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Infrastructure bill aims to close the digital divide, create indie opportunities

The recently-passed bipartisan infrastructure bill will dish out $65B for broadband improvements that aim to remedy the United States’ digital divide and welcome millions of Americans to the digital economy.

The news: Late Friday night, the U.S. House of Representatives passed the $1.2 trillion bipartisan infrastructure bill by a 228-to-206 vote. Once signed into law, the measure will rebuild the country’s aging roads, bridges, airports, ports, and public transit systems, invest in new climate resilience initiatives, and advance the country’s lagging internet infrastructure.

"Broadband is necessary for Americans to do their jobs, to participate equally in school learning, health care, and to stay connected. ... The President’s plan prioritizes building “future proof” broadband infrastructure in unserved and underserved areas so that we finally reach 100% high-speed broadband coverage." —The White House

Why it matters: Tens of millions of Americans — with estimates ranging from 27M to nearly 43M people — are not participating in the digital economy by buying and selling goods and services online. And with more businesses and consumers online, the more opportunities there are for indie hackers.

The impact: The digital divide spans all geographics and demographics but disproportionality impacts low-income, minority, and rural communities. BroadbandNow Research estimates 42.8M Americans lack access to broadband internet.

Lost opportunities: Millions of Americans lacking internet access translates to a profound impact on the broader economy. The U.S. loses about $2.16 of potential economic activity every day that a person is not connected to the internet, according to a Deloitte analysis. That translates to about $130M in lost opportunity every day.

Educational impact: Students are about 7% more likely to earn a high school diploma with an internet connection and will earn $2M more over their lifetimes when compared to those that lack access.

Finding work: An unemployed person with at-home internet access will on average find work seven weeks faster than one who does not and will earn more than $5,000 in additional income annually, according to data from the Bureau of Labor Statistics.

Access subsidies: In addition to expanding internet infrastructure, the bill will specifically target the digital divide by helping low-income households afford internet access. The bill allocates $14.2B for the Federal Communications Commission to create an Affordable Connectivity Program that will provide a $30 monthly broadband subsidy for eligible households - $20 less than that of the Emergency Broadband Benefit Program (EBBP).

Tech training: The bill also dishes $2.75B for a Digital Equity Program that will support the work of states, local governments, and nonprofits to provide tech skills training to residents and assist them in accessing broadband subscription subsidies and discounted devices.

Talent shortage? As more enter the digital economy, it will presumably help address the tech talent shortage — at least eventually. In 2020, the global talent shortage will hit 40M skilled workers worldwide, according to tech consultant Daxx. By 2030, the shortage is expected to hit 85.2M workers. About 87% of businesses are experiencing a computer science or developer talent shortage or are expecting to face it within a few years, according to McKinsey.

That’s wild: The new spending ushered in by the bill is equivalent to the cost of the Interstate Highway System — created in the mid-1950s — after adjusting for inflation, the New York Times reports.

Specifics: Here are details on how the bill aims to close the digital divide:

  • $42.45B for the Broadband Equity, Access, and Deployment program (BEAD) program, which will make grants available to states to fund broadband deployment and adoption in underserved areas.

  • $14.2B for the FCC to create an Affordable Connectivity Program that will provide a $30 monthly broadband subsidy for eligible households.

  • $2.75B for a Digital Equity Program to ensure that "individuals and communities have the information technology capacity that is needed for full participation in the society and economy of the United States."

  • Re-injections of several billion dollars for existing programs, including $2B for RUS ReConnect, a Rural Development agency of the United States Department of Agriculture; and $2B for the Tribal Broadband Program.

  • $1B for a new middle-mile program. The “middle mile” refers to the segment of a telecommunications network linking a network operator's core network to the local network plant.

  • $600M for Private Activity Bonds (PABs), i.e tax-exempt bonds issued by or on behalf of a local or state government, for broadband deployments.

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