public schools.
Still another social problem that affects modern business is the digital divide. The digital divide refers to the wide gap between those
individuals who have access to information and communications technologies and those who do not. This gap exists both within and among countries.
Many government and international organizations are trying to close the digital divide that continues to persist (see IT’s About Business 2.3). For example, in some areas of the United States, the public library provides the only source of free computer and Internet access in the neighborhood, and the demand for those computers frequently exceeds their availability.
per second, a speed that is far too slow for modern, interactive websites. Even many people who can afford faster service cannot get it because they live in an area where it is not cost effective for providers to install the communications infrastructure necessary to provide broadband Internet access. Overall, 34 million Americans have no access to broadband as the U.S. Federal Communications Commission (FCC; www.fcc.gov) defines it: a download speed of at least 25 megabits (millions of bits) per second and an upload speed of at least 3 megabits per second.
Computers and broadband access do not necessarily lead to college degrees and better jobs. However, many people without these
technologies likely are not receiving the training they need to make effective use of software and online services. Furthermore, there are many correlations between broadband access on the one hand and income levels and success in finding employment on the other hand.
Consider a family in Cleveland, Ohio. In 2018, slightly more than 50 percent of the area’s households with incomes below $20,000 had neither broadband nor mobile Internet access, often due to the cost. Another 10 percent had a mobile phone but no home
broadband.
One such household was an apartment in a public housing project where a teenaged girl named Jane lived with her mother, Susan.
Susan could not afford broadband from Spectrum
(www.spectrum.com), which would begin at approximately $50 per month for an entry-level plan, plus modem and taxes.
Furthermore, the price would rise significantly after the 12-month introductory rate expired. The family does have a smartphone, but the small screen is difficult to use, and the family cannot afford to exceed the plan’s data limits. Fast Internet access is available in a library a few blocks away, but it is not safe for Jane to walk there.
The region’s public housing agency, the Cuyahoga Metropolitan Housing Authority (CMHA; www.cmha.net), gave Jane a tablet and a wireless hot spot in a trial program to help close the
“homework gap” between children who have broadband Internet
access and computers at home and those who do not. In addition, Susan qualified for a discount program ($5 to $10 per month) that AT&T (www.att.com) offers to families who receive food
subsidies. This program provides digital subscriber line (DSL; see Chapter 6) service. However, the service does not offer what the federal government defines as broadband.
Another family in Cleveland illustrates that providing people with broadband access and computer training can change their lives.
Monica Jones lives in a low-income neighborhood of Cleveland and has worked as a file clerk at the Cleveland Clinic for more than 20 years. In 2013, the medical center announced that it was
moving to electronic medical records. Faced with losing her job, Monica entered a training center called the Ashbury Community Center, funded by a nonprofit organization called Connect Your Community (www.connectyourcommunity.org). She learned software such as Microsoft Word and Excel and then took online classes from the University of Phoenix. In 2016, she obtained a bachelor’s degree in finance.
Monica still works at the Cleveland Clinic but at a new job that pays $20,000 more than her old job. She is editing digital reports in the hospital’s cardiac catheterization lab. She now pays the $154 per month for broadband access in her new home.
To solve the broadband access problem for many of its low-income residents, Cleveland is focusing on public and subsidized housing, where 50,000 of the city’s 385,000 inhabitants live. St. Vincent’s Charity Hospital is the hub of a high-speed fiber-optic network that connects institutions, including at least 800 schools, medical
facilities, and government buildings across Cleveland. The city plans to extend the network to residents in a housing project near St. Vincent’s.
Because it would cost $350,000 to deploy fiber from St. Vincent’s to those projects, DigitalC (www.digitalc.org) will help to close the gap with a wireless technology from a company called Siklu (www.siklu.com) that will cost only $35,000 to install. DigitalC is an organization that partners with communities to design
technology-driven programs and services. Siklu’s wireless service will deliver 1 gigabit per second (1 billion bits per second) to the main building of the housing project. From there, servers in the building’s telephone room will use the existing copper network to provide broadband service to the housing complex. The goal is to provide the fastest and least expensive service in Cleveland. When the FCC subsidy (called “lifeline”) of $9.25 per month is factored in, all tenants in the housing project will be able to afford
broadband.
