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America’s broadband crisis: the making of a twenty-first-century cartel

“Broadband Internet is the new electricity,” proclaimed president Joe Biden when he introduced the American Jobs Plan, a $2 trillion infrastructure plan that includes broadband upgrades. The White House statement noted:

It is necessary for Americans to do their jobs, to participate equally in school learning, health care, and to stay connected. Yet, by one definition, more than 30 million Americans live in areas where there is no broadband infrastructure that provides minimally acceptable speeds.

Going further, it warned, “Americans in rural areas and on tribal lands particularly lack adequate access.”1

Invoking president Franklin Roosevelt’s Rural Electrification Plan of 1936 in scope and vision, the statement announced: “The President believes that we can bring affordable, reliable, high-speed broadband to every American through a historic investment of $100 billion.”2 In the months since Biden introduced his plan, it has been politically revised with the most recent broadband budget shrinking to $65 billion.3 The politics of compromise led the Democrats to drop Biden’s original call for “universal” broadband and support for community broadband services. Sadly, a decade from now, one can expect digital inequality to persist.

The infrastructure crisis suggests a deeper, more systemic crisis besetting twenty-first-century U.S. capitalism. The American Society of Civil Engineers (ASCE) released its 2021 infrastructure report card for America, giving the nation the grade of C-, with grades for drinking water (C+), energy (C+), levees (D), rail (B), roads (D+), and transit (D).4

The Council on Foreign Relations shares ASCE’s assessment, warning that “the systems currently in place were built decades ago, and economists say that delays and rising maintenance costs are holding economic performance back.”5 Even the investment bank McKinsey & Co. noted that “investment in public goods, from education, training, and skills for human capital development to foundational R&D and infrastructure, has declined relative both to what is needed to enable individuals to have equality of opportunity and participate fully in the economy and to what is required for productivity, growth, and competitiveness.”6

Unfortunately, ASCE did not evaluate the nation’s telecommunications services. Had it done so, it would find that the United States is a telecom-dependent country. The Federal Communications Commission (FCC) estimates that 137.5 million households in the United States are “reached” by more than a half-million telecommunications services—wireless (412.5 million), wireline (32.9 million), and cable (72.9 million). (See Table 1.) Looking deeper, ASCE would have found that the United States is a second-tier telecom country. It is estimated that, in 2021, only 32 percent of U.S. homes have access to fiber broadband services compared to Norway and South Korea, which have over 80 percent access, and Spain, Portugal, and Japan that have over 90 percent.7 The Organization for Economic Co-operation and Development (OECD) ranks the United States eighteenth of the thirty-eight OECD countries in terms of broadband usage.8

Table 1: Telecom Company Homes Passed and Subscribers, 2017

Telecom Household Reach (millions)* Wireless Subscribers (millions) Wireline Subscribers (millions) Cable Subscribers (millions)
AT&T  53.6  176.7  15.4
Comcast  48.5 30.6
Charter  44.9 28.9
Verizon  24.1 120.3  7.1
Century/Lumen  22.6  4.5
Frontier  15.0  3.1
T-Mobile 102.1
Other **  13.5  2.8  13.4
Total 137.5 412.6 32.9 72.9

* “Household reach” are the “homes passed” or the potential number of premises to which a service provider is capable of connecting to in a service area. Data from FCC Form 477 (2019).

** Other telecos subscribers (source):

  • Wireless = Dish (8.9) and US Cellular (5.0).
  • Wireline = Windstream (1.0), Consolidated (0.8), TDS (0.5) and Cincinatti Bell (0.50).
  • Cable = Cox (5.4), Alice (4.4), Mediacom (1.4), Cable One (0.9), Wow (0.8) and Atlantic Broadband (0.5).

