ELECTRONIC REDLINING EXAMINED BY CIVIL RIGHTS GROUPS

MMTC still is trying to determine whether practice of redlining, which means avoiding providing advanced services to neighborhoods for racial reasons, is widespread among cable and telecom operators, Honig said. He said group also must determine whether failing to serve all neighborhoods was illegal. Representatives of cable and telecom operators deny they purposely discriminate when rolling out advanced broadband services.

New class action lawsuit filed in U.S. Dist. Court, W. Palm Beach, against AT&T has renewed debate on issue, groups said. Suit accused AT&T of intentionally limiting access to broadband services in minority neighborhoods by bypassing poor neighborhoods while offering service to more affluent areas in order to “give the appearance of inflated profitability” (CD Aug 30 p9). Lawsuit said that due to electronic redlining, plaintiffs and other members of class were denied access to telecom technology that was widely available in other areas. For example, in Broward County 1% of African-American households has access to high-speed broadband service from AT&T Broadband Services, as opposed to 100% of eligible white households.

Federal Communications Act of 1934 and Telecom Act of 1996 prohibit discrimination in providing communications services, but there’s disagreement on whether laws apply to advanced broadband services. AT&T has obligation to provide equal service, suit said. Carrier said it would have to spend billions of dollars on infrastructure in minority neighborhoods to comply with request. However, lawyers bringing case said AT&T intentionally had failed to build infrastructure to make its broadband division look more profitable before selling it to Comcast. AT&T denied charges. Many advocates for poor and minorities told us they were watching Fla. case to gain insight into how to attack issue in future.

Civil Rights and public interest groups first used electronic redlining as term in 1994 in study “Racism on the Information Superhighway?” by Prof. Chad Kahl of U. of Ill.- Urbana-Champaign. Report on Internet inequality described electronic redlining as alleged -- some civil rights and public interest advocates say “purposively racist” -- practice by cable and telecom providers that limited access by bypassing poor neighborhoods in favor of more affluent areas where profits were higher. Issue first was raised by coalition of public interest groups that examined Bells’ video dial tone installation proposals to FCC and filed petition in 1994 in effort to get clarification of policy and statement opposing segregation.

Among groups that said they were monitoring ways advanced services were being rolled out in low-income and minority neighborhoods were Congressional Black Caucus, MMTC, NAACP, National Action Network (NAN), National Assn. of Black Organizations (NABO), National Assn. of Black Telecom Professionals (NABT), National Rainbow Coalition (NRC), National Urban League. Public interest coalition that includes Media Access Project, Center for Digital Democracy and Consumer Federation of America also have conducted studies with various findings on issue. Some civil rights groups we talked with believe electronic redlining is widespread in many urban areas such as Atlanta, Baltimore, Boston, Chicago, Detroit, L.A., N.Y., D.C. However, they said it was difficult to prove electronic redlining existed.

Lawsuit challenging constitutionality of electronic redlining is “premature without knowing what the law is,” Honig said: “Events could proceed in a way” in future “that could make this a litigable issue.” MMTC or other group could ask FCC to “consider adopting rules” to solve problem, Honig said. “We're monitoring this closely,” said Brian Komar, dir.-strategic affairs for Leadership Conference on Civil Rights: “We're still in the monitoring and research stage.” Komar agreed “some research” could be used, “but more is needed.”

“Full deployment” of advanced broadband services “is the goal of the FCC,” spokesman said: “The issue has come up in many of our reports.” Spokesman cited E-911, 706, universal service and over-air studies: “Clearly this is something that we have focused on. There are a number of issues related to the digital divide” that encompasses “a lot of different factors and a lot of different factors that are covered within the FCC rulebook.” He said subject stretched across FCC policy spectrum. However, FCC to date hasn’t received any complaints about “specific problems,” spokesman said: “We have a mechanism for the complaint process and I'm not aware of any.”

Legality of Redlining Questioned

Major question groups need answered is whether electronic redlining is even illegal. This isn’t issue with cable operators because it’s prohibited under 1996 Telecom Act, NCTA spokesman said. Others said they weren’t sure whether telecoms were bound by same standards. In either case, strong data are needed to back their case, advocates for poor and minorities said. “An argument could be made that there is a racial element, given the historical experience of minorities” in U.S., said African-American official of telecom company: “It’s a real issue and something that needs to be” examined.

Groups have been stymied in efforts to initiate court proceeding or regulatory challenge at FCC because “of the lack of empirical data” and “more pressing issues” at Commission such as “fight over EEO rules and minority ownership rules that has taken precedence,” Honig said: “This is an important issue, but we can only fight so many battles.” MMTC, like others, wants to see data before deciding whether to pursue efforts in court. “The [W.Palm Beach] Florida case is going to be the lead case on this,” Honig said: “There are related issues, but it’s the closest to being on point.”

