NTIA: Require Every State Broadband Agency to Investigate Those Responsible for Creating the State’s Digital Divide.

Bruce Kushnick
9 min readMay 2, 2023

RE: IRREGULATORS Comments to NTIA: Digital Equity Act of 2021;

Let’s start with a quote from 1997, by the New Jersey Ratepayer Advocate over the plan to have the Garden State upgraded 100%, replacing the existing copper wires of Verizon New NJ (Bell Atlantic) to fiber optics, which was announced in 1991 and implemented in 1993 – 30 years ago.

This is from the NJ Ratepayer Advocate interview in the NY Times, in 1997.

“In the five years since Bell Atlantic promised to wire every home and business in New Jersey with fiber optic cable, the company has hooked up suburban business parks and large corporations and set a schedule for suburban neighborhoods, but has not yet made specific plans for the thousands of poor people who live in the state’s largest cities.”

“Under the plan, it would replace all 56 million miles of the state’s copper telephone wire with fiber optic cables. So far, the company has laid 800,000 miles of cable: less than 2 percent of the copper lines.”

Verizon NJ, which covers 95% of the Garden State, convinced the state to change laws so that the company would replace the existing copper wires with a fiber optic wire — to every home and have the entire project done by 2010.

The NY Times quoted advocacy groups who stated that Verizon was going to bypass the low income and minority neighborhoods — and this was almost 30 years ago.

“In 1994, consumer and civil rights groups looked at the early construction plans of the advanced communication networks proposed by companies around the country and found that the companies were planning to bypass poorer neighborhoods and minority populations.”

Case Study: New Jersey Fiber Optic Broadband Failure.

Verizon New Jersey just stopped building out their fiber over a decade ago, leaving *(estimated) less than half not upgraded. Worse, last decade, the State cut a deal to have wireless at the speed of DSL, (7–12 Mbps download) as a substitute for the fiber to the home, (2 Gig) service. And no government agency has mentioned that, there were and still are continuous rate increases, yet the State never went back and lowered rates, or gave refunds to those who have been a customer for decades and never got the service.

This happened throughout America — what are now Verizon, AT&T and Centurylink (Lumen), left most of their state territories to deteriorate, especially the rural and low income areas, and this created the Digital Divide.

NOTE: We’ve been talking about this massive problem when it was starting back in the 1990’s, and was even featured on Bill Moyer’s, PBS special “The Net at Risk” in 2006; our segment was called “The New Digital Divide”.

And this is not history as one has only to take out maps to see that the unserved areas and the underserved areas are in the territories of these holding companies and the state utilities they control.

Unfortunately, the NTIA, the new broadband agencies, the FCC, the politicians, and even the advocates have failed to call for investigations of how AT&T, Verizon and Centurylink (Lumen), with the help of the cable companies, created the Digital Divide,

The NTIA has asked for comments about the government subsidies being given out for developing state digital equity plans — “identifying barriers to and strategies for overcoming those barriers”. Meanwhile, the “Impact the Bipartisan Infrastructure Law includes historic investments in digital inclusion and digital equity”.

While part of this discussion centers around training of computer skills, or that there are programs that focus on minorities, or disabilities — At the core is the ability to get high speed broadband at affordable prices — but also to hold those accountable, especially when these few companies control the price, availability, competitive choices and all of these are ‘barriers to entry’ that must be addressed.

This includes wireless. We must make one point clear — AT&T and Verizon have also been able to use the utilities to build out their wireless networks, and the business data networks, (backhaul) paid for by the utility, but the revenues do not go back to maintain the networks.

At this time, the NTIA, and the government broadband agencies that are being created to give out over $100 billion nationwide in state and federal dollars. A GAO report found “over 100 federal programs — administered by 15 agencies — that could be used to expand access.” And this does not include the ‘state-based programs, it appears.

Yet, all of these different funding programs are being distributed without any discussion of how AT&T, Verizon and Centurylink (Lumen), the 3 non-competing holding companies that control America’s critical infrastructure — the state telecommunications public utilities, created the Digital Divide, with the help of the cable companies.

They Rewrote History and Erased their Role in Creating the Digital Divide.

Not one state broadband agency that we know of, or the NTIA or even the advocates and politicians have called for an investigation to explain how the Digital Divide started in their state.

And no one has ‘named-names’ and detailed the role of their incumbent state utility or the holding company.

§ How can the State Broadband Agency in New Jersey not mention Verizon or the commitments made or the monies collected? Or, how can LA County, California, not mention AT&T or the St. Louis digital divide, digital equity groups not mention AT&T, or the Pennsylvania state broadband report not mention Verizon PA?

It is now clear that through their monopoly power over US telecommunications they have been able to rewrite history — and erase that there are even state telecom utilities left in America, that each state had plans for a fiber optic future, that customers paid for upgrades multiple times, and that the companies were able to now get billions in government subsidies.

But this is NOT history as they are still collecting billions via the manipulation of the financial accounting that uses the utility as a cash machine while hiding the flows of money, the cross-subsidies of the other lines of business, including wireless.

America can not identify barriers to entry and strategies for overcoming those barriers — when the NTIA, FCC, as well as the state government broadband agencies, have not presented any material facts of how the Digital Divide was created, but also all of the money that was already charged to customers to do this.

