The Internet Innovation Alliance is out to make broadband Internet available to everyone, and part of that means convincing people to sign up for the service. The FCC reports that one-third of Americans don’t subscribe to broadband, even when it’s available, due in part to concerns about costs.
So with many households watching every expenditure in their budget, the IIA decided it was time to prove that broadband will pay for itself.
New estimates from the group found that home broadband connections can cut costs in many areas people’s lives, from an annual savings of $1,535 on reduced travel expenses to $47 saved each year by paying bills online instead of through the mail.
“Given the economy, a lot of folks are very understandably concerned about affordability, so we asked whether an Internet user could find enough savings in spending to offset the cost of the service,” says IIA co-chairman Bruce Mehlman. “We found that having broadband can more than pay for itself.”
Mehlman hopes that by raising the level of digital literacy, more people will understand the value of broadband and decide to sign up for the service.
The IIA used data from the Department of Labor’s September consumer spending survey to calculate savings in 10 categories: entertainment, travel, housing, food, apparel, automotive, newspapers, gasoline, non-prescription drugs and bill payments. The IIA estimates broadband service can be used to save an average of $7,694 each year, more than compensating for the cost of an Internet connection.
The group first began providing cost savings estimates last November.
In addition to its stats about cost savings, the IIA will also be evangelizing its three-pronged strategy for providing universal broadband access to U.S. residents: giving the FCC authority to auction off more broadcast spectrum, reforming the universal service fund so it can be used to deploy broadband, and – now this is a controversial one – passing AT&T’s merger with T-Mobile.
“We believe that if these three steps are taken in the short term, we can achieve universal broadband deployment in about five years,” says IIA honorary chairman Rick Boucher, a former Virginia Democrat who served in the House for 28 years and was a leading voice on tech issues.
Appearances aside, Boucher says the IIA’s support of the merger has nothing to do with the fact that AT&T is a member. Rather, it has everything to do with AT&T’s promise to expand its LTE network to 97 percent of the population within six years if its merger with T-Mobile is approved.
“With one company’s private investment, it almost entirely achieves President Obama’s goal of 98 percent of the country having broadband within a five year period,” Boucher says. “We come within 1 percent and one year of achieving the president’s goal just with one company spending its own dollars, not taxpayer funds.”
The IIA isn’t opposed to government spending on broadband – it supports using USF cash to provide affordable high-speed Internet service to underserved rural communities – but Boucher argues some investments are best done by the private sector.
“The free market really can do most of this,” he says, pointing again to AT&T’s rural LTE pledge.
The IIA’s message on the T-Mobile deal may not be well-received by those opposed to the merger, but its goal of broadband access for all will almost certainly get a warm reception.
Filed Under: Industry regulations