cali for n ia i s a lead e r in digital innovation and technology, yet too many California residents are stuck in the slow lane on the information highway, with few competitive options for high-speed broadband. In this report, we focus on broadband availability from AT&T California because it is the largest legacy telephone company in the state, reaching 70.8 percent of California households—approximately 9.7 million households—across its wireline network in 56 counties. AT&T is also the largest telecommunications company in the nation, with revenue of $163.8 billion and profits of $13 billion in 2016.1
How AT&T invests in upgrading its wireline network to meet California consumers’ demand for high-capacity broadband will have far-reaching consequences for access to opportunity for individual Californians and the state as a whole. It will also have a significant impact on economic growth, job creation, and job quality. Network investment drives job growth at AT&T, which employs more than 17,000 union-represented technicians and customer service workers in California who earn family-supporting wages and benefits. Moreover, high-capacity broadband networks create a “virtuous cycle” of innovation leading to the development of new online applications and services, driving economic growth and job creation throughout the California economy. Academic studies have found that broadband expansion drives local economic growth and households that use the Internet have better employment outcomes than those who do not.2
The Digital Divide in California
Rural Broadband Gap: Only 43 percent of rural households have access to reliable broadband service.
Competition/Speed Gap: Only 36.2 percent of California households have more than one choice for a highspeed broadband provider (at 25/3 Mbps).
Adoption/Affordability Gap: Only 43 percent of low-income households subscribe to wireline broadband at home compared to 94 percent of high-income. Only 56 percent of Latinos, 68 percent of Asian Americans, and 66 percent of African Americans subscribe to wireline broadband at home compared to 83 percent of non-Hispanic whites.
- 1. AT&T Press Release, “AT&T Reports 4th Quarter and Full-Year Results,” Jan. 25, 2017 (available at http://about.att.com/story/att_fourth_quarter_earnings_2016.html).
- 2. Council of Economic Advisors, “The Digital Divide and Economic Benefits of Broadband Access,” March 2016 (available at https://obamawhitehouse.archives.gov/sites/default/files/page/files/2016...) Sources: California Emerging Technology Fund, “Internet Connectivity and the ‘Digital Divide’ in California Households: 2016,” July 2016; Testimony of Trevor R. Roycroft on Behalf of TURN, CPUC Competition Investigation I.15-11-007, filed 11/5/2015, public version 6/1/ 2016; CPUC Competition Report, Dec. 2016.