The Digital Redlining of Dallas

In 2018 Dr Brian Whitacre, an economist from Oklahoma State University looked in detail at the broadband offered by AT&T in Dallas County, Texas. It’s an interesting county in that it includes all of the City of Dallas as well as wealthy suburban areas. Dr. Whitaker concluded that AT&T has engaged for years in digital redlining – in providing faster broadband only in the more affluent parts of the area.

Dr. Whitaker looked in detail at AT&T’s 477 data at the end of 2017 provided to the FCC. AT&T reports the technology used in each census blocks as well as the ‘up-to’ maximum speed offered in each census block.

AT&T offers three technologies in Dallas county:

  • Fiber-to-the-home with markets speeds up to 1 Gbps download. AT&T offers fiber in 6,287 out of 23,463 census blocks (26.8% of the county). The average maximum speed offered in these census blocks in late 2017 according to the 477 data was 300 Mbps.
  • VDSL, which brings fiber deep into neighborhoods, and which in Dallas offers speeds as fast as 75 Mbps download. AT&T offers this in 10,399 census blocks in Dallas (44.3% of the county). AT&T list census blocks with maximum speeds of 18, 24, 45, and 75 Mbps. The average maximum speed listed in the 477 data is 56 Mbps.
  • ADSL2 or ADSL2+, which is one of the earliest forms of DSL and is mostly deployed from central offices. The technology theoretically delivers speeds up to 24 Mbps but decreases rapidly for customers more than a mile from a central office. AT&T still uses ADSL2 in 6,777 census blocks (28.9% of the county). They list the maximum speeds of various census blocks at 3, 6, 12, and 18 Mbps. The average speed of all ADSL2 census blocks is 7.26 Mbps.

It’s worth noting before going further that the above speed differences, while dramatic, doesn’t tell the whole story. The older ADSL technology has a dramatic drop in customer speeds with distances and speeds are also influenced by the quality of the copper wires. Dr. Whitaker noted that he had anecdotal evidence that some of the homes that were listed as having 3 Mbps of 6 Mbps might have speeds under 1 Mbps.

Dr. Whitaker then overlaid the broadband availability against poverty levels in the county. His analysis started by looking at Census blocks have at least 35% of households below the poverty level. In Dallas County, 6,777 census blocks have poverty rates of 35% or higher.

The findings were as follows:

  • Areas with high poverty were twice as likely to be served by ADSL – 56% of high-poverty areas versus 24% of other parts of the city.
  • VDSL coverage was also roughly 2:1 with 25% of areas with high poverty served by VDSL while 48% of the rest of the city had VDSL.
  • Surprisingly, 19% of census blocks with high poverty were served with fiber. I’m going to conjecture that this might include large apartment complexes where AT&T delivers one fiber to the whole complex – which is not the same product as fiber-to-the-home.

It’s worth noting that the findings are somewhat dated and rely upon 477 data from November 2017. AT&T has not likely upgraded any DSL since then, but they have been installing fiber in more neighborhoods over the last two years in a construction effort that recently concluded. It would be interesting to see if the newer fiber also went to more affluent neighborhoods.

I don’t know that I can write a better conclusion of the findings than the one written by Dr. Whitacre: “The analysis for Dallas demonstrates that AT&T has withheld fiber-enhanced broadband improvements from most Dallas neighborhoods with high poverty rates, relegating them to Internet access services which are vastly inferior to the services enjoyed by their counterparts nearby in the higher-income Dallas suburbs…”

This study was done as a follow-up to work done earlier in Cleveland, Ohio and this same situation can likely be found in almost every large city in the country. It’s not hard to understand why ISPs like AT&T do this – they want to maximize the return on their investment. But this kind of redlining is not in the public interest and is possibly the best argument that can be made for regulating broadband networks. We regulated telephone companies since 1932, and that regulation resulted in the US having the best telephone networks in the world. But we’ve decided to not regulate broadband in the same way, and until we change that decision we’re going to have patchwork networks that create side-by-side haves and have-nots.

Home Automation as a Carrier Product

Savant Home Automation Control Media Room

Savant Home Automation Control Media Room (Photo credit: Gramophone Maryland)

As a gadget guy I am interested in home automation. I stayed in the Hyatt in the Dallas airport last year which has automated rooms. I spent a great hour playing with the blinds, lighting and temperature from my bed. For a gadget nut this hotel gained a wow.

And a lot of people are interested in automating their homes to some degree. The problem they run into is that once they start investigating home automation they find a ton of different devices on the market, almost all from brands that they never heard of. And so they have no idea how to get started.

And this is why there is a product for carriers. As you probably know from reading this blog, I think that if you are a full-service provider that you need to take every opportunity to get into your customer’s homes. Meeting and talking with your customers benefits you in many ways. First, every time you meet them is an opportunity to upsell them. Second, they are able to put a face with your company so that you are not just another person they send monthly checks to. And this leads to loyalty from customers and less churn.

I have one client who has already seen the wisdom of installing home automation systems. He did his research and he picked a platform that is able to handle a number of devices and that looks expandable into the future. But this is the early days of home automation and he is not wedded to that system and he will consider a better one of it comes along.

And here is how he sells it. He will sell the equipment directly to a customer, but he would prefer that they lease it over time by signing a term contract. He makes more money on the lease and customers find it easier to pay over time. He then charges a fee to install the system to cover his technician’s time. Finally, he offers a monthly fee that will cover the labor cost of adding additional devices onto the system later. This fees basically lets the customer pay you to have you come and sell them more hardware in the future.

So what does he automate? There are a few obvious things. You connect this to the thermostat so that customers can easily change the temperature by time of day for comfort and to save money. And there is the old standby of putting light switches on the system so that they can be set to turn on and off when you wish.

But with a good home automation you can also tie in to security systems, irrigation systems, audio-visual systems, and a host of other devices like alarm clocks, smart door locks, blinds, coffee pots, you name it. With the advent of the Internet of Things, more and more devices in your house are going to have a WiFi or bluetooth interface.

A home automation system can save customers money. For instance, along with controlling the thermostat a customer can tie the system into smart blinds. The blinds can raise and lower at pre-set times to welcome the day, but more importantly to save energy by selectively blocking or letting in the sun depending upon the time of day and time of year.

You can also use motion detectors in the system so that a room responds when you enter by turning on the lights and playing your streaming Frank Sinatra. The number of options for a customer is almost unlimited and this is what homeowners find intriguing but also what they find daunting.  There are a ton of home automation systems on the market that will easily do stuff like automate the lights. But it takes programming to do the more complicated (and fun!) stuff. It’s a little more complicated if you want your house to remind you that tomorrow is your anniversary.

And the systems can all be accessed from the customer’s smart phone. The beauty of this is that you can also pre-set alarms. For instance, a customer can have the house tell them if the temperature goes warmer or colder than the pre-set temperature range. They can have the house send them a text every time somebody comes to the front door. They can check in to see that the pets or the kids aren’t killing each other just yet.

Not all home automation is serious. There are silly devices available that can be tied into these systems. Just last week I saw an egg tray that will tell you how many eggs you have left in the fridge. Doesn’t make sense to me, but if a customer wants that, then let’s make it work!