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Rural Tennessee Economy: Digital Divide, Connectivity Chasm

Rural folks without fast, affordable, reliable Internet access face challenges with common tasks such as doing homework, completing college courses, or running a small business. Although Tennessee has an entrepreneurial spirit, a large swath of the state's rural residents and businesses don't have the connectivity they need to participate in the digital economy. A September article in the Tennessean looks deeper at the state's digital divide between urban and rural areas.

National Internet Service Providers (ISPs) have failed to make good on promises made over recent decades to bring high-quality Internet access to the entire country, both urban and rural. Several telephone cooperatives and the U.S. Department of Agriculture (USDA) are already actively investing in better Internet access to improve rural Tennessee’s economy.

The Tennessean Perspective

The newspaper the Tennessean laid out much of the connectivity problem in the "Volunteer State." Tennessee may have excellent Internet access statewide, but the urban and rural divide remains. According to a Tennessee Department of Economic & Community Development's report, only 2 percent of all urban residents do not have access to broadband. The FCC defines it as 25 Megabits per second (Mbps) download speed and 3 Mbps upload speed. That number climbs in rural areas, where one out of three residents does not have broadband access. 

Speed Is Not The Only Problem

Some folks simply have no Internet connection. For example, Deborah Bahr drove 30 minutes for Wi-Fi at Bojangles (Chicken and Biscuit) or visited a friend’s house a few miles away. Bahr used to run a coffee shop, leaving the Wi-Fi on continuously so local community college students could work on homework overnight in the parking lot. Bahr’s town borders Cocke County, an economically distressed area where almost 30 percent of residents are below the poverty level. 

A state law that prevents cities from expanding telecommunications services to neighboring rural areas hampers local communities’ efforts to bridge the rural-urban divide. The Tennessean article noted that the city of Clarksville has access to a Gigabit (1,000 Mbps), but in nearby Houston County, 99 percent of residents do not have broadband access. Clarksville has high-speed connectivity because the community has CDE Lightband, a municipal Fiber-to-the-Home (FTTH) network that offers a range of affordable Internet access speeds, including a Gigabit package.

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Tennessee Governor Bill Haslam, in speaking with the Tennessean, aptly summarized the dilemma that many face:

“Do we want private enterprise to compete with the government? I don’t think that’s government’s role. Our goal is to provide services people can’t get on their own. But that’s the sticky part. This is a service that people in some places in the state can’t get on their own.”

USDA #RuralMade, More Than Ag

Those rural areas with high-speed connectivity in Tennessee often have their local telephone cooperative to thank. Formed by farmers years ago with support from the federal government, these cooperatives brought the first telephone lines out to rural Tennessee. Although fiber networks in rural areas have a high-cost, many of Tennessee’s rural telephone cooperatives have built them. 

A few, such as Highland Telephone Cooperative and Twin Lakes Telephone Cooperative, relied on support from the USDA to build high-speed FTTH networks. In Tennessee alone the USDA has already invested $236 million for telecommunication projects. For more information on USDA’s multi-million dollar investments in Tennessee, check out the USDA #RuralMade Tennessee Fact Sheet.

These projects are recognized as supporting all aspects of the rural economy from manufacturing to healthcare. According to the Tennessee Department of Economic & Community Development's report, 24 percent of Tennessee’s households run a business from home with 14 percent operating a business exclusively from their home. That same study found that 43 percent of all new jobs are enabled by broadband.

The rural economy needs high-speed connectivity to move forward. In the Tennessean article, Bahr perfectly encapsulated this:

"I want people around here ... to see themselves as entrepreneurs and real stakeholders," she said. "It could help them start their own businesses."

Transcript: Community Broadband Bits Episode 227

This is episode 227 of the Community Broadband Bits Podcast. Chief Information Officer Paul Kronberger of Madison, Wisconsin, explains how the fiber network pilot project will help bridge the digital divide. Listen to this episode here.

Paul Kronberger: We specified we wanted to keep the costs very low and to remove as many barriers as possible for individuals to obtain this service.

