AT&T’s Stankey Broadband Game Plan

Extract Government Subsidies Claiming to Connect Every American to Broadband, while Removing Regulations and Overcharging Them…Again.

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AT&T’s Stankey: The Corporate ‘Say Anything’ Monopoly Man

In a Politico opinion piece, AT&T CEO John Stankey claims:

“We’ve struggled for years to bring high-speed Internet to rural and low-income Americans. Here’s how to get the job done.”

Oh, poor, poor, AT&T. With revenues of $181 billion in 2019, one would think that something was amiss for them to claim that they ‘struggled’ for years to close the Digital Divide. This Stankey opinion piece is officially called “A Game Plan to — Finally — Connect Every American to Broadband”. ArsTechnica claims that this was presented with the “apparent goals of improving AT&T’s reputation, reducing government regulation, and getting more federal funding”.

AT&T’s ‘struggle’ is questionable when one realizes that the merger of AT&T-BellSouth had a commitment that 100% of the newly merged collection of 21 state-based utilities would be upgraded in all rural areas with broadband Internet service by the end of 2007.

“By December 31, 2007, AT&T/BellSouth will offer broadband Internet access service…to 100 percent of the residential living units in the AT&T/BellSouth in-region territory.”

Albeit the speed was adjusted to the FCC’s definition of broadband at the time, (which was a paltry 200Kbps in one direction), but even that was never accomplished. And these rural and low income areas were and are part of AT&T’s 21 state-based utilities, not some foreign land. I’ll get back to this in a moment.

AT&T’s Stankey game plan has 4 goal posts.

  • POINT 1: “First, we need to identify where broadband is unavailable with geographic precision.”
  • POINT 2: “Second, the Federal Communication Commission’s program that supports connectivity for low-income households needs to be modernized.”
  • POINT 3: “Third, as Congress debates earmarking up to $80 billion for rural broadband as part of the next round of pandemic relief, we should give equal weight to wired and wireless options.”
  • POINT 4: “Lastly, Washington should enact a policy framework that incorporates sustainable funding mechanisms for the long run.”

Our take is different: America needs:

  • RESPONSE, POINT 1: A complete accounting of AT&T’s copper and fiber lines in service, “lit” or not lit, (known as “dark”, which are installed but not in use) needs to be done immediately in each state utility.
  • RESPONSE, POINT 2: An investigation to explain why America’s prices are 3–14 times more expensive that other countries, worldwide — with the goal: lower rates 50% or more.
  • RESPONSE, POINT 3: Go after the $95 billion in overcharging over the last 5 years from AT&T, Verizon and CenturyLink — and use the money to solve the Digital Divide, once and for all.
  • RESPONSE, POINT 4: New federal and state government oversight and enforcement with penalties and fines must happen now.

As we will discuss, AT&T has never struggled to bring high speed internet to rural areas or low income families; it has continuously avoided it and figured out different ways to overcharge us (“us” being both customers of AT&T as well as the rest of America).

AT&T wants us to believe that they care and explains that millions can’t afford access and they are in rural and underserved areas.

“The truth is that the “homework gap” — the inability of low-income or rural students to access online educational resources — has grown, particularly for students of color, students with disabilities and students in rural and under-resourced neighborhoods. Millions of American families cannot afford or may lack access to the high-speed internet connection they need to work and learn from home. According to Pew Research, 15 percent of U.S. households with school-age children do not have a high-speed internet connection; for households incomes below $30,000 a year, 35 percent don’t have high-speed internet.”

Crocodile tears. AT&T, Verizon and Centurylink have mostly been responsible for creating the Digital Divide. In May 2011, DSLPrime quoted AT&T’s Stankey:

“AT&T’s Stankey: U-verse Build Virtually Over. Company Comments Suggest Build Ends at 55–60% of Homes.

“AT&T is scheduled to reach 30 million U-verse homes passed by the end of the year with their U-Verse service, or roughly 55–60% of their homes. They will virtually stop there according to President John Stankey speaking at Citibank, who announced 55- 60% as their ultimate goal. He suggested that 25–30% of AT&T homes will only be offered ADSL. 20% are “not a heavy emphasis for investment,” i.e. 5–10 million of AT&T’s 50 million homes are screwed unless they have a decent cable alternative. (Yes, rounding means not necessarily equal to 100 %.)”

DSLPrime wrote:

Virtually stopping means that in many cities U-Verse will look like Swiss cheese, with 10–50% of homes in holes that can’t be served.”

Stopping deployments and leaving Swiss cheese holes is what happened. However, in many states, there were also broadband commitments for fiber optic services a decade before that also never showed up; customers were charged rate increases that were never refunded.

  • POINT 1: “We need to identify where broadband is unavailable with geographic precision.”

Where are AT&T’s accurate maps of its broadband services in the 21 states it covers? And where are the maps of AT&T’s utilities showing the holes in deployment that are ‘unserved’?

  • RESPONSE, POINT 1: The public needs a complete accounting of AT&T’s copper and fiber lines in service, “lit” or “dark”; throughout each state utility.

