Morgan Stanley
  • Access & Opportunity Podcast
  • Feb 3, 2022

Bridging the Digital Divide

Transcript

Carla VO: According to the census, 1 out of every 10 American homes is lacking a high speed internet connection...

Carla VO:  ...and Pew research data reveals that while 80 percent of White adults report access to broadband, that number drops 10 percent or more with Black and Hispanic adults, with the gap growing much wider in rural and low income areas.

Carla VO: As we know, access to the internet is a key to so many opportunities, whether it’s simply to find essential services, start a business or get an education.

Carla VO: This is the digital divide.

Carla VO: Today, we'll speak to two individuals who are trying to tackle the divide in their own way. First we'll speak to High School teacher Mayra Delgado.

Mayra Delgado: My classroom sizes are about 30 kids and at least like 80 to 90% don't have access at home.

Carla VO:  And later we'll speak to Lit Communities co-founder and Chief Strategy Officer, Rene Gonzalez.

Rene: We told the city, let's find 12 of the least connected tracks in the entire city and let's go there. Yeah you want to call it cherry picking, this is like doing it for the right reasons.

Carla VO: Welcome to Access and Opportunity, I’m your host Carla Harris. And we’re telling the stories of individuals working to drive change within their communities. We provide context about systemic inequities and share tangible examples of how ideas around access and opportunity are being made real every day.

Carla VO: On this episode, we'll examine the digital divide, the growing gap between individuals who can access the internet and those who can't.

We're heading just north of the border of Mexico, to the city of Brownsville, Texas. Here, more than 65% of homes lack a broadband connection which has earned Brownsville the unfortunate distinction of being the worst connected city in the United States.

Today we will meet the people of Brownsville who refuse to accept this and are getting the city connected. We'll speak to Rene Gonzalez, whose company utilizes a socially driven approach to develop broadband infrastructure.

But first, we'll see how the divide affects the most technologically savvy individuals on the planet: teenagers.

Carla VO: It's 3rd period at IDEA school in Brownsville, Texas and everyone is in their seats, ready to begin when the bell rings. That's because today is a big day for the high schoolers. It's frog dissection day.

Mayra in classroom: Welcome back to class, good to see you. How are you guys? Happy friday.

Carla VO: Up at the front of the class is Mayra Delgado. She teaches Biology here.

Mayra Delgado: Dissecting is what they ask me about on day one, every single year. When are we going to dissect a frog?

Carla VO: Instead of the usual chaos of amphibian carcasses, the smell of formaldehyde, and teenagers with scalpels, the room is under control.

Mayra in classroom: Everybody’s good? Okay, so I don’t know about you guys but I freaking love this frog dissection, it’s so much fun.

Carla VO: This dissection is taking place on iPads - and the kids love it.

Mayra in classroom: You have your tools up here on the left. You can screenshot if you want to. I would want to share this with my friends on social media, I don’t know about you guys? Why are you guys laughing? You wouldn’t want to show your friends what a frog looks like on the inside? Man your friends are boring, get better friends.

Mayra Delgado: So I started college as an English major. And my first year in, one of my English professors said, “If you all major in English, the only thing you're going to end up doing is being a teacher.” And I was like, oh, I don't want to do that. I don't wanna end up teaching. So I decided to switch majors to bio and, when I graduated with my biology degree, the first job I got was biology teacher.

Carla VO: Whether this was her plan or not, Mayra was ready. And she had big ideas. There were all these modern teaching tools she wanted to try, like iPad games that help kids learn vocabulary words, and something called "flip classroom" where kids learn from online resources at home, then discuss it together in class the next day.

Mayra Delgado: I remember one of the first assignments I assigned was a homework assignment where students had to do research on a topic of their choice. And when the deadline came around, a lot of students hadn't, hadn't done it.

