The following transcript has been edited for length and readability. Listen to the entire discussion here on The Broadband Bunch. The Broadband Bunch is sponsored by ETI Software.
Pete Pizzutillo:
Hello, and welcome to another episode of The Broadband Bunch. I am Pete Pizzutillo. I’m joined today by Dr. Roberto Gallardo. He’s the director at the Purdue Center for Regional Development. Roberto, thank you for joining us today.
Roberto Gallardo:
Thank you for the invite, Pete. I’m excited to be here.
Pete Pizzutillo:
Y’all are doing some really interesting things. And you’re speaking about a lot of interesting things that we’re going to dig into. But you’re not solely a broadband person, somebody we would typically talk to. So I think it would help for some context to understand how you got pulled into this world. What’s your mission to help shine a light on this pretty important topic?
Roberto Gallardo:
Sure. The Center does a host of different things. One of them is digital inclusion and broadband infrastructure and the like. We have been an economic development and administration university center since our inception in 2005. And what that means is that we provide technical support, facilitation, data, data insights, and data visualizations to regional planning commissions and economic development districts. So, we do a lot of regional workforce and economic development work.
Of course, digital inclusion or exclusion has been bubbling up when we were looking at regional development. So that’s what we’ve done. We belong to the Office of Engagement here at Purdue University. Our job and our mission are to engage, which is two-way communication with our communities and our regions to ensure that they have the tools and the information needed for them to implement and draft regional development plans.
Pete Pizzutillo:
That’s helpful. And one of the things that caught our attention was that you guys publish this Digital Divide Index. So first off if you want to give an overview of what that is. On your webpage, you talk about the digital divide being the number one threat to community economic development in this century. So, I would like to dig into that, but first, let’s dig into what you’re trying to get done with the DDI.
Roberto Gallardo:
Yeah, sure. So, the DDI is an old data set. I published that first when I was at Mississippi State back in 2016. You’ve got to keep in mind, before COVID, the digital divide was an abstract concept. It was hard to understand. It was not as common sense as it is now post-COVID. So, we were dealing with this issue. We had identified early on, since the early 2010s, that broadband had tremendous potential for economic and community development and more so in rural areas — urban and rural. Our focus back then was rural areas. So, we were trying to frame the issue where community leaders would make it a priority. And I know that pre-show we were talking about March Madness and stuff. So, we came up with scores. We knew that scores are understood by folks, they resonate.
So, the DDI was developed or designed around scores. The scores range from 0 to 100 where a higher number denotes a higher divide. In addition to that, Pete, we also knew that communities need to prioritize, so we wanted to help them prioritize. And based on the research we had done and the research that was available back then, we knew that there were two main components to the digital divide. One was the actual infrastructure adoption piece. The other was the demographic characteristics that are known to impact technology adoption. What this means, Pete, is that many times, even though the technology may be available, there are going to be some groups that are going to lag in the adoption piece. So, we wanted communities to understand these two dimensions of the issue, and based on the scores, to decide, “Where do I prioritize?”
The DDI consists of three scores. One is the infrastructure adoption score which ranges from 0 to 100. The other one is a socioeconomic score that ranges from 0 to 100. And then there’s the overall DDI score that considers these two scores. It does not add them up. I get that question a lot. It’s not a sum; it’s just a weighted average. And I’m not going to get into statistical, boring stuff, but it does account for those two scores or sub-scores. And what we tell communities, Pete, is if the infrastructure adoption score is higher, and what I mean with higher is highly subjective. It really depends on the community what context they’re interpreting this in and so forth. But if it’s higher, then we would suggest you focus on ramping up the broadband infrastructure and the adoption piece that has some affordability implications and so forth.
On the other hand, if your socioeconomic score is higher than your infrastructure score, then we recommend you focus more on digital literacy, digital relevance, technology relevance, technical support, and handholding, whatever the case may be. So that’s how the DDI was born. And it always tickled me to death, Pete, because when I was doing this work in Mississippi and then in Indiana and ultimately, the country, the first question I would get when I was in a county would be, “How is the neighboring county doing? Compare us to them.” So that kind of competition, that Friday night football rivalry, really, I felt, moved the needle for folks to understand what the digital divide was. And then, of course, COVID hits, right? And that’s a different chapter, but.