In terms of fixed broadband service, the United States ranked eleventh at 191.97 megabits per second (Mbps) (Singapore ranked first at 245.5 Mbps); in terms of mobile service, it ranked eighteenth at 82.04 Mbps (compared to South Korea at 186.06 Mbps).9 The optimal performance speeds of the different telecom technologies is profound: a current telephone line (DSL) is 170 Mbps; Fifth Generation (5G) wireless is 10 Gbps; cable is 50 Gbps; and fiber is 100 Tbps.10

Making matters worse, people in the United States pay more for their inferior telecom services. Fees for a gigabyte of data range from $0.26 in India and $0.27 in Kyrgyzstan to $6.66 in the United Kingdom and $6.96 in Germany. Costs in North America were the highest, averaging $12.02 in Canada and $12.37 in the Unites States.11

Current telecom services are failing the U.S. public and are a symptom of the deeper economic and social crisis plaguing U.S. capitalism. Over the last quarter-century, the proclaimed federal policy of “deregulation” has led to industry consolidation, with a shrinking number giant conglomerates gaining ever-great market dominance as well as control over the regulatory process at the FCC and in state utility commissions. Today, a handful of huge telecom conglomerates—a cartel—are providing inferior services at a higher price than comparable services offered in other “advanced” capitalist societies in Europe and Asia.

Resisting this process, some nine hundred community broadband services and local initiatives offer an alternative way to reconceive broadband from a “luxury” to a “necessity.” Community broadband services—both “municipal” and “cooperative” services—seek to do more than make a profit, they provide an essential resource like electricity and telecom. In this way, broadband needs to be protected and affordable if not free. It is time for community networks to supersede the telecom cartel.

The Price of Reregulation

The deregulation of the telecom industry fostered the “digital divide” and “digital inequality.” The FCC estimated that, in 2020, 21.3 million Americans didn’t have home access to broadband (the FCC defines “broadband” as 25 Mbps per download and 3 Mbps per upload).12 John Kahan, Microsoft chief data analytics officer, warned that the FCC estimates were “vastly undercounts.” He noted that Microsoft data indicate that almost 162.8 million people “are not using the Internet at broadband speeds.”13

Others have raised similar concerns as those expressed by Kahan. Former FCC attorney Gigi Sohn estimated that some 141 million people in the United States lack access to fixed broadband at speeds of 25 Mbps, the FCC’s broadband standard.14 Broadband Now argues that 42 million Americans do not have broadband access.15

The digital divide is most pronounced in rural communities, especially with significant Black, Latinx, and Native American households. The U.S. Census Bureau’s most recent (2019) American Community Survey found that more than 20.4 million homes had no broadband subscription. Of these, 5.1 million homes were in rural areas while 15.3 million homes are non-rural.16 Further, a study by Common Sense Media and the Boston Consulting Group finds that “while 18 percent of White households lack broadband, 26 percent of Latinx, 30 percent of Black, and 35 percent of Native American student households lack adequate home Internet access.”17 It goes further, arguing:

In rural communities, 37 percent of students are without a home broadband connection compared to 25 percent in suburban households and 21 percent in urban area.

Making matters worse, Common Sense Media and the Boston Consulting Group found that “approximately 15 million to 16 million K–12 public school students, or 30% of all public K-12 students, live in households either without an Internet connection or device adequate for distance learning at home.” It also reports that “300,000 to 400,000 K–12 teachers live in households without adequate Internet connectivity, roughly 10 percent of all public school teachers, and 100,000 teachers lack adequate home computing devices.”

The COVID-19 pandemic and the recession made the telecom crisis even worse. Stay-at-home requirements led to increased demand and new usage patterns (home schooling, working from home) that put significant stress on telecom networks. Those who lack connectivity, especially poorer families with children, have become dependent on smartphones—as distinguished from Internet-enabled devices like a desktop or laptop PCs or tablets—to get online. Compounding this abysmal situation, data caps on broadband services are forcing low-income subscribers to ration online access.18 In addition, an increasing number of hospitals and medical centers are relying on telemedicine to safely screen and treat patients, and the lack of Internet connectivity will restrict remote services.

Equally troubling, the pace of fiber deployments by the leading “phone” and “cable” companies has slowed significantly. Traditional phone company AT&T finished its fiber buildout in 2019 reaching 14 million homes; Verizon is focused primarily on wireless (5G) and its fiber deployment is determined by where it helps facilitate wireless traffic. The leading “cable” companies—such as Comcast and Charter/Spectrum—most often employhybrid fiber-coaxial networks. As a result, as one estimate suggests, fiber-to-the-home as a share of total homes passed has been “stalled at 23% over the past year.”19

The state of U.S. telecom has been further compromised by political football over Title I vs. Title II classifications. The 1934 Communications Act divided communications into two categories: Title I involves what is designated as enhanced “information services” that are subject to fewer regulations; Title II services are designated as basic or “common carrier” service that are subject to more regulation.20 Basic services were designated to be “pure communications” services that are “virtually transparent in terms of [their] interaction with customer supplied information.”

