Put cyber attack and smart grid together and you get concerns not only about a consumer’s personal information being hijacked, but the very real probability of whole energy distribution systems being brought down.

We also can’t overlook the impact this may have on broadband adoption, especially wireless broadband. Cyber literacy or the lack thereof is a deterrent to online access – much less using broadband technology and applications. The American Recovery and Reinvestment Act dedicated $7 billion dollars not only to incentivize broadband facility deployment, but to educate consumers about using the Internet and broadband services.

African American and Latino communities may find themselves amongst the pioneers interfacing with a smart grid for a couple different reasons.  It’s estimated that 67% of Black households and 62% of Hispanic households have average incomes below $50,000. Energy costs represent a much larger fraction of disposable income for households earning less than $50,000 than for wealthier families. Due to these income inequalities, the burdens of energy price increases are imposed disproportionately on Black and Hispanic households. That makes these communities prime targets for smart grid technology.

A disproportionate number of minorities also access the Internet via mobile wireless devices. In fact, African American and Latino cell phones owners out number White cell phone owners, making the minority community the first target market for using the smart grid.

While the failure on the part of some grant-receiving utility companies to institute cyber attack protocol won’t stop the development of the smart grid, failing to fortify smart grid projects may dampen excitement for broadband adoption if it is seen as a threat to safety and privacy.

Alton Drew is a political economist and commentator. In addition to being a contributing writer at Politic365.com, Mr. Drew blogs at Law and Politics of Broadband, Paying for Dodd Frank, and The American Centrist. Follow him on Twitter @altondrew, become a friend at https://www.facebook.com/alton.drew, or visit his website at www.altondrew.com.

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