FCC's Initiative to Bridge the U.S. Digital Divide Offers CSR Opportunities

G00227621

Analyst(s):

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Summary

Lowering the cost of Internet access is fundamental to narrowing the U.S. "digital divide." The FCC's Connect to Compete initiative makes a strong start and offers opportunities to corporate social responsibility programs.

News Analysis

Event

On 9 November 2011, the U.S. Federal Communications Commission (FCC) announced that it would enhance its Connect to Compete initiative through a public-private partnership that aims to make PCs and Internet access affordable for more than 25 million largely low-income Americans.

  • A consortium of broadband service providers will offer low-cost (two years at $10 per month) broadband Internet access.

  • Redemtech, an IT asset disposition (ITAD) service provider, will offer fully functional $150 Windows 7/Office Basic 2007 laptop and desktop systems.

Eligible families will be able to sign up for the program during a three-year window starting early in 2012 in some areas. The offer will expand nationwide by September 2012 to coincide with the 2012-2013 school year.

Analysis

The FCC introduced the Connect to Compete initiative to attack the "digital divide" created by the 100 million Americans who are not yet connected to broadband, which has enormous implications for the U.S. workforce, economy and society in general. Affordable broadband access is no longer a luxury, but a necessity for achieving educational, career and economic objectives. Research from the FCC’s National Broadband Plan and the Pew Research Center indicates that many Americans cite the high cost of a device (such as a PC) and broadband Internet connectivity as one of the main reasons for their failure to adopt broadband. The two new initiatives address this challenge by initially targeting low-cost devices and Internet access at low-income families currently eligible for the government School Lunch Program.

As the sole supplier — at least initially — of these low-cost PCs, Redemtech will likely seek out large volumes of used PC assets. This could benefit enterprises looking to develop a successful ITAD strategy in concert with their corporate social responsibility (CSR) organizations. Enterprises may see higher returns from this lean, direct sale, which eliminates the wholesaler, while also assisting low-income families with bridging the digital divide. Moreover, while Redemtech’s free back-end recycle offer will not eliminate most organizations’ “joint and several” liability, it will certainly demonstrate a “best effort,” and likely minimize any such liability. Given anticipated hardware volume of more than 1 million PCs in 2013, we believe Connect to Compete will give organizations other asset disposition suppliers to choose from by 2013.

Recommendations

  • Enterprises: Consider leveraging the FCC’s Connect to Compete initiative for economical and environmentally and socially responsible PC asset disposition.

  • Vendors: Consider participating in Connect to Compete as both a means of demonstrating corporate responsibility and accessing a significant and largely untapped market.

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