Why Change the Definition of Broadband?

slow-downThe FCC is going to vote at its January 29th meeting to possibly increase the definition of broadband from 4 Mbps download and 1 Mbps upload to as much as 25 Mbps download and 3 Mbps upload. The higher speeds are what Chairman Tom Wheeler favors and was contained in the first draft of the Annual Broadband Progress report that goes to Congress each year.

This proposal has me scratching my head because the same FCC just announced a few weeks ago that the large price-cap telcos are going to qualify for the $9 billion in new funding from the Connect America Fund by deploying technology capable of providing speeds of 10 Mbps download and 1 Mbps upload.

I am having trouble getting my head around that disconnect. The FCC is willing to spend a huge amount of money, spread over as many as seven years on the giant telcos that are promising to deliver 10/1 Mbps service to rural areas. If at the same time the FCC changes the definition of broadband, then those upgraded connections are not even going to be considered as broadband.

To make this worse, it’s almost certain that sometime during the next seven years the definition of broadband will be increased again, making any technology that delivers only 10 Mbps seem really slow and outdated by the end of seven years.

I understand the FCC’s dilemma a little. The big telcos are the ones that serve huge portions of rural America and so the FCC is thinking that luring them into serving at least 10/1 broadband is better than nothing. Unfortunately, that’s all it – just better than nothing.

It seems to me before we hand the large telcos that money that we ought to first see if somebody else is willing to take the same money to build fiber to those same rural areas. $9 billion is a lot of money and it would go a long way towards seeding a lot of rural fiber projects. But the current Connect America Fund rules say that if the big telcos accept the CAF money that nobody else has a shot at it.

It’s not like there aren’t companies willing to build faster facilities in rural America. There are plenty of independent telephone companies, municipalities and electric cooperatives that would think about building rural fiber if they got help with the funding. It’s my understanding that there were hundreds of applicants for the FCC’s recent experimental grants who offered to build rural fiber networks. Wouldn’t it make a lot more sense to give these companies a chance to compete with the big telcos for the $9 billion?

Let’s face it. If the big telcos upgrade rural America to 10 Mbps, this is their last hurrah. They won’t ever being doing additional upgrades in those areas. And so the FCC is dooming these areas to those speeds for decades to come.

The FCC’s own numbers say that the average household today already needs at least 10 Mbps. And we know that bandwidth utilization in households is doubling every three years. So if a household needs 10 Mbps today, by the end of the seven years of CAF II funding it is going to need nearly 50 Mbps.

Meanwhile, seven years from now there will be a lot of urban and suburban households that can buy 1 Gbps. And the ones who can’t get that will probably be able to buy 100 Mbps or more.

These rural areas are already way behind the cities. Some of the areas that will be built by CAF have either no broadband or else slow connections at maybe 1 or 2 Mbps. So upgrading them to 10 Mbps is going to feel like a big improvement to those households. But almost by the time the ink dries on those projects those areas are going to be further behind the urban areas than they are today.

I don’t know why we are having a federal program that is supporting rural DSL. DSL isn’t inherently bad and it’s reported that there are places in urban areas where AT&T is now goosing several hundred Mbps from DSL. But that is not what is going to happen over the older wires and the longer distances in rural America. The FCC wants to pay the big telcos to upgrade the electronics on wires that are at least fifty years old and that degrade a little more every year.

I’m actually not against using CAF funding to upgrade the DSL in areas where nobody else is willing to do something faster. But I can’t understand why we aren’t first having an auctions for serving these areas with speed as the determining factor on who gets the federal funding. Under that kind of auction most of the money would probably still go to the telcos, but the money might also bring fiber to a million or more rural households – and that would be real progress. Rural America is doomed to remain behind unless they get fiber. And $9 billion would be a great start towards building that fiber.

I guess the main question this raises for me is why the FCC is changing the definition of broadband. If 25 Mbps is to mean anything then I would think that the FCC would not fund anything that isn’t considered broadband. Otherwise, it’s just a goal that has little meaning. It’s something the big telcos can wink at while they get paid for deploying something that is not even broadband.

2 thoughts on “Why Change the Definition of Broadband?

  1. “It seems to me before we hand the large telcos that money that we ought to first see if somebody else is willing to take the same money to build fiber to those same rural areas.”
    I recently consulted for a rural WISP chosen for first round funding of $2.6 million for Rural Broadband Experiments (sub set of CAF). Very simply put, Big Telco will not offer an honest solution for the areas that will be served by this WISP.

    To at least a limited extent, Wheeler & Co ARE offering others a shot at some portion of the CAF cash.

    • The experimental grants gave a great opportunity to anybody to go after grant money. But that was a tiny amount of money compared to the $9 billion in CAF II funds. The CAF II money might be made available to anybody, but only after the large rate of return telco elects not to take the money for a given market. The money is there for the telcos to claim if they want it. And if they do, they get it all and nobody else has a shot at it.

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