Monday 8th May 2023
DECA is commissioning research on affordable connectivity and related issues - expressions of interest are sought
Digital Equity Coalition Aotearoa (DECA) is conscious that the ongoing COVID-19 pandemic, severe weather events, climate change and just transitions, and the cost of living crisis is making digital equity an even bigger and more urgent issue for Aotearoa/New Zealand to solve. At a time when just about every aspect of our lives has a significant online component - such as education, health, banking, accessing government services and information, shopping, and being connected to family, friends and what is happening in our communities - many New Zealanders are struggling to access these essentials. The cost of living crisis is placing more pressure on household budgets, putting those on the lowest incomes at even greater risk of being digitally excluded. The irony is that being online and using digital channels can help people save money.
There is a complicated mix of social and digital inequalities at play. DECA wants to understand this better, and get a clearer and more community/citizen centric picture of:
- What whānau/households need to be able to meaningfully participate digitally in society - in terms of connectivity, device access and skills. In other words, what is the minimum needed to participate in a meaningful and dignified way?
- The current situation in terms of the number of households that do and don’t have this level of digital access.
DECA is commissioning research to better understand these issues. The research will:
- Be used by DECA to help make the case for government investment in digital equity by providing more specific information than previously on what it is that needs government funding, and who needs it.
- Contribute to a second piece of work that DECA is doing (concurrently) on solutions that will achieve digital equity, or at least get New Zealanders on the lowest incomes to a basic meaningful level of digital access. And how these might be targeted and delivered to those most in need. This work will rely on some of the findings of the research we are commissioning here.
- Be made publicly available, and shared with government ministers and agencies, local government, the telecommunications industry, philanthropic organisations, businesses and others interested in digital equity.
Background (and existing research)
Various pieces of policy or academic orientated research have been done on digital equity issues. Many of these cover the foundations and it is now generally agreed that digital equity is a holistic concept requiring affordable access to internet and devices, digital skills, wrap-around support, and having the necessary trust and confidence. It is also generally accepted that digital equity is essential to participate in society and the economy. The Government’s Digital Strategy for Aotearoa has mahi tahi/digital inclusion is a key pillar, and a goal that all New Zealanders have the tools, skills and confidence to participate in an increasingly digital society. One of the measures is that all New Zealanders can afford a quality internet connection and internet-enabled device.
The big gap, from a public policy point of view, is government policy on what it will do to address barriers to connectivity and device affordability. One of the impediments to this is that there does not yet seem to be a policy position on the minimum required for meaningful connectivity and other aspects of digital access. And there doesn’t seem to be a generally understood view on the number of households unable to afford the basics. Landing these issues is a prerequisite to designing a government support package. It will also help direct philanthropic efforts.
The DECA affordable connectivity white paper
Last year DECA’s Affordable Connectivity Constellation produced a white paper on Affordable Connectivity for all in Aotearoa. In the white paper we shared the DECA community’s thoughts on the number of households unable to afford connectivity that meets their needs - a high level estimate of 150 000 households (eight percent of all households). This was based on:
- An international guideline (from the Alliance for Affordable Internet), that internet access is not affordable if it costs more than two percent of household income. While this was used as a benchmark, engagement with the digital equity community suggests that for many low income New Zealanders a much lower amount will be affordable, in the $5 -$10 per month range.
- An assessment from the DECA community that the following is needed (all of which needs to be included in the weekly or monthly cost):
- A home internet connection that provides for all individuals in a household, noting that average data used in the home is increasing rapidly as more everyday activities move online making data caps unhelpful. Unlimited data is the norm.
- A mobile connection for when out and about.
- A laptop or tablet, and a mobile device (enough devices for the number of people in the household)
- The use of six personas/profiles:
- an 18 year old job seeker living alone: two percent is a maximum monthly amount of $32.90
- a superannuant living alone: two percent is a maximum monthly amount of $46.65
- a sole job seeker parent with two teenagers living in a small town: two percent is a maximum monthly amount of $54.70
- superannuants living together: two percent is a maximum monthly amount of $70.83
- a living wage earner living alone: two percent is a maximum monthly amount of $78.87
- two living wage earners with three children aged 12-17 years: two percent is a max monthly amount of $153.73
- An assessment of basic mobile and broadband plans in the market. Basic prepaid mobile plans range from $16 to $20. Home broadband plans range from $55-70 for a basic package of up to 50/10 mbps and up to unlimited.