Mayra Delgado: And I thought, “Oh God, I have a horrible class of students that don't do their homework.” And when I started probing, a lot of them just said, “Well, I didn't have internet or I didn't have anywhere to go. I didn't have anyone that could lend me a laptop or let me use their phone.” Some of the kids said, “Oh, it's because my mom got home late from work and she couldn't take me to McDonald's to do my homework.” And I said, “Wait, why would you go to McDonald's to do your homework?” I was so confused. And she said, “Well, that's the only way we have internet access. We go to McDonald's and we sit down and I do my homework there whenever I have to do things online.” I felt horrible because I had not been aware that that was such a big issue where I taught.

Carla VO: She didn't know it at the time, but Mayra was experiencing something that's gotten a lot of attention lately, especially in Texas - the digital divide.

News Clip 1: So, okay, let's talk about how big the digital divide is.

Yeah, so it's about 28 million people in Texas and around 2 million are, uh, without internet access.

News Clip 2: The reality is the students who were already the most vulnerable to falling behind will now face even more challenges to keep up with their peers.

UN Speaker: Without decisive action, the digital divide will become the new face of inequality.

Mayra Delgado: My classroom sizes are about 30 kids and at least like 80 to 90% don't have access at home.

Carla VO: Suddenly, Mayra had to readjust everything she had planned for teaching. No more video assignments outside of class, no more submitting homework online. It was hard, and many students weren't getting the education she wanted to provide, but Mayra did her best to make it work. Until everything got much, much worse.

Mayra Delgado: It wasn't a big deal before the pandemic, because I could print out the handouts and give them you know the workbooks or whatever. But, when pandemic happened and we had to stay home, we lost a lot of kids. They weren't logging into classes and we had to call parents and ask, you know, “Hey, we haven't seen your son in a few days,” and they would tell us, “We don't have internet access. We don't have a way to log into classes or see the assignments or see the articles that you're assigning.”

There was one parent I spoke to that, she actually got Spectrum to come to her house to install Internet. And the guy told her that her house was past the line where they had infrastructure to even get internet access. And so she actually started crying on the phone and, and didn't know what to do. They couldn't go to the public library. They couldn't go to McDonald's. They couldn't go to a family member's house, so they really didn't have any options. And I didn't know what to tell that mother, I felt her. I felt what she was feeling, and I feel terrible that I had nothing to offer her.

Carla VO: So Mayra did what she could. The school provided devices to families, and the teachers would drive around, dropping off and picking up learning materials, but the more Mayra tried to help, the more she realized how pervasive this problem was.

Mayra Delgado: Some of our teachers that lived in different parts of town didn't have internet access, so they had to sometimes drive to school and sit in the parking lot and do their classes from there. It was very eye opening for all of us.

One of my colleagues mentioned to me that her old ballet instructor in town had a difficult year with the pandemic, not being able to have in-person classes and he didn't have internet access. He's an older gentleman who, you know, doesn't have a computer or an email. And so he reached out to her for help, and she had heard about the Small Business Association loans, right? Like relief for a pandemic. And she said, “Great. Let's fill one out for you.” And it was only available online. It was only available through email.

Carla VO: It was too much for Mayra. So she and a friend felt they had to do something, even if they didn't really know what. They started an organization now called, “What The Fiber” to advocate for reliable broadband internet services, and they reached out for help. This is when Mayra met Rene Gonzalez, a man who had helped build out San Antonio's broadband infrastructure. Rene helped Mayra organize, and the first thing he said they needed was data.

Mayra Delgado: One of our first projects was to do a survey and find out from the community: what do you use the internet for? How was your internet speed connection at home? And oddly enough, a lot of people didn't find our survey because it was online. And so here we are, in the middle of pandemic, going door to door and talking to people.

One day I took my iPad thinking “Oh great. This will be easy to do.” I have the website open and of course there's no internet service. So we had to print out all these packets and ask people these questions and fill them out with a pen and paper and had piles of paper in the car. And we had to go through these one by one. It just highlighted the issue even more.

