“5G,” ALEC and the U.S.’s Second-Rate Telecom System

Photograph Source: Campax – CC BY 2.0

Do you have a “5G” service? It’s ceaselessly promoted as the mobile phone standard. Over the last two decade, the mobile phone market has been transformed, moving steadily from the earliest “1st generation” to today’s “5th generation.” Americans are being told that the present is 5G and the future is 6G.

Americans use millions of wireless phones and devices. According to the CTIA, the wireless industry trade association, in 2021 there were 469 million mobile wireless devices in use and, of these, 190 million were connected devices that included smartphones, laptops, tablets, watches and in cars. The 2020 U.S. Census reports the population at 331 million, that’s 1.4 wireless devices per person.

Sadly, 5G has very little to do with the actual public benefits of wireless technology, especially as a “mobile” service that facilitates our hectic, postmodern lifestyles. While “5G” has been a great marketing term to signal the wonderful future promised by a new technology, it’s really has served two purposes: (i) to get rid of both federal and state communications legislation and regulation and (ii) to replace copper networks not with fiber but more profitable – and inferior performing — wireless services.

And the strategy has been successful on both fronts. For example, Verizon diverted its existing wireline utility budgets to illegally cross-subsidize its wireless network.

The telecom industry claims that wireless technology can replace a fiber-optic-based network. However, there are two types of wireless service, “fixed” and “mobile”; fixed connects two or more fixed locations where mobile refers to portable devices. Verizon, AT&T and the other wireless carriers do not distinguish the one from the other and are pushing wireless to cover “unwired” parts of many cities with cell sites for wireless. They claim to offer 5G technology, but it is often just the older 4G-LTE.

5G has been aggressively promoted by FCC Commissioner Brendan Carr. In 2018, he put forward 5G small cell technology model legislation that was most likely created by the American Legislative Exchange Council (ALEC). “Carr’s 5G Order” was adopted by the Republican-controlled agency in 2020 and helped launch the new generation of wireless communications. Carr argued that his 5G plan would cut roughly $2 billion in administrative fees and stimulate additional investments. Has it?

Often gone unacknowledged, ALEC has long played a pivotal role influencing telecom policy. It promotes itself as a “nonpartisan individual membership organization of state legislators that favors federalism and conservative public policy solutions.” It claims to “advance the Jeffersonian principles of free markets, limited government, federalism, and individual liberty ….”

ALEC is, formally, a non-profit group that drafts model legislation. It has an estimated membership exceeding 2,400 state legislators from both political parties, but most are conservative Republicans. It regularly invites members to all-expense paid private gatherings with corporate executives and lobbyists where they devise model legislation to fulfill their political agenda, many involving telecommunications policy. These legislators, in turn, return to their home states and promote the legislation at state houses throughout the country. Many of their initiatives are enacted.

ALEC is part of the Koch Bros network of corporate front organizations that lobby for their Libertarian free-market agenda at all levels of government. It has actively supported repealing the minimum wage, privatizing Social Security and replacing guaranteed health benefits with medical savings accounts. It developed template campaigns for states to oppose the new federal healthcare program (e.g., Virginia) and pushed anti-immigration laws (e.g., Arizona). Over the last two decades, ALEC was backed by AT&T, Sprint and Verizon and the NCTA in support of telecommunications re-regulations and in opposition to net neutrality.

Whether its claims are making Jefferson spin in his grave is an open question, ALEC’s effort to get rid of regulation that restrict potential corporate profits is represented by its actions regarding efforts to terminate what is known as “Carrier of Last Resort” (COLR) obligations. Such “obligations” are, according to Sherry Lichtenberg, Ph.D., at the National Regulatory Research Institute, “a cornerstone of utility regulation, arising both from English common law and historical state regulatory policy.” One of the obligations is simple:

The obligation to serve all customers within their territory, including extending facilities where necessary to provide service,

John Stephenson, former director of ALEC’s Communications and Technology Task Force, led the campaign against COLR. “Those [old rules] were written at a time when consumers had no choice in the matter,” he said.

Going further, he insisted that fewer regulations would lead to more investment in broadband and other services. “If we were to clear the underbrush of these rules written long before the Internet was even a word,” Stephenson argued, “there would be a lot more broadband deployed to the United States, and things that are even better that we can’t conceive of today.”

By 2022, more than 29 states had adopted COLR revision legislation, including Illinois. In 2020, the Oregon legislature pointed out, “Meeting the broader policy goal of universal access to broadband would effectively moot the need for a COLR obligation for voice telephony, as broadband service can provide both information and voice services.” It then added: “More than a quarter of Oregonians live in areas that are unserved, underserved, or have older technologies that will not be able to meet the digital demands of the very near future.”

Three open questions standout: (i) will ending COLR obligations end “digital redlining”?; (ii) is overturning COLR just another scheme to maximize telecom industry profits? and; (iii) what does it signify that the telecom system, the electronic glue that interconnects the nation, has no “obligation to serve” our fellow Americans?

Few Americans are aware that the U.S. is a second-tier telecom country. The Organization for Economic Co-operation and Development (OECD) ranks the U.S. 32nd in terms of fiber deployment of the 38 OECD countries. The U.S. is ranked 15th-fastest for mobile speeds (at 110.07 Mbps) and 13th-fastest for broadband speeds (at 203.81 Mbps).

As of April 2022, only 43 percent of American homes had access to fiber broadband services compared to Norway and South Korea with over 80 percent access, and Spain, Portugal and Japan that were above 90 percent.

Making matters worse, Americans pay more for their inferior telecom services. In the U.S., the monthly fee for internet service (at 60 Mbps) is estimated at $70.06 compared to Canada ($64.29), the U.K. ($38.72), France ($32.23) and Japan ($33.45).

And Americans are systematically overcharged not only by rigged service fees (e.g., “Ramming,” Cramming,” “Slamming” and other scams) but a host of hidden fees like “Subscriber Line Charges” and “Inside Wire Charges” and miscellaneous charges (e.g., “Call Waiting,” “Caller ID” and “Call Forwarding”).

Every time you pickup your mobile, especially “smart,” phone, don’t forget the technological, political and economic games that are being played out to bring this 21st century communications device to market.

Sadly, you – me, we! – are captives of a system that one can’t expect to fundamentally change. The U.S. will remain an over-priced, 2nd-tier telecom nation for the foreseeable future.

David Rosen is the author of Sex, Sin & Subversion:  The Transformation of 1950s New York’s Forbidden into America’s New Normal (Skyhorse, 2015).  He can be reached at drosennyc@verizon.net; check out www.DavidRosenWrites.com.