Comparative Analysis of Regulatory Policies for Closing the Digital Divide Gap in US and China

This literature review analyzes the regulatory policies adopted by US and China for closing the digital divide gap and their effectiveness in tapping economic opportunities presented by tech giants in the country. The report highlights the need for government regulations and policies for overcoming the gaps existing between digitally literate people and people with no access to internet in both countries. The report also evaluates the effectiveness of these policies in overcoming the gaps and how they are helping countries in tapping economic opportunities presented by tech giants in the country.

LR 1
Literature Review

LR 2
Table of Contents
Introduction......................................................................................................................................3
Thesis Statement:.............................................................................................................................4
Literature Review:...........................................................................................................................4
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

LR 3
Introduction
This report is prepared to develop literature review on the comparative analysis of regulatory
policies developed for closing the gaps existing between digitally literate people and those who
are unable to access internet of US and China. This report will also include the effectiveness of
these policies in overcoming the gaps. It will also evaluate that how these policies are helping
countries in tapping economic opportunities presented by tech giants in the country.

LR 4
Thesis Statement:
The thesis statement of this literature review report is “To conduct comparative research on the
effectiveness of government policies of US and China for closing gap prevailing between
digitally literate people and the people with no access of digital technology and internet”.
Literature Review:
According to Chesser et al. (2016), there is need of government regulations and policies for
overcoming the gaps existing between digitally literate people and people with no access to
internet in USA. It is so because the USA is consistently facing issue of digital divide. Digital
divide stands for the situation, in which inequality exists between groups, households and
individuals with regards to access to information and communication technologies1. In
accordance to census of 2016, 11.5% of whole population of the United States does not have
access to internet. This is a very big data in current context. The existence of this situation is
creating need for creation of regulatory policies for closing the gaps existing between digitally
literate people and people with no access to internet. In contrast to this, Baron and Thurston
(2016) depict that need for development and implementation of government regulations and
policies has also occurred in USA due to digitization of most of government benefit programs in
the country2. If the gap of digital divide is not resolved, the effectiveness of government welfare
1 Amy Chesser, Burke Anne, Reyes Jared and Rohrberg Tessa, "Navigating the digital divide: a
systematic review of eHealth literacy in underserved populations in the United
States." Informatics for Health and Social Care 41, no. 1 (2016): 1-19.
2 Jason Baron and Thurston Anne, "What lessons can be learned from the US archivist’s digital
mandate for 2019 and is there potential for applying them in lower resource countries?." Records

LR 5
programs can get hampered. Key government services like passport services, visa services are
also available online. In this case, utility of online governance services can only be enhanced
through development of government regulations and policies for overcoming the gaps resulting
from digital divide issue in USA.
In the views of Lu et al. (2015), the issue of digital divide is also prevailing in China. The digital
divide issue is wider in China as compared to US. For example, by the end of 2010 only 31.6%
of entire population of China was having access to internet. It means 68.4% of the population in
China was facing issue of lack of access to internet3. This means, there is greater need for
designing and implementing the regulations and policies for overcoming gaps resulting from
digital issue in China. In support of this Weihuan et al. (2015) argue that the government of
China is initiating efforts for promoting companies in different sectors to accept payment
through digital wallets like Ali Pay in electronic as well as tourism sector4. In addition to this, the
banking firms also offering online banking services through mobile applications and internet
connectivity. But the full success of these programs can only be achieved through planning and
implementing of strong regulations and policies oriented towards minimizing digital divide gaps
existing in country.
Management Journal 26, no. 2 (2016): 206-217.
3 Chun Lu, Chin-Chung Tsai and Wu Di, "The role of ICT Infrastructure in its application to
classrooms: a large scale survey for middle and primary schools in China." Journal of
Educational Technology & Society 18, no. 2 (2015): 249-260.
4 Zhou Weihuan, Arner Douglas W. and Buckley Ross P, "Regulation of digital financial services
in China: Last mover advantage." Tsinghua China L. Rev. 8 (2015): 25-40.