In 2007, under president George W. Bush, the FCC classified “wireless broadband” an information service. In 2015, president Barack Obama’s FCC made broadband a Title II or “common carrier” service, subject to more regulation. However, in 2019, Donald Trump’s Republican FCC moved broadband services to Title I or “information service,” making broadband and wireless more corporate friendly and with fewer regulations. Biden’s FCC is expected to move broadband back to a Title II service.

In addition, Trump’s FCC ended what is known as “net neutrality,” the policy that requires Internet access providers (IAPs) to treat all traffic on equal terms, as a common carrier service. Net neutrality is grounded on three principles: (1) no blocking: an IAP cannot prohibit user accessing legal content; (2) no throttling: an IAP cannot slow down Internet traffic of one service over another; and (3) no paid prioritization: an IAP cannot sell “fast lanes” services for a higher fee over another service.21 In July 2021, Biden issued an executive order calling to restore net neutrality.22

Clinton’s Give Away

Today’s broadband crisis began a quarter-century ago with the adoption of the Telecommunications Act of 1996. Upon signing, president Bill Clinton argued that it would “promote competition as the key to opening new markets and new opportunities.” He insisted that deregulation “will protect consumers by regulating the remaining monopolies for a time and by providing a roadmap for deregulation in the future.”23

Well, that future never arrived. The act had two profound consequences. First, on the federal level, it “deregulated” innovate telecom service and fostered a wave of mergers and acquisitions, leading to the restructuring of the telecom industry. Second, it enabled an ever-growing number of state public utility commissions to deregulate local telecom services. Together, two-phased deregulation led to the consolidation of telecom providers into a postmodern “cartel.”

What is often forgotten in analyses of the U.S. telecom industry is that telecommunications are a regulated federal and state utility. The 1996 Act facilitated the reclassification of new “deregulated” telecom services like DSL Internet, streaming, and wireless from a “basic” or Title II “common carrier” service to a Title I less-regulated “information” service.24 For example, in 2002, the FCC redefined the cable modem as an information service and, in 2005, reclassified DSL—a digital signal running over a traditional analog voice line—an information service.

This shift in regulation helped facilitate a series of acquisitions. In 2005, SBC Communications acquired AT&T for $16 billion and Verizon acquired MCI for $6.6 billion. SBC kept the AT&T name and, the following year, purchased BellSouth for $86 billion.

The 1996 Act “deregulated” federal and state telecom services, especially innovative services (such as cable television, Internet, wireless) and fostered a wave of mergers and acquisitions leading to the restructuring of the telecom industry. This fueled two rounds of mergers and acquisitions, leading to the telecom industry’s consolidation into what can best described as today’s telecom cartel.

The first wave of mergers and acquisitions included:

  • SBC acquired Pacific Telesis (aka Pacific Bell) for $16.7 billion in 1997.25
  • SBC acquired Ameritech for $81 billion in 1999.26
  • Bell Atlantic merged with NYNEX in a $20 billion deal in 1997, forming Verizon in 2000.27
  • Qwest acquired US West for $35 billion 2000.28
  • Bell Atlantic acquired GTE in 2000 for $53 billion.29
  • Cingular acquired AT&T Wireless for $41 billion in 2004.30
  • SBC acquired AT&T for $16 billion in 2005 and kept the AT&T name.31
  • SBC/AT&T acquired BellSouth for $86 billion.32

This first round of mergers was followed by a series of additional mergers and acquisitions that included, but were not limited to, the following:33