Learned a lot of things from talking to people in the community. A lot of them didn't understand how the internet could be something that they could use. They decided not to pay for it because, “I don't watch Netflix. I have cable. I'm fine.” They didn't even know they could do banking online or do other things online. So we learned a lot.

For us, raising awareness became what we realize should be our goal. A lot of people don't even understand how they're missing out.

Carla VO: The widespread lack of internet access has gained a lot of attention since remote work and learning took over our lives. And thanks in part to organizations like “What the Fiber”, cities are realizing how crucial of an issue it is, including Brownsville. In July of 2021, Brownsville approved 20 million dollars of Federal relief money to build 95 miles of new fiber throughout the city.

But these fixes will take years, and Mayra's students will have moved on from her school long before they can benefit from the changes. Mayra, always the optimist has faith.

Mayra Delgado: I think a lot of my students feel hopeless because they feel like they have everything going against them.

But I think you know, we say “si se puede” in Spanish, in Mexico they say “si se puede” – and you can. And something that I saw is like, these kids are really resilient.

Mayra Delgado: So I would just say to them, there's things going against you, but that's just going to make you a stronger person and a successful person at the end. I had one of my, one of my students from my second year just found out that she got a full ride at John Hopkins, she’s a freshman in college. So, it can be done. Si se puede.

Carla VO: In a few years time, Mayra's students will likely have a smoother experience with their connectivity, thanks to this 20 million dollar program, and a company called Lit Communities.

This is the company Rene Gonzalez co-founded, and in 2020, they won the city's contract to develop Brownsville's fiber network.

Lit Communities helps cities develop their own fiber networks instead of bringing in an outside internet service provider. This not only connects their residents and businesses but allows the city to earn money by charging Internet Service Providers for use of the city network.

I sat down with Rene to discuss strategies for tackling the digital divide, and to understand how his own upbringing in Brownsville impacted his life path.

Carla: Rene, thank you so much for being here with me today. It's a pleasure to have you on the show. And are you ready? Can we jump right in?

Rene: I am definitely ready. Ms. Harris.

Carla: Alrighty, Carla, please, honey, please. Ms. Harris is my mother. Yeah. Thank you. So you grew up in Brownsville, Texas, a city we just heard about from Mayra Delgado.

So can you tell us a little bit about your experience growing up there?

Rene: Oh, well, Brownsville was definitely a great place to grow up with a definitely multi-generational, very tight family town. It's on the border. So real strong cultural ties there. And obviously it's a beautiful place to be, you got the beach and this lovely weather almost 99% of the year. So it was just a wonderful place to grow up as I became a young adult.

Carla: Yeah, I don't think I realized the beach in Brownsville. I'm going to have to check that out. All right. So now how did, how did your own access to technology influence your direction in life?

Rene: Oh, geez. Well, I didn't know anything about the worldwide web, until a little CD came in from a company called AOL and it was in 1996.

I was a high school freshman. And you know, my mother was able to afford not only the subscription, but also the second phone line. And I was able to, you know, use that connectivity at that time to find colleges that were not in Texas or to look at what would be requirements to get in for admission or even look at financial aid applications and things like that, too. So aside from just connecting with friends, it connected me to the outside world.

And growing up in a school where you know there's a lot of high poverty I knew right away that at that point in time I had something that not a lot of the other people had.

Carla: And isn't it funny, this was, you know, a little over 20 years ago and you could see that this thing, this new thing that we were all getting exposed to was creating a differential if you will, between you and the people that you rubbed shoulders with every day going to school.

So talk to us a little bit about what this experience taught you about the impact of infrastructure and what it can have on a community. We hear that word all the time and obviously there's a new bill, infrastructure bill that was just passed. But I don't think most people really can grasp the enormity of the word and what it means to the health or lack thereof, within a community.