Pete Pizzutillo:
Right. I think it’s interesting because I think about the adoption. That seems to be another piece that’s becoming more and more in focus. There used to be the “If we build it; they will come” mentality. But there are tremendous obstacles to getting folks to adopt it. Affordability is one; education is the other. So, beyond providing that data, are you consulting with those different communities about ways to improve their scores? Or are you working with partners to help them do that?
Roberto Gallardo:
That’s a great question. So yes, the DDI is descriptive in nature, and then comes the fun part, okay? You’ve identified where you want to hone in. How can you do that? So, then we move on to the digital inclusion plans that we have helped. We have about a third of Indiana counties with one, either an individual plan or part of a region. We have two regional plans. So that’s where we move on to the next step, which is, okay, the DDI is one metric. It kind of, again, helps you understand the digital landscape. Now what can we do about it? So that’s when we get into digital inclusion planning. Digital inclusion, as you mentioned, Pete, is a little bit broader.
And I know that for some folks, any word of inclusion kind of resonates with social justice. It is a social justice issue, but it is also a workforce development issue, and it is also an economic development issue. So that’s how we frame it, especially when working with regional planning organizations or economic development districts. When I’m talking about being digitally inclusive, yes, we need to make sure that those groups that are disadvantaged are brought into the digital age. But it also means your moms and pops. Do they have an online presence? It also means your workers, their skillset, and just their quality of life in general. And that’s where the planning piece comes into play.
Pete Pizzutillo:
Yeah, I really love the perspective that you guys came from this, which is, kudos to you, back before COVID and understanding your mission says here, it’s the number one threat to economic development. And I wonder, a lot of the business cases that we see network operators providing are really around access and take rates specific to either residential, or maybe even commercial business, but not really helping set the foundation for the digital economy within a community. And I wonder if business cases would be better framed if people considered them from a larger context of economic development. Do you have those conversations with folks?
Roberto Gallardo:
Oh yeah, definitely. That’s exactly how we frame it. Ultimately, we want everybody in the community to partake in this evolving digital age, that’s for sure. But we’ve learned, Pete, that we have got to frame the message depending on the audience we’re working with. And to be honest with you, there are certain audiences that really, really are attuned to any economic development. Other audiences are more attuned to public safety. Other audiences are more attuned to workforce development. And other audiences are more attuned to social justice issues.
So, what we have found through research done recently, well, recently over the past three to four years, there are some indicators that show how quickly your community is digitally transforming, for example. Brookings has done some work on… We know the percentage of occupations that require digital skills. And we know the levels as low, moderate, or high digital skills required for certain occupations.
We can calculate that and tell you, “Well, based on your occupations and your region, look, you are below the average of the US when it comes to occupations that require high digital skills.” We have remote work potential as well. There are a ton of indicators, not a ton, but several that we have developed or identified precisely to fine-tune this message. So that’s what we tell communities. These indicators should move. It will take time. It won’t happen overnight. It’s not like a single headline that says, “Hey, we just landed a Tesla factory, and it’s going to attract a thousand jobs.” Everybody claps and everybody’s excited. Community and regional development take time. So, we tell them, “If you do things right, and if you do become a digitally inclusive community, then these indicators should move in the long run.”
Pete Pizzutillo:
Is that type of thinking making its way up at a federal level? I know because of a lot of the BEAD money, there’s a lot of emphases just on maps and access and coverage. I don’t have any visibility into whether they are looking at network operator plans or community plans that are reprioritizing community plans or network operator plans that are looking at it from a more holistic economic development perspective.
Roberto Gallardo:
Yeah, that’s a very good question. It depends on who you ask at the federal level. I do believe that because of COVID especially, this is now on their radar. The problem is broadband data. The infrastructure piece specifically, is notorious for being, it depends on who you ask. We don’t have a consistent metric. We don’t have a consistent data set, and it is a pain in the behind. So that is why most federal, or state have to invest a lot of effort and energy to first and foremost identify where broadband is needed. And that’s where the mapping comes into play. That’s where eligibility comes into play. The Federal Communications Commission defines broadband as 25 megabits per second down and three megabits per second up.