- A finding that connectivity (home, mobile and devices) is unaffordable in four out of the six household profiles. And an estimate of 150 000 households (eight percent of all households) based on information from Stats NZ and MSD benefit fact sheets.
The DECA white paper recommended that further work be done to get a better understanding of the number of households unable to afford the right connectivity for their needs. This is one of the things we want to clarify in the research we are commissioning.
Interesting numbers from recent research and reports
Government and NGOs have recently commissioned work on the numbers. We don’t want to duplicate this, but rather build on it in the work DECA is commissioning.
Gravel Road research
Research commissioned by the Ministry of Education and carried out by the Gravel Road economics and telecommunications consultancy in 2022 (based on the two percent of income benchmark, considering home internet and a device) found:
- 216 000 households (in the lower income quartile) cannot afford digital access at the two percent of income point
- based on an education use case (the amount of data needed to learn or work from home, including video calls etc)
- a cost of around $90 million per year if the costs were fully subsidised for everyone in the cohort
- with a return on investment to government in providing internet and related services to households of between $3.10 and $3.60 for every $1.00 invested. The ROI was calculated using the methodology used by CBRE for the Goodthings Foundation to calculate the economic impact of digital inclusion in the UK.
Spark Foundation research - produced by NERA Economic Consulting
Recent research commissioned by the Spark Foundation uses StatsNZ and Commerce Commission sources to find that 130 320 households do not have a broadband connection. The research does not comment on the amount or speed of internet access and affordability for the household. But it does comment on economic benefits to Aotearoa of connecting these households, using methodologies from studies done in other countries. The annual benefits are estimated at between $3559 to $5652 per household. This works out at $464 - $737 million per year for the 130 320 households.
Overview of what we want to commission
DECA wants to commission research that will clearly define the affordability situation. What is needed, what does it cost, how many households can or can’t afford it, and what do those households look like?
The research we are commissioning will contribute to other work we are doing on solutions to the affordability problem. For example, the work on solutions will rely on the use case and affordability calculations we need as part of the work on defining the affordability situation.
Defining the affordability situation
While the DECA Affordability Connectivity Constellation has done some initial work in its white paper, and we have economic analysis from Gravel Road and Spark Foundation, this work has been based on assumptions (and top down approaches) that we want to interrogate in this new research. The assumptions have been about what people need, what they need to use it for, and what is affordable.
We want to know the following things from this part of the work:
- What (e.g. in terms of home internet, mobile access, devices and essential skills) is needed to provide meaningful digital access? The work so far has made assumptions about what people need to use the internet for, how much internet access/data will meet household needs, and the amount of devices per household. There are different views amongst government departments - for example with the education use case needing unlimited data and MBIE taking a less generous view of what people need. What has been missing is research that asks and reflects what members of the public say is needed digitally to participate in society. We have the following methods or approaches in mind to help get the information needed to determine the base level of government support:
- Focus groups that ask members of the public what their households and communities need to be digitally included. The method for this could be similar to the approach taken in Wales (and being tested elsewhere in the UK) which is to develop a Minimum Digital Living Standard, using deliberative methods and the Minimum Income Standard Methodology. The questions and conversations would be about what people need to do online, and what they need to do it.
- Community case studies. These could reflect the experiences of community organisations that have been supporting their communities and what they have seen the needs to be and what has been provided.
- Personas that explain the use cases for different types of households - developed from the focus groups but linked to demographics that government holds income information on. This might be similar to or build on what DECA did in its affordable connectivity white paper. The key is to consider different household situations e.g. families in urban areas with school age children, households in rural areas, retired people, people with disability etc. We would agree the personas with the research team at an early stage.
The outcome of this part of the work would be a description of the minimum required for meaningful digital access for the use case for each type of household. For example a family living in an urban area with three school aged children uses the internet to do x and y (e.g. remote learning, telehealth, community work). It needs a home internet connection of x speed and x data, x amount of mobile data, a shared laptop for parents and the first secondary school aged child, a laptop for every additional secondary aged child, and x number of entry level smart phones. This may be a similar concept to the Mininum Digital Living Standard mentioned above.
- What is the market cost for the package or packages of meaningful digital access that are developed through the focus group? The DECA white paper started to look at this.
- What is affordable for New Zealanders as a percentage of household income and in terms of weekly or monthly spend? The DECA and Gravel Road work was based on the no more than two percent of household income benchmark. Conversations in the DECA community suggest this may not be affordable for all. We would therefore like the researchers to use the focus group method (and other methods, such as a DECA Community Panel) to find out what would be affordable. Is it two percent or something different? And what does affordability look like in terms of weekly or monthly spend at different income levels? We would also like to understand what sort of contractual and payment arrangements are realistic for people on low incomes.
