In summary

The American Legislative Exchange Council and telecoms are working in tandem to ensure consumers in California and the U.S. do not get access to world-class telecommunication services.

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By Larry Ortega, Special to CalMatters

Larry Ortega is founder of Community Union Inc., a nonprofit corporation that trains consumers living in the digital divide, and a 35-year veteran of the technology sector.

For almost 30 years, America’s telecom companies have been receiving billions of dollars in rate increases and extra fees to finance the build-out of a national fiber optic network. Along the way, they discovered that such a network would hamper their opportunity to make a financial killing with wireless technology. So in 2010, they stopped upgrading phone customers with fiber optics, thus widening the digital divide and leaving millions of Americans unconnected.

This is not just another digital divide story about rural or inner-city residents who lack access to broadband services. This is a story about a skillfully thought-out, well-financed scheme that involves the American Legislative Exchange Council (ALEC), Koch Industries (the largest privately held company in the U.S.) and a gang of lobbyists joining forces to write legislation. 

This legislation would use the levers of state government to fast-track the deployment of an unregulated and a highly profitable wireless business. In state after state, the same political forces that are legislating away voting rights and increasing the power of corporations are pushing fast-track 5G legislation under the guise of fixing the digital divide.

The wireless industry claimed that rapid deployment of 5G technology will bring great new benefits to consumers, and just like that, almost every one of our California legislators were on board. What the industry purposefully omits is that fiber optics (wired) connections are 10,000 times faster than 5G, more secure, less expensive for the consumer and future-proof. 

In fact, it was the phone companies themselves that abandoned the completion of fiber connections midstream, leaving millions of miles of “dark fiber” in the ground. A 2018 Network Exam by the California Public Utilities Commission detailed how abandoning fiber optic upgrades to low-income and rural areas left consumers with wireless-only options. This is a well-known — and unethical — strategy called “harvesting.”

These attacks on consumers by ALEC and the telecommunications industry have been constant. Gov. Gavin Newsom faced off with telecom when he was mayor of San Francisco. Federal Communication Commission Commissioner Brendan Carr had fought the city’s effort to ensure consumer protections. Carr wrote the FCC’s current regulations on 5G, known as Carr’s 5G Orders.

These orders obliterate state and local government oversight of infrastructure build-out, throwing out both financial and physical safety protocols, all in the name of a race to third place. Even when 5G can be successfully deployed, it is still slower than fiber optics and cable TV.

ALEC, Carr and the phone companies are working in tandem to ensure that consumers in California and the U.S. do not get access to world-class telecommunication services. Fiber optic upgrades would slash profits by hundreds of billions of dollars, breaching telecoms’ fiduciary duty to their shareholders. The telecoms want no part of profit-slashing and therefore have chosen to drive a strategy that ensures the persistence of a digital divide.

Community groups, unions (such as the  Communication Workers of America) and parents who fear their children may be harmed by unregulated deployment of wireless infrastructure are on to this nonsense. They recently asked for, and were granted, the governor’s veto on Senate Bill 556, one of the ALEC bills. The effort was a massive grassroots undertaking. But while this cohort of consumers and activists prevailed this time, it is not a sustainable long-term strategy.

The veto of SB 556 is a victory for local governments in California, but it’s only temporary. ALEC and friends have a history that has had a devastating impact on families living with the digital divide, starting with 2012’s SB 1161, which the CPUC Network Exam points to as a culprit in exacerbating the digital divide; followed by 2017’s SB 649, which was vetoed by Gov. Jerry Brown; and 2021’s AB 537, which created a “deemed granted” law that puts safety protocols at risk. Gov. Newsom signed AB 537 into law.

Consumers, telecoms and our legislators are charged with the task of ensuring that all Californians have quality, high-speed, fiber optic access to online resources, be they in the rural cities of Huron, Mendota or Firebaugh or the inner-city MacArthur Park, Huntington Park or Leimert Park neighborhoods of Los Angeles. 

It is time for the governor to call for an investigation into why these ALEC bills keep landing on his desk. Consumers deserve to know how it is that the telecom industry’s plans since 1993 to upgrade consumers with fiber optics still have not been delivered.  At no point did consumers agree to a more expensive, less efficient wireless network. Wireless technology has its application, but to reiterate, 5G is 10,000 times slower, requires higher maintenance and will consume much more energy than fiber optics once deployed, guaranteeing a larger, not smaller, carbon footprint.

We might begin by looking at increasing oversight of fiber optics deployed under Title II of the Communications Act of 1934 — a federal mandate that all customers shall be served. This increased oversight, by itself, might be able to close the digital divide.

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