AT&T et al. have manipulated the accounting of access lines, hiding about 80% of the lines in service that have never been accounted for. In fact, the companies usually supply deceptive accounting to stress that there is a loss of lines, but they are only the losses of one type of service, basic copper-based phone service. Here is the data from 2016 with the lines that were counted and not counted.

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For example, AT&T’s U-Verse is a copper-to-the-home service, where the final connection to the house usually uses the existing, aging copper wires, with a fiber ‘node’ in the neighborhood. The line is no longer counted as an ‘access line’ and the voice service is ‘VoIP’ and is not counted as an access line. And there are various classifications of lines, such as “business data” lines and “backhaul” lines that go to bank ATM machines or some times alarm services, not to mention wires to hot spots or wireless cell cites that are ALL not counted and made public.

Deliver a Complete Inventory to the States and Cities.

In order to actually solve the Digital Divide, we don’t need accurate maps of unserved areas alone, we need AT&T et al. to provide an inventory of all copper and fiber optic wires in their state utility territories, Lit, and Dark. Cities should be allowed to take back networks under their streets that were never properly put into service, but charged to the utility — but this requires a ‘full accounting’ of where the lines are.

And the number of lines that are not counted over the last 2 decades is staggering. SEE:

We uncovered:

  • There were 16 miles (not 16 million homes or offices) — of fiber in the ground by 1998. Where the hell are all of these wires?
  • There were 43.2 million miles of fiber optics in the US by who are now AT&T, Verizon and CenturyLink, in 2007
  • According to S&P Global Market Intelligence, “Fiber Route Mile Leaderboard” in March 2019, AT&T and Verizon, combined, had only 2.2 million route miles of fiber cable. Where are all the lines?
  • While everyone is sitting around wondering how to solve the Digital Divide, did AT&T and Verizon keep these wires DARK on purpose?

This is the last published information from the FCC about dark and lit fiber in just AT&T California, showing 81% was in the ground but not in use.

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  • POINT 2: “Second, the Federal Communication Commission’s program that supports connectivity for low-income households needs to be modernized.
  • RESPONSE, POINT 2: An investigation to explain why America’s prices are 3–14 times more expensive that other countries, worldwide — with the goal to lower rates 50% or more.

AT&T should explain why AT&T’s prices are 3–14 times more expensive for broadband or wireless around the world. This chart compares wireless prices for AT&T vs Vodafone, in the UK — unlimited 1000GB for $30+ dollars vs, on the low end, AT&T offering of 1GB for $41.30, or at the higher end, the package only comes with 50–100GB.

There is no comparison; Vodafone is charging $.03 cents per GB vs AT&T at almost $1.00 a GB, and only 100 GB.

Way to complicated to go into here but Lifeline and the Digital Divide will be solved once the cross-subsidies and overcharging mentioned in Response 3, Point 3 are investigated and cleaned up.

But with Lifeline, AT&T only cares about AT&T getting paid faster: Stankey writes:

“We should also provide beneficiaries of this program with the ability to receive benefits electronically and make digital payments…This would be a more efficient and secure approach to keeping low-income consumers connected.”

  • POINT 3: “Third, as Congress debates earmarking up to $80 billion for rural broadband as part of the next round of pandemic relief, we should give equal weight to wired and wireless options.”
  • RESPONSE, POINT 3: Go after the $95 billion in overcharging over the last 5 years from AT&T, Verizon and CenturyLink — and use the money to solve the Digital Divide, once and for all.

Instead of new government subsidies, we believe that the telcos overcharged Local Service about $95.3 billion for the last 5 years (2015–2019), which is about $16–23 billion annually. And we estimate that AT&T’s portion was $9.3 billion to $13.6 billion in just 2019, for a total of $57.3 billion from 2015–2019.

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Click: Our recent report goes through these financials, which are based on the Verizon NY 2019 Annual Report, published June 8th, 2020. We even broke out this overcharging by state and telephone utility.

By halting the cross-subsidies and making the subsidiaries pay market prices, there is enough money to upgrade most states.

Closing the Digital Divide: Penalties and Enforcement on a State and Federal Level.

  • POINT 4:Lastly, Washington should enact a policy framework that incorporates sustainable funding mechanisms for the long run.”
  • RESPONSE, POINT 4: New federal and state government oversight and enforcement with penalties and fines must happen now.

RESPONSE, POINT 4 has examples of a lack of oversight, and why it is time for enforcement with penalties.

AT&T’s Partial List of Broadband Broken Promises.

AT&T’s doesn’t quite remember that their cash machine has been customers who are charged rate increases, and the ability to use of the construction budgets of the state telecommunications utilities over the last three decades for the other lines of business. These funds came from claiming that the company would give the state a fiber optic future, and it would be built into local residential and business rate increases and tax perks, as well as freedom to make additional profits — which were supposed to be used for additional capital expenditures.

The Digital Divide was borne when it was clear that once the companies got their deregulation deals and more money, they didn’t have to actually serve the public.

In fact, the track record — i.e.; the history of state-based commitments to deploy mostly fiber optic broadband in each state, makes the previous ‘homework gap’ statement a gap in AT&T’s credibility as AT&T et al. caused the problem.