Lisa Gonzalez: This is episode 227 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. Madison, Wisconsin, has embarked on a pilot project with multiple purposes. As the community seeks ways to improve connectivity citywide, they will use the project to collect data about benefits of providing services to the community. Simultaneously, the project will bring fast, affordable, reliable connectivity to areas of the city with the highest concentration of low-income households. In this interview, Chris talks with Paul Kronberger, Madison's Chief Information Officer, who offers more details about the Connecting Madison pilot program. In addition to describing the aims of the project, Paul explains how the city is using existing assets and how they're contending with restrictive state law as they embark on their partnership with a private ISP. Now, here's Chris with Paul Kronberger, Chief Information Officer for Madison, Wisconsin, discussing the pilot program to help bridge the city's digital divide.

Christopher Mitchell: Welcome to another addition of the Community Broadband Bits Podcast. I'm Chris Mitchell. Today, I'm speaking with Paul Kronberger, the CIO of Madison, Wisconsin. Welcome to the show.

Paul Kronberger: Thank you. Glad to be here.

Christopher Mitchell: I'm also glad to have you here. It's a bit of a rivalry time between Minnesota and Wisconsin, but I'm happy to learn more about what's happening over there. For people who aren't familiar with Madison, the home of incredible football and basketball teams, can you tell them a little bit about your city?

Paul Kronberger: We're the state capital of Wisconsin. Our city has a population of about 250,000 or so. We're also home to the main campus of the University of Wisconsin. I mean, there's quite a few other four-year campuses and two-year campuses, but we're the largest, the central UW campus. It's a beautiful city. We're nestled between two good-sized lakes. The central part of the city is actually an isthmus. We have a diverse population and quite a few people who are in the technology area. We have some major government institutions, including the seat of state government. Many of the state agencies are centered here. We have the city of Madison, Dane County, the Madison school district, one of the largest technical colleges here, and another college called Edgewood College, which is a private institution, but it has a pretty diverse and large student body as well. We also are the home to some major corporations, including Epic Systems, which you probably know is a major healthcare IT provider, also American Family Insurance, Cuna Mutual, and a number of other corporations.

Christopher Mitchell: I think you're also home to one of the most interesting of the digital divide efforts that we've seen around the country, where the city has picked four neighborhoods and is building out a rather robust fiber optic network. That's the main thing we're going to talk about. We'll talk a little bit about future plans or discussions around a citywide network, but what can you tell us about the goals of this four-neighborhood network?

Paul Kronberger: We have been discussing the issue of the digital divide for some time, and there's been growing awareness the last few years. We've had a number of discussions with the mayor and other city officials. The mayor moved ahead on this by establishing a city committee that would help determine a direction to go in, and the committee is called the Digital Technology Committee. It has nine members. Two of them are alders, our elected officials, and then the other seven are citizen members. Then I and my staff staff the committee. One of our members is Barry Orton, who is a professor of telecommunications from the University of Wisconsin, I think pretty well-known in the broadband area. He's been a major contributor and part of the effort. In fact, he chairs a subcommittee called the Citywide Broadband Subcommittee. In the early discussions on the committee, we were trying to work through how can we address the digital divide, and discussions ranged in many different directions. Finally, we settled on an idea of doing a pilot project to wire one or more of some of the challenged neighborhoods in Madison, and we went through a selection process where basically we're looking at a number of areas. Madison already has some predefined areas called NRTs, which stands for Neighborhood Resource Team areas, and these were defined years ago as areas that need more attention from the city and more intensive, coordinated effort from the city. Our primarily-challenged neighborhoods have some factors that make them challenged. The committee went through a process and ended up selecting four areas for a pilot project. We weren't sure how to move forward on that, so we did a request for information to get some ideas on what vendors would propose like, "How would you do a pilot project? What technologies would you use? Wireless? Wired?" et cetera. We learned something from that, and then we moved ahead within RFP, a more formal procurement. Our committee, in discussing this, they felt that wireless was perhaps a better option. We structured our RFP to say that a wireless proposal would be preferred, but we were open to other technologies and proposals and would like to see whatever the responders -- whatever they submitted. As we received the responses and then evaluated the RFP, information from the different vendors and such, what came to the top was a solution from a local firm that was for a fiber solution. Basically, leverage the city's extensive fiber backbone and extend that network into each of these four pilot areas and basically have a Fiber-to-the-Premise in those areas. Then the vendor would actually provide the Internet services, and we specified we wanted to keep the costs very low and to remove as many barriers as possible for individuals to obtain this service. At this point, we're moving ahead with offering low-cost but high-speed Internet service for $10 a month. No gimmicks. No need to add on extra services or bundle, unless you wish to, but you don't have to.

Christopher Mitchell: Is that available to anyone that lives within the area, or does one have to qualify by having a certain kind of income or a child in the school system or something like that?

