The FCC and AT&T Don't Care About Rural Areas and They Can Just Make Crap Up

First, we would like to thank the Federal Communications Commission, FCC, for the three pages it dedicated to our Petition for Investigation in the AT&T-DirecTV merger Order. What a shame it got the facts wrong and spent the time mostly making up garbage we never said or implied, or that the Agency is either in bed with the carriers or is in denial that it screwed up before, or was in a rush to push through the merger, or all of the above.

CLICK here to contact us if you live in an area where AT&T is the local phone company and AT&T didn't offer you broadband service, starting in 2007 -- and want to become part of a new complaint (BEFORE AUGUST 24th, 2015)

Read this letter: How children in rural areas are being harmed by AT&T's lack of broadband.

Summary: On May 12th, 2015, New Networks Institute, (NNI) filed a Petition for Investigation against AT&T, claiming that in the previous AT&T-BellSouth merger, the company made a commitment to be able to offer broadband to 100 percent of locations in 22 states, by the end of 2007. And in 2008, AT&T filed a letter with the FCC, under penalty of perjury, claiming it had fulfilled this obligation.

The Petition supplies the details of the mergers that created AT&T as well as the states it covers. Or see: "The Book of Broken Promises: $400 Billion Broadband Scandal & Free the Net"

However, as we pointed in our Petition, AT&T's own statements from its "IP Transition VIP Announcement", October, 2012, claimed that the company never finished 25 percent of its territory.


"In the 25 percent of AT&T's wireline customer locations where its 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..."

And yet, the FCC didn't bother to confront this fact even though this is one of many statements made by AT&T and presented to the FCC in various ongoing and previous proceedings that directly contradicts AT&T's claim that it completed this AT&T-BellSouth merger condition, especially by 2007. That's 8 years ago.

One would think that the FCC would care about a failure to upgrade whole parts of multiple states, especially with all of the brouhaha about getting broadband to rural areas, or the billions being spent on rural broadband proposals, or the Universal Service Fund tax increases to pay for broadband, or the billions not spent on broadband deployments by AT&T, or the tens of billions lost in economic development that should have been accruing to the municipalities and their citizens and businesses that were supposed to be upgraded at least 8 years ago.

And, even more disheartening, the AT&T-BellSouth merger commitment wasn't about fiber optic services, and it wasn't even about U-Verse, AT&T's upgraded copper-to-the-home service; this was broadband service capable of a paltry 200kbps in 1 direction, which was the standard set by the FCC so that a tin can-&-string could qualify as broadband.

Let me give you some highlights of how the FCC, our government, wasted New Networks Institute's time and didn't investigate even the basic claims, then just either got it wrong or put words in our mouth. Some have suggested we should just send the FCC a bill for the time spent by the lawyers and analysts who put together the Petition. (And sorry for the detailed discussion. See the Petition for the links, footnotes, etc.)

FCC: New Networks' position appears to be that AT&T did not satisfy the broadband
deployment condition because it failed to cover 100 percent of its footprint with its wireline U-verse service, a technology that provides download speeds of up to 45 Mbps or greater.

NNI: This is a perfect example of something that is totally made up. We never mentioned anything about U-Verse being the product that was supposed to be delivered by 2007. We focused our attention on the commitment made in the merger agreement -- that 100 percent of 'locations' in AT&T's 22 states should have been able to get a measly 200kbps -- (and probably 25 percent never got any upgrades).

FCC: However, New Networks neglects to consider that only 85 percent of living units in the AT&T-BellSouth in-region territory needed to be covered by wireline technologies and those technologies other than U-verse, including digital subscriber line ("DSL") and IPDSL, would also meet the defined level of service.

FCC2: New Networks further neglects to consider that 15 percent of living units in the footprint could be covered using alternative technologies or operating arrangements, such as satellite service and Wi-Max fixed wireless service.

NNI: We neglected nothing. The opening AT&T quote we highlighted in the beginning claims the company couldn't and didn't offer broadband in 25 percent of their territory in 2012 and that means it certainly didn't have at least 25 percent covered in 2008.

No matter how you slice it, even with wireless, there's still 10 percent missing at best. And that would assume that wireless was a substitute and offered at the time, i.e., the year 2007, in these rural areas.

The FCC scores an "F" in basic math; 100 percent minus 25 percent does not equal "85 percent".

FCC: New Networks also argues that the Applicants' statements regarding the deployment of an additional 15 million locations in connection with the instant proceeding is further evidence that AT&T does not have 100 percent broadband deployment in its footprint and has therefore not satisfied its 2006 condition to achieve 100 percent deployment. However, New Networks fails to consider the extent to which deployment of such additional service might be to areas located outside of AT&T's incumbent local exchange carrier ("ILEC") territory.

NNI: Wha? This is the original quote:

"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."

If AT&T doesn't cover's 15 million locations in their current territory, then, according to the FCC, AT&T would just leave that part alone and go into other rural territories where they are NOT the incumbent and build something?

What is the FCC smoking?

History tells us that, except where AT&T had service prior to the AT&T-SBC merger, (where SBC bought AT&T and changed its name to AT&T), the incumbent phone companies have never, ever entered each others' territories for wireline services with any force, even when they had merger commitments that required it.

The FCC is in charge of the mergers and the FCC should know this.

