Equity in Infrastructure Development: The Digital Divide

Event Context & Objectives

• CalMatters and the Milken Institute co-hosted a forum on the future of work, specifically focusing on high-speed broadband as an essential utility exposed by the pandemic.
• The event aimed to explore equity and opportunity at the intersection of workforce development and infrastructure.
• The discussion addressed the "digital cliff" where lack of connectivity exacerbates poverty, isolation, and inequality.

Current State of the Digital Divide

• Adoption Gaps: A December 2019 report indicated 23% of California housing units (approx. 8.4 million residents) lacked home broadband; by 2021, 9% remain completely unconnected and 6% are smartphone-only.
• Disadvantaged Population: Current research identifies 2 million households as "digitally disadvantaged," a number consistent with 2019 estimates despite some progress.
• Barriers to Access: The primary obstacles are identified as infrastructure inadequacy, the high cost of service and computing devices, and a lack of digital literacy.
• Trust Deficit: Low-income and minority communities often do not trust major Internet Service Providers (ISPs) to act as primary messengers; trusted community-based organizations are required for effective outreach.

Infrastructure & Regional Challenges

• Nevada County Case Study: Rural areas with low density face severe connectivity issues where school-issued hotspots failed due to insufficient backhaul and tower capacity, forcing students to connect from parking lots.
• Infrastructure Types: Effective broadband requires both wireline (fiber) and wireless; experts argue they are complementary rather than competitive, with fiber providing the necessary backhaul for 5G.
• Reliability vs. Speed: Infrastructure metrics must include not only speed but also latency, reliability, and price; high download speeds are useless if the connection is unstable.
• 5G Limitations: 5G is viewed as a temporary solution for mobility but cannot replace fiber for fixed home broadband beyond approximately 2035 due to physics-based speed limitations.
• Permitting Bottlenecks: A significant barrier to deployment is inefficient permitting processes; one member company reported a decade-long delay in obtaining permits to expand networks.

Economic Impact & Micro-Businesses

• Micro-Business Growth: 17% of micro-businesses (defined as 1-10 employees) launched in California since March 2020, with higher adoption rates in areas with better broadband.
• Employment Resilience: Areas with higher broadband density and micro-business activity experienced lower unemployment rates during the pandemic as businesses could pivot online.
• Revenue Generation: 7% to 10% of micro-businesses reported increased revenue during the pandemic due to their online presence, highlighting the necessity of broadband for economic survival.
• Demographic Shift: The pandemic saw a surge in entrepreneurship among groups with higher job barriers, including Black and female entrepreneurs and those without college degrees.

Legislative Action & Funding (California's $6 Billion Plan)

• Funding Breakdown: The state approved a $6 billion investment package, including grants for construction in underserved areas, low-interest financing for local nonprofits, and funding for a state-run open-access middle-mile network.
• Middle-Mile Strategy: $3.25 billion is allocated to CDT to build a public "information highway" (Scenic Runs) connecting anchor institutions, intended to lower costs for last-mile providers.
• Last-Mile Priority: Experts unanimously agree that middle-mile investment must be driven by last-mile demand; without private sector participation to connect homes, the middle-mile investment is insufficient.
• Affordability Mechanisms: The plan relies on the Emergency Broadband Benefit (EBB) and future subsidies (e.g., $50/month), though uptake remains low due to lack of awareness; only 24% of eligible households are aware of affordable offers.
• Provider Participation: The California Emerging Technology Fund (CETF) advocates for a "step up or step aside" approach, urging the Governor to negotiate with ISP CEOs to join partnerships or face state-led competition.

Implementation Challenges & Solutions

• Digital Literacy: Training can be effective in as little as six hours; experts recommend integrating digital literacy training into outreach for telehealth, school lunches, and utility bill programs.
• Data Mapping: California possesses the best state-level broadband map, but gaps remain; legislation (SB 28) aims to collect granular data from ISPs, though industry groups argue the proposed scope may miss non-cable providers.
• Public-Private Partnerships: Success requires collaboration between state agencies, private ISPs, and local governments; Nevada County is cited as a model for combining environmental impact reporting with cooperative broadband planning.
• Cooperative Models: Municipal or community-owned networks (e.g., Plumas Sierra Electric Cooperative) have successfully deployed gig-speed internet in low-density areas where private investors found no return on investment.
• Equity in Outreach: Effective distribution of benefits requires leveraging existing databases from power utilities (CalFresh, CARE programs) and schools (National School Lunch Program) to identify eligible low-income households.