Photo by Stan Santos

Deregulation of Communications Infrastructure in California

By Stan Santos

AB 1366, which was introduced by Lorena Gonzalez (D–San Diego), would lead to the indefinite extension of SB 1161 (2012), which ended public agency oversight, quality measurements, reports and fines for any communications service that touches the IP (Internet) network. The intent was to force “hands-off the network” by regulatory agencies such as the California Public Utilities Commission.

Without oversight, AT&T, Verizon, Frontier, Comcast and other providers can increase profits by deploying evolving, untested services, including 5G and fixed wireless. It comes at the expense of consumers and union jobs, especially for members of the Communications Workers of America (CWA), District 9. AT&T recently announced the layoffs of dozens of technicians in the Central Valley and 368 technicians in California, and this is just the start.

SB 1161 was a model deregulation bill written by lobbyists (i.e, the American Legislative Exchange Council) and passed in states across the nation. Then State Senator Alex Padilla, former friend of labor, betrayed his supporters in the CWA and carried SB 1161. He subsequently earned AT&T and tech industry support in his run for California Secretary of State. Currently, Gonzalez is carrying AB 1366 for AT&T and seeks to follow in Padilla’s electoral footsteps.

The passage of deregulation in 2012 enabled AT&T to declare that by 2020 the company would be all wireless and IP. Following the Verizon model, it wanted to “let the copper die in the ground” and force several million California landline customers to cell phone and VoIP aka fixed wireless via their computer line.

Outside field technicians already have seen steady cuts in permanent jobs as the industry moves to the 5G network. AT&T is leading the field in building the platform of the future, while denying the hardworking men and women who built the existing network the promised “jobs of the future.”

Since the passage of SB 1161 in 2012, the two main California providers, AT&T and Frontier, have failed consistently to comply with the regulatory metric for restoral time in 24 hours. The Public Utilities Commission (PUC) states, “This is a significant service quality measure because it tracks the time that consumers have no telephone service and are unable to contact 911 or emergency services.” Field technicians constantly encounter homes that have been out-of-service for several days or even weeks from the date of the trouble report.

Frequently, in neighborhoods with large numbers of low-income persons, ethnic minorities and families with elderly and disabled, technicians experience requests for landline service while working on a neighbor’s phone. Customers state that when they contact AT&T, they are told that landlines are not available in their area; they are denied the freedom to choose. Homes including elderly and disabled continue to rely on landlines for services such as health monitoring and 911 location capability—services that are not assured via IP or wireless services.

Thousands of consumers in rural areas and sections of inner cities in California have poor network coverage, both wireless and cabled. Despite promises of “up to” 10 Mbps or even 100 Mbps, many neighborhoods still experience actual speeds as low as 768 kbps, which is not adequate for the applications and HD/DVD quality video streams that require 3 Mbps to 5 Mbps.

Since 2012, AT&T has averaged 42,000–54,000 customer trouble reports with 50%–60% “off-the-hook” for more than 24 hours. In 2018, AT&T was assessed fines of $2.2 million for its performance in 2017. In 2019, AT&T was assessed fines of $3.7 million for not meeting the out-of-service metric in 2018.

Current PUC rules allow the company to invest an amount equal to twice the fine in areas of poor service. However, the company uses its own criteria and prefers not to disclose where those areas are or what technologies will be deployed (i.e., copper, optical fiber or wireless). It’s no surprise that a multibillion-dollar industry can ignore fines and throw techs to the street while leaving consumers off the hook.

Under AB 1366, California’s communications services put the public at risk:

  • There is no requirement for reporting VoIP and wireless outages, problem areas or measures for restoral of service to California regulatory agencies and representatives.
  • VoIP network equipment regularly experiences glitches and interruptions of service due to power outages, vehicle accidents, construction and natural disasters.
  • During the fires that have ravaged California in recent years, lives have been lost that were substantially the result of ineffective communications of evacuation orders. Although AT&T, Verizon, CenturyLink and other nationwide providers have been assessed millions in fines for loss of connectivity, including 911, nothing will bring back those lives.
  • In 2018, a section of the California Highway Patrol in a major Central Valley community was out of service for five days, as was the campus police department for a community college with more than 24,000 students.
  • Recently, several hundred AT&T broadband customers in Fresno were out of service for 17 days after a vehicle damaged equipment. There was no public apology or explanation why the restoral took so long because, under deregulation, “anything that touches the IP network is not subject to regulation.”

In 2017, AT&T announced that it would invest $1 billion and create 7,000 good jobs for the middle class if Congress passed a tax reform bill and the President removed Title II regulation (as a utility) passed under the Obama administration. CEO Randall Stephenson said that Title II regulation is “suppressive to investment.”

AT&T got the tax cut, and the Trump administration ordered the Federal Communications Commission to repeal Title II, but then started laying-off employees. “Despite its claim that a corporate tax cut would create thousands of middle-class jobs in its industry, AT&T recently announced that hundreds of workers in the Southwest would be declared ‘surplus’ and subject to layoff,” the CWA said in an announcement of its lawsuit.

After receiving more than $20 billion in tax cuts, AT&T has not fulfilled its promise to spend at least $1 billion in tax savings toward creating 7,000 good jobs for the middle class. AT&T eliminated 11,780 jobs in 2018 alone, despite paying out three-quarters of its 2018 profits to shareholders in the form of dividends and share buybacks.

In January 2019, AT&T reported net profit of $19.4 billion for 2018 and projected free cash flow of $26 billion. The company sees steady growth in all its business units and increased profitability in wireless. Despite these strong results, the company continues making deep cuts in its workforce.

On May 23, 368 AT&T California technicians were laid off including dozens in Central Valley communities. And this is just the beginning, as AT&T benefits from huge tax breaks while promising increases in jobs.

Lives have been lost due to failures in critical communications systems. IP and wireless networks are not ready for exclusive deployment until they are ready to provide adequate service to all California residents. In the event of an outage, there must be measures in place for detection and restoral of service within a reasonable time frame.

Continuing oversight by state authorities, such as the the PUC, is essential. Moreover, adequate staffing of technicians and service reps is required: The layoffs must stop. AB 1366 will be detrimental to the public interest and the future of California.

*****

Stan Santos is an activist in the labor and immigrant community. Contact Stan at alianzadefresno@gmail.com.

  • The Community Alliance is a monthly newspaper that has been published in Fresno, California, since 1996. The purpose of the newspaper is to help build a progressive movement for social and economic justice.

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