AT&T will pump $2B in funds toward closing the digital divide

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According to Jeffries, there are 35 million to 40 million homes in the U.S. that are unserved or underserved with broadband services.(Pixabay)

AT&T is the latest major communications company to designate billions of dollars toward closing the digital divide. The Covid-19 pandemic has painfully demonstrated the gap that exists between those with broadband connectivity and those without.

AT&T announced it will invest $2 billion over the next three years to expanding its low-cost broadband services. This $2 billion contribution is double what AT&T has spent over the last three years in bringing broadband to the underserved.

According to George Notter, equity analyst and managing director at Jeffries, there are around 35 million to 40 million homes in the U.S. that are unserved or underserved with broadband. Notter, who spoke during a Fiber Broadband Association webcast last month, said that the pandemic has made many companies devote resources to closing the digital divide. In addition, the government has also designated billions in funding over the next few years with the same goal in mind.

Learning Centers

AT&T will use a portion of the funds to launch 20 Connected Learning Centers this year. These centers will be un underserved neighborhoods where many residents lack broadband connectivity. The centers will have AT&T Fiber service and Wi-Fi as well as resources such as laptops and tablets. The centers will also have access to WarnerMedia educational content. WarnerMedia plans to use a portion of the $2 billion to develop educational content and curriculum.

Related: Jeffries analyst says rural broadband market is ripe for investment

AT&T cited a Morning Consult study to support its decision to use some of its funding to launch Connected Learning Centers and develop educational content. The study found that 76% of parents and 81% of teachers are somewhat or very concerned about the homework gap that results from students not having access to the Internet at home.  

The company also will use a portion of the $2 billion in funding to continue offering discounted wireless services to more than 135,000 public and private schools, colleges and universities.  Plus, it will continue to fund its program that delivers wireline internet to eligible Americans for $10 or less per month with no contract or installation fee. And it will also reduce monthly broadband bills for customers that qualify for the Federal Emergency Broadband Benefit, which provides a subsidy of up to $50 a month for broadband services and a subsidy of $75 a month to those on Tribal Lands.

 AT&T isn’t alone. It’s initiative similar to that of Comcast, which announced earlier this year that it will invest $1 billion over the next 10 years to close the digital divide. Like AT&T, Comcast said that it is developing Lift Zones, which are Wi-Fi connected spaces that will be developed in 1,000+ community centers by the end of the year.

And Comcast is also going to use the funding to expand its Internet Essentials program, which offers discounted internet connectivity to low-income people.

Charter Communications is also devoting funds to erasing the digital divide, but it’s specifically targeting rural broadband. The company, which was awarded $1.2 billion from the FCC’s Rural Digital Opportunity Fund (RDOF), will spend another $3.8 billion to expand its broadband coverage to rural areas across more than 24 states.