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New Regulation Could Harm Low-Income Consumers

12.19.2014

The prospect of new regulation on broadband Internet service providers is raising concern among groups representing low-income communities who are worried about cost increases and postponed investment. Last month, in commentary appearing in The Hill by Jamal Simmons, co-chair of the Internet Innovation Alliance, and Rosa Mendoza, executive director of the Hispanic Technology and Telecommunications Partnership (HTTP), the co-authors noted that African American, Latino and other under-resourced communities “are already at a disadvantage when it comes to broadband access” and “are significantly more vulnerable to policies that could potentially impede innovation or progress within the industry.” They wrote, “To continue promoting this type of private sector investment we must not over-regulate innovative broadband providers using antiquated policies that may end up being litigated for years and diminish the certainty of being able to bring high-speed, advanced broadband networks to all Americans.”

Kim Keenan, president/CEO of the Minority Media and Telecommunications Council agrees. In an op-ed piece published by National Newspaper Publishers Association, she writes: “Communities of color disproportionately lack access to high speed broadband, which is where homework, job applications, and social justice issues are rooted.” Keenan urged the Federal Communications Commission to adopt a lighter-touch regulatory approach in adopted net neutrality regulation, rather than the common carrier Title II reclassification that President Obama has asked FCC Chairman Tom Wheeler to implement.

In addition to reduced investment and broadband adoption, utility-style regulation would likely result in increased costs to consumers, detailed in a recent study from the Progressive Policy Institute (PPI) on the economic impact of Title II regulation. Data from the report shows that applying such regulation could add $15 billion in new user fees, breaking down on an annual basis to new state and local fees of $67 for wireline subscribers, $72 for wireless customers and new federal fees of $17 per subscriber.

This is particularly troubling for minority and low-income consumers. According to Jose Marquez, founder of Latinos in Information Sciences and Technology, while all consumers “would feel the pain of higher bills,” as he observes in this recent TechLatin post, African-Americans and Hispanics would especially “bear the brunt of these increased costs” since they rely on mobile broadband to access the Internet more than most other groups and have lower wireline broadband adoption rates in their homes. Martin Chavez, former mayor of Albuquerque and currently senior advisor to HTTP, also speculates about the adverse financial impact on Latinos in this Roll Call opinion piece. He writes, “As of last year, 24 percent of Latinos don’t use the Internet. Nearly 1 in 4 (19 percent) cite cost as the reason . … How many will be forced to opt out of this essential tool? Or, if they remain connected, what other necessities will they dispense with to accommodate the increased costs?”

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