Will Rural Texas Ever Get Its Phone Service Back After Harvey?

According to the official Federal Communications Commission (FCC) statics (current to August 30), Harvey is having a predictably significant impact on telecommunications in the path of its devastation. We won’t actually know the final damage for awhile yet, but it appears that cell sites are pretty much gone in the counties where Harvey made landfall (but service is being steadily restored). Over 265,000 landline phones have been rendered inoperative. No one expects a communications network to come through an epic flood like Harvey without serious disruption. Indeed, from the very surface look of things, it appears that the communications network in the impact area is performing much better than it did during either Katrina or Sandy.

 

But looking ahead, I have a different question. Once the floodwaters recede and the reconstruction begins, when can residents see their phone service — and broadband service — return. For rural residents of Texas still dependent on traditional landlines, the answer to that may be “never.”

 

 

Why never? Back in 2011, Texas deregulated its telephone system. Of particular relevance here, Texas made it ridiculously easy for phone companies to get rid of their “carrier of last resort” (COLR) obligations — the obligation for the incumbent telephone network to provide service to everyone its service territory. As a result, phone companies in Texas do not have a state-based legal obligation to repair or replace service once it goes down. So in places where the telephone network has been damaged or destroyed by Harvey, AT&T (the primary legacy phone company in the impacted area) has no state responsibility to restore service.

 

Why Wouldn’t AT&T Want To Restore Service?

 

AT&T, like other legacy phone companies in America, is in the process of converting its phone network from traditional legacy technology to an Internet based platform, a lengthy and complicated process known as the “Tech Transition.” As a result, AT&T is not going to simply repair a destroyed system using obsolete technology, it’s going to rebuild the network, assuming it does, with new technology. That costs money. While AT&T will undoubtedly want to replace and upgrade the facilities in Houston and the suburbs (although, in light of AT&T’s record in Cleveland, it may skip certain poorer neighborhoods), investment in rural areas is much more expensive (since you need to cover a lot more territory to reach everyone) and much less profitable (because there are fewer customers and more of them are poor) than in urban areas. Historically, phone companies only built out to rural areas after we passed the Communications Act of 1934, when federal law (duplicated in most states) required phone companies to build out to rural areas.

 

This same economics contributes to our broadband “rural digital divide.” Broadband providers have no legal obligation to build out to rural areas where they would make less money, so they don’t. This is also why many rural areas don’t have a cable provider. It was simply never worth it for a cable company to build out a network for the community. So if the traditional phone line goes away, that’s it for landline service.

 

Opponents to COLR regulation argue that wireless and satellite have solved the problem. But these services don’t always substitute for a landline in rural areas. Again, the same economics applies to building cell towers as it does to building landlines. In urban areas, mobile companies can cover a large population with relatively few towers, making mobile a very affordable and relatively dependable substitute for a traditional copper line or fiber for city dwellers. But once you get out to rural territory, the rural math kicks in — it takes more towers to provide quality service to fewer people (and more of them low-income and therefore offering lower return on investment), making it more expensive and less profitable for a mobile company to offer service. In addition, mobile networks face challenges related to the terrain. Rock outcroppings or dense foliage may block signals, electronic “noise” from power lines may create interference for particular homes, or other conditions may make it difficult and expensive for a wireless company to provide a reliable signal.

 

As for satellite phones, these are outrageously expensive. They also don’t connect to the 911 system. Telling rural Texans to use satellite phones because the benefits don’t justify the costs may sound good in Washington DC, but I guarantee that rural Texans won’t like it.

 

Superstorm Sandy And Fire Island.

 

Lest folks accuse me of fear mongering, I must point to the unfortunate experience of Fire Island, NY after Superstorm Sandy.  Fire Island is a vacation community an hour and a half from New York City. It has no cable system, so the only landline service available for either voice or broadband was Verizon’s traditional copper line system. Superstorm Sandy destroyed virtually all of the traditional telephone network. Rather than rebuild the existing copper network or extend its fiber footprint, Verizon opted to simply rely on its existing cell network. For residents and small businesses that depended on the traditional copper line for voice and/or DSL, Verizon offered a product called Voicelink — which plugged your house or business into the existing cellphone network. Voicelink had, to put it mildly, serious problems. Many essential services for businesses and residents, like credit card readers and medical monitoring systems, did not work reliably with Voicelink.

