Why is it so Hard for Policy Makers to Separate Access from Affordability?

981207_10156731174555570_8112977795619686083_oNew Orleans    Life, work, and the world are full of mysteries, but after years of hitting my head against various walls, I’m finally connecting the dots in trying to understand the peculiar responses we sometimes get in trying to change public policies and private pricing strategies.

Remittances are a prime example. Talking last week to a professor who teaches a course at a local university on personal finances, she was excited when I told her about ACORN’s Remittance Justice Campaign, because she wanted her students to understand the complicated world of money transfer systems. When she understood the topline demand of our campaign was to cap the pricing at 5% to stop remittance costs from being so predatory, her face almost deflated. Of course she supported our position, don’t get me wrong, but affordability had not occurred to her as an issue in the way that it is of course paramount to immigrant families and migrant workers trying to send money home to relatives and communities in their home countries.

ACORN Canada members are testifying this week before the CRTC (Canadian Radio & Television Commission) about the high price of internet in Canada. Quoting from an early copy of their prepared testimony:

…the organization released a report summarizing 400 testimonials from low-income Canadians about how vital yet unaffordable home internet is.

A recent CRTC survey suggests that many Canadians think home internet is essential, but too pricey. Half of the survey’s 29,000 respondents are dissatisfied with the price of their internet service. ACORN Canada members view affordable access to the internet as essential to improving low-income Canadians’ ability to succeed in the digital economy.

“How can low-income families get out of poverty if they can’t apply for jobs, or access government services? Our kids can’t even do their homework,” says ACORN Canada President Marva Burnett. “Access to the internet is a right, and going to the library or coffee shops are not practical solutions.”

The same dilemma was faced by the FCC in the United States and, as we recently discussed, and the FCC duck walked around the issue by subsidizing the cost of internet ostensibly for lower income families by around $10 per month, rather than tackling head on the fact that affordability is the barrier to access, rather than availability of the internet.

This is an old saw. In the housing collapse from 2007, the supposed “reform” was trying to force lenders, many of whom were overtly predatory in the subprime mortgage field, to have to assure the loan was affordable to the family before issuing the money. When they were just churning loans, there was more than enough access to mortgage lending capital, but whether it was affordable within an honest reckoning of family income was a diminished factor in pumping air into the bubble.

Why do policy makers refuse to routinely address the issue of affordability when dealing with the question of access of services and implementation of programs? This is where the divide of experience between the one-percenters and big whoops from the rest of us and especially from low-and-middle income families becomes so pronounced and creates such tragic results. They just don’t get it, and too often these days, seem unwilling to do the “homework” and listening to understand the issues from any other point of view, especially from the perspective of our people.

Simple suggestion: consider affordability first, and access later down the list. Make stuff work by understanding that pricing pushes people as a primary concern.

Duh!

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Neoliberal FCC Half-Step to Low Income Access to the Internet

blue-wire-knot-364-364x223New Orleans       It would be nice to read the report of a proposal by FCC Chairman Tom Wheeler and embrace it with open arms and a wide smile.  After all even a small step forward in bridging the digital divide is important, but this will be a half-step at that, and it’s easy to see the headwinds forming already in the murkiness that accompanies any understanding of the program or the problem.

Briefly, Wheeler is talking about expanding the Universal Service Fund to allow lower income families to access high-speed internet by choosing either phone service or internet or in some undefined way picking both services.    Since President Reagan’s Administration, the Universal Service Fund provides “lifeline” telephone service, which increasingly means mobile phones virtually for free.  The Fund is financed not by public dollars and taxpayers but by assessing telecommunications companies an adjustable fee every quarter on the telecom’s interstate end-user revenues. The first quarter of 2015 the rate was around 17% and the fund collects and distributes billions annually, about $9 billion in 2013 for example.   If you read your telephone bill line-by-line, you can see the charge, and if you think about it for a minute, you can also start to see the problem.

The FCC is merely the facilitator and distributor.  The funds come from companies and therefore consumers, rather than being equally shared by all citizens as a public good.   It may have been good enough for Reagan, but despite all of the genuflecting in his direction, the new gang is not the old gang, and this crowd has been attacking the Fund because there was some occasional double-dipping in households having more than one cellphone.  Oh, horrors!

The Fund provides a subsidy of close to $10 per month.  The Times’ report is already, erroneously, setting the table for the fight when it reports that “debate over just how far a $9.25 credit can go in covering the cost of broadband is sure to arise.”  Well, it shouldn’t, except that this is the world of neoliberalism now and not entitlement, so corporations whine, and citizens’ wail.  The FCC and all experts were clear in the Comcast/NBC Universal order creating a $10 access program for internet, which the company flaunted, that even at that rate, the company would make money.  Not great, heaping wheelbarrow loads of cash like they are all used to making, but, yes, still make money, so let’s put a stake in the heart of that argument from the start.

Then there is the question of speed.   After ACORN worked with Rogers, the huge Canadian telecom, to put in a $10 program in Toronto, we had a fight to get them to provide enough speed so that users could stream or use the internet for job applications and the like.  Since broadband companies are trying to market different price points for higher speed, you can already envision the fight to make sure lower income access isn’t degraded.   Finally, the poverty standard of 135% also just isn’t enough to bridge the digital divide either.   This proposal already feels like the poor trying to squeeze into internet heaven through the eye of a needle, not the other way around.   And, this is all when the proposal is still pristine, long before the rest of the political fight begins in earnest and Congress starts mucking about.

So why can’t we spend a small slice of $10 or $20 billion and directly subsidize as an entitlement the access to internet for all families at 300% of poverty guideline, and, heck, throw in some of the Universal Service Fund as part of the funding stream with a hit on ISP providers as well, since this is internet.

There is a limit to what companies and consumers can carry.  That’s why we have a government and taxes, so we can all equally share on programs that advance the common good for everyone.  Until we get to that point, the digital divide will just keep getting wider and wider, leaving more and more, lower income and working families behind.

Facebooktwittergoogle_plusredditpinterestlinkedinmail