Rene: Well, I can tell you that, infrastructure, you know, there's anything roads, bridges, railways, airports, seaports, electric lines, right? And then the broadband got thrown into that category too and we're thankful for it. It wasn't until the pandemic hit that I think everybody universally realized the shared importance of the Internet and that it wasn't just a convenience or an amenity. Now having the Internet is a necessity. You know, being able to do a telemedicine visit, which I did my very first one, with my daughter who, you know, had a little health issue – it wasn't anything major – but we were able to use that infrastructure to communicate with our healthcare provider and get that treatment and what we needed without wasting any time. And it's these things that, um, they're differentiators.

Carla: So now when you talk about the digital divide or when you hear people talking about it, you often hear this idea of the “last mile”. Can you explain for our listeners, what is this “last mile”?

Rene: Oh, yeah. So, the way that you think of the “last mile”, you think about it the way that you get from one area in the city to another, you get on a highway, which is what we typically call “backhaul” or “middle mile”.

And that is basically a thicker trunk that goes through a majority of your community and it's very strategically placed. And, in order to get “last mile” connectivity, providers like us have to find that “backhaul” infrastructure or that “middle mile”, and we have to connect to it and literally build the roadway from your highway to the home, into the neighborhoods and down your streets, and eventually up to your curb.

Carla: The way our infrastructure has been built up now has, has failed to provide equity, if you will, with respect to a level of service, which is what you were just talking about. So can you explain how homes and businesses are currently being connected and why that has led to problems for us?

Rene: Yeah, absolutely. And I mean, it's not any kind of knock on any specific provider. It's just the way that networks were built, you know, going into the early nineties and two thousands using copper.

Where signal degrades as it travels further away. With fiber internet, you get a much more robust, solid connection. And I think a part of why we're seeing this problem kind of rear its head in the last couple of years is that it's very costly to invest in this infrastructure.

Carla: This infrastructure being defined as fiber optic versus copper. Is that what you're saying?

Rene: Yes.

Carla: What are the key factors, which determine whether one city is more connected than the other? Who makes that call?

Rene: Well, actually, one of the sources is through the FCC's data that is reported from ISPs. And there's a little bit of controversy regarding that because it's self-reported so you know you got to basically be very honest of where you have service. and essentially you report this information to the government twice a year. And the way that it's reported right now is that if one home is being served in a census block, then the federal government considers that entire census block served.

So in some cases it overstates availability. If I haven't physically built infrastructure down every single home, now that area is showing no need. So that has a very big impact.

Carla: Yeah I could see all kinds of places where the inequities could have been created, and, and when I think about, you know, communities of color, if people were making decisions based on commercial estimates about ability to pay.

I can see how people's biases and misperceptions could have been created in a decision would have been, well don't put the infrastructure there because when I do my commercial forecast, I don't think there's going to necessarily be a return on that, that's kind of reading between the lines, what I think I heard you say.

Rene: Yeah, and I mean, I can be a hundred percent honest with you. We do look at that as a metric when we're building our financial models. You know, what is the per capita income and the median income look like? And to be honest with you, some of the areas that we're intentionally going into like Brownsville have very historically low per capita income so it takes a different kind of approach, a more socially driven type of mission to go out and do this because, yes, we know that maybe it'd be risky to go out and do something like that. But we have to take that risk.

I think, you know you have to basically say, “Well if this area has been suffering for decades without the technology, how much worse do they need to get without it?” Because this disparity is only going to increase so somebody's got to take a risk. Somebody's got to go in there and say let's build a model that works. Let's do something that can be sustained. And then let's give the people what they want. They want access. And that's really the whole mission. We are not focused on putting fiber in the ground. That's not our mission. Our mission is getting people connected.

