ITC case could upend mobile access

In spite of New York City’s grit, scars and cracks, we Gothamites assume we live in a hyper-connected modern metropolis. So I was a little shocked when I read recently that Tony Marx, CEO of the New York Public Library, said that a lot of people depend on public libraries for Internet access.

Speaking at a recent Aspen Institute Ideas Festival, which was reported about in the Huffington Post, Marx said the New York public libraries together get about 40 million physical visits a year – which, he pointed out, is more than all the city’s museums and professional sporting events combined.  If only they were there for the pleasure of reading books the old fashioned way. 

{mosads}In fact, an astounding 27 percent of households in New York City lack a connection to broadband Internet. Marx told a story about a boy who was sitting outside a library branch in the South Bronx after hours to use the Wi-Fi so he could do his math homework!  But this sad anecdote illustrates another reality: There are many Americans with more restrictive family budgets without broadband and rely on mobile devices for Internet access.

The Pew Research Center recently compiled some eye-opening data on this demographic reality. Sixty four percent of African Americans living in low-income homes rely on mobile broadband for Internet access. Thirteen percent of Americans with an annual household income of less than $30,000 per year are smartphone-dependent.  That’s compared to just 1 percent of Americans at the $75,000 plus income level.

Just like people in high-income communities, people in low-income communities and minority communities need Internet access for a lot more than binge watching TV shows. They do research for school, hunt for jobs, get information about health and safety and shop for bargains. For example, according to Pew, African-Americans are less likely to be internet users, but the gap is shrinking.  Today, 78 percent of blacks and 81 percent of Hispanics use the internet, compared with 85 percent of whites.

This gap was highlighted just this week when President Obama outlined a new broadband initiative, called ConnectHome, would help low-income students access high-speed Internet access at home. The initiative is a the product of efforts undertaken by the Department of Housing and Urban Development, private companies and nonprofit groups to close a “homework gap” that the President argues undercuts the prospects of greater achievement later in life.

Moreover, President Obama has set a national goal of providing 98 percent of Americans with access to high-speed, mobile broadband.  That is worthy goal but it can only be achieved if people have access to devices. Therefore, it will be interesting to see how the International Trade Commission will rule later this year on a case involving patent disputes about the technology that currently exists in thousands of mobile devices.

Essentially, the case centers on the claim by Nvidia that chips made by Qualcomm, which are found in a wide range of devices made by Samsung, contain Nvidia’s patents for graphics processing. Patent disputes are common in the high-tech world but what makes this case relevant to consumers, and especially low-income consumers who depend on mobile devices, is that Nvidia wants the ITC to issue an order to keep Samsung’s products out of the United States.

Anyone who has tried to get the latest phone, or even upgrade their phone, can tell you about supply shortages. Imagine what would happen if a whole class of many of the most affordable and popular devices suddenly vanished from the U.S. market or were rendered ineffective. Aside from the possible dent in the GDP, consumers would find themselves disconnected from the Internet. Prices would likely rise, disproportionately harming low-income consumers.

 To date, some members of the five-person ITC, a panel created to address unfair international trade practices, have voiced an inclination for clearing Samsung of patent infringement.  Nonetheless, a complicated legal process is underway in advance of a final ruling on the request, which is expected in October 2015.

 The bottom line is that the digital divide in the United States is wider than many of us realize and smart phones are playing an ever more important role in bridging the chasm. Policymakers in Washington have a complicated challenge when it comes to high-tech patent fights and the huge sums at stake for innovators. At the same time, it is critical for them to keep in mind the high stakes for people on the challenging side of the digital divide – whether a single parent looking for a job, a veteran seeking health care information or a kid camped outside a library trying to do his homework.

Burnett is a financial services executive and a former candidate for New York City Comptroller.