Paul Kronberger: It's available to every household within those defined areas, their defined geographic areas. We actually have it down to the individual address level.

Christopher Mitchell: Okay. I found it really interesting. You mentioned the city's existing fiber network, which has a very cutesy name, MUFN. I'm assuming the first word is Madison.

Paul Kronberger: Actually, it's not the first word.

Christopher Mitchell: Oh, it isn't?

Paul Kronberger: Metropolitan. It's an acronym. It stands for Metropolitan Unified Fiber Network.

Christopher Mitchell: Ah, okay. I got those other three letters right. The private provider extended the network, but that fiber, was that entirely paid for by the city of Madison, or was that a partial where the city kicked in some and the provider kicked in some also?

Paul Kronberger: For the pilot project, the city is paying the capital costs of running that fiber to each of those households or apartments.

Christopher Mitchell: That's the entire cost, and then the city will also retain ownership of that, right?

Paul Kronberger: Yes. That's the plan. The stated purpose of the pilot project -- and I'm sorry. This is more background, but you may be aware of a Wisconsin state statute which places a number of requirements on any municipality that is thinking about a broadband service for its residents. One of the requirements is that, before any service is actually instituted, the city do a cost-benefit analysis and hold a public hearing and a number of other requirements such as that. The stated purpose of our pilot project is to gather data in order to do the cost-benefit analysis. We intend to move ahead with this pilot project, gather that data, and then have that available, but it also will be a very good learning opportunity for how services could be provided to the public.

Christopher Mitchell: Is this envisioned as a temporary project? If it is, I'm curious what happens at the end of that period to the fiber that's already been created.

Paul Kronberger: The city would take ownership of that, but in parallel with that, we are moving ahead with a major citywide Fiber-to-the-Premise project. It's really in parallel, and I think as we learn more, as we move along on that, that'll help determine or answer some of the questions about what becomes of the pilot infrastructure and will that continue to be used and be incorporated into, say, a citywide infrastructure.

Christopher Mitchell: One of the things that the state law also does is that if you became a service provider, there are some pretty stringent accounting requirements that I think are designed to basically make it infeasible for you to offer services. Is that part of the reason that you're so focused, that you're working with a private provider in providing this service?

Paul Kronberger: That's part of it. We take a step back, and we look at, "What does this mean, to be providing this type of service?" As an information technology department, I am not staffed up to do that. I do not have staff to provide those customer call services or help desk services. We really know that we have to work in partnership with the private sector to accomplish this. With our pilot project, we're doing that. We have the private sector extending that network, and they're going to actually provide the actual service and bill the residence for that service.

Christopher Mitchell: Is ResTech expecting that they will break even or make the profit that they may need solely through selling customers services?

Paul Kronberger: They're doing this as a for-profit corporation, so they would not be engaging in this if they didn't expect to make some money from it.

Christopher Mitchell: I guess the question, then, is for people -- Frankly, I think there's other cities that are going to be interested in doing similar things or, at the very least, evaluating if they would be able to. I'm curious. Does ResTech have to offer a lease payment to the city for using the fiber? What's their arrangement with the city in that regard?

Paul Kronberger: Right now, no. They do not. They do not lease the fiber. We're providing the money to build that network out, and they are not leasing it from the city, but they will utilize it and then complete the installations within the individual residences. Again, it's designed as a pilot project to help make this happen and move along and then give us the opportunity just to see what we learned from this pilot.

Christopher Mitchell: Right. There's a lot of cities that have had to figure this all out just using paper and math ahead of time. I think actually doing it will give you a much better sense of the true costs and opportunities. One of the things that I think is noteworthy, I think there's a growing trend where, 10 years ago, almost every city that got involved in this said, "Well, we're going to invest in fiber, but that fiber is going to have to pay for itself." Now, it seems like Madison, you're really treating this as infrastructure and as a digital divide effort where your number one goal is to provide social benefit. It's not to make sure that the fiber can maximize its value.

Paul Kronberger: That's correct. We're really looking at the social aspect of this, how to meet some of these needs for people who are affected by the digital divide.

Christopher Mitchell: If I can just ask a final question, since the fiber installs have been happening for some time, have there been any early lessons or big success stories, people being really excited about this available in their neighborhood? What's the reaction from the community been?