That’s an old definition. I think it came out in 2015, so it’s eight years old. So now we’re talking about 100 megs down and 20 up. But now you see that a higher share of homes in the US are now subscribing to way faster speeds at 100 over 20. The devil’s in the details. It’s, “Where do we build, to begin with?” Well, it’s a simple question, but it is a very complex answer. So that’s why you see these efforts in the mapping piece. And you see these efforts of trying to get the best data possible and eligibility to then funnel these monies into those particular areas. But it gets very tricky.
Pete Pizzutillo:
And I’d be interested in your perspective on this. I noticed on the interactive map you’ve shied away from the FCC maps and moved toward the Ookla speed test for some of your data.
And the FCC’s leaning on CostQuest and some other data sets out there. So, because it’s complex, do you feel we’re getting more data? Or we’re getting better data in terms of coverage? Is the most recent focus on just trying to understand?
Roberto Gallardo:
So, yes, progress is being made. Unfortunately, it’s at a glacier pace, but progress is being made. Back in the day, the FCC data for the infamous form 477 requires internet service providers to file this form every six months. And in this form, they would identify what’s the smallest geography for which the US census compiles data, which is called the census block. They would report based on a census block. And they would say, “We offer service here and the maximum advertised speed is this. The maximum advertised download and upload speeds are X and Y.” The problem with that was that if you had a home in the corner of a census block in rural Wyoming that could exceed two square miles. If that home had access to that service, the entire block was considered served. So that caused the broadband footprint to overshoot.
It was not reflecting reality. If you had another nine homes in that block, they would all be considered served. In reality, they were not. So that was back in the day. And I say the infamous, it’s because everybody hates, not hates, but everybody struggles with that data set, but it’s the only thing we have. Now for this new round of funding, the BEAD funding, Congress mandated that the map be improved. And now, Pete, rather than looking at census blocks, we are now looking at address-level data, which is a vast improvement. The issue that remains though is that it is provider data. It’s provider self-reported data. And back in the day, it was not validated by customers at all.
This time it is. The map allows you to go in there and say, “No, the service that is being reported at this address actually is not available. And here I have some email conversations. Or I have a screenshot of the website of the provider. Whatever the case may be. “It’s not the case, so please adjust the map.” So that’s the process. But you can imagine; it is massive. It is a massive undertaking. So, it’s taking time. But it is moving in the right direction. We just need to be patient.
Pete Pizzutillo:
And that brings up another question I have for you. You’re right, the latest maps I think had over a million challenges. So, it puts the onus on the individuals who know enough about it, who care enough about it, and who have digital access all ready to go and complete the challenge. We talked about the other maps kind of exaggerating the coverage. We’re under-representing the discrepancies within the dataset. If it’s a million, it’s probably 10X that, right? I guess my question to you then is a lot of our dialogue has been to community leaders, broadband offices, network operators, and policymakers. Do everyday Americans understand what we’re talking about?
Roberto Gallardo:
No, there is a lot of education to take place. I can speak about this firsthand. Back in the day, 10 years ago, it was really a handful of us that were looking at this outside the providers and the FCC researchers and academics. We were looking into this. We then started educating communities, hence the DDI. And then COVID hits and everybody’s starting to ask about broadband and everybody’s trying to say, “Oh my God, there’s a lot of money coming through. Is it going to benefit my community? What are the steps?” So, there is a tremendous amount of education that needs to take place on two fronts. The first one is what is broadband, to begin with? People get confused with Wi-Fi. And they confuse that with fixed wireless. Or they confuse that with cable. Another one they do is mobile.
Mobile coverage is confusing. For example, you hear, “Oh yeah, that home has a 1 gig service,” right? 1G or 1 gig. But then you hear other people say, “Well, no, that’s not fast enough.” And you’re like, “What are you talking about?” They’re like, “No, we were told that for telehealth we needed at least 4G.” And you’re like, “Oh, well, that’s different. You’re talking about multiplexing cellular technology, which is 4G. 1G is really 1 gig to the home.” So, there are a lot of nuances that need to be explained, for sure. Now, I will tell you, Pete, that from my vantage point, anecdotally, the level of awareness about the divide has increased exponentially because of COVID.
But the level of awareness and knowledge around the technicalities, and I don’t mean very purely technical stuff, just overall awareness of the programs and what broadband is. What are broadband technologies? What is Wi-Fi, right? I have Wi-Fi, is that enough? They don’t realize that Wi-Fi is like the shower in your home and the actual broadband is the waterline. So, there are different things that need to be educated, and that takes time and that has just begun.