  • Comcast acquired a controlling stake (51 percent) in NBC-Universal, a subsidiary of General Electric, and French media conglomerate Vivendi Universal Entertainment for $6.2 billion in 2011.34
  • Charter Communications acquired Spectrum (aka Time Warner Cable) for $55 billion and Bright House Networks for $10.4 billion in 2016.35
  • AT&T acquired DirecTV for $67.1 billion in 2015; bought Time Warner for $85 billion in 2018; and acquiredAppNexus, a digital ad exchange that competes with Google and Facebook, for between $1.6 and $2 billion in 2018.36
  • Verizon acquired AOL in 2015 for $4.4 billion and Yahoo! in 2017 for $4.8 billion.37
  • Mobileand Sprint, valued at $26.5 billion, merged in 2020.38

The current FCC acting chair, commissioner Jessica Rosenworcel, opposed the Mobile-Sprint merger, noting:

Shrinking the number of national providers from four to three will hurt consumers, harm competition, and eliminate thousands of jobs.39

In the decade following the passage of the 1996 Telecom Act, the National Regulatory Research Institute found that thirty-eight states “reduced or eliminated regulatory oversight.”40 Sherry Lichtenberg, author of the 2015 study “Examining the Role of State Regulators as Telecommunications Oversight is Reduced,” points out:

As State legislatures and commissions continue to expand the deregulation of telecommunications, the role of State public utility commissions in ensuring the universal availability and reliability of basic telecommunications services has become increasingly challenging.

In a follow-up 2016 report, Lichtenberg notes that “as the tide of deregulation ebbs, state legislatures have increased their focus on broadband.”41 Nevertheless, she adds that, “during the 2016 legislative session, 19 states proposed legislation addressing ways to increase broadband availability and adoption, including proposing changes to current state laws limiting the availability of municipal broadband systems.”

Regulatory Capture

The current telecom crisis was facilitated by the telecom industry’s control over the FCC, a process dubbed “regulatory capture.” “Regulatory capture is a big deal,” declared senator Elizabeth Warren (Democrat, Massachusetts).42 “It is one way in which powerful corporations rig the system to work for themselves—and the rest of America pays the price. The tilt in Congress is pretty much out there for everyone to see, but corporate influence works its magic even better in the shadows—and that’s where rulemaking occurs.” She added:

When it comes to undue industry influence, our rulemaking process is broken from start to finish. At every stage, the process is loaded with opportunities for powerful industry groups to tilt the scales in their favor.

Former FCC chairman William Kennard (1997–2001) shared Warren’s perception. He noted: “Regulatory capitalism is when companies invest in lawyers, lobbyists and politicians, instead of plant, people and customer service.… Regulatory capitalists would rather litigate than innovate.”43 He added,

It’s always easier to prowl the halls of Congress than compete in the rough and tumble of the marketplace.

The career paths of recent FCC chairmen—from both parties—illustrates how regulatory capture has played out over the last decade. (The current acting chair, Jessica Rosenworcel, a Democrat, has been a commissioner since 2012 and, in 2017, was confirmed for a second term.)

  • Ajit Pai: A Republican commissioner (2012–17) and chair (2017–21) who, as an attorney, served as Verizon’s associate general counsel from 2001 to 2003.
  • Thomas Wheeler: A Democrat appointed by President Obama who acted as chair from 2013 to 2017. He was a longtime Obama fundraiser who served as CEO of the wireless industry group CTIA (the Wireless Association, formally Cellular Telecommunications Industry Association) from 1992 to 2004 and CEO of the NCTA (Internet & Television Association, formally National Cable Television Association) from 1979 to 1984.
  • Julius Genachowski: A Democrat appointed by President Obama who served as chair from 2009 to 2013, and at Fox Broadcasting. He was an FCC counsel during the 1990s; after the FCC, he joined the Carlyle Group, a private equity firm.
  • Kevin Martin: A George Bush-II appointee who served as chair from 2005 to 2009, and went to Patton Boggs, a leading Washington DC law firm and lobbyist.
  • Michael Powell: Colin Powell’s son, appointed by Clinton, who served as chair from 2001 to 2005, and now heads the cable industry trade association NCTA.

Equally revealing, Trump’s attorney general, Republican William Barr, served as general counsel for GTE and its successor Verizon (1994–2008). From 2009 to 2018, he served on Time Warner’s board of directors.

