EBT for broadband payments?
One idea for closing the digital divide in New York City proposes allowing underserved households to pay for high-speed internet with electronic benefit transfer cards.
In an effort to help New York City bridge its digital divide, some experts have proposed a solution that would allow qualifying individuals to pay for broadband access with electronic benefit transfer (EBT) cards.
Two-fifths of New York City residents still do not have access to home or mobile broadband internet, and some say the growing necessity of high-speed internet outpaces current initiatives. One innovative solution was proposed by a cohort from the Aspen Tech Policy Hub’s Tech Executive Leadership Initiative, a six-week program in which participants developed strategies to help New York ensure that vendors awarded contracts through its record-setting investments in broadband infrastructure adhere to city’s digital inclusion principles to meaningfully close the digital divide.
“Current efforts to address these [issues] by federal, state and local governments tend to focus on internet service providers more than consumers,” Red Pocket Founder and CEO Joshua Gordon said at Aspen’s Embedding Equity in City Broadband Initiatives webinar. “Low-income households suffer from high costs and lack of market power relative to other target populations.”
The team decided to explore broadband payment options using the same service delivery channels that are already in use by lower income households, said Angela Govila, cohort member and head of product for payments and banking platforms with JPMorgan Chase’s corporate investment bank. Individuals would pay for broadband with the same EBT cards they use for to make grocery and utility payments through assistance programs like the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families.
The team’s research indicated that only a few changes to the current EBT system infrastructure would be necessary to support the program.
First off, the team called for the Mayor’s Office of the Chief Technology Officer (MOCTO) to establish a task force to consider integrating broadband subsidies into EBT cards for New Yorkers.
The next phases focus on targeting end-users, consulting residents in affected communities to confirm the program’s potential benefits and identifying sources of funding. After that, the task force would consult the state comptroller’s office and internet service providers to determine which back-end systems need to be modified to support point of sale payments and provider reimbursements. Legislative and programmatic modifications to the EBT program would also be worked out.
A full operational roll out would require setting up benefits payments to ISPs, enrolling eligible participants, onboarding broadband providers to the EBT program and collecting and reporting data.
ISPs would benefit greatly from the program’s validation of EBT for payment, according to the team, as it would enable digitally underserved households expand ISPs’ subscriber bases and improve their overall reputation among the companies’ target market and policymakers. The program would also give ISPs a head start for future eligibility, as the city considers similar initiatives.
“EBT is widely used and the most effective way of providing government assistance. It’s basically much like a debit card,” Govila said. “It provides them with the market power to choose their own ISP just like any other consumer.”
Read more about the proposal here.