Pete Pizzutillo:
Yeah, it’s interesting because when 5G popped up pre-COVID and all the hype around that from the mobile operators and trying to redefine, I can’t tell you how many people that were not in the business talking about ultra-high band and just needing to get 5G-enabled phones. So, I guess just pouring a ton of money into commercials and Super Bowl ads really helps that part of the problem. We just don’t see the same kind of thing on the broadband side. I think a lot of the advertisements from speaking at a consumer level, you do see people talking about the lifeline or the ACP promoting that type of stuff, but not really-
I think going back to digital equity and digital inclusion and education. Is money being effectively set aside? You may not have full visibility at the community and state level to plan for that education, or is it still going in towards pure infrastructure costs?
Roberto Gallardo:
So, yes and no. The BEAD program requires significant community engagement. And through this community engagement, it is assumed that you will educate or bring those folks you are hearing from at a level that will result in meaningful input. The same with the Digital Equity Act, the DEA, which is the smaller sibling of BEAD, part of IIJA. That one also requires significant community engagement. So, through this engagement, it is again understood or assumed that there will be some education taking place.
Now, the digital equity one will then result in a plan. That plan can then include not only infrastructure but devices. In fact, it focuses on devices, and it focuses on literacy. So that education is built into the digital equity piece, at least. The BEAD does require significant community engagement. So again, you assume they will be educating folks there. But once that plan is out, then it’s a matter of implementation. And I am not sure, I don’t recall, Pete, if there is an educational component to the implementation piece of BEAD.
Pete Pizzutillo:
Yeah, it’s a good question. I don’t have that level of visibility. One of the concerns that we have — if I’m a municipal leader, and we were speaking to the Colorado Broadband Office. And it’s not a question that we got to ask them, but I think expectation management is key, right? Because now post-COVID, we’ve been talking about this problem for a while. The Infrastructure Act came out, what, 18 months ago almost. People that are paying attention to the problem are like, “Great, all this money’s coming. I still can’t watch Thursday Night Football on Amazon or whatever it is.”
Without that kind of education and getting in front of expectations, my fear is that a couple of years down the road, people are going to say, “Hey, we spent all this money, what happened? We just lined pockets of the politicians and AT&T and the big guys?” But as you know, it takes time and there are other things in the way right now that are slowing down that deployment. So, is that a concern that you have in terms of managing consumer expectations?
Roberto Gallardo:
Yes. We must make sure people understand how complex this program is. And there are a lot of misunderstandings as to what a community can do: what it will receive; when it will receive it; and how much. Most of those questions are unanswered now. Pete, we need to wait for the FCC to come up with the official broadband map on June 30th after all these challenges have been accommodated, and resolved, whatever the case may be.
Then the FCC will use that map to then say, “Okay, Indiana, you’re getting X amount of dollars. Illinois, you’re getting X amount of dollars.” So that will be known June 30th. After that, the map continues to be updated by challenges filed by individuals, not necessarily states. And then at that point, the eligibility question comes into focus where in the fall, one speed starts to be implemented then the question becomes, “Okay, where can this money go?” And that’s where the latest updated map should provide that answer. How much a specific community is eligible for will depend.
So those are two very important questions to distinguish, Pete. How many areas or homes or businesses in my community are eligible to receive BEAD? That should be answered with June 30th and subsequent updates of the map. How much my community ends up getting; that’s a different question. That’s going to depend wholly on the number of applications that are submitted to cover those eligible areas. So yes, we must manage expectations. It is a complicated program. On top of educating folks on what the digital divide is, they need to understand digital equity is on top of that. They need to be aware of the timeline and limits and limitations and how the program was designed, for sure.
Pete Pizzutillo:
Yeah, that’s helpful. June 30th, you’re right. Is that time when money starts leaking out because it’s not coming all at once? It’s, I think, a five-year 20% allocation over the next couple of years.
Roberto Gallardo:
I believe so, yeah.
