Every day we find new and innovative ways to use the greatest resource of this generation: the Internet.
More and more schools are using Internet access to “bring” subject matter experts into the classroom via streaming video. Thanks to the Internet telemedicine allows house-bound patients the opportunity to receive care from doctors a world away. Applying for a job via the net is the standard; and everyday people enroll, log on and begin the journey toward a better education. From logging on to check email or pay bills to binge-watching your favorite shows on Netflix, the Internet plays a vital and unique role in our day-to-day lives.
Like most resources the Internet is finite and comes with a price tag; and for some Americans that price is too steep.
According to Financial Times the US ranks 30th out of 33 countries for affordability, with an average price of $44 a month, compared with $26 for the UK, $22 for Greece and $16 for South Korea, based on speeds of 2.5 Mbps.
Those most often left in the digital dark ages are the poor. A mere 45 percent of households with an income of less than $20,000 a year have broadband compared to the 91% of connected households who earn more than $75,000 annually. African American and Hispanic households statistically earn less than white households or Asian households, so it’s no wonder nearly a third of those homes remain unconnected compared to 20 percent for white households and 10 percent for Asian households.
The answer to getting more of the American poor connected is tiered pricing strategies. In a tiered pricing world you only pay for the services you need. For the unconnected poor this strategy can be looked at as a ‘pay for what you can afford’ strategy.
Unfortunately there are those who believe a universal fee for Internet access would be best. Those who argue for a flat fee across the board do not consider Americans who are unable to pay that average $44 per month. While a counter argument is for a lower flat fee, that line of reasoning does not take into consideration the capital investment needed to maintain and expand access; and if you only use the Internet for paying bills or checking email is it really fair that you pay the same amount as an online gamer or a start-up that streams video?
Those who need more broadband access should pay more, not just because it’s fair, but because the profits generated by the heaviest users means Internet service providers have the capital to continue building, and innovating. Thus far cable broadband providers have invested $230 billion over the last decade towards capital upgrade and expansions of America’s broadband networks. Tiered-pricing helps allocate these costs fairly. A pay for what you need approach to Internet access makes the most sense.
In reality a tiered pricing structure benefits anyone who wants to pay for what they use; but these strategies are also critically important to households who make less and need to be able to choose a price point that fits their budget and level of Internet access needed.
Without a tiered pricing strategy the unconnected become second-class digital citizens. Unable to log on they are cannot compete for jobs, attain a better education, access broader healthcare options. The Internet is not a ‘nice to have’ luxury. It is vitally important and should be available at a reasonable price to every American.