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A Tiered Data Plan CAN Close the Digital Divide

Now here is a concept and model that seems to be fair and may work. Economists Robe rt Shapiro and Kevin Hassetts released a white paper this week, “A New Analysis of Broadband Adoption Rates” which surmises that tiered broadband data prices may actually assist broadband adoption for lower income consumers.

The fact remains that 5 to 20 percent of people are consuming most of the broadband bandwidth today. The flat price model we have today is tantamount to a regressive pricing structure because the remaining 80 to 95 percent of those who use the Internet for email and browsing websites that don’t require streaming or downloading are subsidizing heavy users. The authors predict near universal broadband adoption by 2017 or 2018 but that given all of the necessary investments in the infrastructure to accommodate rising needs, the costs of broadband will increase across the board for all to recover these costs. These increased costs will slow down adoption by those for whom the price of broadband is a deterrent for adoption, the study says.

As a solution, the authors recommend a pricing model where the highest bandwidth users pay more to account for their elevated use. That seems fair to me. Pay for what you use. If in the end, more Americans, especially those from poor and minority households are able to afford access, we all win.

This model actually is best for the United States if it wants to rise in the ranks globally among other economies in terms of broadband adoption and usage. Currently, the US is behind some developing countries even. Getting close to 100% adoption in broadband means we must have an educated and cultivated economy that is able to take advantage of all the benefits of broadband. It is not socialism if you think in terms of what is beneficial for our nation as a whole. It is novel because it is a “trickle up” economic model and we see how “trickle down” hasn’t gotten us too far recently, it sounds like it’s a worth a try.

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