 

Because New York had not eliminated its COLR obligations, state law required Verizon to get permission from the state Public Service Commission (PSC) to end landline service and offer Voicelink instead. This allowed the local community to organize and create massive public pushback. Additionally, after a brief effort by Verizon to proceed without getting federal permission, the FCC also stepped in to review the process. The political pressure finally got so bad that Verizon agreed to replace its traditional copper line with fiber rather than with Voicelink. Without the regulatory review process, Verizon would have simply dropped its landline service on Fire Island altogether (as it did on the Barrier Islands in NJ, but the Barrier Islands residents had Comcast available as a landline provider).

 

FCC Chairman Pai Proposes Rolling Back Safeguards The FCC Adopted After Fire Island.

 

In response to the experience with Sandy and Fire Island, the FCC conducted a lengthy proceeding to put appropriate safeguards in place to assure that all Americans would continue to have quality voice service capable of supporting the needs of residents and small businesses. In a series of orders (see here, here and here), the FCC adopted rules that require legacy telephone providers, before permanently terminating traditional landline service, to prove to the FCC  that everyone in the service area has access to a substitute service at least as good as the traditional copper line as measured by clear, engineering evidence for voice quality, reliability, ability to connect to 911, and other key metrics. The FCC also required that, before retiring any copper lines, phone companies must provide advance notice to customers, as well as state and local governments so that can participate in the FCC process.

 

Throughout the 3 year FCC process that culminated in these final rules, then-Commissioner Pai (and his Republican colleague, Commissioner Mike O’Reilly), made clear that he considered these rules both excessive and exceeding the FCC’s authority. Appointed by President Trump to serve as Chairman of the FCC, now-Chairman Pai moved expeditiously to roll back all of these protections on the grounds that rolling back these regulations would “encourage broadband deployment” in rural areas. It is hard to see, however, how rolling back the protections adopted after Superstorm Sandy to make sure that carriers don’t abandon service in rural areas without providing an adequate replacement will “encourage broadband deployment.” To the contrary, when existing copper DSL lines are eliminated — “retired” in telephone jargon — it tends to eliminate the one source of reliable broadband as well.

 

In addition to proposing to roll the notice requirement and the requirement that telephone providers show that subscribers have access to a comparable service, Pai has proposed other additional roll backs recommended by the industry to relieve them of “burdensome” regulations. Pai has proposed to roll back the classification of broadband as a Title II “telecommunications service,” effectively eliminating any way for the FCC to ensure that local communities don’t lose whatever broadband they have. He has proposed changing the definition of “broadband” for the national broadband report to include lower quality wireless. which would mean that any loss of broadband from retirement of DSL lines would be camouflaged by the de facto lowering of the broadband standard. Finally, Pai has proposed mandated a “cost/benefit” analysis for FCC policy at a time when former members of the Trump FCC-transition team have openly questioned whether trying to get broadband to rural America is worth the cost. 

 

Taken together, this raises serious questions as to whether Pai will enforce the existing rules that he has already made clear he wants repealed.  It is perhaps an interesting straw in the wind that in FCC Chief of Staff Mathew Berry’s daily retweet of the FCC’s Harvey statistics, we see no mention of wireline. Wireless, television stations and radio station outages are all listed, but wireline is apparently not important enough for the Chairman’s office to provide through Twitter.

 

What Will Happen After Harvey?

 

Unlike the people of Fire Island, the rural communities around Houston have no state protections. Unless the FCC vigorously enforces the safeguards put in place after Superstorm Sandy, telephone companies can simply walk away from their copper networks. Will Chairman Pai enforce safeguards he opposed as a Commissioner? Will he require companies that want to shift away from traditional landlines to show that their proposed substitute service actually meets the needs of local communities? Or will Pai decide that “markets know best” and allow the phone companies to decide if serving rural Texas is more trouble than its worth?

 

Stay tuned . . . .

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