Dallas Morning News, Editorial Board, September 2, 2019
Wealth inequality in the U.S. is at its highest level since the Great Depression. According to the Federal Reserve’s 2014 Survey of Consumer Finances. The top 3% of earners account for 30.5% of all income and hold 54.4% of all the net worth. And according to Pew Research Center, “America’s upper-income families have a median net worth that is nearly 70 times that of the country’s lower-income families, the widest wealth gap between these families in 30 years.”
But wealth inequality isn’t what’s troubling us as it’s just a symptom of a core problem; namely, inequality of opportunity. And the solution to that problem is not government-enforced wealth redistribution. It’s a holistic approach to providing equal opportunity.
That’s why we’re paying close attention to a new initiative championed by the Federal Reserve Bank of Dallas to tackle one of the most important barriers to opportunity in our economy: broadband internet access. According to Fed senior adviser Jordana Barton, Dallas lags behind other cities in broadband access. Of Dallas households, 42% do not have a subscription to home broadband. On a list of 75 large U.S. cities with the worst connectivity rates, Dallas ranks sixth, worse than any other Texas city.
An exhaustive report Sunday by Dallas Morning News reporter Melissa Repko demonstrated just how significant this problem is and how business interests too often misalign with the growing need for good broadband service in poor communities.
Broadband connectivity is worst in the parts of our city that need it most. Last month, when Barton presented the Fed’s plan at the digital inclusion symposium, she showed a map of connectivity in the city. The southern half of the map was a broad, pink desert of exclusion — a swath of residents disconnected from career, education, housing, health care and transportation opportunities.
This isn’t acceptable. Broadband is a tool of opportunity. Employment, education, transportation, health care, finances, news and all sorts of communication increasingly depend on reliable internet. And the internet is especially important to the workforce. By some estimates, 70% of job openings are posted online, and 80% of jobs require digital skills. As Barton reported in a symposium last month on digital inclusion, “As basic services and tools that are fundamental to upward mobility become increasingly digitized, the digital divide creates a structural barrier to closing the income and wealth gaps.”
AT&T, the international telecom giant in our own backyard, is making business decisions about the expansion of broadband. Too often, as Repko’s reporting showed, those decisions are not aligning with creating equal opportunity in poor and minority communities — even as they expand opportunity in wealthy and largely white communities.
AT&T would be wise to recognize what political leaders in Dallas long ago recognized, that expanding the opportunity for prosperity everywhere is the best way to build greater profitability and sustainability over the long term.
That means looking past the numbers as they are today for where 5G expansion is needed and into what the larger city and region can become. The investment now will pay dividends later.
AT&T isn’t alone in this. Closing the digital divide means more than installing fiber optics and constructing mobile hotspots. It means digital skills training and computer access. And that is why the Fed’s proposal of a public/private partnership makes a lot of sense. City government can incentivize infrastructure and provide basic access. (The biennial budget under consideration at City Hall includes $136,764 for 300 mobile hotspots.) But digital access is not only a civic consideration like parks or potholes; it’s a market consideration. Or as Barton called it, “an ecosystem for entrepreneurship.”
Other cities have tackled this issue and may provide guidance for Dallas’ efforts. In 2015, the Dallas Fed helped convene a coalition of government, education, business and nonprofit organizations in Brownsville, McAllen and Pharr to address the same issue. Last summer, Boulder, Colo., issued $15 million in debt to construct a city-owned broadband network. And this year San Jose, Calif., launched what is to be the nation’s largest digital inclusion fund, generated by fees charged to telecom companies, with the goal of bringing high-speed internet to 50,000 homes in the next 10 years. These approaches range widely in terms of who bears the cost burden, and Dallas leaders will have to work carefully and cooperatively to create a solution that closes the divide while also meeting market demands.
We believe the business community in Dallas is smart enough to see the inevitable returns from investing in a more knowledgeable, more connected workforce. Greater digital access improves the ability of workers to move up the economic ladder and improves the ability of companies to innovate and succeed. Thus far, the effort has been driven by the Fed, along with the Dallas Innovation Alliance. We’d like to see the Chamber of Commerce, City Hall, telecom providers and faith groups join the effort.
In October, Barton and her team will hold what she calls a “roll up your sleeves” meeting with government, business and community leaders to drill into specific costs and responsibilities, and how those will be distributed among stakeholders. We look forward to seeing their progress. For now, we’re glad they’ve made a start. When our city ranks among the worst in the nation in any category, it causes concern. And in a business city like ours, ranking sixth-worst in a category critical to a powerful workforce is a problem we must solve.