DigitalC also plans to give all tenants in the CMHA refurbished computers and training. The tenants will be directed to online workforce training schools, such as Career Online High Schools. At the same time, the government of Cuyahoga County is putting more services online, including workforce training, benefits enrollment, and, potentially, telemedicine appointments.
One of the new participating businesses is WeCanCodeIt
(www.wecancodeit.org), a 12-week software engineering boot camp for people with little experience in technology. The program aims to equip them for technology jobs such as building websites.
There is a larger digital divide problem: How do we get faster, cheaper, readily available broadband access across the United States? One answer is to stimulate competition. For example, after Google began offering broadband on fiber-optic lines in the Kansas City area in 2012, existing providers increased the speed of their services by 86 percent over what they had been offering only one year earlier.
Unfortunately, Cleveland has only two companies that provide Internet service: Spectrum and AT&T. AT&T does not offer broadband (defined by the FCC) to most of Cleveland. In fact, it offers only dial-up service to some streets.
The situation is even worse in rural areas. The town of Andover, Ohio (population about 1,100), has only DSL service from
CenturyLink (www.centurylink.com). However, the Andover Public Library has a broadband connection from the state library consortium. As a result, people sometimes sit in their cars outside
the library building after hours to access the Internet by using the library’s Wi-Fi.
Other cities are providing innovative strategies to provide
broadband Internet access. For example, Huntsville, Alabama, is building the basic fiber infrastructure, known as dark fiber. Google will then light the fiber and provide the service. Ammon, Idaho, built a fiber network and allows private providers to compete.
Customers can now use a Web interface to switch providers in a few seconds. Significantly, this system does not require the company-specific cable or optical networking boxes that are common in homes across the country.
In most locations, however, efforts to install new networks face obstacles. Consider utility poles, for example. These poles are almost always owned by an electric company or a telephone
company. The telephone companies make adding new fiber to the poles slow and expensive. The FCC has streamlined the rules for how companies attach to poles. Under federal law, however, the rules benefit only Internet service providers (ISPs), telephone companies, and cable companies. So, if the entity trying to install fiber happens to be, for example, a county agency in a rural area, then the FCC rules do not apply. Therefore, pole owners can make the process lengthy and difficult, even if the agency has been
authorized by the state or local government to use the poles.
Let’s take a look at the economic impacts of the digital divide.
EveryoneOn (www.everyoneon.org) is a nonprofit organization whose mission is to create social and economic opportunity by connecting everyone to the Internet. EveryoneOn has shown the following:
Students are 7 percent more likely to earn a high school
diploma and attend college when connected to the Internet at home. Furthermore, these students will earn over $2 million more over their lifetimes.
An unemployed person who has the Internet at home will be employed seven weeks faster than one who does not and will earn more than $5,000 in additional income annually,
according to EveryoneOn’s analysis of data from the Bureau of Labor Statistics.
According to Deloitte (www.deloitte.com), every day that a person is not connected to the Internet, America loses $2.16 per person per day of potential economic activity, meaning that the digital divide costs the United States over
$130 million per day in economic activity.
Sources: Compiled from C. Aguh, “How the ‘Digital Divide’ Is Holding the U.S. Economy Back,” VentureBeat, February 10, 2018; A. Perrin, “Digital Gap between Rural and Nonrural America Persists,” Pew Research Center, May 19, 2017; U. Aneja et al., “Bridging the Digital Divide: Skills,” G20 Insights, May 5, 2017; J. Fink, “Closing the Digital Divide,” TechZone360, April 10, 2017; M. Anderson, “Digital Divide Persists Even as Lower- Income Americans Make Gains in Tech Adoption,” Pew Research Center, March 22, 2017; G. Galvin, “States Struggle to Bridge Digital Divide,” US News and World Report, March 16, 2017; J. Bond, “2.1 Million People Still Use Dial-Up Internet from AOL,” The Daily Dot, January 8, 2017; D.
