AT&T Wants EBB Government Subsidies for Its Broadband Public Utilities in 21 States — Hiding in Plain Sight.
Ever hear of Michigan Bell? How about Southwestern Bell or BellSouth? AT&T has 86 separate entities listed for EBB money — including the broadband utilities that it controls in 21 states.
According to this footnote, AT&T is only offering wired home Internet broadband service in their 21 state telecommunications public utilities — the AT&T ‘footprint’.
Worse, in writing this, we uncovered:
- AT&T claims that they are doing a $2 billion donation to solve the Digital Divide — but it fails to mention the government is reimbursing them.
- AT&T also announced plans to shut off whole areas of their wired rural territories, and bring fiber to the more attractive suburban areas –i.e.; redlining, a violation of many of the state utility laws.
THIS IS PART 3:
- PART 1: EBB: Emergency Broadband Boondoggle for Big Telecom & Cable went through the fact that AT&T’s EBB service has 30–40% of extra charges compared to the advertised price, including made up fees, like Cost Recovery or Admin fees, or having to pay for the internet modem — or use AutoPay to get discounts off of their inflated rates.
- PART 2: $500 Internet Modem Rental? Low Income Households and America’s Broadband Emergency (EBB) AT&T charges $10 a month, $120 a year, for an internet broadband modem that appears to cost AT&T $20-$30 at wholesale rates. That’s a lot of extra profits to take from the Emergency Broadband Benefit, EBB, government subsidy for low income families, don’t you think?
Boy, were you fooled! When I saw the highlighted footnote above, I realized something was seriously wrong. What it says is — AT&T, which controls more than half of America’s public telecommunications infrastructure by population in their 21 state service areas — never competed with the other incumbent telcos nor did they establish serious competition outside of their territories. This was never the plan; the mergers that created this version of AT&T were supposed to be competing out of region as part of their merger conditions. but that never happened.
And let us be clear — AT&T was supposed to be competing out of region with wireline advanced network broadband in merger after merger as their condition for government approval to get larger.
The FCC, in granting the Ameritech-SBC merger, stated that the merger was based on this outside competition. It would not have been granted without this competition guarantee.
“This will ensure that residential consumers and business customers outside of SBC/Ameritech’s territory benefit from facilities-based competitive service by a major incumbent LEC. This condition effectively requires SBC and Ameritech to redeem their promise that their merger will form the basis for a new, powerful, truly nationwide multi-purpose competitive telecommunications carrier. We also anticipate that this condition will stimulate competitive entry into the SBC/Ameritech region by the affected incumbent LECs.”
NOTE: These companies are known as “LECs”, Local Exchange Carriers.
NOTE: Ameritech was one of the original “Bell Holding Companies” and controlled Michigan Bell, Ohio Bell, Illinois Bell, Indiana Bell and Wisconsin Bell. And the merger was with SBC, which was created out of the original Southwestern Bell, which covered Kansas, Texas, Oklahoma, Missouri and Arkansas, and the Pacific Bell Telephone Company as well as Nevada Bell. And while all of these company names were abandoned decades ago, why did they suddenly show up to offer internet broadband for government subsidies in 2021?
In the opening chart:
- Column A is the sometime used name for the 21 states.
- Column B is the state in which AT&T is the primary state public telecommunications utility.
- Column C is the original name, such as Ohio Bell Telephone Company or Pacific Bell (California) or the Regional Bell Operating (Holding) Company (RBOC) that was set up in 1984, such as “BellSouth” or “Southwestern Bell” — names that stopped being used in public since the 1990’s, for the most part.
AT&T never uses the “U” word, “utility”, nor was it mentioned in this FCC statement. Nevertheless, it is clear that AT&T, in 2021, is using the utility property, rights of way and funding from local phone customers to offer whatever broadband they have available.
AT&T’s actual plan has been to dismantle these utilities and have the utility fund the wireless buildouts — substituting a wireless service with spotty coverage for a wireline fiber optic infrastructure with universal service to homes, institutions and businesses.
In AT&T’s 2013 announcement of its “VIP” plan, AT&T claimed that it would have 75% of their territories covered with wireline broadband networks by the end of 2015.
“AT&T plans to expand and enhance its wireline IP network to 57 million customer locations (consumer and small business) or 75 percent of all customer locations in its wireline service area by year-end 2015.”
