Study Of AT&T Fiber Highlights Income Inequality and the Digital Divide

2 minute read
| Analysis

The dark side of AT&T fiber internet is income inequality, according to a new study by UC Berkeley’s Haas Institute (via Ars Technica). The analysis compared fiber deployed in California to the median income where it was deployed. Here’s what the study found.

Chart of AT&T fiber speeds in California

Chart of AT&T fiber speeds

AT&T’s Digital Divide In California

The study, called AT&T’s Digital Divide In California, found that affluent areas had much faster fiber speeds than poor areas. California households using AT&T fiber that had a median income of US$94,208 had gigabit speeds. Households with a median income of US$53,186 had download speeds that ranged from 768kbps to 6Mbps.

From the study:

Because there is no regulatory oversight of AT&T’s fiber-to-the-home deployment, AT&T is free to choose the communities in which it builds its all-fiber GigaPower network,” UC Berkeley’s Haas Institute for a Fair and Inclusive Society wrote in a report released today. “Our analysis finds that AT&T has built its all-fiber network disproportionately in higher income communities. If this pattern continues, it has troubling consequences for low- and moderate-income Californians, leaving many without access to AT&T’s gold standard all-fiber network and exacerbating the digital divide.

The federal government defines broadband internet as having a minimum of 25Mbps downloads and 3Mbps upload speeds. Although the California utility commission has a much lower definition detailing 6Mbps/1.5Mbps, this is still higher than what AT&T has been providing.

What to Do?

The question for many would be what to do with this information. Those who favor a free market might be quick to note that it’s obvious AT&T would build out its infrastructure in places most likely to offer a good return on its investment. The end.

Those more concerned about the practical effects of the digital divide might argue practical reality trumps the free market. Or that it should. Think everything from opportunity to education to crime.

In centuries past, services like water, electricity, and telephone have been regulated as utilities. Rural America has telephone service, for instance, because the AT&T monopoly of the 20th century was required to provide every household access to a minimum level of service.

The Obama administration started down the path of treating Internet access similarly, but the Trump administration is reversing course. The next administration, or a different Congress, might reverse course yet again.

In the meantime, AT&T is behaving as a corporation will—in the interest of its shareholders. Your mileage will vary on whether this is good or bad.

7 Comments Add a comment

  1. Philip190

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  2. mbmoore@mbmoore.com

    “Those more concerned about the practical effects of the digital divide might argue practical reality trumps the free market. Or that it should. Think everything from opportunity to education to crime.”

    Rabid egalitarianism is rarely, if ever, ‘practical’ or ‘reality’. As always, a plan to equalize everything mistreats taxpayers to the benefit of someone else. Why would everyone need fiber network, anyway? I don’t have it, and I wouldn’t pay for it if it were substantially more expensive. In a free market, you pay for what you can afford, and just about everyone benefits compared to what would be available in a socialist/communist/top down control economy. Socialism spreads poverty like gangrene; I want no part of it.

  3. Old UNIX Guy

    If it were not for those “evil government regulations” that certain politicians like to rail against there would still be Americans without access to electricity and / or phone service. That’s just the facts.

    Now, no one is forced to connect their home to the electric grid, nor should they be. But does anyone want to argue that they shouldn’t have the option to do so?

    The same should apply to broadband internet … left to their own devices the AT&T’s of this world are never going to provide service to rural communities. Just because you don’t see the need for fiber to your home doesn’t mean that others don’t. And, of course, if we did run fiber to every home in American the best things that would ultimately come from that are the things that we can’t even imagine right now.

    Old UNIX Guy

  4. Brutno

    Old Unix Guy – I would never say “Never”. Some rural communities will get broadband when and if AT&T (or any other provider) starts to see 1.) Return on its initial investment and 2.) Needs to provide service because it has saturated its other markets and rural is the only way to expand profitability (albeit at lower margins due to economics). That being said, this is no different than car dealers ordering option packages on all their dealer stock and making any customer who wants less options to order out, or early adopters paying way more for electronics (a $4500 TV, anyone?) than later purchasers. The first markets you service are those that provide the cash to further the service. You surely wouldn’t start by going into low-margin markets, would you? This is common sense. I’m no fan of AT&T but did someone say they were stopping their rollout at this point?

  5. dhp

    “As always, a plan to equalize everything mistreats taxpayers to the benefit of someone else.”

    The myth of the hardworking taxpayer versus the “taker.” Virtually everyone is a taxpayer or the dependent of a taxpayer. Even “illegal” immigrants pay billions in taxes. Maybe you could avoid paying taxes if you were a subsistence hunter/farmer on someone else’s land or you live solely by barter.

    “Why would everyone need fiber network, anyway? I don’t have it, and I wouldn’t pay for it if it were substantially more expensive. In a free market, you pay for what you can afford…”

    It’s not about one individual’s needs; it’s about everyone’s access. (Ignore that whirring sound; just Ayn Rand spinning in her grave.) In this “free economy,” people in the rural areas cannot get fiber service even if they *can* afford it, because they live where not everyone can afford it. So the cost of fiber broadband becomes the cost of moving to a more expensive home in a more expensive community and then the cost of the actual service.

  6. Nom

    “Our analysis finds that AT&T has built its all-fiber network disproportionately in higher income communities”

    Paraphrased: “our analysis finds that AT&T has optimised its product rollout towards those most willing and able to pay for it”. Well, duh.

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