Time for Universal Access

Michael Cushman Divinci Insititue Speaker
By Michael Cushman, Director of Consulting at the DaVinci Institute

In the US, much of the country has problems of dying communities. Unemployment creeping higher, sometimes close to 30%. Average wages falling as industries leave. Youth moving to metropolitan opportunities. Opioid addition devastating lives.

What’s also true? Limited or no access to broadband. Why would businesses or youth stay in a digital desert?

So how did rural and industrial America miss the future?

After all, doesn’t America have a tradition of national infrastructure and universal access?

It started with the US Post-Office, established a year before the 1776 Declaration of Independence. As the nation moved West, so too did mail service, no matter how remote. Few appreciate that the US was the first nation to grant free public education to all. By the 1950s, the US had more engineers and scientists than the rest of the world combined. Railroads, electricity, telephones, radio, TV, and the interstate highway system all rolled out with state and federal involvement to ensure rural access. But no such support for broadband. What happened? More accurately, what didn’t happen?

In the US, much of the country has problems of dying communities. Unemployment creeping higher, sometimes close to 30%. Average wages falling as industries leave. Youth moving to metropolitan opportunities. Opioid addition devastating lives.

What’s also true? Limited or no access to broadband. Why would businesses or youth stay in a digital desert?

So how did rural and industrial America miss the future?

After all, doesn’t America have a tradition of national infrastructure and universal access?

It started with the US Post-Office, established a year before the 1776 Declaration of Independence. As the nation moved West, so too did mail service, no matter how remote. Few appreciate that the US was the first nation to grant free public education to all. By the 1950s, the US had more engineers and scientists than the rest of the world combined. Railroads, electricity, telephones, radio, TV, and the interstate highway system all rolled out with state and federal involvement to ensure rural access. But no such support for broadband. What happened? More accurately, what didn’t happen?

Year 2000 was pivotal

The dotcom bubble burst. The US economy slowed down. One proposal advocated rolling out broadband, nationally. It made perfect sense. The problem of oversupply of digital services would be addressed by expanding Internet access to more areas and people. The estimated costs were $25 billion / year for several years.

It was resisted by Congress. Objectors framed this as government picking winners–Better to let markets and private enterprise decide. So instead of broadband for all at a cost of $100 billion, the Congress and the President reduced taxes. The Heritage Foundation study at the time claimed that the tax-cut benefits would eliminate the deficit by 2011. Instead, the cuts did nothing for the economy since the primary beneficiaries were already flush with cash. Worse, from 2001 to 2018, the 2001 cuts added $5.6 trillion to the deficit.

The future of work depends on decisions we make now

As digitalization expands on every continent, into every industry, changing professions, job opportunities, and lives by the billions, many towns and smaller cities dry up with slow Internet. Slow Internet means companies and young people won’t stay, jobs, wages and opportunities drift away. Sure, other issues exist, but studies show that the wireless phone and the Internet are the only innovations to directly affect GDP. Broadband access in a rural community is the key to staying relevant.

It’s not too late.

Two innovations, 5G and Opportunity Zones, can change the trajectory of decline.

5G networks are expected to be up to 100 times faster than 4G networks, connect 100 times the number of devices, and respond five times quicker. Plus, the small, pizza box-sized cells are far easier to deploy than large towers. Good news, his time around, conservative representatives and senators from rural states are advocating for closing the digital divide with 5G. Adding more users is also good for the digital service providers on the East and West Coasts.
Opportunity Zones, 8,700 of them in all 50 states, can attract investments using tax benefits. Funds are easily set up. Capital gains taxes are deferred on the incoming investment. Long-term gains of 10 years or more are tax free. Investments are aimed at improving real estate (new construction or repairs to existing homes and buildings), and adding new businesses.

Working together in private-public partnerships, local communities, state and federal agencies, fund managers, investors, Telecom, Media, and Internet providers can close the digital divide. Broadband everywhere enables reverse migration, away from urban areas, too expensive for raising families. It enables high-paying digital jobs in remote places that then support local retail and service jobs. Broadband opens opportunities for online education where schools have vanished, reskilling the unemployed, and telemedicine. Capital infusion will renew the housing stock that’s fallen into disrepair. Tax benefits will relocate businesses and start new ones.

Of course, not every small town can or should be saved. Some are too far gone. But why not intelligently renew those with promise?

Invest again in America’s future.

No one can stop the future, so it’s easy to miss. Those who made products, built machines, and fed the nation in the past, must demand a new deal, focus on transforming their communities, and take advantage of 5G infrastructure and Opportunity Zone funding, as if their future depended on it, because it does.

Now is the time to close the digital divide. The future won’t wait.


Michael Cushman, The Strategic Futurist, is the Director of Consulting at the DaVinci Institute.