Pete Pizzutillo:
And there are other federal funds, but what we haven’t been speaking about is private money. In the last 18 months or two months or so, the acceleration of private money coming into this space has been much faster. And it’s been making some progress. You’re seeing a lot of companies move quickly, consolidating different networks to try to make a larger entity. It’s funny to see the timing of the BEAD money, what are we facing? Inflation is creeping up and private money has had a two-year head start on snatching up all the resources and all the staffing and getting in front of the educational process to the consumer. So how does that change the calculus of business cases, both on the public and private side? And what are some of the concerns that you see manifesting from this perfect storm of economic and risky and long-term projects?
Roberto Gallardo:
Yeah, that’s a great question. It’s a lot of moving pieces. And you’re exactly right, a network that’s quoted today, if it takes too long by the time they get the money, that quote would be outdated. So how providers and communities will deal with that, I have no idea. But I do know that we are very clever, and we have been over time. So I’m sure there will be a solution, but there will be some hiccups. There are some issues there as well. Another thing is, as you mentioned, the private investment, right? Providers, because of competitive reasons, do not share their footprint. So, they are supposed to share with the FCC where they are and where they’re going. That should factor in.
But to what extent is that information accurate? We don’t know. So, there’s going to be a lot of challenges back and forth where perhaps the updated map says, “Yep, that neighborhood is eligible.” But then a provider comes in last minute and says, “Actually, no, by the way, we’re building already there.” So, there are going to be these nuances that have to be ironed out before the actual money comes into the provider or the projects, and then work begins. So, this will take time. And with that, obviously, uncertainty increases risk, and then, hopefully, not inflation. But we shall see.
Pete Pizzutillo:
You’re listening to The Broadband Bunch. And we’ve been speaking with Dr. Roberto Gallardo about the digital divide and digital equity. Thank you for joining us. So, about that, one of the things that we’re seeing on the private side of the funding equation is that as resources become scarce and inflation increases, the cost of capital is changing the decision process, the investment process. There’s the expression that capital chases return. So, 18 months ago, private equity was looking at a lot of rural opportunities. My concern is now they’re creeping back into repaving the same old territories because that’s where the densities justify the returns. With that and the mapping issues, and the delays in getting funding out there, have you ever considered that after all this, the digital divide may widen?
Roberto Gallardo:
That’s a trick question, Pete. There will always be a divide, but not because of the issues of how BEAD is implemented or not. And the reason is that there are some researchers that argue that the digital divide is misleading because a divide implies it can be bridged. But with technology, it’s more of a continuum. So as more applications come online, there will be more needs for training, for devices, for certain connections, whatever the case may be, connectivity situations. So, the divide is really not going to be bridged ever. It’s more of a digital continuum where we’re going to have constant work. This new application came out, who’s benefiting, who’s not? How can we help those that are not benefiting? So that’s going to be a broken record-type of situation. The BEAD piece specifically was designed to really take care of those that have no internet.
So that’s the emphasis. High-cost areas have no internet whatsoever, let’s take care of those. The priorities are high-cost areas, as you know, and then followed by what the bill labels as unserved, which is that you do not have access to 25 down and three up. So those need to be billed out first. After those come underserved, which is an area that does not have 100 over 20 but does have more or at least 25/3.
So, you have those three categories. Then hopefully, if there’s still money left, then you can do other stuff with BEAD. I’m not very familiar with what the other things could be, but those are the three priorities. The problem, Pete, is as I mentioned before, 100 over 20 will make an area eligible. And then, in theory, they should build a network that should offer 100 over 100, I believe, over a certain amount of time.
That’s good. But the problem may be: where do you define an area that’s not served? What are you using? Are you using provider data? Are you using speed tests? Neither of those is perfect information or perfect data. So, my concern is that we will take care of those that have nothing. The issue I think may happen is that we will leave vast areas that currently are considered, quote-unquote, served, but that the technology that underlies that service is outdated like DSL, for example. So those vast areas will be left with subpar service for years and years and years to come. And the issue will be that then the divide will morph into, well, it’s not a yes-no issue at this point, it’s really, does it fulfill my needs issue?
And as an example, OpenVault recently published that 26% of US households are now subscribing to gigabit service. 26 up from less than 10% two years ago, okay? But what that tells you, Pete, is that now app developers have reached critical mass to truly develop 1 gig applications. So, lo and behold, those that have 1 gig are going to benefit. Back to your question about whether it will get worse or not. 1-gig users: great, I have these holograms going on. This is fantastic, right? But what happens to those that were not eligible because the threshold was decided with what the needs were, honestly, yesterday? Not even today and not in the future. So that’s my concern is that we may end up with vast areas that are currently served. The service is okay, but what about five years from now and 10 years from now?
