Griffin on Tech: Let's end the digital divide once and for all

What would it cost to get the 58,000 lowest-income families in New Zealand set up with unlimited broadband and devices allowing them to enjoy the digital access many of us take for granted?

Thanks to some new research commissioned by the Digital Equity Coalition Aotearoa and drawing on several quality sources of data, we now have an answer to that question. 

A modest subsidy of $4.54 covering a decent chunk of the cost of a household broadband connection, would amount to $13.9 million per annum. Increasing the subsidy to bridge the gap between the cost of broadband and the devices an average-sized family needs to get online would bump the price up to $78.4 million a year.

In a recessionary environment with the coalition Government slashing public spending across the board, neither figure would be enthusiastically received around the cabinet table. But the more important question to consider is what we could gain as a nation from giving families the tools and connectivity to be fully engaged online, undertake digital lessons at home, be able to undertake remote work, follow their creativity, and take advantage of the latest AI chatbots and whatever else is coming down the technological pipeline.

“Research shows a conservative estimate of $3 of benefit to households for every $1 invested in digital equity,” the DECA report suggests.

Having broadband on tap and Chromebooks, tablets and smartphones that can run the latest applications, helps kids learn. It aids adult family members to upskill themselves and take care of household admin more easily.

It feeds the curious, entertains the bored, and allows far-flung whanau to stay connected. All of this amounts to a significant dollar return on investment that would pay off for the nation in multiple ways. It would particularly help Māori and Pasifika families, and migrants who come to New Zealand for a better life but find themselves in low-wage jobs and a cost of living crisis.

Time running out for access subsidies

It really is a no-brainer to make this investment in our future. But the only government-funded scheme of this kind, the Equitable Digital Access subsidy set up during the pandemic to subsidise broadband and which currently benefits around 10,000 households, could have the plug pulled on it as early as June, after a last-minute extension of the scheme late last year.

Services like Skinny Jump wireless broadband help fill some of the need with low-cost broadband access, but we require a more comprehensive approach to tackling the greatest need in the digital divide.

Now we have a handle on the costs involved in doing so, government, industry, and NGOs can start working together, as many other nations have done, to come up with a sustainable solution.

This is not an uncommon problem. The US, one of the richest countries in the world still has a digital divide with pockets of people across the country unable to gain high-speed access to the internet. 

It is undertaking a sustained push to try and bridge the gap, with US$90 billion of federal government funding for initiatives to improve broadband access and digital skills. The latter can’t be underestimated. It’s one thing to give a family internet-capable devices. It’s another to give them the skills to download apps, keep their tablets and laptops free of malware, and find the resources online that will help unlock their potential for ongoing learning.

The US Congress approved the funding as part of its US$1.2 trillion infrastructure package to stimulate job growth and help refresh America’s ageing infrastructure. The Americans see digital skills and broadband access as a crucial part of that push to reinvigorate their economy. We should take the same view. 

Telcos have a role to play

Chorus, which runs the ultrafast broadband network, other regional fibre providers, and the large telecommunications providers, can help bridge this digital divide once and for all by making any government digital equity subsidies go as far as possible. There are some competition issues to work through in the highly regulated telecoms world, but it is doable, with the government’s support.

DECA’s suggestion of using the welfare system to distribute a digital equity payment to families most in need, makes a lot of sense. This is already done effectively for the winter energy payment. MSD already knows most of those 58,000 families, so this is the option generating least friction and bureaucracy.

Yes, the need is greater than those 58,000 families with children. DECA’s research suggests that 380,000 households earn less than $42,000 per year and struggle to pay for broadband. The cost of extending a digital equity payment to all of those households would be around half a billion a year, a bridge too far for a government of any political persuasion, I should think. But we need to start somewhere and those low income families supporting children is the obvious place to focus efforts, with the aim of broadening the scheme.

DECA’s work, led by IT Professional NZ’s tireless CEO Vic MacLennan who is co-chair of DECA in her spare time, is exactly what we need to start a deeper conversation about how we address our lingering digital divide problems. Yes, it will require significant government funding and the goodwill of industry players and NGOs to make it work. But now is the time. As I look around the world, most other countries are investing to tackle this issue because they know those investments will pay dividends.

Why should Aotearoa be any different?