- How many households can’t afford the package of meaningful digital access that has been identified This would take the use case and affordability information from above, and apply it to the information held by Statistics NZ about income levels.
- Who is most in need of digital equity support/what do these households look like? This part of the work would take the total number of households that can’t afford meaningful digital access, and break it down by income deciles, other demographics, and regions (also with an urban/rural lens). And also have it applied to the personas developed. This piece of the puzzle will provide information that will help government (and other stakeholders) know where to focus their digital equity efforts where resources are limited and it is not possible to support everyone who can’t afford it.
Solutions to the affordability problem
While the work on solutions is not part of the research we are commissioning, the research will contribute to it. We have therefore provided a summary of what we will be looking at, so you can see what your work would be contributing to.
The solutions would flesh out a number of potential solutions to the affordability problem that the DECA whānau has been discussing at a high level. This work will start with a workshop to crowd source ideas and work through options.
The questions we will be canvassing include:
- If the government were to provide a digital equity subsidy (which might cover costs in full or in part), what are the options for doing this? For example:
- Something similar to the Winter Energy Payment administered by MSD, or other payments from government (e.g. the IRD Cost of Living Payment)
- A simple and clear process to get grants for devices through the existing MSD benefit system.
- An equity product or products (at weekly or monthly price points identified in the research we are commissioning) for home internet access, jointly developed and funded by government and telco wholesalers and retailers. What non-price attributes might the product need - e.g. contract terms, break fees, credit ratings and the like? How might the subsidy be applied? For example, could there be a tiered approach with full government funding for the most vulnerable, a part subsidy for the next tranche, and no subsidy but lower cost commercial offerings for the next tranche. See also the question below re eligibility criteria.
- Other ideas that come from an initial workshop.
- Who could develop and administer the options discussed in the point above? Options in government might include organisations such as MSD, DIA, MoE or MBIE. Who is better placed and why? Are there NGO options, including NGO options being developed for other issues that could provide inspiration?
- If government has a pool of funding for devices, digital skills and wrap around support, how might it use an NGO commissioning agency or intermediary to get that funding to the community organisations who know the needs of their people? The model we have been thinking about could be similar to that used in Australia where the Good Things Foundation is the intermediary and gets funding and other support to community. How could we do this sort of thing in Aotearoa? Does Whānau Ora provide inspiration? Are there organisations in New Zealand that could carry out this function? If not, what would they need to gear up and how long would they need to get ready? The key here is not imposing government procurement on small community organisations, and finding a fast and flexible way to get funding to communities who know what their people need.
- At a high level - what are the options for who would be eligible for support? What are the options for government in terms of what cohorts to focus on? For example: all households that can’t afford it, only those in the bottom one or two income deciles, folks in the bottom two deciles that are also in other high need demographics? What would be the cost of government providing the package/s of support identified in Part One?
- At a more detailed level, what eligibility criteria might be needed and who would make decisions on who qualifies for various sorts of support? DECA is interested in options with minimal criteria and a process that empowers communities to make decisions because they understand the needs of their people. Could proxies such as eligibility for existing services be used, e.g. community service card or working for families? Or a simple nett household income level?
- How do you link eligibility to total funding available? For example if the government has x dollars to spend, how does it limit support to the number of people it can afford to help with that budget?
- What is already happening in Aotearoa - are there programmes or elements of programmes that could scale? DECA works with a number of organisations running programmes and can provide initial information and contract details.
Expressions of interest are being sought
DECA is seeking light touch expressions of interest from people who are interested in doing this work.
Please send your EOI to email@example.com by Monday 22nd May.
In your expression of interest please include:
- The names of your team and the disciplines they work in.
- When you would be available to do the work.
- Your thoughts on how you would approach the work.
- What you would charge.
- Information about previous work you have done that makes you a good fit.
We are interested in working with interdisciplinary teams with combined expertise in social, economic, geographic, and community/citizen centric research. You would need experience in facilitating deliberative focus groups, and to know your way around StatsNZ sources.
We would are looking to have a first draft by the end of June, and the final by end of July. This timing is to enable DECA to engage with political parties and other stakeholders in the lead up to the General Election in October, and with the current government after the Budget is announced.
A doc version of this EOI is available here: https://docs.google.com/document/d/1iF6ywJ2cETdRhihxx0TVu-vwKTNskkuU0d5TQSa3nSY/edit?usp=sharing