Telecom Cartel

Today’s telecom conglomerates may be best understood as twenty-first-century “cartels.” Perdue University economist John Connor defines cartels as “voluntary associations of legally independent companies that manipulate market prices or industry output in order to increase their collective profits.”44 He distinguishes between “private” cartels (“not protected by national sovereignty or by treaties”) and “international” cartels (“those that have participants from two or more nations”). He adds that “private cartels operate secretly to avoid detection.”

A century-plus ago, the development of the cartel- or trust-dominated economy fueled the Gilded Age. In response, the Progressive movement emerged, fostering what Teddy Roosevelt mockingly dubbed “muck-raker” journalists who investigated and publicized social and economic injustices.45 They included Jacob Riis, Upton Sinclair, Lincoln Steffens, Ida Tarbell, and Ida B. Wells. Progressives sought to eliminate government corruption, supported women’s suffrage, championed social welfare, racial justice, prison reform, and civil liberties. Many feared that concentrated, uncontrolled, corporate power threatened democratic government. They argued that large corporations could impose monopolistic prices to cheat consumers and squash small, independent companies. And the cartels could strongly influence both federal and state governments.

In 1887, Congress established the Interstate Commerce Commission to stop discriminatory and predatory pricing practices. Three years later, it passed the Sherman Anti-Trust Act (1890) aimed to limit anticompetitive practices, such as those institutionalized in cartels and monopolistic corporations.

Now, more than a century later, the issue of corporate cartels has found new resonance. In 2012, the journalist David Cay Johnston, in a New York Times op-ed, linked the issue of cartels to the telecom crisis. He argued, “what we’ve witnessed instead is low-quality service and prices that are higher than a truly competitive market would bring.”46 He went on, noting, “after a brief fling with competition, ownership has reconcentrated into a stodgy duopoly of Bell Twins—AT&T and Verizon. Now, thanks to new government rules, each in effect has become the leader of its own cartel.” He added, “because AT&T’s and Verizon’s own land-based services operate mostly in discrete geographic markets, each cartel rules its domain as a near monopoly.”

Susan Crawford, a Harvard Law School professor, observed:

A handful of private companies dominate last-mile data delivery in American cities. They choose the richest, densest areas to serve with expensive second-class services—not with malign intention, but with a detrimental effect on the country.47

Following merger after merger over the last two decades, the four corporations that make up the telecom cartel came to not only control wireline and wireless services, but Internet and streaming services as well, and are moving to acquire media/content businesses and theme parks. Collectively, the total 2020 revenues of the four telecom conglomerates totaled nearly $430 billion. The individual telecom’s 2020 revenues are: AT&T ($181.2 billion), Comcast ($108.9 billion), Charter Communications ($45.8 billion), and Verizon ($131.9 billion).48 Their respective “market value” is near $1 trillion.49

Going Forward

There are three ways to address the ever-growing power of the telecom cartel: by federal legislation, by increasing the number of community broadband networks, and by cities undertaking innovative programs.

Per federal legislation, two approaches are being undertaken. First, in early June 2021, Congressional Republicans and Democrats introduced a series of six bills that could significantly limit “big tech” companies like Amazon, Apple, Facebook, Google, and Microsoft from using their control over multiple business lines to favor their own products or to suppress rivals.50 In late June, the House Judiciary Committee adopted the six bills and they went the Senate where their fate is uncertain.51

The proposed federal legislation would set up a mechanism by which a giant conglomerate could be broken up if it doesn’t comply. In addition, it could significantly limit the ability of any of the big tech companies to complete large mergers and would mandate them to make it easier for users to leave their platforms with their personal data intact. Unfortunately, while much legislative and media attention has been focused on the top-tier big tech firms, other sectors of the increasingly consolidated U.S. economy—such as semiconductors and oil/gas—have been overlooked. This is especially significant with regard to the telecommunications services that anchor the contemporary economy.

The second federal approach is through Biden’s Build Back America bill.52 In August, the Senate overwhelmingly passed a version of the bill and the House of Representatives followed, voting 220-212 to move the $3.5 trillion budget resolution one step closer to passage.53 If, as is quite possible, the House adopts the bill in September and is reconciled with the Senate bill, it will be a major Democratic Party achievement.

