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Tuesday, June 28, 2005 | On Thursday, June 30, at 2 p.m. and 7 p.m. at the Scottish Rite Center (Square Compass Room), 1896 Camino Del Rio in Mission Valley, there will be California Public Utility Commission hearings for the purpose of soliciting input from citizens regarding the proposed SBC/AT&T merger.

SBC tried to circumvent any public hearings at all regarding this merger but were unsuccessful due to the efforts of the California Technology Foundation of California (CTFC). The CTFC filed a protest with the CPUC detailing the reasons why such a merger was not in the public interest. As a result of the filed protest, the CPUC has scheduled meetings throughout California.

So why does this matter to you?

President Bush, Congress and the Federal Communications Commission have identified deployment of broadband networks as a high national priority and a crucial aspect of the national economic and information infrastructure. Broadband is becoming increasingly essential for business, education, citizen awareness, employment and health care as voice, video and data converge, but private enterprise is only installing it when it is deemed profitable.

Leaders are concerned that communities without affordable (for instance, wireless access from Verizon costs $79.99 a month, completely out of reach for all of those people making $16 an hour or less, which is the majority of San Diego workers) broadband service will essentially “die” and be left behind as jobs and companies leave to go to areas – domestic and foreign – where instant, high-bandwidth connections are readily available and affordable. As an example, FCC Commissioner Michael Copps has stated: “Providing meaningful access to advanced telecommunications for all of our citizens may also spell the difference between stagnation and economic revitalization. Broadband is already becoming key to our nation’s systems of education and commerce and jobs and, therefore, key to America’s future. It’s going to be front and center in 21st century America’s transformation. Bet on it.”

And without such broadband service being affordable, the “digital divide” that currently exists for those traditionally called the “underserved” (those whose broadband access is affected by economic, educational or location factors) will be exacerbated and the “digital divide” expanded to include all of those who are obtaining the new jobs being created at $10-$12 an hour.

California Public Utilities Code Section 854,Section (a) states, “No person or corporation, whether or not organized under the laws of this state, shall merge, acquire or control either directly or indirectly any public utility organized and doing business in this state without first securing authorization to do so from the commission.” Section (b)(2) states, regarding an approved merger, that it “Equitably allocates, where the commission has ratemaking authority, the total short-term and long-term forecasted economic benefits, as determined by the commission, of the proposed merger, acquisition or control, between shareholders and ratepayers. Ratepayers shall receive not less than 50 percent of those benefits.”

The cost savings benefits estimated by the companies or industry analysts range from $12 billion to $16 billion. Yet, SBC is telling the CPUC that the expected benefits from the merger in California would only amount to $50 million; therefore the adjustment to ratepayers would only be $25 million. Obviously, there is a world of difference between $25 million and the $1 billion that independent analysis shows would be the ratepayers adjustment based on savings to the companies of $2 billion in regards to their doing business in California.

Additionally, according to new economic analysis by former FCC chief economist Simon J. Wilkie, the proposed SBC/AT&T and Verizon/MCI mergers would produce a dramatic loss of competitive choices, fueling major price increases and stifling innovative services for business customers.

And that difference in monies spells a world of difference in making broadband available on a basis that addresses the traditionally “underserved” and those whose hourly wage imposes restrictions on their access to broadband.

View the economics benefits associated with municipal wireless.

Both SBC and Verizon (which has proposed to merge with MCI) indicate that such mergers will allow them to implement broadband access faster using fiber-optic technology. But such service usually requires a consumer to buy a “package” in order to obtain a lower cost for broadband access. Industry studies have indicated that 46 percent of consumers would move to broadband from dial-up Internet access if the “price point” (cost to consumer) was $29.95 a month. (Obvious question: What is the price point at which well over half of dial-up users would move to broadband?). However, in Murrieta, Verizon is offering its existing DSL customers two fiber choices; a lower speed at $34.95 a month and a higher speed at $45.95(if the customer uses Verizon for their phone service).

Compare that to what various municipalities across the nation charge for the municipal broadband services offered. (And that is what some of the $1 billion due to the ratepayers could be allocated to.)

MetroFi, a company based in Mountain View, Calif., intends to offer a residential WiFi Internet service to Santa Clara homes in early 2005 and to Cupertino homes later in the year. At $19.95 a month, the MetroFi price will be considerably less expensive than current cable modem or DSL service offered to residents in those cities. Many other California cities are either offering such access or are planning to.

That’s why this hearing matters to you. Let your voice be heard at the hearing(s).

Bruce Sims, native San Diegan and local activist, is an organizer of the San Diego FightBigMedia meetup and a computer professional.

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