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.

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    Companies: at&t, frontier

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    Comments on “California's 'Open Access' Fiber Broadband Plan Is Making Telecom Giants Like AT&T Nervous”

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    Anonymous Coward says:

    the problem is, it wont make them anywhere near nervous enough! having said that, i’m waiting for the ‘dirty tricks’ campaign to start to prevent the use of and all equipment that’s already in place from being used, because you can bet there must besome needed just as you can equally be sure that it will be prevented from being used if at all possible, even for the slightest of reasons!

    Anonymous Coward says:

    Re: The first thing we do is cripple AT&T and Comcast...

    How does replacing regional monopolies with local monopolies solve your problems? All that does is create an illusion of competition for the politicians to point at. Heavily regulated infrastructure with shared exchange buildings allows ISPs to compete for customers, while having a different provider from the next town over does not create real competition.

    Anonymous Coward says:

    Re: Re: The first thing we do is cripple AT&T and Comcast...

    How does replacing regional monopolies with local monopolies solve your problems?

    You’re thinking about a specific type of breakup. The important part of 1984’s AT&T breakup wasn’t the 7 local phone monopolies that resulted, but the separation of local and long-distance service, and the mandated "open access" local phone competition (CLEC). A breakup of local (DSL, cable, fiber) lines and consumer ISPs could be the first step of the "shared exchange building" model you propose. Although, to be honest, the incumbents (including cablecos) have been so slow to upgrade local infrastructure that completely bypassing them might be preferable.

    Anonymous Coward says:

    Re: Re: The first thing we do is cripple AT&T and Comcast...

    You hear yourself right? Take the desired network without building it?

    Simple regulations which are already in the books is easy to build out.

    Whenever they dig up a street. CONDUIT it large enough that other conduits or multiple providers can fit through for competition. Whenever they build a neighborhood it must be fiber ready that again multiple providers can provide. One touch policies on poles where competition doesn’t have to wait for each other to make additions or changes they all hire the same people, no one’s going to sabotage/damage the lines

    Anonymous Coward says:

    Re: Re: Re: The first thing we do is cripple AT&T and Comcas

    So company a pulls in enough fibre to serve a neighbourhood, plus extras to provide for expansion and faults. Company b does the same, and so does company c. How does that result in cheaper connections, as there is several times as much capital invested in the network, and with much of it being idle. There is also the problem that should their be local damage due t poles being brought down, which company gets access to the poles the cabinets to pull in and splice in the replacement fibre first.

    There is a reason that network infrastructure, especially in the last mile, is considered a natural monopoly, and other countries regulate it as such.

    The existing competition between phone and cable is an accident of history. The networks were built out when they used different technology, and served different purposes. Now that they have converged as digital networks, the phone companies are abandoning their network, especially where the faster cable networks are available. The reduction to one network is what happens when a natural monopoly apples and one company gains some advantage over the competition.

    Anonymous Coward says:

    Re: Re: Re: The first thing we do is cripple AT&T and Co

    You hear yourself right? Take the desired network without building it?

    No. Separate the networks from the services running on top, if the companies are convicted of abusing their wire-monopolies to compete unfairly. Which is what happened with Openreach: originally there was just BT, who had to give "fair" third-party access… and didn’t, so Openreach was created as an "independent" subsidiary. And when BT was still abusing their ownership of Openreach to prop up their own ISP monopoly, it was spun off to a totally separate company.

    Anonymous Coward says:

    I think AT&T etc, should be given $50 billion each to build out infrastructure.

    Failure to comply 100% with ALL conditions 100%, means they have to give back the $50 bilionn PLUS a further $10 billion for every month they delay returning the money. AND a further $100 billion if they try to drag out any sort of lawsuit.

    They’re so greedy we could vaporize AT&T and Comcast etc and end these vile parasites.

    Anonymous Coward says:

    Re: Re:

    Failure to comply 100% with ALL conditions 100%, means they have to give back the $50 bilionn PLUS a further $10 billion for every month they delay returning the money. AND a further $100 billion if they try to drag out any sort of lawsuit.
    They’re so greedy we could vaporize AT&T and Comcast etc and end these vile parasites.