Pete Pizzutillo:
Yeah, I’m going to add a little bit of dimension to that conversation. Even if we had perfect maps, we fully understood who was getting what and who was not being served, and even if we had an agreement that the baseline capability is a gig or whatever that is, absent of a national adult supervisor of what’s going on in a free market scenario, people are rushing. It’s a gold mine, right? It’s a gold rush. So, people are rushing out to build these networks. In most cases, they’re proprietary.
So, affordability and sustainability become my concern. So, if you can get a gig to everybody, can people afford that gig the way we’re deploying it currently? And who’s the watchdog to say, “Hey…” I’m not a proponent. I’m saying either for open access or not, or middle mile, but there are strategies. There are ways to design these approaches to make sure that affordability is a design constraint. I’m not sure that that’s the case. Does that make sense?
Roberto Gallardo:
Yes, I agree.
Pete Pizzutillo:
So that’s one of the things we need to keep pushing that agenda for. Okay, so looking ahead, right? Let’s say 24 months from now, where are we? Where did we win? And what do you think we’re due to come up short?
Roberto Gallardo:
So, I recently was asked that question, Pete, “How do we know we’re there?” So there are two answers to this. One is on the infrastructure piece. How do we know that we got there? To me, it will be symmetrical service that’s affordable and reliable. Okay? Very simple, but hard to implement or ensure. Why symmetrical, Pete? Because we are now producing or uploading way more than even before COVID.
So, the problem with symmetrical is that some technologies simply cannot offer that. So, then you get into why are you, quote-unquote, winning technologies? Which is not the case. It’s simply that we are producing more of what can give me what I need. So, to me, the infrastructure piece would be symmetrical. Maybe if it’s 25 over 25, maybe if it’s 50 over 50, 100 over 100, a gig over a gig, I really don’t care as long as it’s symmetrical. To me, it’s that producing-uploading piece that we have not factored in ever. So that means we’ve got there.
The digital equity piece, to me, means that are we ever going to have a level playing field? No, I’m not naive to think that. However, the differences that currently exist will be a very good sign if those differences are reduced. If those differences between groups are reduced either in access to technology, technology use, well-paying tech jobs, or all these other components, the metric will be five years from now, did we reduce that gap? Are we going to eliminate it? Hopefully, but did we reduce the gap? Because like I said, there’s always going to be new things coming up generating differences, generating gaps. So, to me, if we’re going to eliminate all of those, that’s not realistic. But if we shoot to reduce those gaps to make sure that we are inclusive to the extent possible, then, to me, we are there.
Pete Pizzutillo:
That’s helpful. And I really want to thank you for all the insight and for taking the time to speak with us. There are some really interesting ideas that we need to continue to share with each other and some tools that you guys have developed. How can our listeners learn more about the work that you’re doing and some of the resources that you’re providing?
Roberto Gallardo:
Sure. They can go to our website, pcrd.purdue.edu. We have our digital inclusion toolbox there. We also have other stuff, as I explained at the beginning. But they can go there to pcrd.purdue.edu. They can check out our digital inclusion toolbox. We have developed surveys. We have developed innovative metrics like DDI. There’s another metric I didn’t mention, Digital Distress. That’s a smaller, less robust metric. But that resonates very, very strongly with economic developers because of economic distress. I’m sure you’re familiar with that one. So, we have these metrics there. We have surveys. We have research that we are conducting to help inform folks. So, feel free to visit there or shoot me an email, at robertog@purdue.edu. I’ll be more than happy to help in any way we can.
Pete Pizzutillo:
Roberto, I appreciate it. Thank you for joining us today.
Roberto Gallardo:
Thank you, man. Had a blast.
Pete Pizzutillo:
And that’s going to wrap up this episode of The Broadband Bunch. I’m going to thank everybody for listening. And if you’ve made it thus far, you’re probably into all things broadband like Roberto and we are. If you get a chance, check out our website at broadbandbunch.com. We have weekly episodes and other resources for you to use. And we’d love to share your story. So if you have a chance to ping us, let us know, and we’ll get you on the show. Thanks a lot.
© 2023 Enhanced Telecommunications.