Carla VO: And that's why your point earlier was very apropos because thinking about it as another point of infrastructure, just like water and roads and bridges, making that analogy and putting it on the same page as that is what creates the imperative. Not just looking at it as a commercial investment and what the returns are going to be, because you don't think about what are the returns on clean water. Everybody has to have it. You don't think about the returns on the street lights. Everybody needs it, if you want to keep crime down. Nobody thinks about the returns on the bridges. We have to get from there to yonder. Right? So all of those are things. That's the true definition of infrastructure: the things that we all use, we all need in order to just exist in this space. And so now what you’ve said is you’ve said, well guess what? Broadband and access to the internet is exactly the same as those things. It's not a 15 ton bridge, but it is the bridge for us to be able to communicate, to be able to get information, etcetera. You got me on a soap box here, Rene.

Carla: Let's talk a little bit about Lit. How you created Lit, and why Lit?

Rene: Well, we created Lit Communities out of necessity. We had been working with some of the largest telecommunications carriers in the country in some of the biggest markets in the United States. And when the stars sort of aligned up, for us to be able to leave those careers to start Lit Communities we didn't want to repeat the same mistakes that we had seen in other markets. And we wanted to do a little bit better job in terms of the relationship with the community. We want to know: what do you want this network to look like? Where do you want it to start? Who do you want to be connected first?

I don't think they're used to hearing that very often from a provider that's coming in with tens of millions of dollars. Sometimes they think they're just going to come in and build their network and leave town. And I think because we are soliciting guidance from them so early on, that is what keeps communities really happy with us.

Carla: So you recently started an effort in Brownsville, which must have been huge and exciting since you grew up in Brownsville. But give our listeners a feel for how you approach that, because I really want to make sure that we're granular around how Lit approaches the opportunity versus anyone else?

Rene: As we were starting up Lit, I told myself there is no way I can see myself as a co-founder of this company, not able to help the least connected city in the United States, which happened to be Brownsville.

Talk about solidifying a purpose. I took it on as a personal challenge to myself to say, “I got to get involved. I'll call the city manager, I'll talk to the mayor. I'll let them know who we are, what we do.” And we competed against 11 other companies to win the consulting contract to come in and help the city.

And the largest competitors that we are up against nationally also were looking at Brownsville. And I think at that moment is when I realized, “Wow! Brownsville is getting on the map. They're trying to solve this problem.” And all these big companies, they never would have wanted to do nothing with Brownsville. And now we were competing toe to toe to win that work. And it was a very competitive process. We came out on top. And in July 2020 in the middle of this pandemic, we started to work with the city of Brownsville on putting together their broadband feasibility study and Digital Equity plan.

And to me, if the plan had just stopped right there, I would have just said, “Okay, well, you know, now they know that broadband is important,” but that's not good enough for me. We told the city, I said, “Let's find 12 of the least connected tracks in the entire city,” and we saw the worst of the worst in Brownsville. And I said, “Let's go there.” Let's figure out what it's going to take to build infrastructure in these census tracts. And yeah, you want to call it cherry picking. This is like doing it for the right reasons and going to the highest priority areas and just using the government funding to match with their will and their Middle Mile project to essentially connect people with that “last mile” infrastructure.

Carla: Wow. As we go to a close let me talk about, there's 3 million students from what I understand across the United States that lack internet connection in their homes. How was Lit thinking about that?

You know, how do you hope to grow in order to shrink that amount? Or is there something else that you think even beyond Lit that could happen in the next year or two to really significantly close that gap?

Rene: Well, we're optimistic because the solution is scalable in multiple respects. From a technical perspective, the networks themselves are future-proof compared to the existing infrastructure. And as network speeds increase beyond a gig to 5, 10, 20 gigabits per second, fiber networks can be scaled relatively easily with just some equipment upgrades and minimal disturbances to the fiber itself.

From a business model perspective, we scale each network from a geographic standpoint. We literally start in the areas that have the greatest demand and as demand increases throughout the community, we expand into those adjacent neighborhoods and areas. So the network itself is scalable, and as time goes on within a given community, they achieve that universal access.

I think communities will see the success of the markets that we're in. And they're going to look for partners who can build a solid relationship with them and understand the risks involved with those endeavors and ultimately bring the funding to the table, whether that be through grants or private equity.