The NTIA writes:

“Where applicable, NTIA encourages commenters to provide specific, actionable proposals and relevant fact-based information, along with the rationale for their comments, including available examples of studies, measures, outcomes, assessments, etc., and supporting information.”

And,

“Question 15: What are examples of past or current evidence-based or evidence-informed digital equity and/or inclusion projects or other relevant or similar projects that NTIA can showcase as a part of its technical assistance efforts to support applicants in identifying promising or evidence-based project models, partnerships, activities, and strategies to consider, replicate, and leverage lessons learned as applicable?”

Lessons learned? The evidence points to not getting out the pom-poms to celebrate how much money we can spend. To really fix the Digital Divide we need to address the massive negligence on the part of the state and federal government agencies to hold the companies accountable for their commitments to do major fiber optic broadband deployments, a failure to investigate the billions per state of investments that came directly from phone customers and especially the low income, minority and rural areas and worse — a failure to recognize the role of AT&T et al. in creating the Digital Divide, or the failure to confront and fix the monopoly controls they still have over the entire US communications market.

Fact-Based Creation of Redlining, the Digital Divide, and the Ongoing Utility

The opening quotes from the 1990’s and New Jersey, clearly lays out that the Digital Divide did not start with the pandemic, but has been going on for at least 30 years.

The First Fiber Optic Future: In 1992, the Clinton-Gore administration announced the National Infrastructure Initiative, the first national broadband plan, which would have all of America’s copper wires of the state utility be upgraded to fiber optics by 2010. While it was first proposed that this should be done with government subsidies, ALL of the US telecommunications companies that controlled the state utilities, now AT&T, Verizon and Centurylink, each made announcements that they would be upgrading their states, as long as they were able to charge local phone customers extra, (or get government subsidies to do this switch out), or the removal of regulations and obligations.

Focus on California and LA County.

We wrote these articles to summarize just what the states don’t know and how the current plans do not supply the material facts to be able to create a new solution for the digital divide.

In California, Pacific Bell, now AT&T California, claimed that starting in 1993 it would have 5.5 million homes done by the year 2000 and spend $16 billion — and this was just California. It never happened and the money was never spent on the infrastructure. In 2005–2007 time-frame, a little over a decade later, AT&T went back and again claimed it would be upgrading the state and got more financial concessions — i.e., rate increases through deregulation. The assumption was it would be used to build out U-verse, which was a bait and switch, as it used the existing copper wires and was not fiber to the home.

Along the way, the prices of all wired services had continuous rate increases; the basic phone customers have been and are being ˜harvested”, — i.e., gouged.

This is seriously problematic when one realizes these are most likely the same low income and rural customers who also did not get the promised upgrades.

By 2010 time-frame, AT&T et al. decided it could do a bait and switch and roll out wireless, using the state utility as a cash machine to fund these activities.

But, in 2023, neither the State of California nor LA County, even knows that any of these activities were or are underway.

Los Angeles County, (and the iconic cities, towns, and municipalities that it encompasses, such as Santa Monica and Los Angeles, to Hollywood and Compton), like most of America, has proclaimed it is time to close the Digital Divide once and for all. And yet, there are fundamental, underlying facts that are not discussed.

LA County prices for services need investigations. The prices for communications and information services, including everything from broadband and internet to wireless and even basic phone service, are out of control and this is the primary reason given by households as to why they don’t go online.

In just 2019, the IRREGULATORS estimated that AT&T California, also known as Pacific Bell, had overcharged customers about $1.7 billion — $2.4 billion, and this is a fraction of the total. Moreover, it has been going on for decades. Fixing the cross-subsidies and overcharges should provide enough funds to upgrade the state and lower prices.

No audits or investigations or explanations of how ‘The Company We Will Not Name’ — (AT&T et al.) red-lined, cross-subsidized, overcharged, and failed to upgrade America’s critical wired, public utility infrastructure over the last 30 years — including LA County.

Conclusion: The NTIA must make the states present full disclosure of how the Digital Divide was created in each state, who the players are, how much money was charged to local phone customers, the commitments made and state laws changed that gave the companies the ability to not fulfill basic obligations. And the states must now hold companies accountable for their actions or these programs will never be able to be fully realized.

The opening quotes shows that in New Jersey, the Digital Divide was being created — 30 years ago, where Verizon failed to upgrade the state utilities, and when it did do work, it left out the low income areas.

Halting the cross-subsidies that have allowed the state utilities to become cash machines for the companies’ other lines of business must be stopped as it is designed to take the customers’ excess charges and use it for other lines of business, when it could be redirected back to upgrade the copper to fiber — which was the plan for 30 years — just forgotten.

There are billions of dollars at stake in 2023, as these are current cross-subsidies that have been in place for over a decade.

Finally, throwing billions of dollars in government subsidies to subsidize the over-inflated prices of the companies, or giving companies billions for upgrades in their ‘footprint’, while they are still getting funds and perks from their hidden-in-plain-sight utilities — is ludicrous and can’t be sustained and won’t fix the Digital Divide.

The IRREGULATORS is an independent, consortium of senior telecom experts, analysts, forensic auditors, and lawyers who are former senior staffers from the FCC, state advocate and Attorneys General Office experts and lawyers, as well as former telco consultants.

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Bruce Kushnick

New Networks Institute,Executive Director, & Founding Member, IRREGULATORS; Telecom analyst for 40 years, and I have been playing the piano for 65 years.