The Digital Divide

Did you know that for years telecom companies have been overcharging customers fees with the promise of building out fiber optic networks across the country, while wrongfully using those funds to support telecom’s more profitable wireless business?

The unfortunate truth is that instead of building out safe, secure wired fiber optic networks as originally promised, telecom realized that the unregulated wireless business would be much more profitable than building out fiber optic infrastructure. In their accounting records, telecom inappropriately allocated money collected for the fiber optic network toward their wireless business.  This decision created the current “digital divide” and has left millions of people without high-speed Internet access, especially in rural areas and low-income communities in urban areas.

Their decision violated cost accounting rules and a group of former accounting executives called the Irregulators filed a lawsuit against the FCC to expose this accounting issue. If government officials in all states across the US would take action to correct this accounting discrepancy, it would allow states to collect millions of dollars that could be put toward safer, more secure and more stable fiber optic infrastructure, and bridge the digital divide between urban and rural areas.

If Illinois government officials work to fix this accounting issue, our state could have access to over $900 million annually to bring fiber optics to all communities. The Irregulators estimate that in the last five years “…$95 billion should have been used to upgrade America’s wired networks throughout the state utilities – wasn’t.”

Some government officials are already holding telecom accountable for not keeping their agreement to install fiber optics. Mayor Bill de Blasio of New York City just recently won a lawsuit against Verizon for failing to upgrade 100% of the city to fiber optics by 2014.  Based on the settlement, Verizon must provide an additional 500,000 lines of high-speed fiber optic broadband to households throughout the city. Verizon will also be required to provide quarterly reports on their progress.

Watch this short video that explains how telecom created the digital divide. We need government officials at every level to investigate and fix these egregious accounting issues related to cross-subsidies, so that the resulting funds can be used to deliver the high-speed broadband connections the public was promised and bridge the Digital Divide.