Take AT&T Kansas:

  • Southwestern Bell Kansas got changes in the laws, rate increases and tax benefits for “TeleKansas I” and “TeleKansas II” a plan to bring fiber optic services to rural Kansas, including for tele-learning in 1994 — never done.
  • MUST READ REPORT: Tele-Learning for Rural Areas: “Expected impacts of TeleKansas Fiber Optic Links, 1994
  • Kansas is FCC Chairman Pai’s home-state and he is clueless about this history,
  • The same thing happened as part of “TeleFuture2000”, the Missouri plan.

Other States:

  • Connecticut, SNET was supposed to have spent $4.5 billion to do the entire state with fiber optics, to be completed by 2007. The company even started doing the network upgrades after state laws were changed; after the merger with SBC, it was all shut down.
  • California, Pacific Bell was supposed to have spent $16 billion on 5.5 million households to be completed by 2000. After the SBC merger, the fiber optic plans were scrapped — even though the company got not only tax benefits but more profits and rate increases.

AT&T now claims that fiber is too cost prohibitive to roll out.

“The FCC currently heavily weights subsidies toward gigabit speeds (fiber) over other technologies (such as fixed wireless). It is simply not practical or responsible to assume a fiber broadband service can be delivered to every unserved rural household — the prohibitive cost is part of why connecting many of these households has been uneconomical.”

Thus, AT&T has been paid for fiber networks multiple times, and yet, at this juncture, there is very little to show for it, yet they keep asking for more. We wrote this piece to summarize the lay of the land.

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The Creation of the Digital Divide and the UnServed Areas of AT&T.

By 2007, according to the AT&T-BellSouth merger, the 21 state utilities would have broadband internet at the minimum speed set by the FCC (of at least 200Kbps in one direction.) with 100% completed by 2007. Any unserved area would have been a breach of the commitment with the FCC.

It would appear that AT&T was just kidding.

Compare these 3 AT&T statements about broadband coverage in the company’s 21 state territory — and focus on the dates.

2007: AT&T-BellSouth Merger 2007 Commitment

“By December 31, 2007, AT&T/BellSouth will offer broadband Internet access service…to 100 percent of the residential living units in the AT&T/BellSouth in-region territory.”

2012: AT&T’s VIP Announcement, October, 2012

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…”

2015: DirecTV: to 15 million locations, 2015

“AT&T intends to expand its plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas where AT&T does not provide high-speed broadband service today.”

It appears that after 2007, AT&T still had 25% of the territories that they hadn’t upgraded by 2012. And in 2015, AT&T admits that it didn’t have high speed service to 15 million customer locations, about 20%.

Even at this totally nominal speed (then the FCC’s minimum speed), AT&T couldn’t get its act together to deliver basic broadband over decades to the rural areas or the inner cities. And it didn’t even care that the statements made in proceedings after 2007 made it clear that AT&T had left enormous gaps in deployment in rural areas.

Unserved Areas in AT&T California and Other Territories — and CAF Funding.

This is an excerpt of a map for the latest Connect America Phase II Auction According to the last available FCC data (as of 2007), AT&T California controlled about 80+% of the State of California, which means that much of this show that AT&T has unserved areas over the last 5 years.

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The map above shows that the government is giving money to get inferior wireless services in AT&T franchised utility areas that are ‘unserved’ or ‘underserved’.

There are no maps of AT&T’s franchise coverage from the FCC that we could find — Stankey’s own Point 1 would suggest AT&T wants other data but no accountability for what it didn’t do in its own unserved areas.

The FCC writes:

“The Auction: The Connect America Fund Phase II Auction (Auction 903) will use competitive bidding to award up to $1.98 billion of universal service support over 10 years to areas currently unserved by broadband. For more information, see the CAF Phase II Auction webpage.

The Eligible Areas:

Include high-cost census blocks in states where larger telephone providers (called price cap carriers) declined an earlier offer of model-based support Also include other areas that are not served by the incumbent price cap carrier or an unsubsidized service provider with broadband at speeds of 10/1 Mbps or higher (based on December 2016 FCC Form 477 data)

That’s 10 Mbps down, 1 Mbps upload; where’s the 5G Gigabit speeds?

Government Technology headline, August 2015:

“Feds Give AT&T $428M for Rural Broadband Expansion — -Money from the FCC’s Connect America Fund is intended to help close the digital divide in rural communities.”

These companies not only were able to overcharge customers but moved billions to other lines of business instead of upgrading their franchised territories — their state telecommunications utilities.

To recap and paraphrase:

  • RESPONSE, POINT 1: Where are the maps of AT&T’s copper and fiber lit and dark lines, including unserved areas?
  • RESPONSE, POINT 2: Why are prices 3–14 times more than around the world? We want Lower prices 50%+ now.
  • RESPONSE, POINT 3: No more Government subsidies: Get $95 billion back of the overcharging.
  • RESPONSE,POINT 4: Where’s the regulators’ oversight to examine the state utilities’ books? Where are the penalties and enforcement of commitments for broadband that never came?

Written by

New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 38 years, and I have been playing the piano for 63 years.

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