March 2012

The Investigative Reporting Workshop analyzed Federal Communications Commission and Census Bureau data to create a map that shows subscribership rates and demographic information at the Census tract level. That includes practically every neighborhood in the nation, or about 66,000 tracts. Each tract represents between 1,500 and 8,000 people.

Broadband subscribership in rural states, particularly in the West, increased at a rapid clip between 2008 and 2010, while the South has lagged behind the rest of the nation. Southern states like Mississippi, Alabama, Arkansas and Tennessee have abysmal subscription rates, according to the analysis. While the No. 1 most-wired state is Hawaii, states in the relatively wealthy Northeast have the highest subscription rates — among them, Connecticut, New Jersey, Massachusetts, New Hampshire and Rhode Island.

The other lowest-subscribing states and their median incomes were:

• Arkansas ranked 49th with a 43 percent subscribership rate. The state ranks 50th in median annual income, at $38,600.
• Alabama ranked 48th in broadband with a 47 percent subscriber rate. It ranks 43nd in income, at $42,218.
• Tennessee was 47th in broadband at 48 percent. It ranks 49th in income, at $40,026.
• West Virginia was 46th in broadband at 49 percent. It ranks 48th in income, at $40,824.
• Oklahoma was 45th in broadband at 50 percent. It ranks 38th in income at $45,577.

Wealthier states ranked near the top:

• Hawaii is first in broadband at 74 percent, and 10th in income at $59,125.
• Connecticut is second in broadband at 72 percent, and second in income at $65,958.
• New Jersey is third in broadband at 72 percent, and third in income at $65,173.
• Massachusetts is fourth in broadband at 70 percent, and seventh in income at $60,923.
• New Hampshire is fifth in broadband at 70 percent, and first in income at $66,303.

[Commentary] Today, as phone, video, and broadcast services have become merely bits passing over a wire, Congress’s intentions embodied in the Telecommunications Act of 1996 have been completely subverted. Through a wave of mergers and years of litigation, new companies have found it almost impossible to compete. Given this context, and its direct impact on consumers’ pocketbooks and innovation in America, you’d think that Congress would want to have an empowered regulator able to do something to protect the country from the rational, profit-seeking depredations of our new generation of monopolists. Instead, the House Republicans are going in exactly the opposite direction. They’re lining up big-company support to push legislation early next week on the floor of the House that would gut the Federal Communications Commission. The bill is called the “FCC Process Reform Act of 2011” (H.R. 3309). To be sure, it’s a job-creation bill. The Congressional Budget Office estimates that twenty additional government employees will be needed to handle the new rulemaking and reporting requirements of the legislation, at a cost of $26 million between 2013 and 2017. And the bill will trigger lots of lobbyist hours as everyone scrambles to figure out what the heck it means. Although the bill’s proponents say they aim to make things work more quickly at the FCC, the legislation will have the opposite effect: it will make it very difficult for the FCC to deal with any of the real-time telecom problems the country faces. What the Republicans seem to want, at bottom, is to grant the giant companies that sell us basic communications capacity — an essential utility for the 21st century — the ability to throw sand in the works at every opportunity.

T-Mobile made the sad announcement that it would be closing seven call centers, laying off thousands of workers, and that more layoff announcements may follow. Normally, we’d not comment on something like this. But I feel this is an exception for one big reason -- only a few months ago AT&T promised to preserve these very same call centers and jobs if our merger was approved. We also predicted that if the merger failed, T-Mobile would be forced into major layoffs.

At that time, the current [Federal Communications Commission] not only rejected our pledges and predictions, they also questioned our credibility. The FCC argued that the merger would cost jobs, not preserve them, and that rejecting it would save jobs. In short, the FCC said they were right, we were wrong, and did so in an aggressive and adamant way. Rarely are a regulatory agency’s predictive judgments proven so wrong so fast. But for the government’s decision, centers now being closed would be staying open, workers now facing layoffs would have job guarantees, and communities facing turmoil would have security. Only a few months later, the truth of who was right is sadly obvious.

So what’s the lesson here? For one thing, it’s a reminder of why “regulatory humility” should be more than a slogan. The FCC may consider itself an expert agency on telecom, but it is not omniscient. And when it ventures far afield from technical issues, and into judgments about employment or predictions about business decisions, it has often been wildly wrong. The other lesson is even more important, and should be sobering. It is a reminder that in government, as in life, decisions have consequences. One must approach them not as an exercise of power but instead of responsibility, because, as I learned in my years of public service, the price of a bad decision is too often paid by someone else.

Verizon’s Board of Directors has written a letter to shareholders:

The Board of Directors strongly believes that by requiring the Company to "not privilege, degrade or prioritize any packet transmitted over its wireless infrastructure based on its source, ownership or destination" this proposal will harm Verizon's ability to provide robust and secure wireless broadband service to its customers. The delivery of high-quality and safe wireless Internet access services is a highly complex, technical undertaking. The proponents appear to have no concept of the negative technical and operational ramifications of requiring purely "neutral" routing of Internet traffic. This proposal would substantially interfere with the technical operation of Verizon's wireless broadband network and have a wide-ranging and significant impact on Verizon's business and operations. Among other things, the proposal would prevent Verizon from engaging in reasonable network management practices designed to address potential congestion, security and other wireless network problems and make the network more efficient and more widely available to all customers. The proposal would also prevent Verizon from giving priority to police, fire and military communications over its wireless broadband network in the event of natural disasters or terrorist attacks.

Importantly, this very proposal was rejected by the FCC in its recently adopted rules addressing net neutrality issues. The FCC recognized that managing a broadband network in "non-neutral" ways was critical to ensuring network integrity, providing security capabilities and reducing congestion. It further concluded that wireless networks in particular present unique operational issues and expressly permitted providers to develop differentiated services that this proposal would prevent. The proposal disregards the FCC's conclusions about the importance of network management and would impede Verizon's ability to manage its networks and offer services to meet the needs of its customers.

Finally, Verizon is committed to maintaining an open and vibrant Internet. Verizon already complies with the FCC's net neutrality rules and voluntarily operates its wireless broadband networks in accordance with additional openness principles published on its website. The Board believes that the rigid operational requirements of this proposal will not further the "openness" of the Internet; to the contrary, it would expose Verizon's wireless broadband customers to reduced service quality and security.

For these reasons, the Board strongly opposes the proposal.

The Board of Directors recommends that you vote AGAINST this proposal.