Talbot, “The Hole in the Digital Economy,” Benton Foundation, December 16, 2016; D. West and J. Karsten, “Rural and Urban America Divided by Broadband Access,” Brookings, July 18, 2016; “FCC’s Broadband Progress Report 2016,” FCC.gov, January 29, 2016; and C. Tolbert and K.
Mossberger, “Cuyahoga County Survey of Internet Access and Use,”
Connect Your Community, 2012.
Questions
1. Describe some impacts on individuals and families (not
mentioned in the case) resulting from a lack of Internet access.
2. Is affordable, broadband Internet access strategically
important to cities? Why or why not? Support your answer.
3. Is affordable, broadband Internet access strategically important to the United States? Why or why not? Support your answer.
One well-known project to narrow the divide is the One Laptop per Child (OLPC) project (www.one.laptop.org). OLPC is a nonprofit association dedicated to developing a very inexpensive laptop—a technology that aims to revolutionize how the world can educate its
children. In 2018, the price of OLPC’s laptop remained approximately
$230. We note that this price includes educational software loaded on the laptop. On the other hand, there are many other costs associated with these laptops, including shipping, solar chargers, maintenance, and training. Some international users insist that the actual cost of one laptop is therefore approximately $450.
IT’s About Business 2.3 examines the impacts that the digital divide has on socioeconomically disadvantaged people and various ways in which cities are trying to close that divide.
Compliance with Government Regulations.
Another major source of business pressures is government regulations regarding health, safety, environmental protection, and equal
opportunity. Businesses tend to view government regulations as expensive constraints on their activities. In general, government deregulation intensifies competition.
In the wake of 9/11 and numerous corporate scandals, the U.S.
government passed many new laws, including the Sarbanes–Oxley Act, the USA PATRIOT Act, the Gramm–Leach–Bliley Act, and the Health Insurance Portability and Accountability Act (HIPAA).
Organizations must be in compliance with the regulations contained in these statutes. The process of becoming and remaining compliant is expensive and time consuming. In almost all cases, organizations rely on IT support to provide the necessary controls and information for compliance.
Protection against Terrorist Attacks.
Since September 11, 2001, organizations have been under increased pressure to protect themselves against terrorist attacks, both physical attacks and cyberattacks. Employees who are in the military reserves have also been called up for active duty, creating personnel problems.
Information technology can help protect businesses by providing security systems and possibly identifying patterns of behavior
associated with terrorist activities, including cyberattacks (discussed
in Chapter 4). For a good example of a firm that provides this protection, see Palantir (www.palantir.com).
An example of protection against terrorism is the Department of
Homeland Security’s (DHS) Office of Biometric Identity Management (OBIM) program. (We discuss biometrics in Chapter 4.) OBIM
(www.dhs.gov/obim) is a network of biometric screening systems, such as fingerprint and iris and retina scanners, that ties into
government databases and watch lists to check the identities of millions of people entering the United States. The system is now
operational in more than 300 locations, including major international ports of entry by air, sea, and land.
Ethical Issues.
Ethics relates to general standards of right and wrong. Information ethics relates specifically to standards of right and wrong in
information processing practices. Ethical issues are very important because, if handled poorly, they can damage an organization’s image and destroy its employees’ morale. The use of IT raises many ethical issues, ranging from monitoring e-mail to invading the privacy of millions of customers whose data are stored in private and public databases. Chapter 3 covers ethical issues in detail.
Clearly, then, the pressures on organizations are increasing, and organizations must be prepared to take responsive actions if they are to succeed. You will learn about these organizational responses in the next section.