A recent study by the California Community Foundation and Digital Equity Los Angeles highlighted stark differences in price and availability of internet services from two of LA County’s internet service providers – dominant ISPs Charter Spectrum and Frontier.
In the San Fernando Valley, Charter Spectrum is offering residents of a Sylmar neighborhood with a 7% poverty rate a $30 monthly service, guaranteed to stay locked up for two years. Another community in Sylmar, with a poverty rate of 27%, receives an offer of $70 per month with a one-year price guarantee.
The two neighborhoods are one kilometer apart.
“The highest speeds at the lowest costs are available to the wealthiest, whitest communities,” study lead author Shayna Englin said during a Zoom community meeting with representatives from Digital. Equity Los Angeles.
Page after page of the study describes disparities similar to the Sylmar example. The study is limited to Los Angeles County, so it focuses on Charter Communications, or Charter Spectrum, whose Internet service is available to 97% of households in the county.
Low-income and minority neighborhoods may not only face price differentials, but also slower Internet service, with fewer MBPS (megabits per second), according to a study of 38 cities in the United States by the agencies press releases Markup and Associated Press. Download speeds were significantly faster in high-income, predominantly white neighborhoods. (The Los Angeles area was not included in this study.)
The California Community Foundation/Digital Equity LA analysis notes that in Los Angeles County, residents of very poor areas are routinely offered slower service at higher prices. (Disclosure: The California Community Foundation is a financial contributor to Capital & Main.)
“It’s not because people don’t know what the problem is, it’s just the urgency and the depth of the problem is still somewhat hidden,” says Ana Teresa Dahan, chief executive of GPSN (formerly Great Public Schools Now). “Everyone feels like they have internet access because we have cell phone plans.”
GPSN has worked on a variety of education issues, but students’ struggle to learn online during the pandemic has made digital equity a priority for the organization.
Michael Picker explains the problem in terms of who runs the show. These are the major telecommunications companies at the table both federally and in Sacramento. Picker knows; he was chairman of the California Public Utilities Commission for five years. He sat at the table with company officials and walked the halls of Sacramento to urge lawmakers to give the PUC more oversight latitude.
When communications companies were deregulated in the 1990s, he says, the Public Utilities Commission became “toothless in the face of federal preemption.
“States have no authority over regulation,” says Picker, “which benefits Comcast, AT&T, Verizon. The same way we don’t have the ability to set prices, we don’t have the ability to regulate.
“If you can’t fix a rate, what leverage do you have?”
The Federal Infrastructure and Jobs Act of 2020 includes $65 billion for broadband investment, of which $42.45 billion is allocated to the Broadband Equity, Access and Deployment (BEAD) program.
Providers are scrambling to scoop up the largesse that builds bridges of internet access to low-income communities. This could be thought of as building a customer base – when the federal money runs out, they will have a new set of consumers and all of their data in order to sell them a new product.
GPSN’s Dahan says grassroots groups are using the Slowest and Most Expensive study to determine the way forward. “I think as we learn what the different opportunities and solutions are, we’re going to amplify them.
“I think what our report is trying to say is that, at a minimum, we should have some type of price transparency which can then lead to solutions on what price fairness would look like,” he said. Dahan said.
“What we’re trying to do is figure out how to get concessions from them, on those infrastructure investments that they need for their business. What is the government asking for in return? A minimum requirement would be price transparency so that customers can compare the prices offered.
Picker has three words of advice: Joint Powers Authority (JPA). Bring two local government agencies together and create a JPA. A JPA can purchase fiber connections and become a utility. “You can fit the definition of a utility because you’re installing fiber and serving customers.
“So you have real power – because you compete; you have fiber, you can lease some of it to these ISPs and have them serve all the customers. Then you can then set the prices.
It’s a long-term strategy, he admits.
“You need a plan,” Picker said. “You need power and you need the power to follow.”