Data Caps Could Dim Online Learning's Bright Future

Michael Morgenstern for The Chronicle

March 04, 2013

Will the Internet remake education? Prestigious universities like Stanford and Georgetown now offer free classes to any student with an Internet connection and an attention span. Educators and policy makers believe these new online courses could make higher education more available and affordable for all.

The key word here: could. As people struggle to sort the good from the bad in the world of massive open online education, some are already asking, as The Chronicle did recently, "For Whom Is College Being Reinvented?"

But even that debate rests on a fundamental assumption that access to the courses themselves is not a barrier. Today, data caps—monthly limits that force Internet users to pay for a specific amount of data and bill them even more if they exceed the limit—are proliferating. They threaten to put the brakes on this potential online revolution.

Although much of the data-cap debate has focused on how these restrictions affect streaming-video services like Netflix, a recent study by the Open Technology Institute found that the caps also create barriers to using other data-intensive services, including online education. Sites like Coursera and Udacity, which offer free online lectures and interactive feedback, are growing in popularity, as are downloadable lectures on iTunes.

But consider trying to complete an online class using a mobile broadband connection with a data cap. Both Verizon and AT&T offer "low cost" plans that bundle unlimited voice and texting with a gigabyte of data consumption for $40 or $50 per month. However, if you tried to stream video lectures on that connection, you'd reach the data cap after about three hours and then face fees of $15 per gigabyte. If you tried to complete a course with 15 hours of video a month, your phone bill could arrive with as much as $70 in extra fees.

And trying to use mobile broadband on your laptop (connecting to a cellular network via a USB modem, which is often the only high-speed option in hard-to-reach rural areas) could be even more expensive. Sprint offers a three-gigabyte plan for $34.99 per month, but after you finished the first eight hours of lectures, overage fees would kick in, costing you $100 to $150 to watch all the necessary lectures. Despite arguments from broadband providers that caps and "usage-based billing" offer consumers affordable plans, the above reality demonstrates that, in fact, providers are charging more for less. Consumers are neither saving in their monthly fees nor able to access services like online education without paying substantial overage fees.

These costs are especially worrisome for subscribers who rely exclusively on mobile broadband service for access to the Internet. Often these are low-income families and those living in rural areas. They tend to have mobile phones but often lack personal computers, let alone home broadband connections. Many policy makers and industry representatives point to mobile as the key to closing the digital divide, but could the limits and high cost of mobile data actually widen it?

Furthermore, roughly 19 million Americans still don't have access to Internet service capable of streaming a video lecture. A 2010 survey from the National Telecommunications and Information Administration found that 22 percent of households with school-age children did not have broadband at home, and that low-income, minority, and rural households all have significantly lower rates of home broadband use compared with the rest of the nation. How accessible will the online education revolution be to these households?

The high cost of Internet access in the United States and the rise of capped data plans on mobile broadband have a lot to do with limits on competition in the marketplace. The two largest mobile providers, AT&T Wireless and Verizon Wireless, control two-thirds of the mobile market in the U.S.; they have little financial incentive to offer more-affordable plans or bring back unlimited ones when the new capped plans have become so profitable.

The Federal Communications Commission could help strengthen competition in the mobile marketplace by ensuring that new access to the wireless spectrum does not end up only in the hands of AT&T and Verizon but is available to existing competitors and new entrants. Additionally, the FCC needs to make it easier for consumers to switch among providers. In many European and Asian countries with more-affordable rates, regulations allow subscribers to easily take their smartphones from provider to provider. In the United States, breaking a contract with a cellphone company is messy and expensive—so consumers rarely switch.

The FCC and federal lawmakers could also help a broader swath of the population gain access, thereby narrowing the rural digital divide. Recently the commission offered hundreds of millions of dollars in subsidies to telephone companies to extend broadband service to rural households as part of the Connect America Fund. Although a few smaller telephone companies accepted more than $100-million in subsidies to bring Internet service to nearly 400,000 people in 37 states, the two largest providers, AT&T and Verizon, declined to participate. Why? Because the subsidies still did not make serving rural communities as profitable as serving urban and suburban ones.

Instead of trying to subsidize profits for private providers and Wall Street investors, it would be wise for the FCC, the Obama administration, and Congress to consider replicating the New Deal's Rural Electrification Administration program, which offered low-interest, long-term loans to local governments and cooperatives to build electrical grids. Previously only 10 percent of the nation's rural households had been electrified. Today access to electricity is nearly universal in the United States.

As a nation, we should embrace the potential benefits of online education. But we must not ignore the disparities that may keep many from taking advantage of those innovations. In the 21st century, ensuring equal access to education may also depend upon equal access to broadband.

Benjamin Lennett is policy director and Danielle Kehl is a program associate at the New America Foundation's Open Technology Institute.