Paul Kronberger: It's been positive. I should mention other aspects of the projects. The pilot project for the digital divide is a three-pronged effort. The first is the actual network itself, to get that network to each residence. The second prong is education, digital literacy education. We've contracted with a local non-profit who is, and is going to continue, providing training and basic computer training for people and provide some basic help desk, rate-fixed types of services, and also the installation of computers for the residences. Then the third aspect of it is the computers themselves for the people. What we did is we partnered with another local corporation, actually one of our vendors, who really stepped up to the plate and coordinated the donation of computers from some of the large corporations in the area. Then they're processing any reconditioning that's necessary on those computers and are working hand in hand with our educational non-profit to get those deployed to residences as their services come online. We've been fortunate that several of the corporations locally have donated computers. We actually, at this point, have sufficient numbers of computers, and they're late-model, high-end, corporate computers that are perhaps two years old to three years old that are being refreshed by the corporations, and they're donating these to us. The equipment that's going to go out to the participants in the pilot project, it's going to be decent equipment. That's a three-pronged effort that's part of the project.

Christopher Mitchell: Great. It sounds somewhat similar to a project called Eliminate the Digital Divide and something that I think is a good model for communities anywhere, especially those that have large corporations locally that may have these recent computers that are nonetheless outdated for their needs. Then I just wanted to finish up by noting that you mentioned a citywide potential project. You have a feasibility study that I looked at, doing a citywide dark-fiber-type approach. We will look forward to following any progress there and hopefully talking with you as you move forward. I certainly hope that you're able to make it work out.

Paul Kronberger: Thank you. We're very hopeful about it, and we are really moving it to the next phase where we are planning to engage some outside resources to help us develop an implementation plan. When that's ready, we will then submit that to our city council. It would include options or recommendations for how to finance this and how to move forward on this. There's a very big decision point that'll come up next year for our city council on where we go with Fiber-to-the-Premise citywide, but we're not at that point yet.

Christopher Mitchell: Great. Well, I look forward to seeing what happens, and I just want to salute you for taking a novel approach and just going out there and figuring out how to get fiber to low-income areas and to gather the data that you ultimately need to figure out how to make it work citywide. Thank you for taking the time to talk with us today.

Paul Kronberger: You're welcome, and thanks for having me.

Lisa Gonzalez: That was Chris talking with Paul Kronberger, Chief Information Officer from Madison, Wisconsin. For more coverage, follow the Madison tag on MuniNetworks.org. We'll continue to follow developments as the project grows. Remember, we have transcripts for this and other Community Broadband Bits Podcasts available at MuniNetworks.org/broadbandbits. Email us at podcast@MuniNetworks.org with your ideas for the show. Follow Chris on Twitter. His handle is @CommunityNets. You can also follow MuniNetworks.org's stories on Twitter. The handle is @MuniNetworks. Subscribe to this podcast and all of the podcasts in the ILSR podcast family on iTunes, Stitcher, or wherever you're out to get your podcasts. Never miss out on our original research by also subscribing to our monthly newsletter at ILSR.org. Thanks to the group mojo monkeys for their song “Bodacious,” licensed through Creative Commons, and thanks for listening to episode 227 of the Community Broadband Bits Podcast.

Madison Starts Muni Fiber Effort, Considers Citywide Effort - Community Broadband Bits Podcast 227

The second-largest city in Wisconsin and the home of the University of Wisconsin, Madison, is pursuing a path-breaking municipal Fiber-to-the-Home (FTTH) strategy. They have already started by deploying fiber to several low-income neighborhoods and working with local ISP ResTech to offer services.

Madison CIO Paul Kronberger joins us for Community Broadband Bits episode 227 to discuss their plan. We start by discussing how they decided to deploy FTTH as a digital divide strategy. Like more and more of the communities considering this approach, Madison does not have a municipal electric utility.

We also discuss how Madison plans to deal with the state law that limits municipal fiber network investments and why Madison has decided to work with a private provider even though the city will retain ownership of the network. Read more of Madison coverage here.

Read the transcript of the show here.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 18 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to mojo monkeys for the music, licensed using Creative Commons. The song is "Bodacious."

H.R. Trostle On Co-ops, Munis, Connectivity In North Carolina - Community Broadband Bits Podcast 224

In June, North Carolina released a report pronouncing that 93 percent of the state has access to broadband speeds. At the Institute for Local Self-Reliance, our Research Associate H.R. Trostle, who has been examining reporting data in North Carolina for the past year, came to some very different conclusions. In episode 224, she and Christopher talk about the report they co-authored, which gives a different perspective on the connectivity situation in the Tar Heel State.