This meant that 25% of it would be wireless because it was not ‘economically feasible’ to buildout this IP broadband network.
“In the 25 percent of AT&T’s wireline customer locations where it’s currently not economically feasible to build a competitive IP wireline network, the company said it will utilize its expanding 4G LTE wireless network — as it becomes available — to offer voice and high-speed IP Internet services.”
Do the Math: It’s Ugly. We previously wrote:
“AT&T had 76 million ‘locations’ according to their own statements. (Note: If 75% equals 57 million then 100% is 76 million.) AT&T would have a total of 33 million locations by the end of 2015 — which meant that AT&T would still only have about 40% of their 21 states covered with TV competition or very high-speed broadband. And it also states that 25% would never get properly upgraded — and this obviously was the case in the year 2007.”
AT&T never did the wireline buildouts — just one more ‘broken promise’ to get more deregulation after the other.
Welcome to the creation of the Digital Divide.
AT&T’s infrastructure in the US, then, is a collection of state-based public telecommunications utilities. Period. So, to all you pundits, politicians, advocates, business folk, and public who keep claiming there are no state utilities, or that they want a broadband utility or they think that AT&T is an “ISP” — sorry, there are still state telecom public utilities in the US.
Giving Billions to the Company that Knows it is Redlining and Screwing the 21 States Is Just Plain Wrong and Needs Investigation.
In a recent investor briefing, AT&T actually admitted it is planning on screwing rural America and ‘redlining’, bringing fiber to the highly attractive suburban areas. Worse, AT&T’s plan is to “shut down” some of the utility territories, leaving whole areas of their territories to fend for themselves.
Seeking Alpha posted the transcript of “AT&T Inc.’s CEO John Stankey Presents at JPMorgan 49th Annual Global Technology, Media and Communications Brokers Conference (Transcript) May 24, 2021”
“fixed broadband can do in urban and highly attractive suburban areas, but what we do believe is that fixed wireless plays a role in other parts of our footprint, and there’s no question where we’ve had lower speed, you know, DSL offers in the market, that a fixed wireless solution in that outer reaches that what IT used to be the ILEC footprint, could be a good solution for us, and for those customers.
“And more importantly, it allows us to, you know, shut down some infrastructure. Over time, we have a voice replacement service now that can be in there. And so that allows us to look at our options around footprint that used to be in place and fixed costs that used to be there, begin the work of starting to shed some of that footprint and reduce the number of square miles that have that fixed infrastructure in place that really, you’re never going to have an incentive to ultimately upgrade to fiber.”
And the Government is funding this plan? Funny how AT&T tells the investors about the bait and switch, the redlining, the destruction of the state utilities but never calls them utilities — and never, ever tells this story to the public.
But talk about hubris, this investor statement compared to AT&T’s public statements are just deceptive — AT&T claims it is making a $2 billion dollar donation — but it never mentions that the FCC’s EBB plan is paying back AT&T, as well as the other providers, for the discounts — up to $50 a month… IT IS NOT A DONATION; IT IS A MARKETING DECEPTION.
The utilities are not play-toys; the areas of coverage are not some cut and paste but a package where the more rural areas were required to be upgraded because the more supposed profitable urban and suburban areas would be balanced. Moreover, the company got perks like the ‘rights of way’ for their state territory, tax breaks and a host of other financial benefits. Instead, the companies want only the profitable areas and have let the rest deteriorate.
AT&T never even upgraded the 21 states to universal fiber optic infrastructure, as these various state utilities and (their previous Bell Holding companies) had promised, even though almost every state had major deregulations to pay for it — over and over.
AT&T is, in fact, causing the Digital Divide with redlining and shutting off the massive US infrastructure they control instead of upgrading it.
And this reveals that AT&T’s territories have no serious competition or the price for broadband would have been ‘affordable’; and it is AT&T that never showed up with fiber so it let the cable companies continuously raise rates. In fact, AT&T never brought high-speed competitive broadband to its 21 states — and now it wants government subsidies?
Talk about Market Power: AT&T has hidden that there are still broadband state utilities that it is effectively destroying.
Where is the call to separate AT&T from this critical infrastructure and have them pay back all of the money that was used to build their other subsidiary lines of business, from WarnerMedia to their wireless company?
Boy, were you fooled!