“There is a philosophical issue of whether the Internet is a necessity such as dial-up telephone service, or a luxury,” Honig said: “Eventually, the Internet is going to be a vital necessity. If it isn’t now, it will be soon.” He said high-speed Internet access currently was based on neighborhoods. “If it’s an essential service” as some civil rights lawyers suggest, citing certain language in Communications Act, then cable and telecom operators could be forced to roll out services in areas “that may not be as profitable,” Honig said. “One potential solution may be to offer the same subsidized lifeline link-up that’s currently offered for telephone service.”

FCC “has enough resources to conduct a study,” but it probably won’t happen in current political climate, Honig said: “This is not high on their priority list.” Privately, some say data have been hard to collect because foundations (such as AOL Foundation) that normally fund such studies have been reluctant to provide money, said official of civil rights think tank: “There is no foundation support to do work in this area.” Other civil rights organizations receive major financial support from cable and telecom operators such as AT&T and Comcast, he said: “In some ways [some civil rights groups] are turning a blind eye to the problem. Some studies have shown that in terms of deployment, this has hit low income and minorities very hard.”

“There is a great deal of concern that this is happening, but we don’t have evidence that it’s happening,” said CRFCP Dir. Mark Lloyd and Martin Luther King visiting prof. for Communications Policy at MIT. “When we had an FCC that was concerned about [civil rights issues], we might have been able to get some kind of allocation done for a study.” Contributing to problem is that current FCC data are based on zip codes, which Lloyd, Honig and others say don’t give clear picture. “Zip codes were roundly criticized by the previous FCC,” chaired by Democrat William Kennard, Lloyd said. Zip codes “won’t give us any data as to which communities are being avoided.”

Communications Act gives Commission legal authority to require companies to roll out services in poor and minority neighborhoods on equal level, Lloyd said. CRFCP is focusing on doing its own redlining study, rather than asking FCC to do so. “It’s like spitting in the wind at the FCC,” Lloyd said. Best chance for funding remains with foundations, he said, but AOL, for example, “is not going to fund a study that criticizes their brethren.” Companies “are playing hide the ball and [redlining] is more difficult to prove if you don’t have the evidence.”

BellSouth Vp-Regulatory Affairs Bob Blau told us electronic redlining was “significantly less” of issue today than it was 10 years ago. BS provides broadband service in cities with large minority populations such as Atlanta, Birmingham, Columbia, S.C., Jackson, Miss., Louisville, New Orleans. He also said “you can get dial-up” if high-speed service isn’t available or is too costly. “Whenever you deploy technology, you have to start somewhere,” Blau said: “You start with areas where you are going to do best” financially. “In the early days” of high-speed Internet access, “that was the higher income areas.”

BellSouth broadband is deployed in 70% of area it serves, “more than any other telecom,” Blau said. He said 30% without access are in rural, not inner-city as some civil rights groups have suggested: “The demand for DSL is still sensitive to income,” and BellSouth rolled out service with profits, not access, in mind: “There obviously has to be an expectation that we are going to get our money back. You have to have enough customers.” Atlanta is perfect example of how BellSouth has targeted users in low-income or predominately minority community, he said: “As technology has gotten cheaper, under-deployment has become less of a problem.” Decisions by companies are business-oriented today because “more people can afford computers and kids [in low- income areas] are making better use of them,” Blau said: “It’s a more valuable asset to have in the home.”

NCTA doubts cable operators are guilty of electronic redlining, both because it’s illegal and because of “good business practices,” spokesman said. Local franchise “authorities are there to set up agreements” with cable operators “to ensure this doesn’t occur,” he said. In addition, “it’s good business to deploy services everywhere,” including low-income minority neighborhoods. “In Anacostia [D.C.] more people buy pay-per view than in Georgetown [D.C.],” spokesman said. He said when fiber optic networks are built, they're designed with high-speed Internet access in mind. “Availability is there in poor neighborhoods,” spokesman said: “In our business, the customer-base is everywhere.”

Former FCC Comr. Andrew Barrett, business consultant for several companies, including telecoms, told us issue wasn’t as cut-and-dried as some would make it. When at FCC, Barrett said, he initiated study on issue and has been collecting data for 10 years. “It’s not so much a racial issue as an economic issue,” he told us. He said it might be easier to prove race is factor in cities such as Boston, Chicago, L.A. and Washington “because you know where people are congregated.” In Atlanta, where there is large minority population, “it’s harder to prove because you don’t know where people live.” Same is true, Barrett said, of northern Va.: “It’s the most difficult place to do economic analysis because you have housing projects in the middle of wealth.”

