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Will American Telecoms Kill the Online Ed Revolution?

Here at Via Meadia, we’ve been extremely optimistic about the potential for online courses and MOOCs to shake up the stagnant world of higher education. Our optimism assumes, of course, that enough students have, or soon will have, video-quality broadband internet connections. As the Chronicle of Higher Education warns, this may not always be a safe assumption.

The problem is data caps, where internet users are charged per gigabyte for all data they download above a steady (and often very low) baseline. These data caps, and the rise of pure usage-based plans, which are picking up steam in the telecom industry will force consumers to pay considerable fees for heavy usage of the internet. As a result, users with data caps may find that completing MOOCs, which make extensive use of large, streaming videos, comes with a hefty price tag:

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.

Unfortunately, due to the near-monopoly certain telecoms enjoy in their markets, many users have no choice but to use capped plans and pay the high fees that result. As the Chronicle notes, the problem is particularly acute in poor, rural areas where home broadband access is hard to come by, meaning that those who have the most to gain from a low-cost education may end up paying the most for it.

What this problem highlights is the fact that American progress in the 21st century will rely on upgrading infostructure more than traditional infrastructure. As more and more of the basic activities of life move online, ensuring that cheap, reliable and fast internet is available to as many people as possible will become just as important as ensuring robust networks of roads and electricity were to economic growth in the 20th century.

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