Jon Brodkin of ArsTechnica wrote a recent article about the Mississippi Public Service Commission (PSC) notifying the FCC that AT&T had failed to meet its CAF II requirements in the state. AT&T had taken over $49 million per year for six years ending this December and was supposed to use that money to upgrade broadband to almost 144,000 residents in the state to at least 10/1 Mbps broadband.
The PSC notification informs that FCC that they don’t believe the upgrades have been done or that many of those homes were able to get faster broadband. AT&T has certified to the FCC that the CAF II work has been completed on schedule. AT&T has stonewalled the PSC on data requests to find out how many homes have successfully been able to access faster broadband.
The FCC is supposed to begin testing CAF II homes in 2021 and is supposed to fine the big telcos like AT&T if homes in the CAF II area aren’t getting the faster speeds. However, that testing program is badly flawed in that the telcos are going to have some say about which homes get tested, and they’ll certainly funnel the testing into places that meet the speed test.
AT&T elected to use the CAF II funding to upgrade speeds by offering fixed cellular service to customers that formerly had slow DSL service. From what I can see, AT&T has not widely advertised the new wireless product and it’s unlikely that they have added many people to the cellular technology in Mississippi or anywhere else. The company is refusing to tell the state how many homes are on the new product.
Unfortunately, what AT&T is doing in Mississippi is not unusual. AT&T took $2.57 billion nationwide for CAF II and it’s likely It hasn’t made many upgrades in other states as well. I’ve seen a lot of evidence that Frontier ($1.7 billion) and CenturyLink ($3.03 billion) have also failed to upgrade rural customers. Those two companies elected to mostly upgrade rural DSL to the faster speeds. We’ve recently had engineers in counties where Frontier and CenturyLink were supposed to make CAF II upgrades and we could find no evidence of upgraded DSL anywhere in the rural parts of these counties. We’ve also helped counties to solicit speed test from citizens and we’ve studied a number of counties where no rural DSL service tested even close to the 10/1 Mbps goal of CAF II.
To make matters even worse, the FCC recently decided to award these big telcos a seventh year of subsidy. That means AT&T will get $428 million in 2021, Frontier will get $283 million, and CenturyLink will get $506 million. The companies have no obligation for this addition funding and don’t have to use it to improve rural broadband.
While 10/1 Mbps broadband isn’t great, it’s a lot better than the DSL that was in these rural areas in 2015 when the CAF II payments began. The CAF II areas are remote and most customers who could even get DSL saw speeds under 1 or 2 Mbps download.
The impact of AT&T’s failure to make the upgrades became apparent this year when millions of students were sent home during the pandemic. A student might be able to squeak out a school connection on a 10/1 Mbps broadband connection, but students cannot function on the slower DSL that is still in place due to lack of upgrades. The actions of the FCC and the greed of the big telcos robbed millions of rural homes from getting better broadband.
The failure of CAF II rests entirely on the FCC. The last FCC under Chairman Wheeler awarded the funding to upgrade to 10/1 speeds, even though the definition of broadband at the time was 25/3 Mbps. The current FCC under Chairman Pai has turned a blind eye to the non-performance of the big telcos and absurdly is awarding them with an additional year of CAF II funding. The overall CAF II program handed out over $10 billion in funding for improving rural broadband that might as well have been flushed down the drain. The FCC could have awarded this money instead to broadband grants that could have brought better broadband in the CAF II rural areas.
I hope the Mississippi PSC does more than just write a letter. I’d like to see them ask for AT&T to refund the CAF II money to the state to use for broadband grants. And I’d love to see other states do the same and take back the billions of CAF II broadband funding that was wasted.