MAY 3, 2022
TEXAS CAN CLOSE THE DIGITAL DIVIDE WITH NEWLY AVAILABLE FUNDS AND TECHNOLOGIES, NEW RESEARCH SHOWS
Billions in federal funding and the growth of technologies like low Earth orbit satellites provide state leaders the tools to connect all Texans
HOUSTON, TX —Millions of Texans could see their Internet speeds skyrocket in coming years thanks to a range of policy options available to connect those families to land- or satellite-based broadband service and improve their access to health care, education, and economic opportunities.
Those options are laid out in a new study from the Center for Public Finance at Rice University’s Baker Institute produced as part of a new Texas 2036-sponsored series focused on key investment opportunities for the state. “Evaluating Prospects for Expanding Broadband Access Across Texas” details the current state of residential internet access around Texas — and examines opportunities to better connect all Texans, especially rural and low-income residents.
“Throughout Texas, broadband access offers clear and measurable benefits in education, health, and economic opportunities. After the COVID-19 pandemic, we understand that digital inclusion can offer other important benefits, including more social interaction, which can lead to improved mental health,” said Texas 2036 Senior Policy Advisor Luis Acuña. “High-speed internet connections can also improve everything from civic engagement to communications with public safety officials. By increasing internet access, Texas leaders have the chance to improve daily life for millions of Texas families.”
Approximately 7.4 million Texans do not have access to broadband internet, and roughly 2.5 million people still do not have access to the internet at all. Many live in rural areas that have not yet been connected because of the high cost of bringing infrastructure to sparsely populated regions. Others have incomes too low to afford such access or lack digital literacy. Together these communities make up the state’s “digital divide” in internet connectivity.
As the report highlights, broadband access results in significant economic benefit to individual Texans, their communities and the state as a whole, because it has become critical to a variety of quality-of-life issues including economic prosperity, health care, and education. Researchers found that regions without broadband don’t draw as many businesses or new jobs. Families without access can’t access telehealth services. And students have harder times completing homework, logging into class remotely, or enrolling in online educational programs that could improve their long-term earning potential.
“One of the most defining characteristics of the twenty-first century has been the introduction, expansion, and integration of the internet into nearly every dimension of human life. While the capabilities of the internet continue to grow and become necessary for these opportunities, access for many Texans remains out of reach,” said Jorge Barro, Ph.D., a fellow in public finance at Rice University’s Baker Institute of Public Policy who authored the report.
The report explores several possibilities for increasing broadband access, including:
● Increased outreach to Texans eligible for broadband discounts through the federal Affordable Connectivity Program and the potential development of similar options at the state level.
● Enhanced competition among companies in the broadband market and the deployment of technologies tailored to the differing needs and characteristics of diverse communities throughout the state.
● Using available federal funds including $500 million from the American Rescue Plan Act and $2 to $4 billion in the Infrastructure Investment and Jobs Act to help finance costs associated with connecting Texas families.
In September 2021, Texas 2036’s Texas Voter Poll found that 81 percent of Texas voters supported the state using $2 billion or about 13% of the federal funds coming to Texas to improve the state’s broadband and emergency communications infrastructure, increasing access to the internet in rural and under-served areas, and enhancing disaster response capabilities.
“Getting Texans more access to high-speed broadband is vital to the prosperity of our state. Last session, our state legislature took significant steps to prioritize broadband expansion and digital inclusion, including moving forward with establishing a Broadband Development Office that will be instrumental with ensuring Texas is coordinated and ready to deploy these historic broadband investments,” said Texas 2036 Executive Vice President A.J. Rodriguez. “This research supports the range of technology options now available to Texas, and given our past polling, lawmakers will have widespread voter support for finally moving forward with a statewide broadband plan that will allow us to better connect Texans across the state with high-speed internet.
To download the report, visit www.texas2036.org/investing-in-texas
A Closer Look: Low-Earth Orbit Satellites
A network of low-Earth orbit satellites that beam broadband signals into areas where residents are cut off from land-based connections could provide a new model to finally get Texans, mostly in deep rural areas, high-speed internet. The technology is in its early stages and is expensive, but it is backed by global powerhouses like SpaceX and Amazon.
||THE CASE STUDY
|25% of Texans do not have broadband at home, including 10% without any internet access.
Viability of fiber networks as solutions for rural communities declines as population becomes sparser. Low-Earth satellite internet is an ideal alternative.
|SpaceX has launched more than 2,000 of what could be 40,000 Starlink satellites into orbit about 200 miles above Earth. Other companies launching similar ventures include Telesat, OneWeb and Amazon.
Starlink’s 500-pound devices offer higher internet speeds than the heavier, higher orbit satellites.
|Last year, the Ector County Independent School District and the Permian Strategic Partnership teamed up with SpaceX to provide free internet service to 90 families in a community south of Odessa that didn’t have high-speed internet with hopes to expand.
Closing the Digital Divide: Affordability
While the capabilities of the internet continue to grow and become necessary for connections to work, learning and health care access for many Texans remains out of reach. Affordability must remain a priority along with investing in various types of providers.
|Lifeline: Eligible households may receive discounts of $9.25 per month off the cost of telephone, broadband or bundled services through this telecommunications subsidy program. Texas has one of the lowest estimated take-up rates at only 10% of eligible households.
Affordable Connectivity Program: This recently created broadband subsidy program offers an additional discount of up to $30 towards broadband service and a one-time discount of $100 for a laptop, desktop computer or tablet for eligible low-income households.
Increase Market Competition: By promoting greater competition, broadband prices might be reduced for all households, making high-speed internet more accessible to low-income households.
Closing the Digital Divide: By the Numbers
|2.5 million Texans didn’t have any at-home internet access in 2019
||The 2020 national average monthly rate for broadband services was
29% of Texas households didn’t have broadband
in federal funding is available for rural Texas broadband projects
|10% of Texas households use a satellite internet service provider
Closing the Digital Divide: Financing
The right solution for government involvement calls for careful consideration of local impacts. Any measurement of the long-term benefits of land-based broadband infrastructure investment in rural communities must be evaluated against the prospect of the growing satellite broadband industry.
|Land-Based Technology: Government incentives can reduce the fixed cost of expanding into rural areas. Examples include tax credits, subsidies, grants, low-interest loans and public-private partnerships.
Satellite Technology: Consumer subsidies and rebates could be an efficient allocation of government resources to expand broadband access and meet demand.
Infrastructure: With large, fixed costs of establishing infrastructure, grants and tax policy could encourage expansion, while subsidies to connect homes to networks could be an incentive for broadband providers.
About Texas 2036
Texas 2036 is a nonprofit organization building long-term, data-driven strategies to secure Texas’ prosperity through our state’s bicentennial and beyond. We offer non-partisan ideas and modern solutions that are grounded in research and data on issues that matter most to all Texans. For more information, visit www.texas2036.org.
About the Center for Public Finance
The Center for Public Finance (CPF) at Rice University’s Baker Institute focuses on the economic effects of major U.S. fiscal policies. Given the complexity of the U.S. tax system and the unsustainable nature of current U.S. tax and spending policies, the center examines the potential effects of various fiscal reforms on economic growth and the distribution of income in an effort to inform policymakers, stakeholders and the general public. In addition, CPF examines the challenges facing the country if policymakers continue to delay implementing solutions to these critical issues. CPF scholars actively participate in the policymaking process by advising various national government agencies, state and international governments, and multilateral development institutions, as well as various key individual policymakers. CPF scholars routinely present their work at CPF sponsored events, other public and private events, and in testimony before federal and state government committees.”