In their report, North Carolina Connectivity: The Good, The Bad, and The Ugly, Trostle discovered that, while urban areas have been well served by the big private providers, those same national companies have shunned rural areas. Instead, rural cooperatives and municipal networks are attempting to serve their residents and businesses with high-quality Internet access. It isn’t easy, however, when state laws discourage investment and access to federal funding.

Trostle gets into her analysis of the data, its limitations, and what we can learn from both. She and Chris go through some of the recommendations they provide to the state of North Carolina as it moves forward. The obvious first step is to repeal the state’s barrier on municipal network expansion, which has caused real harm in Pinetops, North Carolina. They also offer advice on how to facilitate telephone and electric cooperative investment and what that could mean for rural North Carolina.

For more, take a few minutes to download the report, which offers useful maps of where to find various connection speeds in the state.

Read the transcript of the show here.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 23 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to mojo monkeys for the music, licensed using Creative Commons. The song is "Bodacious."

Authors Discuss NC Report On PRX

We have extensively studied the connectivity situation in North Carolina and just released our report, “North Carolina Connectivity: The Good, The Bad, and The Ugly.” Now you can hear from the report authors, H.R. Trostle and Christopher Mitchell, in our most recent PRX coverage.

We spoke with both authors who gave us a recap of the situation in urban and rural North Carolina. They explained how they examined the data and came to the conclusion that, while urban areas are served relatively well by big private providers, the same cannot be said in rural areas. Unless a muni or rural telephone or electric cooperative offers Internet access in a rural region, odds are rural residents and businesses just don’t have access to FCC defined broadband speeds. Audio coverage runs 5:22.

Listen to the story on PRX…

You can also download the report to dig into the details and learn more about connectivity in North Carolina.

North Carolina Connectivity: The Good, The Bad, and The Ugly

Publication Date: 
October 11, 2016
Author(s): 
H. R. Trostle
Author(s): 
Christopher Mitchell

North Carolina's digital divide between urban and rural communities is increasing dangerously in a time when high quality Internet access is more important than ever. Rural and urban areas of North Carolina are essentially living in different realities, based on the tides of private network investment where rural communities are severely disadvantaged. The state has relied too much on the telecom giants like AT&T and CenturyLink that have little interest in rural regions.

Download the Report

The state perversely discourages investment from local governments and cooperatives. For instance, electric co-ops face barriers in seeking federal financing for fiber optic projects. State law is literally requiring the city of Wilson to disconnect its customers in the town of Pinetops, leaving them without basic broadband access. This decision in particular literally took the high-speed, affordable Internet access out of the hands of North Carolina's rural citizens.

The lengths to which North Carolina has gone to limit Internet access to their citizens is truly staggering. Both a 1999 law limiting electric cooperatives' access to capital for telecommunications and a 2011 law limiting local governments' ability to build Internet networks greatly undermine the ability of North Carolinians to increase competition to the powerful cable and DSL incumbent providers. 

In the face of this reality, the Governor McCrory's Broadband Infrastructure Office recommended a "solution" that boils down to relying on cable and telephone monopolies' benevolence. What this entire situation comes down to is a fundamental disadvantage for North Carolina's rural residents because their state will not allow them to solve their own problems locally even when the private sector abandons them.

"It's not as if these communities have a choice as to what they're able to do to improve their Internet service," says report co-author Christopher Mitchell, director of the Community Broadband Networks initiative at the Institute for Local Self-Reliance. "There's a demonstrated need for high-quality Internet service in rural North Carolina, but the state literally refuses to let people help themselves."

Read ongoing stories about these networks at ILSR’s site devoted to Community Broadband Networks. You can also subscribe to a once-per-week email with stories about community broadband networks.

From The Report:

  • Despite significant tax subsidies from the state and federal government, North Carolina's private providers are building their fiber-optic networks only in certain metro areas and none in rural regions.
  • Only 12 percent of North Carolina's rural population has a choice for their broadband access, the rest are stuck with only one option and no control over their Internet prospects.
  • All of North Carolina's telephone cooperatives are investing in fiber for members in their service territory, some have entirely replaced their copper lines with fiber-optic. 
  • While North Carolina has 26 electric cooperatives capable of bringing fiber-to-the-home to rural residents, a 1999 state law (N.C. Gen. Stat § 117-18.1) limits the co-ops' access to capital for telecommunications projects.

