AT&T-Direct TV Merger: Low-income users loose out!

Back in July 2015, the US Federal Communications Commission (FCC) set out terms for AT&Ts acquisition of Direct TV.

Back in July 2015, the US Federal Communications Commission (FCC) set out terms for AT&Ts acquisition of Direct TV.

Since the consummation of the deal would result in the formation of one of the nation’s largest Pay TV provider, as well as potentially have huge implications on internet policy, the Commission included certain clauses to offset that impact. The idea was to help low-income families get cheaper access to broadband internet.

It now appears that perhaps, as a result of the merger, the promise to help low-income users might not be working out as the FCC may have thought!

Promises Made

As part of the approval for the merger between the two giants, the FCC stipulated that the merger should result in:

· Expanded “fiber to premises” deployment that could benefit up to 12.5 million users
· Discounted access to broadband internet to consumers in a certain section of society
· Extension of fiber connectivity to libraries and schools so they might benefit from subsidized federal rates for broadband use
· Certain restrictions, as well as additional reporting, around Net Neutrality, to ensure that other content providers (notably Netflix) may not be stifled

As part of its compliance to the second clause, discounted broadband access, AT&T unveiled its Access program, which promised “…low-cost wire line home internet service to qualifying households”. The criterion for such qualification was:

· The household must have at least one member that is enrolled in the U.S. Supplemental Nutrition Assistance Program (SNAP); or Supplemental Security Income (SSI) benefits for California users
· The address should fall within AT&Ts 21-state service area
· The prospective recipient consumer should have no outstanding dues with AT&T

Based on technical feasibility and capacity availability in any given service area, those households or individuals that pre-qualified by meeting the above stipulations, would receive the fastest of the following services available:

· 10 MB/S @ $10/month
· 5 MB/S @ $10/month
· 3 MB/S @ $5/month

But according to one industry alliance, AT&T seems to be reneging on its FCC commitments by not delivering on its Direct-TV merger stipulations.

Promises Unfulfilled?

According to the National Digital Inclusion Alliance (NDIA), AT&Ts Access Program is not living up to its commitments, which means that a significant number of “eligible” households are being denied access where current AT&T download speeds are less than 3 MB/S.

NDIA points out that, as their staff geared up to help eligible residents in a number of AT&T service areas apply for the Access Program, they were being told by AT&T that they were ineligible – due to “technical inability”.

NDIA however points to the fact that:

· Some of these very same households, who are being denied fast internet access today, until recently had several related AT&T services available to them
· As well, fast access is surprisingly being used by some of their next-door neighbours – which makes it all the more surprising why homes just a door or two down the corridor can’t be accommodated by Access

The crux of the matter is that, if the 3 MB/S download speed threshold set by AT&T isn’t available to an otherwise eligible SNAP recipients, then they (that household/individual) will not be able to sign up for low-cost high-speed internet. However, AT&T is more than happy to provide them lower speed access for FULL FEE!

So who might be impacted by this promise unfulfilled? Many more recipients than anyone might think of!

FCC Broadband Deployment Data Form 477 shows that almost 21% of those households in Detroit and Cleveland that were polled had download speeds of 1.5 MB/S or less from their AT&T service. The residents of those areas were mostly low-income earners living in inner-city blocks – a demographic that the FCC is desperately trying to help get access to high-speed internet.

Of course, when NDIA made representations to AT&T management to reconsider terms of the Access offer, by lowering the lowest download speed restriction to include those 21% households, the company declined with the following comment:

“AT&T is not prepared to expand the low income offer to additional speed tiers beyond those established as a condition of the merger approval.”

While “technically speaking” AT&T may be in compliance of the letter of its agreement with the FCC, some might think its promises stand unfulfilled in the spirit of the merger deal.

Stark Contrast

While one might sympathize with AT&Ts stance that, if Access faces certain technical barriers, the company cannot legitimately be expected to overcome those hurdles at whatever cost, just to provide broadband access to a small constituent of users. The company may also be legally covered by including the following verbiage in its Access Program offer:

“If none of the above speeds are technically available at your address, unfortunately you won't be able to participate in the Access program from AT&T at this time”.

And this, sadly, means that thousands of users that were hoping to at last receive the benefits of Access, will be unable to do so.

However, in stark contrast to how AT&T is approaching the challenge of delivering high-speed internet access to underserved communities, Google has chosen to take the moral high ground to respond to the same challenge.

In a move announced early this year, Google has pledged to provide FREE high-speed internet access to low-income communities all across the country, under its ConnectHome initiative. The tech giant kicked off its pledge by making the service available to around 100 Kansas City homes.

According to company spokespeople, Google Fibre will provide this service FREE of cost – including NO INSTALLATION CHARGES – to affordable and public housing all over the USA where Google Fibre service is available. Normally, this service is offered to Google Fibre clients at an average monthly cost of around $70.

The Way Forward

Mergers such as the AT&T-Direct-TV transaction are a part of corporate America – and they certainly benefit many segments of our society. However, if we are to keep the “Great Digital Divide” at bay, regulators like the FCC will have to scrutinize future deals with an even finer tooth comb, just to ensure that the “have not’s” in our society aren’t deprived of yet another digital right – the right to low-cost high-speed internet access.

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