California's 'Open Access' Fiber Broadband Plan Is Making Telecom Giants Like AT&T Nervous
from the do not pass go, do not collect $200 dept
Back in 2009, the FCC funded a Harvard study that concluded (pdf) that open access broadband networks (letting multiple ISPs come in and compete over a central, core network) resulted in lower broadband prices and better service in numerous locations worldwide. Of course when the Obama FCC released its “National Broadband Plan” back in 2010, this realization (not to mention an honest accounting of the sector’s limited competition) was nowhere to be found. Both parties ignored the data and instead doubled down on our existing national telecom policy plan: letting AT&T, Verizon, and Comcast do pretty much whatever they’d like. Something, of course, taken to ridiculous new heights during the Trump era.
Since then, “open access” has become somewhat of a dirty word in telecom policy, and even companies like Google Fiber — which originally promised to adhere to the concept on its own network before quietly backpedaling — are eager to pretend the idea doesn’t exist. Why? Because having ISPs compete in layers over a centralized network may improve service, boost speeds, and reduce prices (see: this community-run network in Ammon, Idaho), but it would eat into the revenues of the regional monopolies bone-grafted to our intelligence gathering apparatus, and you simply can’t have that.
Which is why it was surprising to see California recently pass a $6 billion broadband infrastructure bill that does something unique: it mandates the creation of a massive “middle mile” fiber network that will be open access, which should encourage increased competition. The original announcement breaks down the spending this way:
$3.25 billion to build, operate and maintain an open access, state-owned middle mile network ? high-capacity fiber lines that carry large amounts of data at higher speeds over longer distances between local networks. $2 billion to set up last-mile broadband connections that will connect homes and businesses with local networks. The legislation expedites project deployment and enables Tribes and local governments to access this funding. $750 million for a loan loss reserve fund to bolster the ability of local governments and nonprofits to secure financing for broadband infrastructure.
That’s a lot of money that could be potentially going somewhere other than entrenched telecom giants like AT&T and Comcast. That means increased competition, something AT&T, Comcast, Verizon and others fight tooth and nail (rather successfully) to avoid. You can tell AT&T in particular is nervous about it, because the new bill’s passage forced the company to recently launch this silly astroturf website claiming to represent “Californians for broadband equity.” The website is chock full of stock photos of children, and lots of empty lip service to “fixing the digital divide”:
Only if you look at some of the materials posted in the page’s resources section do you see the site is backed by AT&T and Frontier Communications.
To be very clear, dominant regional monopolies in California like AT&T and Frontier love the decades-old US telecom policy approach to broadband. Namely, throw billions of dollars in tax breaks and subsidies at incumbent monopolies, which then fail to deliver what was promised, refuse to give back the money, and then pretend they’re not part of the problem.
There’s an entire universe of AT&T-linked orgs and individuals that suffer an absolute embolism anytime taxpayer resources are used to build local community broadband efforts. But those same groups and individuals are nowhere to be found every time AT&T gets a $42 billion tax cut for doing absolutely nothing. Or gets billions in subsidies and regulatory favors in exchange for fiber networks that are always, mysteriously, half deployed.
In short, AT&T and Frontier want the focus to remain exclusively on giving them yet more money to shore up access in areas they’ve neglected for years. What they don’t want is any money going toward competition within their existing footprint. Despite the fact that high prices due to limited competition are one of the highest barriers to access for many communities (something particularly pronounced during COVID). US broadband is expensive and mediocre thanks to regional monopolization and the state/federal corruption that protects it. There’s a lot of time and money spent trying to ignore or deny that fact.
If you didn’t understand this context you might stumble into this new AT&T website thinking it’s a well intentioned group just super interested in helping poor toddlers get broadband. But it’s really just incumbent monopolies trying to ensure more of California’s new broadband budget goes to them, and less goes to pesky competitors that might force them to (gasp) compete on price. Should AT&T and Comcast not get their adequate slice of California’s planned broadband budget, you can expect a lot more lobbying and policy theatrics of this sort in the fall.