Download the Report

Buses Bring Wi-Fi So Kids Can Work At Home

When Liberty County, Georgia’s school system, began a one-to-one iPad initiative, they were making a positive impact in technology readiness for local school kids. After a year of the program, however, district officials determined that lack of Internet access at home was so prevalent, students ran the risk of falling behind. To fix the problem and allow kids to work online away from school, the school district is installing buses with Wi-Fi equipment and parking them throughout the community, creating “Homework Zones.”

Taking Internet Access To The Streets

In Liberty County, approximately 60 percent of students don’t have Internet access at home, which renders school issued iPads useless at home. Access is available in libraries, when there are extended school hours, and sometimes in other public locations, but using public Wi-Fi takes kids away from home; some kids are just too young to be out at night.

Pat Millen, Co-Founder and President of Eliminate the Digital Divide, spoke with Christopher for episode #218 of the Community Broadband Bits podcast. He described some of the burdens associated with finding Internet access away from home, just to complete your homework:

…[T]hink about the kid staying after school in the media center of the school until the very last second that the janitor needs to lock the door so that he can do his work. Then think about the same kid walking through all kinds of weather to get to the public library and hop on one of their computers.

Think about that same kid walking home in the dark through some of the toughest neighborhoods in the area...Then think about this very same kid going through the motions of walking through the rain and the dark or the heat and the sun to get to the library that's two miles from his house. Then think of him taking measure of his life's prospects. "I can't get this work done. I'm not going to be able to pass this class. My family is so poor, shouldn't I just go ahead and drop out and go try to find a job?" 

As textbooks and applications become increasingly available only online, high concentration of low-income students have no way to complete homework at home. Nevertheless, without the opportunity to use those online tools, they fall behind.

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Liberty County’s 24 “Homework Zones” will be concentrated in areas where the most low-income families live; the Wi-Fi enabled vehicles will stay parked from 2:30 - 11:30 p.m. and will allow students to access educational, school-district approved websites for classroom work.

“The more technology we integrated into the curriculum, the greater the need for connectivity at home,” said John Lyles, director of transportation for Liberty County School District. “We want to ensure no student is left behind because he or she doesn’t have the tools for success.”

It's Not Just About Homework

This summer, Housing and Urban Development (HUD) solicited comments on a proposed rule to require Internet access infrastructure in all public housing, which would begin to address the problem. There are, however, a number of low-income people who do not live in subsidized housing who should have access to high-quality Internet access. Elderly people need good Internet access to stay connected to loved ones, obtain connections to healthcare professionals, and stay engaged when mobility is a challenge, There are also many working age adults who simply cannot afford Internet access. While there are a few programs that provide minimum speeds for families of low-income school children, disabled adults or the working poor with no children can’t qualify for those programs and fall into a black hole. Affordable, high-quality Internet access for all low-income individuals needs to be a priority for all of us.

AT&T Gets Snagged In Giant Loophole Attempting To Avoid Merger Responsibility

They're at it again. Recently, they have been called out for taking advantage of E-rate; now they are taking advantage of their own lack of infrastructure investment to worm their way out of obligations to serve low-income residents. Fortunately, a nonprofit group caught up with AT&T's shenanigans and held their feet to the fire.

"Nah, We Don't Have To Do That..."

As part of FCC-mandated conditions under which AT&T was allowed to acquire DirecTV in 2015, the telecommunications conglomerate created the "Access from AT&T" program, offering discount Internet access to low-income households. The program consists of tiered services - download speeds of 10 Megabits per second (Mbps) for $10 per month, 5 Mbps for $10 per month, and 3 Mbps for $5 per month.

The company is required to enroll households in the fastest speeds available, but a significant amount of low-income families don't qualify because the fastest speed AT&T offered to their home is 1.5 Mbps download. The problem, created by AT&T's own lack of infrastructure investment in certain neighborhoods, allowed AT&T to dodge their responsibility under the terms of the DirecTV acquisition by simply denying enrollment to households with speeds less than 3 Mbps. Trouble is, some one noticed.

NDIA In Cleveland, Detroit

The National Digital Inclusion Alliance (NDIA) realized the scope of the problem when they attempted to help families in low-income neighborhoods in Detroit and Cleveland sign up for Access from AT&T. In addition to discovering that residents could only obtain 1.5 Mbps download speeds, NDIA found that AT&T denied these households enrollment because their speeds were too slow. The only other option for ineligible households was AT&T’s normal rate for 1.5 Mbps service, which is six times the cost of the Access program.