In fact, the FCC has failed over and over to create usable merger conditions and enforcement. In the SBC-Ameritech merger, then-SBC was to compete in 30 cities outside its wired regions by 2003. Yet, the FCC's fine print said it only needed, get this, three unaffiliated customers to fulfill that requirement. You can get more customers to sign up for a service if you have a free beer night at a local pub.

NOTE: SBC-Ameritech was the combination of Ameritech, (Ohio, Indiana, Illinois, Wisconsin and Michigan), and SBC, which had Pacific Telesis (California and Nevada), SNET (Connecticut) and Southwestern Bell (Texas, Oklahoma, Arkansas, and Missouri and Kansas).

FCC: In addition, the deployment totals that New Networks provides are based upon AT&T's current footprint and not AT&T's footprint as it existed on December 31, 2007, when the condition applied.

NNI: You got to be kidding. We specifically discussed AT&T's coverage of 22 states, and then the sell off, later, of SNET, the telephone company of Connecticut that AT&T had bought in the 1990's. And we quoted the original text of the 2007 commitment.

Maybe the FCC simply can't count, or didn't bother looking up the holdings of AT&T in 2007?

FCC: New Networks also alleges that promises for fiber to the curb and fiber to the home ("FTTH") were made to the Commission in 2004 and have not been fulfilled.

NNI: We didn't have to allege anything. We quote former FCC Chairman Michael Powell who said in October 2004 that the reason he was voting to close the networks to competition was because AT&T -- (then SBC and that would include BellSouth) claimed that they were about to deploy fiber to the home, "FTTP", or fiber or to the curb in 2004.

Powell wrote, October 2004

"In my separate statement to the Triennial Review Order and in countless other statements during my seven years at the Commission, I have emphasized that 'broadband deployment is the most central communications policy objective of our day'. Today, we take another important step forward to realize this objective.... By removing unbundling obligations for fiber-based technologies, today's decision holds great promise for consumers, the telecommunications sector and the American economy. The networks we are considering in this item offer speeds of up to 100 Mbps and exist largely where no provider has undertaken the expense and risk of pulling fiber all the way to a home.

"SBC has committed to serve 300,000 households with a FTTH network while BellSouth has deployed a deep fiber network to approximately 1 million homes. Other carriers are taking similar actions." (Emphasis added)

  • "FTTH" -- "Fiber to the Home", where the fiber optic wire starts at the customer's location.
  • "FTTC" -- "Fiber to the Curb", is defined as 500 feet from a customer's home.

Unless the current FCC is calling the former FCC Chairman a liar, AT&T made a commitment for fiber to the home in 2004. U-verse is a copper to the home service. And BellSouth is also now part of AT&T.

And this is important, not simply because the networks were closed to direct competition, but because the FCC is currently dealing with issues about this in the current "IP Transition" and copper retirement proceedings. And it's important because AT&T has never lived up to any major merger condition and if you think that the current, new, 2015, FCC 'commitments' for AT&T's proposed fiber to the home deployment makes AT&T actually have to deploy anything, you haven't read the fine print. There are no serious penalties or fines; it's just the cost of doing business and keeping the lawyers busy.

I leave you with two short analyses; the first is from a 30+year veteran telecom analyst and the second a former FCC telecom attorney who started at the FCC before AT&T was broken up in 1984; both of whom worked on the Petition. (They mention some other items in the FCC's response I didn't address; I'll let them point them out.)

Telecom Analyst


"I saw the reference in the AT&T-DirecTV Order and knew you were onto something. The refutation looks like something AT&T's lawyers might have written. It begins with a technicality, that you were late, though in this case you were pointing out something about the applicant, not claiming to be aggrieved. To me, that is something that should be taken into consideration simply as background knowledge, which is what ex parte is normally for at the FCC.

"Then they raise two bizarre claims. One is that you are talking about U-Verse, when clearly you are only talking about the lowest possible level of DSL or WISP, (wireless Internet service provider) which is all they had promised. The other is that you were not referring to their in-territory areas. The plain fact is that, as the Moore letter notes, they are not providing even basic wideband service to parts of their wireline footprint. So unless every single one of the 15M additional sites promised in this Order is out of territory, then there must be some in-territory area not served yet. So technically the merger commitment has expired, sort of a statute of limitations effect, but the point you clearly made was that they don't live up to their promises, and promising it again and again gets tired."

Telecom Lawyer

"Clearly the FCC was wired to let this acquisition go through, and didn't want facts to get in their way. What is troubling about the FCC's discussion of the NNI petition is that it relies on technicalities to dismiss your allegations, as well as those of Free Press. The agency ignores its own responsibility to verify compliance with the merger condition, instead uncritically accepting AT&T's one sentence response to interrogatories asserting that it offered broadband to 100 percent of residents in its service area. The FCC is keen on pointing out potential issues with your facts; it has no interest whatsoever in getting at the truth.

CODA: In AT&T's current IP Transition trial in rural Carbon Hill Alabama, after AT&T does all of its upgrades and shuts off 60 percent of the working copper phone lines for a wireless phone service than can't handle Internet service, AT&T has no plan for four percent of the customers. I.e., they never had broadband, were never upgraded and at the end of the trial, four percent are still not served by wireline or wireless broadband.--How could AT&T file in 2008 that it had completed 100 percent?

Direct Excerpt from the Carbon Hill IP Transition Trial Docs.

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CLICK here to contact us if you live in an area where AT&T is the local phone company and AT&T didn't offer you broadband service, starting in 2007 -- and want to become part of the new complaint (BEFORE AUGUST 24th, 2015)