Biden’s original proposal called for $100 billion for broadband, but this was, unfortunately, cut to $65 billion. The plan also called to “prioritize support for broadband networks owned, operated by, or affiliated with local governments, non-profits, and co-operatives—providers with less pressure to turn profits and with a commitment to serving entire communities.”54 This part of the plan, however, was dropped from the final Senate bill, as was the call to override laws eighteen states that block community broadband services.55

Community broadband represents a realistic alternative to the hold that the giant telecoms have on broadband services. In addition to the delivery of voice (telephony), they are able to provide Internet (connectivity) and video (channels or streaming services), both wired and wireless. Such services are accountable to the community and likely offer superior quality services at a lower price. Community Networks, a part of the Institute for Local Self-Reliance, estimated that, as of January 2020, there were more than nine hundred communities offering broadband services throughout the country.

Community broadband involves two categories: (1) “municipal” networks that include more than 560 operations and (2) “cooperatives” that comprise more than 300 ventures.56 A municipal utility is owned, operated, or controlled by a city to provide a service like telecom or electricity; a cooperative is owned and operated by the customers it serves.57 The most well-known of the municipal networks is operated by the Electric Power Board of Chattanooga, Tennessee, which implemented the world’s first community-wide 10 gigabit Internet service and is available to more than 180,000 homes and businesses.58 The Roanoke Electric Cooperative of Aulander, North Carolina, is a co-op that built Roanoke Connect, a 10 gigabit fiber-to-the-home network. According to one source, it reduces “operating costs by as much as 50 percent compared to industry standard network operations solutions.”59

Among some of the other community broadband services are:

  • Bristol Tennessee Essential Services: A municipal broadband service that began providing telephone and Internet service via DSL in 2005 and offering gigabit service via a fiber network in 2012.60
  • Virginia Beach, Virginia: Connects the city’s government buildings, schools, fire stations, and more; the city reportedly saves at least $500,000 per year.61
  • Utah Telecommunication Open Infrastructure Agency: A consortium of sixteen cities that, in 2004, joined together to offer a public fiber network. As executive director Roger Timmerman put it: “The national carriers are simply not making the investments required to make this happen, but we are.”62
  • Wilson, North Carolina: Municipal fiber project for a city of 50,000 residents and 21,000 households. By 2015, it had 7,000 household subscribers. As Christopher Mitchell of the Community Broadband Networks Initiative notes, it helped low-income families get access to the Internet. He calls it “a major equity issue, as it is a minority-majority town.”63
  • Portland, Oregon: Hillsboro Highlight, a municipal network serving a Portland suburb, has “one poor neighborhood and it’s gone out-of-its-way to make sure people can be connected but also to connect them early-on to the network.” As Mitchell emphasized: “That is a big deal.”64

Special note needs be made about the Choctaw Nation’s Tribal Area in Oklahoma.65 It covers ten southeastern Oklahoma counties that long lacked access to reliable broadband service and was marked by low population density and a high poverty rate (25 percent of the population below the poverty line). Pine Tele provides voice, video, cell, long-distance, and high-speed broadband through fiber-through-the-home via landlines and wireless services.66

A third approach in the ongoing attempt to close the digital divide is being implemented by individual cities across the country. Historical conditions associated with urban redlining have been made worse due to the COVID-19 pandemic, especially troubling for school-age children and those required to work at home. These cities are using city agencies, federal support (such as the FCC’s Emergency Broadband Benefit and the CARES program), and local nonprofit groups to provide broadband services for communities not served by the incumbent commercial provider.67

Among some city initiatives are:

  • Cleveland established the nonprofit wireless Internet provider DigitalC in 2015. In 2017, it undertook a pilot project—Connect the Unconnected—to provide devices and Internet access to over 500 households in 156 public housing units and a homeless shelter. This year, it reached 1,100 residents.68 DigitalC’s goal is to provide technology network coverage for 130,000 households in the greater Cleveland area.
  • San Antonio is investing $27 million in the Connected Beyond the Classroom program to ensure students are connected to their school networks. Funding comes from CARES Act monies.69 It will use the Citizens Broadband Radio Systems.
  • Tucson launched the Community Wireless Program to provide wireless access to support remote learning, teleworking, and access to virtual services.70 The city used $4.4 million from the CARES Act to provide routers to eligible residents, including families with at least one school-aged child, college student, person over 60 years old, or person who is immunocompromised.
  • In Pittsburgh, Every1online, a community-based nonprofit wireless Internet service provider, was launched in 2015 to provide no-cost residential Internet access in the greater Pittsburgh area, especially directed at households with K–12 students.71 Every1online is working with Allentown’s Meta Mesh Wireless Communities, another wireless Internet service provider.