Loopholes: All Lawyered Up And Nowhere To Go

By diving through a cavernous loophole, AT&T cleverly manipulated the terms of the merger order and single handedly squelched the intended purpose of the program. According to the directive, AT&T “shall offer wireline Broadband Internet Access Service at speeds of at least 3 Mbps, where technically available, to qualifying households in the Company’s wireline footprint for no more than $5 per month.”

AT&T’s repeated unwillingness to invest in infrastructure in low-income neighborhoods precluded residents from living in neighborhoods where 3 Mbps download was technically possible. Yet, the corporate giant used lack of speed availability to justify denying Internet access discounts for those who need it the most. It's amazing Randall Stephenson doesn't get dizzy from all that circular reasoning.

Unfortunately, this technicality didn’t just affect a few households on the fringe of AT&T’s service area: according to data from the FCC, 21 percent of census blocks in Detroit and in Cleveland have Internet speeds of 1.5 Mbps or less. Unsurprisingly, these blocks include mostly low-income households in inner-city neighborhoods.

Don't Mistake Us For Philanthropists

Because these households can't partake in the program, NDIA asked AT&T to extend their $5 per month offer to households with 1.5 Mbps speeds. While 1.5 Mbps is considerably slower than the program’s slowest speed, and far from the FCC’s broadband goal of 25 Mbps, AT&T would not budge. It took the corporate giant a month to reply:

“AT&T is not prepared to expand the low income offer to additional speed tiers beyond those established as a condition of the merger approval.”

logo-NDIA.jpg

NDIA Director Angela Siefer detailed the exchange in a post, writing

“AT&T's response is very unfortunate for tens of thousands of households in the company's 21-state service territory who may need affordable Internet access the most, but who happen to live in places – both city neighborhoods and rural communities – where AT&T has failed to upgrade its residential service to provide reasonable speeds.”

Bad Press Has A Purpose Sometimes

After a significant amount of bad press, AT&T reversed its original stance. AT&T spokesman Brett Levecchio was quoted in CNN Money:

"We're currently working to expand the eligibility process of Access from AT&T to the 2 percent of our home Internet customers unable to receive Internet speed tiers of 3 Mbps and above."

Siefer replied by pointing out that 2 percent of all AT&T customers still equates to 250,000 people, typically concentrated in low-income neighborhoods where the only Internet access available is the same slow technology found in Cleveland and Detroit. She wrote in a follow-up post:

“Some are already paying AT&T full price for their slow connections, while many others can’t afford Internet at all—and still won’t be able to, unless the Access speed threshold is lowered. Both groups will benefit from AT&T’s change of heart...We look forward to learning more about AT&T’s plans to extend Access from AT&T to these households, and to working with our local affiliates to maximize the program’s contribution to digital inclusion in their communities.”

Eliminate the Digital Divide - Community Broadband Bits Podcast 218

After his daughter asked how her classmates could do their school homework if they did not have a computer or Internet access at home, Pat Millen's family formed E2D - a nonprofit organization called Eliminate the Digital Divide. This week, Pat and I talk about their strategy, which was created in the footprint of North Carolina's municipal MI-Connection but is now expanding through Charlotte and working with incumbent operators.

E2D has arranged an innovative and replicable program to distribute devices, provide training, and arrange for an affordable connection. Along the way, they developed a sustainable funding model rather than merely asking people with deep pockets for a one-time donation.

An important lesson from E2D is the richness of opportunity when people take action locally. That is often among the hardest steps when success is far from assured - but these local actions are the ones that can be the most successful because they are tuned to local needs, assets, and culture.

Read the transcript of this episode here.

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Thanks to Roller Genoa for the music, licensed using Creative Commons. The song is "Safe and Warm in Hunter's Arms."

Comment Highlights: Proposed HUD Rule To Expand Low-Income Residential Internet Access

The U.S. Department of Housing and Urban Development (HUD) recently asked for comments about a proposed rule to expand low-income access to high-speed Internet. The regulations would require building owners to install high-speed Internet infrastructure in HUD-funded multi-family rental housing during new construction or substantial rehabilitation, improving Internet access by promoting competition. Because the Internet infrastructure is not owned by one company, many Internet Service Providers (ISPs) can compete to provide residents with better options.