Former FCC Chmn. William Kennard doubts companies are purposely engaging in electronic redlining because of race, but believes there is problem with way services are provided to low-income and rural areas. “There’s definitely a history in this country of markets not delivering service to people on the wrong side of the tracks,” he said. Kennard said Indian reservations and others lacked “basic dial-up service,” making Internet access impossible. He agreed Telecom Act prohibited electronic redlining, but said stopping it would take “continuous oversight and vigilance” from FCC. Kennard said advanced broadband services should be “subsidized” so all segments of population could have it.

Internet isn’t essential service as some groups claim, said Barrett: “That’s pushing the envelope. It’s an important educational tool, but it isn’t an essential tool. You don’t learn math on the Internet… Dial tone service is essential. Gas and electric is essential.”

Groups Say Public Policies Are Needed on Access

“There need to be public policies” to ensure access, said Center for Digital Democracy Exec. Dir. Jeffrey Chester, who in 1994 did one of first studies on subject, which led to widespread funding of computer access for schools and libraries by private and govt. organizations nationwide. “Given where we were 10 years ago, we've made modest” progress, he said: “Progress is lagging among people with low income and people of color.” He said Congress and White House had “frozen” on issue. “Republicans cut back funding for community technology centers. There hasn’t been leadership” on issue “from either party,” Chester said: “This is the civil rights issue and the economic rights issue of the 21st Century.”

“The pipes are there,” Chester said: “You can’t just look at this as a consumer option. The Internet is a necessity.” He called Internet “new form of electronic poll tax. If you want to find out about the local PTA, city council or information about a candidate, you have to have cable and you have to have the ability to go online.” Chester agrees major problem has been lack of funding: “The debate about digital divide must be extended to advanced broadband services or there is going to be a new digital divide.” Critics say redlining contributes to widening digital divide.

“It is essential for democracy and economic growth to make sure we hook all of America to broadband services,” Media Access Project Exec. Dir. Andrew Schwartzman said: “Many of the benefits of the technology operate from a network effort. If you are able to leave people off, you are hampering the network. Citibank needs to be able to access all of its customers, not just a few. Many of the other benefits of innovation and the gene pool of ideas come from the Internet, and minority populations have been sources of innovation that have kept America growing.”

Schwartzman said “there are problems” with electronic redlining. “One of the benefits of open access makes it more likely local and regional ISPs can service minority markets and function as training wheels onto the Internet.” He said classic example was AOL Spanish Language access network, which has “cultural roots” that have increased use among Cuban population in Fla. and Puerto Rican population in N.Y.C.

“There is a lot of data that will make a compelling case for the digital divide,” and electronic redlining, Benton Foundation Vp-Programs Tony Wilhelm told us. Wilhelm said Benton Foundation did study 2 years ago that found electronic redlining was reality. “We just scratched the surface and some patterns began to emerge,” Wilhelm said. “It’s harder to discern the intentionality. A lot of this is economics. It’s a fairly complex issue.” Same patterns exist in cable and telecom industries when looking at digital footprints, he said. “Low income and minority groups are being left out. There still is a long way to go on the high-speed front.”

Situation “still isn’t clear” to William Spriggs, exec. dir. of Urban League Institute for Opportunity & Equality, which handles Internet policy issues. Despite looking at FCC maps, Spriggs said, he doesn’t have all data needed on DSL. “It seems to be clear there are differences in access, but take-up rates” in minority and low-income neighborhoods are extremely low for advanced broadband services, he said. “There aren’t all of those killer apps out there” that are making people buy service. Spriggs said that, as with other civil rights groups, Urban League was focusing on “fallout” and large loss of jobs because of “overcapacity collapse” in telecom industry. Jobs and EEO issues are “ahead of electronic redlining” at this point, he said: “That doesn’t mean it isn’t an important issue.”

Digital divide could be eliminated by allowing more minority-owned businesses that offer broadband services into marketplace, Northpoint Vp Toni Bush said: “Our plan would roll out services in all areas. We have transmitters in Ft. Washington, Maryland, which would allow us to provide Internet access in Washington. It’s very cheap for us to deploy our service in the inner city. Our basic packages are only $20, so we need a lot of people” to make business work. National Assn. of Black Organizations (NABO) Pres. Horace Sheffield agreed: “We need more minority-owned companies like Northpoint. That would go a long way in eliminating this digital divide. African-Americans and minorities would have a friendly face where we could turn.”

Making advanced broadband services part of program such as universal service would help, Urban League spokesman said. BellSouth’s Blau disagreed: “I don’t want to tell you we need something like universal service because that program is obviously under some stress.”