Tech News

A Capitalist Repair to the Digital Divide

This article is part of the On Tech newsletter. You can sign up here to receive it weekdays.

The pandemic has made it more clear that millions of Americans are falling behind in work, school and life because they don’t have or can’t afford decent internet access.

I’ve written about one proposed Big Government solution: for the United States to spend tens of billions of dollars or more to bring internet lines to every American, as it did to wire electricity everywhere.

But Apjit Walia, the global head of technology strategy at Deutsche Bank, has a more free market suggestion: Big technology companies should pay for millions of lower-income Americans to get what they need to go online.

And not out of the goodness of their heart. In Walia’s view, it would be a smart business decision to reach new customers and repair Big Tech’s reputation.

“Rarely in my investment career do I see what’s good for society is also good for investment returns,” Walia told me.

Walia is far from the first person to highlight the digital divide along race and income lines. But the messenger and his proposed way of tackling the problem are an unusual combination of the cold language of return on investment and outrage about racial inequality.

Walia’s proposal also points to the reality that to get an essential service to more Americans, we might need a scattershot approach with both more effective government policies and actions by self-interested corporations.

America’s “digital divide” is at least two problems. In less populated parts of the United States, it doesn’t always make financial sense for internet providers to build service lines to people’s homes.

And in heavily wired population centers, there are internet deserts where internet access isn’t available or is subpar, particularly in lower-income neighborhoods. If it is offered, not all households can afford internet service or think it’s a priority. There are government subsidies to address some of these gaps, but they haven’t always worked.

Walia’s research — based on surveys, existing data, interviews with experts and an analysis of cellphone location information — reinforced existing data that Black and Latino Americans are far less likely to have internet access and computers at home. Walia also found that Black people are more likely than white Americans to have poor quality internet service.

He penciled out a five-year plan for big tech companies to collectively spend about $15 billion on three things for millions of Black and Latino households with an annual income below $30,000: providing discounted internet service, supplying basic computers, and providing mentorship and education on technical skills.

Why would tech companies do this? Self-interest.

This internet gap is an economic liability for these Americans and the country as more jobs have digital components, Walia said. It’s bad for tech companies, too. “This is about investing in a market that is going to be a large demographic group in a generation,” he said.

Walia also said that by starting to tackle the digital divide, tech companies build good will among lawmakers and regulators, who are more closely watching how Big Tech uses its power.

I asked Walia whether there is a risk of tech companies barreling in with magical fixes for a problem they don’t understand. He said that his proposal wouldn’t be a cure all, and that tech companies have the competence and cash to implement comprehensive programs.

“It’s a meaningful start,” Walia said.

Your Lead

A number of readers disagreed with Friday’s newsletter, which examined how best to influence policies at companies like Facebook. Instead of boycotting companies to demand change, I wrote, what if people demanded that elected officials change laws that apply to the company?

Some of you emphasized the importance of people pushing for change with our wallets and habits. Others said that pressuring companies to change their behavior is pragmatic because our elected officials are often less responsive and effective than corporations. (My astute analysis: This is true, and, wow, it bums me out.)

These reader emails have been lightly edited:

“Citizens need to be more consciously involved in the society and norms we produce. The most effective way to do that is through our consumption. Relying on the government (which is only an extension of us) to have the answer is avoiding our responsibility and historically ineffective.” — Mike

“The outset of this missive misses the point that boycotting or changing personal habits to reduce their revenue is an accessible, tangible way to influence the companies mentioned. We can vote sporadically but even that won’t necessarily result in the changes desired. It also isn’t either or!” —Conrad

“The reason people do not look to the government for changes to Facebook is that our government has been decimated by individuals who use their seat in government for their own profit. America is shocked, disappointed, used and abused by their own government. It’s no place to get action or to resolve problems.” — Johanna Baynard

United States vs. Google: It’s been coming for a long time. The Justice Department could sue Google within days for violating antitrust laws, in one of the government’s biggest legal challenges in years to an American tech superpower. My colleagues wrote that the government’s case is expected to focus on Google’s search business and whether the company wielded its search heft in ways that blocked competitors and hurt consumers.

(If you’d like a refresher on the case, here’s my reader guide outlining the motivations of a possible Google lawsuit.)

Do tech superpowers tilt the game to their advantage? That’s the heart of the ongoing antitrust investigations into Google and other tech giants. The Wall Street Journal wrote that Amazon allows its own devices to promote themselves on the shopping site by capitalizing on interest in competing products, but Amazon doesn’t permit serious rivals to do the same.

A school that did a lot right for digital learning: The New York Times’s coronavirus and schools newsletter wrote about how a school district near San Diego managed to reopen this fall for virtual and in-person classes. It prepared for years to get families, teachers and its curriculum ready for digital instruction, and it responded quickly when it discovered problems like families who lacked home internet.

There is meaning, probably, behind these absurdist, intentionally imperfect pandemic-life cakes for Instagram. Don’t miss the one that looks vaguely like Jabba the Hutt, decorated with shrimp.

We want to hear from you. Tell us what you think of this newsletter and what else you’d like us to explore. You can reach us at [email protected]

If you don’t already get this newsletter in your inbox, please sign up here.

Related Articles