A variety of individuals and groups provided feedback for HUD, including local governments, nonprofit advocacy groups, ISPs, and professional associations. The majority of comments support HUD’s proposed rule, with many encouraging HUD to go further in their efforts to close the digital divide.

We submitted comments with Next Century Cities to articulate the importance of having reliable Internet access in the home:

Although Internet access may be available at schools, libraries, and other locations away from home, families with children - in particular single-parent households - face barriers to accessing those facilities. There is no substitute for having high quality home Internet access, where all members of a household can use it with privacy, security, and convenience. This high quality Internet access is what our organizations work with mayors and local leaders to achieve for residents and businesses everyday, which is why we feel so strongly about the proposed steps to close the digital divide and allow more residents to connect online.  

HUD correctly notes that installing telecommunications equipment during major rehabilitations or as units are being built creates an opportunity to ensure high quality access without significantly adding cost to the project. The ongoing benefits from high quality Internet access certainly dwarf the one-time low cost of installing appropriate technology. --Next Century Cities and the Institute for Local Self-Reliance

Promote Competition

Google Fiber discusses the importance of infrastructure to access, suggesting that HUD could take further steps to ensure choices are available to multi-family housing residents:

...HUD should expressly prohibit the public housing agencies (PHAs) and landlords supported by its programs from unreasonably interfering with the right of any multifamily rental housing resident to request or receive installation, operation, maintenance, or removal of a broadband service from a provider.  --Google Fiber

Comments submitted by Eric Null highlight the benefits of open access networks for lower-income families who are forced to pay high rates when there is no competition. Null’s submission represents the comments of several public interest groups including New America’s Open Technology Institute, New America’s Resilient Communities Project, New America’s Education Policy Program, Benton Foundation, Center for Rural Strategies, National Hispanic Media Coalition, and Public Knowledge:

Open access networks are critical in traditionally underserved areas where a dearth of choice has led to higher prices and fewer choices for consumers. Allowing any internet service provider to service new and substantially renovated buildings would increase the number of competitors and lower the barriers to entry for new providers, forcing providers to compete for customers by reducing pricing and improving offerings. --Eric Null, on behalf of several public interest groups

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The City of Seattle also highlights how infrastructure can support competition and discusses ways to provide quality, reasonably priced service:

Local housing providers should be enabled with options to provide the best, lowest cost service to residents as possible. The two primary means to do this are to 1) enable multiple competitive providers, or 2) enable the housing provider and residents to aggregate purchasing and delivery of service. To do this there either needs to be sufficient conduit and wiring from the entry point to each unit, or to a central distribution managed distribution system where either a single best provider can be selected or multiple providers can offer service through the building distribution system. --City of Seattle

Encourage Fiber For Future-Proof Connectivity

The National Association for County Community and Economic Development’s comments about the proposed rule suggest HUD encourage fiber service and negotiate with ISPs for service agreements:

When requiring the build-out of broadband infrastructure in HUD-funded multifamily rental housing the agency should seek methods to incentivize the highest level of broadband service, such as fiber service, to ensure the ability to keep pace with the increasing needs of connection speeds… we believe a significant opportunity exists to utilize HUD’s negotiating power to secure competitive broadband service agreements from providers. Aggregating demand among HUD-funded buildings and properties could potentially yield lower service rates for low- and moderate-income renters. --National Association for County Community and Economic Development

Funding

Comments from The National Housing Conference encourage HUD to consider broadband infrastructure to be an eligible expense for multifamily affordable housing developments:

HUD has made good strides in clarifying that broadband is an eligible expense, like the recent guidance on broadband in HOME, CDBG, and the National Housing Trust Fund. HUD should continue these efforts for all multifamily development programs. Building on these initial steps, HUD should explore treating cost-effective basic broadband as a standard operating cost for affordable housing properties... Put more simply, if use of a program requires a property to install broadband infrastructure, the funds provided by that program should also be allowed to cover the cost. --National Housing Conference

Other comments support HUD’s interest in Internet expansion, but disagree with the way in which HUD is promoting low-income access. A few Public Housing Authorities and professional associations state their concerns with HUD creating an unfunded mandate; however, the estimated cost for broadband infrastructure is only $200 per unit and the construction occurs during significant rehabilitation or new construction. 

To read full comments from organizations listed above as well as other comments, view the docket here.