AT&T's Digital Divide in California

Executive Summary

Executive Summary

Californians need high-speed broadband—it is an essential conduit for opportunity, shaping access to education, employment, health services, and other spheres of life. Internet speed matters. More than half of all Internet traffic is now data-rich video, requiring higher capacity networks. All-fiber networks capable of delivering gigabit speeds have become the global standard for Internet connectivity.

With great fanfare, AT&T launched an initiative to build “GigaPower,” fiber-to-the-home networks to 12.5 million customer locations across its 21-state wireline footprint. This report provides the first analysis of the income distribution of AT&T’s initial fiber-to-thehome deployment in California. The analysis uses the most recent data (which presents data as of June 30, 2016) from the Federal Communications Commission (FCC) and correlates the FCC data with statistics on household income from the Census Bureau’s American Community Survey

The report also examines more generally AT&T’s advertised wireline broadband services in California. The analysis covers households located within AT&T’s California wireline footprint (i.e. households where AT&T California is an incumbent local exchange carrier). AT&T is the largest telecommunications carrier in California, with a landline network serving 70.8 percent of California households across 56 counties. AT&T is the largest telecommunications company in the United States, with revenue of $163.8 billion and profits of $13 billion in 2016.

The data reveals disturbing trends that will exacerbate the digital divide in California. First, AT&T’s initial fiberto-the-home deployment is disproportionately focused on high-income communities. Second, AT&T has left too many Californians stuck in the slow lane on the information highway, unable to participate fully in the expanding digital economy. Despite its large size and profitability, AT&T has fallen short of providing equitable access to high-speed broadband in California. The major findings from the June 2016 data are as follows:

AT&T’s Initial Fiber-to-the-Home Network Deployment is Concentrated in High-Income Communities

  • The median household income of California communities with access to AT&T’s fiber-to-the-home (FTTH) network is $94,208. This exceeds by $32,297 the $61,911 median household income for all California households in the AT&T wireline footprint. 
  • In contrast, the median household income of California communities for whom the most advanced broadband technology available from AT&T is its slower U-verse fiber-to-the-neighborhood (FTTN) network is $67,021, which is $27,187 (28.9 percent) lower than the median household income of fiber-to-the-home households. 
  • Approximately one-quarter (27.6 percent) of households— about 2.7 million households—in AT&T’s California footprint are stuck with slow DSL. The median household income for California households for whom DSL is the most advanced broadband technology available from AT&T is $53,186, which is $41,022 (43.5 percent) lower than the median household income of fiber-to-thehome households. 

Millions of Californians are Underserved by AT&T Broadband

  • 1.7 million households are underserved by AT&T. The California Public Utilities Commission (CPUC) defines communities without access to broadband at a speed of at least 6 Megabits per second (Mbps) download/1.5 Mbps upload as underserved. A full 18.1 percent of California households in AT&T’s wireline footprint—approximately 1.7 million households—lack access to AT&T broadband according to this definition.
  • 4.1 million households are without access to AT&T high-speed broadband. The Federal Communications Commission (FCC) defines highspeed broadband as digital transmission at 25/3 Mbps download/upload. Based on this definition, 42.8 percent of California households in AT&T’s wireline footprint, or approximately 4.1 million households,do not have access to AT&T broadband that meets the FCC’s high-speed definition of 25/3 Mbps.
  • Rural California is left behind by AT&T. In 14 largely rural counties, virtually no household has access to AT&T broadband at the FCC’s 25/3 Mbps speed and one-third or more households are underserved without access to AT&T broadband at 6/1.5 Mbps. 
  • Many urban and suburban Californians are stuck in AT&T’s slow lane. AT&T’s slow speeds are not limited to rural areas. In Los Angeles county, for example, approximately 443,000 households (20.4 percent) in AT&T’s wireline footprint lack access to AT&T broadband at 6/1 Mbps and approximately 1.1 million households (51.5 percent) lack access to AT&T broadband at 25/3 Mbps. In Santa Clara County, the heart of Silicon Valley, approximately 98,000 households (17.5 percent) are underserved by AT&T and approximately 176,000 lack access to AT&T broadband at 25/3 Mbps.

Recommendations 

Access to high-speed broadband is not a luxury, it is a necessity. Yet too many Californians are trapped on the wrong side of the digital divide. To remain a leader in high-tech innovation, California must do better. Public oversight and intervention is needed to ensure universal and affordable access to high-speed communications services. Policymakers must hold network carriers accountable to meet deployment benchmarks to ensure that essential services like high-speed broadband are provided in an affordable and equitable way. 

Therefore, our recommendations are: 

  • Policymakers and community leaders should call on AT&T to accelerate investment in its wireline broadband network in California, expanding deployment of its all-fiber network to more communities on an equitable basis, and ensuring that everyone in its wireline footprint has access to a high-speed broadband connection.
  • Policymakers and community leaders should call on AT&T to make available to the public its fiber deployment plans: where it plans to deploy fiber, the timeline for the deployment, the number of households that will be served by fiber, internal measures to ensure equitable access to diverse, low-income communities, and network investment plans in rural and other areas. 
  • The California legislature should reassert public authority over broadband network deployment by repealing SB1161, which places some limits on such public oversight, and should adopt legislation that establishes enforceable fiber deployment benchmarks that apply to all providers.
  • The California Public Utilities Commission should convene public hearings in 2017 across the state on the availability of high-speed broadband in order to inform its 2018 report on the state of broadband in California. It should also continue to require broadband carriers to provide accurate information on broadband deployment by speed, technology, and customer types at a granular Census Block level and audit such data for accuracy; Lastly, it should publish and make available to the public statutorilymandated reports in a timely manner.