LR 6
In the views of Clark et al. (2014), US government has planned and implemented different
regulations and policies for overcoming digital gaps. The US State Department has launched the
Global Connect initiative for supporting the aim of World Bank of making 1.5 billion additional
people online by end of 20205. There are different legislations being framed for addressing the
digital divide issues in United States. Example of these legislations includes American Recovery
and Reinvestment Act of 2009, Broadband Data Improvement Act of 2008, America
COMPETES Act of 2007, Workforce Investment Act of 1998, Internet Tax Freedom Act of
1996, Telecommunication Act of 1996 and Maine Learning Technology Initiative of 2000.
According to Marcum (2017), apart from these, the government and regulatory bodies of USA
have also implemented some other legislation for mitigating gaps of digital divide in the country.
These legislations are Massachusetts IT Bond Bill of 2014, California Advanced Services Fund
of 2013 and the Eliminate the Digital Divide Law of 2000 (Illinois)6. In United States,
approximately 150 municipal systems offer the broadband services to their local households.
This initiative is also quite effective to overcome the issue of digital divide in country.
As per the opinion of Greyling (2018), China state government plays a vital role in the
monitoring and regulation of internet and internet providers. Digital Opportunity Task (DOT)
5 Schofield Clark Lynn, Eszter Hargittai, Seong-Jae Min and Sharon Strover, “The National
Communication Association and the Digital Divide,” National Communication Association,
October 8, 2014,
https://www.natcom.org/sites/default/files/pages/2014_Public_Statements_Digital_Divide_Press
_Kit_October.pdf.
6 Shawn Marcum, "Throttle Me Not: 2015 Open Internet Order Protects Unlimited Data Plan
Users." American University Business Law Review 5, no. 2 (2017): 6-20.

LR 7
Force is one of the examples of programs run by government of China for overcoming the digital
divide gaps7. Main purpose of DOT Force program is to help the marginalized and poorest
people to enjoy benefits of digital revolution. Under this program, the integrated efforts of
private sector companies like tech giants, non-profit organizations and government were used to
overcoming the digital divide gaps. Following diagram is helpful to understand the digital divide
issue in China:
Initially in China, Ministry of Posts and Telecommunication was enjoying the monopoly power
in telecommunication industry of China. But with the passage of time, different reforms took
place in China, and the structure of market changed to oligopoly market. The ministry of
information industry (IMII) was developed in China in 1998 that became a major regulator in the
industry. The government of China has also developed and implemented 9th Five Year Plan for
ICT development and overcoming the digital divide issue in country. During execution of this
plan, the telecom industry of China grown with rapid pace8. The joining of China to WTO was
also a major change that accelerated the developments in telecommunication sector and increase
in access of people with digital technologies. Event of “The 2010 World Expo” that was
organized in Shanghai has also helped the China for development of ICTs as well as to bridge
the digital divide to some extent.
7 Talita Greyling, "Internet access and its relationship to subjective well-being in a developing
region." South African Journal of Economic and Management Sciences 21, no. 1 (2018): 1-12.
8 Bo Li, Yang Jianxin, Lu Bin and Song Xiaolong, "Estimation of retired mobile phones
generation in China: A comparative study on methodology." Waste management 35 (2015): 247-
254.

LR 8
The regulatory measures and policies adopted by US and China are quite effective in tapping the
economic opportunities offered by digital companies. For example, the tech giant companies are
able to capture greater market share in country with greater pace. Due to regulatory support, the
companies are able to launch highly advance technology and digital services across entire
locations of countries in effective manner. For example, now the companies are working 5G
technology for better quality calling and internet surfing services. Due to regulatory support, the
companies are able to expand technological infrastructure in different geographical regions in
easier manner with ease or licensing and permit issues9. In context of the customers, these
policies and regulations have helped customers to enjoy internet as well as calling services with
high quality and at competitive price. Regulations also provide protection to the customers from
issues like call drop, poor quality of network issues, poor quality of internet speed, as companies
have to deliver the service that is promised by them in any data plan purchased by customers.
Due to regulatory efforts of government in China and US, the people residing in rural areas and
distant geographical regions are able to use digital services like social media applications, online
banking and the e-commerce applications with greater ease.
The government regulations of United States and China are very effective in tapping the
economic opportunities offered by digital companies. For example, due to promotion of digital
services and digital habits like adoption of digital payment mechanism, use of mobile
applications for different purposes including shopping, purchase/ reading of e-books, getting
participated in online learning programs etc the financial performance of companies is increased.
This has provided enhanced tax revenues to the companies10. Whenever, any issue of breach of
any regulation is faced by any company, the regulatory fines are imposed on the companies. At
9 Marcum Shawn, "Throttle Me Not: 2015 Open Internet Order Protects Unlimited Data Plan
Users." American University Business Law Review 5, no. 2 (2017): 6-20.