I anticipate other investors in companies, like ours, finding similar opportunities. Not only to close the digital divide, but to also be profitable in that endeavor. And in 10 years or less, we don't want to be hearing about the homework gap anymore. I think we're going to be in a better version of what we have today. We should always be pushing to have equal access to these resources and technology because it will really level the playing field, so I'm excited for that future and that's why I wake up and try so hard every single day.

Carla: Absolutely. So Rene, we have a tradition on Access & Opportunity called the lightning round and it's where our listeners get an opportunity to learn a little bit more about you, the man, away from the businessman that we've just talked about.

So I'm going to give you a series of rapid fire questions and you tell me whatever comes to your mind in three words or less. Are you ready?

Rene: Yes ma'am.

Carla: City or countryside?

 Rene: Countryside.

Carla: Winter or summer?

Rene: I'm in a hot area. So I can say winter, because I know that I long for it.

Carla: What book have you read recently that you might recommend?

Rene: Oh, well I've reread it a couple of times. People's History of the United States from Howard Zinn.

Carla: Ok alrighty, do you have a hidden talent?

Rene: Uh, well, I can hold a lot of tasks in my head, but I think that's a boring one. I can play guitar and that's about it.

Carla: Oh, that's I didn't know about that one. That's a hidden one. Alright. Do you prefer working in the office or working at home?

Rene: I have worked at home for almost three quarters of my career, so I'm definitely good at working from home.

Carla: Wow. Binge watch a TV show or watch a movie?

Rene: Oh, binge watch a TV show. Do you want to know which one?

Carla: Yes, yes, which one?

Rene: I just recently rewatched the Sopranos and that was great.

Carla: Oh, I love that show. I love that show. So if you had a talk show, who would you want to be your first guest?

Rene: Oh, geez. I never met President Obama, so I'd want to meet him.

Carla: Okay. What's your personal mantra?

Rene: Be here now.

Carla: One word to describe your legacy?

Rene: Passionate.

Carla: Oh, I thought you were going to say ‘connected’, honey. Alright, Rene Gonzalez, thank you so much for taking the time to speak with us.

Rene: Thank you, Carla, it's been a pleasure to join you. And I hope this conversation leads to some, some great solutions down the road for all the listeners.

Carla: I do believe.

Carla VO: I want to thank our guests Rene Gonzalez and Mayra Delgado so much for joining me on this episode of Access & Opportunity. Every day, access to the internet becomes more crucial to our professional and personal lives, and communities that are unable to connect will only fall further and further behind in their ability to build and maintain wealth. I'm so impressed by those who are working to bridge that gap and secure a better future for everyone. Both Mayra and Rene have found their own ways to help address this problem within the city that they love. Hats off to both of you.

Have you personally experienced the digital divide? Send us your thoughts at carlapod@morganstanley.com. We would love to hear from you. Subscribe to Access & Opportunity on Apple Podcasts or wherever you listen. Thanks for coming along.

On this episode, we hear from high school teacher Mayra Delgado about how her students are affected by the digital divide, and what she’s decided to do about it. Then host Carla Harris sits down with co-founder and Chief Strategy Officer Rene Gonzalez about how his company, Lit Communities, brings broadband connectivity to the communities that need it most.

According to the U.S. Census, roughly one in ten homes in America lack a broadband internet connection, and the city of Brownsville, Texas tops the list of least connected cities in the country. On this episode, we’ll learn from two people on the frontlines in the battle against this digital divide. After seeing her students struggle with connectivity, Brownsville high school teacher Mayra Delgado co-founded a group called What the Fiber to address the problem. Then host Carla Harris talks with Rene Gonzalez, co-founder and Chief Strategy Officer of Lit Communities, a company that helps Brownsville and other cities develop their own fiber networks instead of relying on outside internet service providers to provide the infrastructure.

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