AT&T's deployment of fiber-to-the-home in California has been heavily concentrated in higher-income neighborhoods, giving affluent people access to gigabit speeds while others are stuck with Internet service that doesn't even meet state and federal broadband standards, according to a new analysis.

"Because there is no regulatory oversight of AT&T’s fiber-to-the-home deployment, AT&T is free to choose the communities in which it builds its all-fiber GigaPower network," UC Berkeley’s Haas Institute for a Fair and Inclusive Society wrote in a report released today. "Our analysis finds that AT&T has built its all-fiber network disproportionately in higher income communities. If this pattern continues, it has troubling consequences for low- and moderate-income Californians, leaving many without access to AT&T’s gold standard all-fiber network and exacerbating the digital divide."

California households with access to AT&T's fiber service have a median income of $94,208, according to "AT&T's Digital Divide in California," in which the Haas Institute analyzed Federal Communications Commission data from June 2016. The study was funded by the Communications Workers of America, an AT&T workers' union that's been involved in contentious negotiations with the company.

By contrast, the median household income is $53,186 in California neighborhoods where AT&T provides only DSL, with download speeds typically ranging from 768kbps to 6Mbps. At the low end, that's less than 1 percent of the gigabit speeds offered by AT&T's fiber service.

The median income in areas with U-verse VDSL, which ranges from 12Mbps to 75Mbps, is $67,021.

The income difference is even more stark in some parts of California. "For example, in Los Angeles County, the median income of households with fiber-to-the-home access is $110,474, compared with $60,534 for those with U-verse availability, and $47,894 for those with only DSL availability," the report said.

In 4.1 million California households, representing 42.8 percent of AT&T's California service area, AT&T's fastest speeds fell short of the federal broadband definition of 25Mbps downloads and 3Mbps uploads, the report said.

The numbers are still bad even when using the California utility commission's lower 6Mbps/1.5Mbps broadband standard. "A full 18.1 percent of California households in AT&T’s wireline footprint—approximately 1.7 million households—lack access to AT&T broadband according to this definition," the Haas Institute wrote.

Overall, about 68,000 California households had AT&T fiber as of the June 2016 data, while 6.9 million had VDSL and 2.7 million had DSL. The fiber number is higher now because of AT&T's ongoing construction. AT&T said it now offers its fiber Internet to 500,000 customer locations in California, but didn't provide median income data for the newly deployed locations.

UC Berkeley’s Haas Institute for a Fair and Inclusive Society

UC Berkeley’s Haas Institute for a Fair and Inclusive Society

AT&T/DirecTV merger required fiber deployment

The California analysis is similar to another recent one in Cleveland that found that "AT&T has systematically discriminated against lower-income Cleveland neighborhoods in its deployment of home Internet and video technologies over the past decade."

After being contacted by Ars, AT&T said, "We don't favor any demographic when it comes to providing any service we offer. The market for Internet service has never been more vibrant and competitive, both wireless and wireline. We would like nothing more than to serve every customer who wants our services."

AT&T argued that the study ignores the impact of mobile broadband on Internet affordability and availability.

AT&T started offering fiber-to-the-home service in late 2013, and in 2015 it agreed to bring fiber to at least 12.5 million customer locations nationwide by mid-2019 in exchange for the FCC's approval of its DirecTV acquisition. In its latest fiber announcement last week, AT&T said it now markets fiber to 4.6 million locations across 52 metro areas and will add 2 million more before 2017 is over. Parts of Oakland were just provided with AT&T fiber service.

The DirecTV merger conditions also required AT&T to offer Internet service for $5 or $10 a month to people with low incomes. But AT&T can use DSL to meet that condition, and at one point the company refused to provide the discount price in areas where its network speeds were slower than 3Mbps. After being criticized, AT&T changed its mind.

Despite AT&T's use of fiber in dozens of metro areas, many rural customers in the US will continue to be stuck on sub-broadband speeds for years to come. AT&T struck a deal with the US government to get nearly $428 million a year over 10 years to provide 10Mbps/1Mbps service to 1.1 million rural homes and businesses in 18 states. The money comes from the Connect America Fund, which draws from surcharges on Americans' phone bills to pay for rural Internet service.

As copper networks increasingly become outdated, the FCC is seeking to eliminate regulations to make it easier for ISPs to retire copper networks. However, the copper could be replaced by wireless networks instead of fiber in areas where fiber rollouts aren't cost-effective. AT&T is deploying a 10Mbps fixed wireless service in order to meet its Connect America Fund obligations.

AT&T said 140,000 of the Connect America Fund homes and businesses will be in California, and pointed out that its "Project AirGig" technology could eventually "deliver low-cost, multi-gigabit wireless Internet speeds."

This article was updated after publication with responses from AT&T.