Disregarded: Has the U.S. Forgotten Its Responsibility to Bring Puerto Rico into the 21st Century?

by Latoya Livingston on June 24, 2012

Though many appear to have forgotten, the U.S. has distinct duties to Puerto Rico and its other territories and Native American tribal lands.  By definition, Puerto Rico is a commonwealth of the United States and an organized unincorporated territory.  This means that the island is not a part of U.S. proper, but is controlled by the U.S. government and subject to U.S. authority and law.  Most importantly, Puerto Ricans are U.S. citizens, and as such, they deserve access to broadband just as if they were citizens living in Connecticut or Wyoming.  But they are nowhere near the level of access we enjoy in the 50 states.

Puerto Rico should not be an afterthought in U.S. and FCC regulation and policy.  Puerto Rico is the poster child of the broadband adoption challenge.  It is facing the great U.S. infrastructure challenge of the 21st century, which makes building out broadband in the country extremely difficult.

Although 86 percent of Puerto Rican households have access to basic, fixed broadband (768 Kbps), compared to 95 percent of mainland U.S. households, broadband adoption rates in the territory are severely anemic:  Only 31 percent of Puerto Rican households subscribe to broadband, compared to 68 percent of mainland U.S. households.  Of those who do have access, only 57 percent of Puerto Rican households have broadband available at 3 Mbps or faster, and only 32 percent have access of 10 Mbps or faster.

Communications companies cite lack of interest in broadband and adoption on the island as a major blow to the business case for investing in deployment, but without access to and education about the benefits of the technology, it’s hard to blame the citizenry for their lack of enthusiasm for the service.

How bad is the problem?

In the next few decades, this adoption gap will be readily apparent across the island.  In a recent Congressional briefing, members of Connected Nation’s Puerto Rican Broadband Task Force, headed by Connect Puerto Rico, announced alarming statistics about the effects the broadband gap will have on the island:

  • Across Puerto Rico’s public schools, broadband connectivity is insufficient to meet the challenges of this new millennium; in 2011, the maximum connection speed contracted by the public K-12 system was 1.5 Mbps.
  • Puerto Rico’s extensive bandwidth constraints are preventing healthcare providers and consumers from fully leveraging the benefits of online health applications and services.

As Congressman Pedro Pierluisi (D-PR) so aptly stated at the briefing, “The problem in Puerto Rico is not just a Puerto Rican problem, it is a U.S. problem.”

Are there any solutions?

In contrast to Puerto Rico, Jamaica, a country with similar topography, has been able to make genuine strides toward connecting its residents.  In April 2011, the Jamaican government signed a J$543 million (US$6.37 million) agreement with telecommunications companies LIME and FLOW to build out a high-speed island-wide broadband network.  Under the terms of the agreement, the providers must provide 99.9 percent availability and high speed transmission of 100 megabits per second on the backbone.  Funding for the buildout of the island-wide broadband network has come from the Universal Access Fund Company Limited (UAFCL), which manages the tax charged to telecommunications companies for incoming international calls into Jamaica.

Although the World Economic Forum’s 2012 Global Information Technology Report ranks Jamaica 75th in network readiness with a score of 3.86 and Puerto Rico 36th with a score of 4.59, it is innovative solutions to the conundrum of a financially poor citizenry and the demands of the 21st century that set Jamaica apart.  The Jamaican government’s response to its citizenry’s need for broadband can serve as an example for similarly situated emerging nations; with the caveat that Puerto Rico’s status as a U.S. territory hinders similar options that local and island-wide leaders have in providing incentives for providers to build out throughout the island.

Although Puerto Rico has independent tax-levying authority by mutual agreement with the U.S., commonwealth laws limit those taxes to commonwealth income tax, payroll taxes, gift taxes, estate taxes, and statutory excise taxes.  Congressman Pierluisi noted that presently there are more people of Puerto Rican descent living abroad than there are living on the island; with this in mind, legislators could possibly take a page from Jamaica’s book and implement a similar measure, implementing a special tax for incoming international calls.

What can be done?

Puerto Rico is an extremely poor island with at least 40 percent of its residents living below the U.S. poverty line.  Although Puerto Ricans do not pay federal taxes on income received from island sources, they do pay customs taxes to the federal treasury, which are returned to the Commonwealth.  However, according to Congressman Pierluisi, for every ten Puerto Ricans who adopt broadband, the island would see a 3.2 percent increase in its gross national product.  Promoting broadband adoption on the island could create a technological snowball that can ease its people and the island’s coffers into a digital revolution.

Considering the nation’s precarious position as a commonwealth, local Puerto Rican leaders have some of the best and worst access to funding.  Congress and the FCC can include Puerto Rico in their broadband initiatives, but have lately chosen to restrict many of those programs to the 50 states.  Unfortunately for the people of Puerto Rico, the island needs U.S. involvement to build out broadband infrastructure, but have yet to see much help.  In March 2012, the FCC failed to allocate any funds to Puerto Rico out of a total of $300 million capital injection for 2012 broadband build out.  Additionally, Puerto Rico did not receive any funds under the National Telecommunications and Information Administration’s Broadband Technology Opportunities Program for its Sustainable Adoption or Public Computing Center programs.

Puerto Rico is a digital problem that can be solved.  But, it is time for Congress, the FCC, and Puerto Rican leaders to come together to find an effective solution for the island, before its people are left in the digital dust.

  • Latoya LivingstonLatoya Livingston is a Washington-D.C.-based attorney with years of legal experience working in the private and public sector. Currently, Attorney Livingston serves as a Senior Attorney and the Earle K. Moore Fellow at MMTC.
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  • Latoya Livingston

    Hello readers,

    I spoke to my friend about his experiences with broadband in Puerto
    Rico.  Although I wanted to include his remarks in my article,
    unfortunately I found them hard to tie into my theme.  Nonetheless, here
    is our discussion:

    “1. What are your experiences when you go to PR? 2. What do you think is the biggest issues that the average PR has when choosing to adopt broadband (wireless and at home)?

    3. Companies say that they are less likely to buildout broadband in PR because so few people are adopting the technology, so it will be hard for them to recoup their costs… what is your response? 4. What should the US’ response be to PR and other territories with respect to building out broadband in PR?”

    Rene Gonzalez’ answers:

    “1. Internet doesn’t seem to yet be a full-scale utility in everyone’s homes. Most people get Internet through their phones or in public places like Burger Kings or Star Bucks (both which have free wireless). There are not many public libraries available for people to freely come in and out and the Universities, while they do have libraries, have their Internet protected by student ID systems (one has to be a student). When I went to Puerto Rico, I would log in mostly at Burger Kings. 2. Probably the biggest issue is cost. 50% of Puerto Ricans live with some sort of federal assistance. The U.S. territory’s economy is poorer than the poorest American state (Mississippi). At 45-60.00 a month, many Puerto Rican families simply cannot afford the service, with the pressures of higher food prices, higher electricity/water prices, higher gasoline for their cars, etc. Broadband is therefore a luxury, rather than a reasonably priced utility. 3. If they made it more affordable, they probably could. They could also consider partnering up with the government to develop public wi-fi services which are paid for by modest hikes on everyone’s taxes. The people receive cheaper wi-fi and these companies receive profits in the form of the government contracts to build, maintain, and provide the wi-fi service. 4. I think the United States should partner with some of the major Wi-FI companies and build public access areas throughout the majority of their urban and rural territories. In other countries, Internet use is much higher (South Korea, for example). There is no reason why the United States cannot marshal the necessary funds to build the infrastructure for accessible, public wi-fi internet. The private sector can profit from this arrangement if it works with the government.”


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