The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

COVID Exposes The Digital Divide

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My family moved from the ultra-modern San Francisco Bay area to a rural part of Northern California several years ago, and in many ways, it has been a wonderful change, most notably the huge night skies and the profound quiet that settles like a blanket over the landscape every night. Sure, there are certain limitations; for example, the nearest Target and Home Depot are 20 miles away, and the nearest Trader Joe’s is an hour away. Amazon would be the default for nearly every staple product we needed - if the U.S. Postal Service would deliver packages more than ½ mile off a main “line of travel” (meaning, a publicly maintained road), or Amazon would give customers a choice of delivery carriers. But they don’t, at least not yet. Regardless, these limitations to “living a suburban lifestyle in a rural setting” can be overcome without too much trouble.

But one of the unanticipated limitations of living outside of town is that the availability of a high-speed Internet connection is iffy at best. Outside of the town limits (where both AT&T and Comcast offer service), the very best that is available is access to a line-of-sight infrared system that offers 16Mbps for $200/month. Lucky me, I can afford that, but it brings up a serious question: during a pandemic-induced lockdown, how are rural families going to participate in our increasingly digital economy? The blunt answer is: unless they’ve got the money, they can’t.

Let’s look at some numbers. In California, 89% of all households have Internet access. But in rural California, only 34% of households subscribe to an Internet service. And that means that they don’t have access to telemedicine, distance learning, or omnichannel shopping. The point is... we’re talking about California (!), arguably the world’s ground-zero for technology innovation. If California is the litmus test for universal Internet access, then we’re in trouble.

Of course, the digital divide isn’t a new problem, but COVID-19 has made it worse. A piece in the San Francisco Chronicle last weekend recounted a discussion that the reporter had with San Francisco CIO Linda Gerull, itemizing the improvements that ubiquitous Internet access would bring to the city. According to the article, those are: “Education and Telecare equity; healthier, cleaner communities; (and) stronger democracy” (at this point, I would add, “digital shopping”).

And that’s San Francisco’s perspective, based on making the Internet available to the 11% of that city’s population that don’t currently have it. Of course, when we’re talking about offering ubiquitous access to the whole state (and especially to those 66% of rural residents that don’t currently have access to the Internet), the price tag would go up meteorically, and given the budget challenges of state and federal governments in the U.S., it seems highly unlikely that the problem will get fixed with public money, even though digital schooling and telemedicine are becoming “must haves” during the pandemic.

There Is Hope

But since at least in the U.S. Internet access is a for-profit business, private corporations see opportunity, and are trying to break through the obstacles to universal access. For example, Elon Musk’s SpaceX is building a network of low altitude satellites to offer “moderate” Internet access. In June the company launched 60 satellites for its megaconstellation "Starlink" project.

Social media giant Facebook has created what it calls internet.org, to offer “Free Basics by Facebook” via local mobile carriers, that “provides people with access to useful services on their mobile phones in markets where internet access may be less affordable... <including> content on things like news, employment, health, education and local information.”

In December 2019, eCommerce mega retailer Amazon asked the U.S. Federal Communications Commission (FCC) for permission to launch over 3000 satellites that would offer home Internet services. At the time, Amazon CEO Jeff Bezos said, ““The goal here is broadband everywhere... by definition you end up accessing people who are ‘under-bandwidthed.’ Very rural areas, remote areas. And I think you can see going forward that internet, access to broadband is going to be very close to being a fundamental human need as we move forward.” On July 30, the FCC granted Amazon permission to go forward with its “Kuiper” project.

In the meantime, U.S. cable network providers Comcast and AT&T are pushing ahead with plans to make fiber-optic based access available to more places. In my little part of the world, a $27 million project called Bright Fiber seeks to make highspeed Internet access available to approximately 2000 residents. A casual browse via Google finds similar projects in Vermont, Georgia, and other parts of the nation with large rural areas.

What’s hard to find is any mention of the “digital divide” by large retail trade organizations. Given what’s happening in the retail industry with the new emphasis on digital shopping as well as the “consolidation” of whole retail vertical sectors, making it possible for consumers to find products and services via the Internet is more important than ever. If there’s anything the industry should have learned during the Great Recession of 2008-2012, it’s that once consumers adopt a technology-enabled way of improving their lives, they won’t willingly give it up. So, consumers that are Internet-enabled now will use digital shopping more, and those who are digitally disabled will increasingly demand equal access. But the industry has to push governments harder to act.

The COVID crisis has pushed this issue to the front of the backlog and there’s no going back. Education, access to doctors, and Commerce all depend on it. The “traditional” retail industry needs to make its voice heard. If it doesn’t, Amazon will be happy to sign people up!

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Articles & Opinions August 11, 2020
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