LR 9
the same time, consumers or users of online services are provided greater level of security while
using online payment services. Customers or individuals are also motivated for use of online
services through better benefits in the form of lower price of products and better cash back offers
while enjoying the online shopping services. The government policy measures complement the
rise of US/ Chinese tech giants because it is very important for meeting the goal of overcoming
digital divide gaps existing in countries. For example, due to support from government, the
companies will be able to expand their telecom and high speed internet networks across rural
regions also. In addition to this, the revenue growth of companies resulting from regulatory
support will also help in increasing GDP of the nation and will help to address issues like
unemployment due to resulting new job opportunities11. Apart from these, the growth of these
companies will also add increased tax revenue to the government.
10 Shahla Ghobadi and Ghobadi Zahra, "How access gaps interact and shape digital divide: a
cognitive investigation." Behaviour & Information Technology 34, no. 4 (2015): 330-340.
11 Baron, Jason and Thurston Anne, "What lessons can be learned from the US archivist’s digital
mandate for 2019 and is there potential for applying them in lower resource countries?." Records
Management Journal 26, no. 2 (2016): 206-217.

LR 10
Conclusion
On the basis of above analysis, it can be concluded that the issue of digital divide is existing in
both China and United States. The gap of digital divide is wider in case of China as compared to
USA. There are different regulatory and legislative measures that have been adopted by United
States for overcoming the digital divide gaps such as American Recovery and Reinvestment Act
of 2009, Broadband Data Improvement Act of 2008, Internet Tax Freedom Act of 1996,
Massachusetts IT Bond Bill of 2014, California Advanced Services Fund of 2013 and the
Eliminate the Digital Divide Law of 2000 (Illinois). Similar to this, government of China has
also implemented different regulatory initiatives for mitigating digital divide gaps existing in it.
Example of these initiatives involves development of Digital Opportunity Task (DOT) Force,
ministry of information industry (IMII), development of 9th and 10th Five Year Plan for ICT
development and The 2010 World Expo.

LR 11
Bibliography
Baron, Jason and Thurston Anne, "What lessons can be learned from the US archivist’s digital
mandate for 2019 and is there potential for applying them in lower resource countries?." Records
Management Journal 26, no. 2 (2016): 206-217.
Chesser Amy, Anne Burke, Jared Reyes, and Rohrberg Tessa, "Navigating the digital divide: a
systematic review of eHealth literacy in underserved populations in the United
States." Informatics for Health and Social Care 41, no. 1 (2016): 1-19.
Clark Lynn Schofield, Hargittai Eszter, Min, Seong-Jae and Sharon Strover, “The National
Communication Association and the Digital Divide,” National Communication Association,
October 8, 2014,
https://www.natcom.org/sites/default/files/pages/2014_Public_Statements_Digital_Divide_Press
_Kit_October.pdf.
Ghobadi Shahla and Ghobadi Zahra, "How access gaps interact and shape digital divide: a
cognitive investigation." Behaviour & Information Technology 34, no. 4 (2015): 330-340.
Greyling Talita, "Internet access and its relationship to subjective well-being in a developing
region." South African Journal of Economic and Management Sciences 21, no. 1 (2018): 1-12.
Li Bo, Jianxin Yang, Bin Lu and Song Xiaolong, "Estimation of retired mobile phones
generation in China: A comparative study on methodology." Waste management 35 (2015): 247-
254.
Lu Chun, Tsai Chin-Chung and Wu Di, "The role of ICT Infrastructure in its application to
classrooms: a large scale survey for middle and primary schools in China." Journal of
Educational Technology & Society 18, no. 2 (2015): 249-260.

LR 12
Marcum Shawn, "Throttle Me Not: 2015 Open Internet Order Protects Unlimited Data Plan
Users." American University Business Law Review 5, no. 2 (2017): 6-20.
Wei Li, "Bridging the digital divide: China's strategy." In Information Management, Innovation
Management and Industrial Engineering (ICIII), 2011 International Conference on, vol. 1, pp.
456-459. IEEE, 2011.
Weihuan Zhou, Douglas W. Arner and Buckley Ross P, "Regulation of digital financial services
in China: Last mover advantage." Tsinghua China L. Rev. 8 (2015): 25-40.