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Regulation - What is it Good For?

Taking the Short View

We need to talk about the insidious carryover impact of having a national definition of broadband speed of 25/3 Mbps. You might think that the FCC’s definition of broadband doesn’t matter – but it’s going to have a huge impact in 2021 on how we spend the sudden flood of broadband funding that’s coming to bear from the federal government.

First, a quick reminder about the history of the 25/3 definition of broadband. The FCC under Tom Wheeler increased the definition of broadband in 2015 from the paltry former definition of 4/1 Mbps – a sorely overdue upgrade. At the time that the new definition was set it seemed like a fair definition. The vast majority of US homes could comfortably function with a 25/3 Mbps broadband connection.

But we live in a world where household usage has been madly compounding at a rate of over 20% per year. More importantly, since 2015 we’ve changed the way we use broadband. Homes routinely use simultaneous broadband streams and a large and growing percentage of homes now find 25 Mbps download to be a major constraint on how they want to use broadband. The cable companies understood this, and to keep customers happy have upgraded their minimum download speeds from 100 Mbps to 200 Mbps.

Then came the pandemic and made the whole country focus on upload speeds. Suddenly, every student and every adult who tried to work at home learned that the upload stream for most  broadband connection will just barely support one person working at home and is completely inadequate for homes where multiple people are trying to function at home at the same time.

Meanwhile, the FCC under Chairman Ajit Pai ignored the reality of the big changes in the way that Americas use broadband. The FCC had multiple opportunities to increase the definition of broadband – including after the evident impact of the pandemic – but he stubbornly stuck with the outdated 25/3 definition. Chairman Pai did not want a legacy of suddenly declaring that many millions of homes didn’t have adequate broadband.

We now have an FCC that is likely to increase the definition of broadband, but the FCC is still waiting for a fifth Commissioner to hold a vote on the issue. Meanwhile, we are poised to start handing out billions of dollars of broadband subsidies that come from the $1.9 trillion American Rescue Plan Act. This includes $10 billion that is directly approved as state block grants for broadband plus some portion of the larger $350 billion that is approved for use for more general infrastructure that can include broadband. I can promise you that this money is going to come encumbered in some form or fashion by the old definition of broadband. I can’t predict exactly how this will come into play, but there is no way that the Treasure Department, which is administering these funds can’t ignore the official definition of broadband.

As much as federal officials might want to do the right thing, 25/3 Mbps is the current law of the land. The new federal monies are likely to emphasize serving areas that don’t have speeds that meet that 25/3 Mbps definition. Let me rephrase that to be more precise – federal broadband money will be prioritized to give funding to areas where ISPs have told the FCC that households can’t buy a 25/3 broadband product. Unfortunately, there are huge parts of the US where homes don’t get speeds anywhere close to 25/3 Mbps, but where ISPs are safe in reporting marketing speeds to the FCC rather than actual speeds. States like Georgia and North Carolina have estimated that the number of households that can’t buy a 25/3 Mbps broadband product is twice what is reported to the FCC.

What this all means is that we are going to decide where to spend billions in funding from the American Rescue Plan Act based upon the 25/3 Mbps definition of broadband – a definition that will not long survive a fully staffed FCC. The intransigence of Chairman Pai and the big ISPs that strongly supported him will carry over and have a huge impact even after he is gone. The broadband that will be built with the current funding will last for many decades – but unfortunately, some of this funding will be misdirected due to the government taking the short view that we must keep pretending that 25/3 Mbps is a meaningful measurement of broadband.

2 replies on “Taking the Short View”

Excellent insight an commentary Doug. With COVID and everyone at home I could tell the time of day by bandwidth speeds. Federal programs have not always achieved their intentions and require oversite of smart people like you to keep the corporate ISP’s in check.
I believe one reason 25/3 remains is because of the lack of competition and the high capital costs of grid construction.
Thank you

The Biden administration’s proposed American Jobs Plan suggests an end to the unproductive speed games with its reference to “future proof” infrastructure, which is generally interpreted to mean fiber to the premises:

“Build high-speed broadband infrastructure to reach 100 percent coverage. The President’s plan prioritizes building “future proof” broadband infrastructure in unserved and underserved areas so that we finally reach 100 percent high-speed broadband coverage.”

https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/

That said, this White House fact sheet on the proposed legislation continues to refer to throughput. It would be better to simply dispense with both references and establish an explict fiber to the prem infrastructure standard.

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