By The Engine Policy Team
Startups, their founders, and their users can come from anywhere across the country. But the digital divide — or a lack of accessible and affordable broadband in some places and some communities — means many are unfairly shut out of the startup ecosystem, hurting those people, their communities, and U.S. innovation overall. With a funding deadline for an affordable broadband program looming, policymakers have an obvious way to help close the digital divide, but they must act soon.
At a recent roundtable of rural startup founders — which we hosted as part of our Innovation for All initiative — we heard firsthand from founders who see the ways the digital divide impacts their companies and the startup ecosystem every day. Charisse Smith, the founder of virtual tour software company CAPTVR3D, called broadband limitations one of the biggest problems her company faces. “What I create takes a lot of bandwidth and sometimes with my clients when I show up to their location, and it doesn’t work, it’s kind of hard to make a sale,” she said.
Another founder explained that a lack of broadband creates significant work for their company before they can onboard new customers in rural areas. That puts their small company in the position of first having to tackle the question of whether they can work with ISPs and other outside entities to bring in adequate broadband, which is a much bigger and more time-consuming project.
But a lack of adequate, accessible, and affordable broadband is bigger than just a headache for one or two startups. The entire Internet and startup ecosystem is better off when everyone can participate. Studies have shown that diverse teams lead to more innovative products and services that appeal to more people, making companies more productive and profitable. To unlock the full potential of every facet of the technology sector we need everyone with an interest and a good idea to be able to participate.
That starts with closing the digital divide and ensuring universal access to affordable and adequate broadband. Today’s middle school student with an interest in STEM fields can’t be the founder of tomorrow’s biotech startup if she doesn’t have adequate Internet access at home to complete homework with a multimedia component. The person with the idea to revolutionize farming with innovative tech will have a harder time making their vision a reality if their home Internet is insufficient. And the would-be software engineers won’t be able to work at a startup if they can’t get online.
Luckily, policymakers see the problem too, and many have already taken big steps toward closing the digital divide and ensuring equity in broadband access. Recently, the federal government has awarded billions of dollars to states to expand broadband access in unserved and underserved areas, and the Federal Communications Commission (FCC) passed new rules late last year to punish ISPs that have discriminatory policies and practices that give certain communities worse Internet access based on things like their income level and race.
But there’s more to do. Congress has to act soon to prevent a lapse in a program that helps make Internet service affordable. That program — which has given millions of qualifying households a $30 monthly discount on their broadband bills since it was created in 2021 — is set to run out of funding this month, and the FCC has mapped out winding the program down. A proposal in Congress, the Affordable Connectivity Program Extension Act, would provide an additional $7 billion to keep the program going.
Closing the digital divide is necessary for startups across the country to succeed. As long as potential and future clients, users, and customers can’t get online, startups will have artificial limits on how much they can grow. But bigger than that, closing the digital divide is necessary for the entire startup ecosystem to truly succeed. Equitable broadband access is necessary to have an equitable innovation ecosystem where everyone from all communities has access to 21st century opportunities.
Engine is a non-profit technology policy, research, and advocacy organization that bridges the gap between policymakers and startups. Engine works with government and a community of thousands of high-technology, growth-oriented startups across the nation to support the development of technology entrepreneurship through economic research, policy analysis, and advocacy on local and national issues.