Finally, New York is contesting the digital divide on a number of fronts. In 2008, under mayor Michael Bloomberg, the city signed an agreement with Verizon under which the company committed “to extend its FiOS network to every household across the five boroughs by June 30, 2014.” In 2010, Verizon suspended FiOS expansion due to the high cost of building a fiber-optic network and running connections to homes.72 In 2017, the city sued Verizon, claiming it had broken the contract to provide citywide fiber coverage. In November 2020, mayor Bill de Blasio announced a settlement with Verizon agreeing to wire 500,000 additional homes for high-speed Internet service.73

In January 2020, as the Verizon settlement was being worked out, the city released the NYC Internet Master Plan, which declared: “The private market has failed to deliver the internet in a way that works for all New Yorkers.”74 Going further, in July 2020, the city announced it would “make a historic $157 million investment in ending digital redlining and providing high-speed Internet, including $87 million redirected from the NYPD budget.”75 According to the city, the “investment will extend new Internet service options to 600,000 underserved New Yorkers, including 200,000 NYCHA residents over the next 18 months.”

Joshua Breitbart, an Open Society fellow and New York City’s former deputy chief technology officer, says that “what we did for New York is develop a plan based on neighborhood scale. This was based on an understanding that there was no way to deliver on a city-wide infrastructure—this is the one thing you can learn from Verizon.”

He strongly argues that “the structural inequalities of the digital divide rests on ‘digital red-lining’ that is built on top of urban red-lining.” This applies equally to New York as to other cities. As Breitbart notes:

You have to deliver broadband within that framework and with a real eye at repairing and understanding the need for justice, of the inequity and trauma built into so many urban communities. Especially within terms of structural racism, you need to be implementing—no matter what program—with that framework in mind in your city in order to address the digital divide.

Breitbart adds, “New York City is multiple Clevelands but we can see how it can scale-up to neighbotarhoods as a half or large portion of a borough, which is equivalent to a lot of cities.”



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  12. FCC data is based on “FCC Form 477,” a biannual report based on Internet service provider self-reporting at U.S. census block levels. The Institute for Local Self-Reliance warns that the FCC “overestimates actual broadband availability and ISPs’ service areas.” It notes: “Census blocks are the smallest unit of measurement in the U.S. census, but they vary in both land area and population. An ISP may classify a census block as served even if only one resident could receive service.” “Profiles of Monopoly: Big Cable & Telecom,” Institute for Local Self-Reliance, August 2020.
  13. John Kahan, “It’s Time for a New Approach for Mapping Broadband Data Better Service Americans,” Microsoft on the Issues, April 8, 2019.
  14. Gigi Sohn, “Empowering and Connecting Communities through Digital Equity and Internet Adoption,” House of Representatives, January 29, 2020.
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  17. Closing the K-12 Digital Divide in the Age of Distant Learning,” Common Sense Media and Boston Consulting Group, 2020.
  18. Christopher Mitchell, “How Will Broadband Networks Handle Quarantine Congestion? Mostly OK,” Community Networks, March 12, 2020.
  19. Shahed Mazumder, “US Residential Broadband Competition–Cable is Winning and Will Continue to Win, Decisively,” June 15, 2020.
  20. Kathleen Ann Ruane, “Net Neutrality: The FCC’s Authority to Regulate Broadband Internet Traffic Management,” Congressional Research Service, March 26, 2014.
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  28. Quest Completes Purchase of US West,” New York Times, July 3, 2000.
  29. Mike Mills, “Justice Approves Bell Atlantic, NYNEX Merger,” Washington Post, April 25, 1997.
  30. Jon Van, “Cingular Buys AT&T Wireless for $451 Billion,” Chicago Tribune, February 18, 2004.
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