FCC Report Sour on Broadband: New Data, Definitions Change Everything

For the first time in 11 years, the FCC says broadband deployment in the United States does not measure up to reasonable expectations. The 180-degree reversal, as one Republican commissioner put it, from previous findings resulted from two crucial, overlooked changes: the FCC has re-defined broadband and used data never before available to make its case.

In all the flurry of reaction to the FCCs Sixth Broadband Deployment Report, released on July 20, few people, if any, seemed to note those two points. Indeed, those aspects new speed standards and new statistics transform everything about what it means to have broadband in America.

New Standards, Stats

In a long-overdue move, the FCC has decided 200kbps downstream no longer qualifies as broadband. Thus, the agency said, between 14 million and 24 million Americans do not have near-term prospects for high-speed Internet access, and that means broadband deployment to all Americans is not reasonable and timely. Indeed, 200kbps served as the standard more than a decade ago, in the days of text-based Web pages. But graphics- and video-intensive sites and applications now rule the Internet, putting the onus on providers to offer access that keeps up with those needs. Operators have failed to do that in much of the country, it appears.

The FCC also incorporated data its never had for previous studies. Yes, the agency still relied on carriers broadband-subscribership self-reporting, done twice each year on Form 477. Yet, in addition to the December 2008 Form 477 results, the FCC included Census Bureau figures as well as statistics gleaned during the year spent formulating the National Broadband Plan. The FCC further integrated results of a consumer survey that polled online connection speeds. Because of those new factors, the FCC said broadband deployment in the United States is lacking.

However, the Julius Genachowski-led FCC made sure not to shoulder all of the blame for network-expansion shortcomings on carriers. Our conclusion in no way diminishes the achievements industry has made deploying better and faster forms of broadband to most Americans, nor the commissions past efforts to foster broadband deployment, the agency said in its 143-page report.

AT&T Inc. and Verizon Communications Inc. didnt seem to take to the salve, though. In a blog post, AT&Ts federal regulatory expert, Bob Quinn, called the FCCs assessments unreasonable. And he begged the FCC not to use its study to justify more investment-choking regulation a la the Title II debate, referring to the agencys push to re-classify broadband as a telecom, rather than an information, service. Similarly, Verizon told The Washington Post the FCCs report is hard to understand since the carrier is among those expanding its broadband services throughout the country.

What Now?

Congress, in the 1996 Telecom Act, charged the FCC with fixing any broadband deployment problems by doing what it can to remove barriers to infrastructure investment. The FCC is intent on taking immediate action to do just that.

As one solution, the agency wants to revamp the Universal Service Fund so subsidies go toward high-speed Internet buildouts rather than more home-phone access. The FCC already has started exploring this possibility and, to be sure, AT&Ts Quinn, for one, welcomed the idea as long as it finally [fixes] the long-broken universal service/intercarrier compensation problem, and [removes] actual economic barriers to broadband investment. The struggle is that the parties receiving USF money cannot agree how best to overhaul the fund because they dont want to be shortchanged. Therefore, it will take many years, and many lawsuits, before the USF sees meaningful reform.

Another way the FCC wants to fix the deployment issue is by unleashing new wireless spectrum as a way of encouraging broadband deployment. The airwaves, most of which are owned by television broadcasters and government agencies, are capable of covering great distances at lower costs than their satellite and wireline counterparts. But again, convincing spectrum owners to relinquish those assets will take time and legal wrangling.

The FCCs report comes as the federal government distributes more broadband stimulus money to operators and utilities, co-ops and community institutions. The grants and loans, provided by the 2009 American Recovery and Reinvestment Act, are meant to create jobs and get broadband into unserved and underserved parts of the country. The funds are taking months to seep into the economy, however, and network buildouts are not happening quickly.


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