    Nah, courts would quickly throw out any clause that limits access to lawsuits, and the companies would lobby the lawmakers for retroactive immunity from the rest of the penalties (and many lawmakers, by an astounding coincidence, would be working for AT&T and Comcast after leaving office).

    That Anonymous Coward (profile) says:

    Re: Re:

    bursts into laughter
    They’ll never let that happen…
    They still haven’t bothered to claw back the money for the 1st responder network thats not done much with the cash & spectrum.
    Pretty sure that the USF is still trying to figure out how they might get back the billions that have been stolen from it.

    Even when the rules say there is a punishment for not doing it they still manage to get more money for doing nothing.

    That One Guy (profile) says:

    Re: Re:

    If you really want to or are stuck depending on the likes of AT&T a better way to at least try to keep them in check would be to force them to foot the bill and reimburse them only after the work is done, so for example they’d spend $10 million of their own money building the infrastructure in a given area and then the state would reimburse them in part or in whole, then they move on to the next area and repeat the process. If they fail to meet the requirements for the build-out they’d get nothing and as it would be entirely their own money on the line they’d have real incentive to actually do the work(or bribe a few politicians/regulators to say they did).

    ECA (profile) says:

    And now for the magic trick

    Create a sub company, supposedly not owned by the Corp, and Bid on building access.
    Cost over runs
    1/2 the money disappearing
    Any excuse that has a Probability, will be espoused and exclaimed.
    Cost will double and triple.

    There is another way.
    Pay each town and city to get City workers to build the Last mile.
    Then get the State/county Hiway to build the interconnecting line for the rest of it.
    But it would be nice to EDUCATE someone on how to do it. The Odds are there are a FEW that know how. Even get the Tech people to tell you how. Its called freedom of information. No proprietary knowledge.

    This comment has been deemed insightful by the community.
    That One Guy (profile) says:

    Always worth remembering...

    Local communities and states wouldn’t be stepping into the internet access ‘business’ if the companies already there were doing a good or even acceptable job, so to the extent that the government may be ‘meddling with the free market’ here it’s because the market has failed the public and someone with power needs to step in and correct it.

    Lostinlodos (profile) says:

    Again, pricing?
    To the door municipal services are a problem.

    Even if free and tax paid… there’s still the price of use issue.
    this bill is capping out at 100Mbps.

    So if the service is paid via taxes do you get a credit for not using the service? That’s 1/10th my connection. There’s no way I’d willing downgrade to that speed. Even if completely free.

    nasch (profile) says:

    Re: Re:

    To the door municipal services are a problem.


    this bill is capping out at 100Mbps.

    Where did you get that?

    So if the service is paid via taxes

    There is tax money going into it, but that doesn’t mean subscribers aren’t going to also have a bill to pay. Even community broadband (which this mostly isn’t) usually charges money for the service. I don’t remember hearing about one that doesn’t.

    Lostinlodos (profile) says:

    To the door municipal services [aren’t] a problem.

    As for the speed, I just tipped in bps and searched the bill.
    I made a mistake in assumption. I admit I was incorrect.

    “ Projects eligible for grant awards shall deploy infrastructure capable of providing broadband access at speeds of a minimum of 100 mbps downstream and 20 mbps upstream”

    I again wonder how many lawmakers read the bills they sign, though.
    I only now went back and read this.

    Over all it’s an interesting attempt. I doubt it will amount to anything substantial but for brownie points it’s an A-.

    Most municipal WiFi I’ve come across has been free. So I’m making assumptions on cost based on that when it comes to taxing.

    I do know that residential areas that have association high speed make it difficult to bypass it for commercial service.
    And you still pay the fee despite not using it.

    I don’t have it myself and don’t know how it actually all comes together.

    With this bill the focus appears to be moving 20/25 mbps to something faster. But target top out appears rather low.

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