Category Archives: Regulation – What is it Good For?

The Race to Bury Net Neutrality

The Internet is currently full of news articles describing how the FCC will soon be putting to bed the last vestiges of its order a few years ago to eliminate net neutrality rules. The order that is widely being called the net neutrality ruling was a far-reaching change at the FCC that essentially wrote the FCC out of any role in regulating broadband.

Eliminating net neutrality rules was only a small part of that order. Net neutrality is a set of principles that describe how ISPs and network owners are to not discriminate between bits carried over the Internet. Most of the largest ISPs said that they could live with the net neutrality principles, and eliminating net neutrality was not a high priority for companies like AT&T and Comcast. The real priority for the big ISPs was to take advantage of a friendly FCC that was open and willing to deregulated broadband – particularly willing to eliminate any threat of broadband rate regulation.

So when you read the flood or articles this month talking about net neutrality, you need to substitute the term ‘net neutrality’ with ‘regulating broadband’ as you read articles on the topic. The FCC chose to disguise their attempt to kill regulation under the moniker of net neutrality and was successful since the average American probably has no idea that the FCC no longer regulates ISPs and broadband.

The FCC is holding a vote on October 27, just before the presidential election to cement the last open pieces from the FCC’s order to eliminate broadband regulation. The FCC’s order to write the agency out of broadband regulation was challenged in federal court. The court basically said that the FCC had the regulatory authority to either change the rules (or not change the rules) to walk away from broadband regulation.

However, the court said that the FCC needs to demonstrate that eliminating regulatory authority over broadband didn’t impact three areas negatively. The FCC was asked to clarify:

  • How eliminating broadband regulation impacts public safety;
  • How the FCC can still regulate pole attachments if it doesn’t regulate broadband;
  • If walking away from regulation negatively impacts the FCC’s ability to offer the FCC Lifeline programs that benefit low-income Americans.

On October 27 the FCC is going to take a vote to say that it’s earlier order doesn’t negatively impact any of these issues. It’s clear that that the FCC wants to finish the elimination of broadband regulation before the election on the chance that a new Democratic president will mean a new head of the FCC. The FCC has openly said that it changed the rules on broadband regulation in such a way that will make it hard for a future FCC to overturn its order.

A new FCC can obviously undo anything that was done by a previous FCC. However, the net neutrality order was done in such a way that a new FCC would have to go through the full cycle of the FCC’s processes that including various cycles of notices of proposed rulemaking, a final rulemaking, and then the inevitable court challenges to any attempt to reregulate broadband – all done with vigorous opposition from the big ISPs. The process of reversing the deregulation of broadband would likely stretch over many years.

However, there is a much shorter and quicker path for reversing the FCC’s order. Congress is free to reset the FCC rules in any way it seems fit, and Congress could finally pass a new telecom act. There hasn’t been any major telecom legislation out of Congress since 1996 – during the heyday of dial-up Internet. In today’s political environment it would take a Democratic sweep of the White House and both houses of Congress to get new telecom legislation passed.

Even should that happen with the election, the new Democratic majority would have to agree on what is contained in a new telecom act. I can’t foresee that being an easy or quick process. There is an accumulation of topics in addition to broadband regulation that would benefit from Congressional clarification including privacy, regulation of web companies, solving the digital divide, elimination of outdated cable TV and telephone regulations, a national policy on spectrum, regulation of low orbit satellites, and a host of smaller issues.

If the Democrats don’t make a clean sweep of Congress and the White House, then the current FCC will largely have succeeded and it might be many years until a determined FCC could reestablish any regulatory authority over broadband. What is clear to somebody who closely watches industry regulation – it’s going to be interesting few years ahead of us in this industry regardless of what happens at the polls in November.

FCC Kills CableCards

The FCC Commissioners recently unanimously voted to eliminate the rules that require cable companies to support devices that use CableCard technology for connecting to video services. The largest user of the technology is TiVo, but consumers have also been able to buy settop boxes using the technology rather than paying monthly to lease a box from the cable company.

The requirement for CableCards came from the Telecommunications Act of 1996. The congressional authors of that act thought that consumers ought to have an alternative to leasing a mandatory settop box from a cable company. After some industry wrangling, the FCC ordered that cable companies be ready to allow devices with CableCards by July 2000.

The big cable companies hated the CableCard rule and refused to share network security keys with CableCard manufacturers, making it a major challenge for a customer to install a CableCard device. In 2005 the FCC clarified the original order and told cable companies that software had to be separate than settop box devices so that CableCards could connect to cable company networks.

Over time, the software on cable networks has grown increasingly complex, and CableCard technology never became plug and play. Anybody who has ever installed a TiVo box knows the challenge of getting the CableCard software to talk to a specific local cable system. Because of this, and because of ongoing resistance to cable companies to make it easy for CableCards to work, no major market for consumer-owned settop boxes ever emerged. However, even in recent years, there have been sales of roughly half a million CableCard devices per quarter.

The biggest user of CableCard technology is TiVo which has a CableCard in every DVR recorder it sells. The FCC order doesn’t force cable companies to continue to support CableCard technology, but they likely will. Any cable company settop box built before 2015 uses CableCard technology – that was the easiest way for the cable companies to make CableCards work.

However, the FCC eliminated the last vestige of regulation on CableCards, so there is nothing to stop a cable company from cutting off CableCard devices, other than perhaps a desire to not push more households to cut the cord. Cable companies are also free to charge extra to consumers for connecting with a CableCard device.

It’s more likely that CableCard devices will just become technically obsolete over time. Without the FCC’s rules in place, the cable companies might not worry about the impact on CableCards as they update settop box software. This likely spells the end of the traditional TiVo box that could record many hours of video to watch later. Most cable companies offer an alternate to TiVo and allow customers to record and store programming in the cloud rather than on a device in the home. However, TiVo and other companies already started that transition, and TiVo introduced a cloud DVR service in 2018 for a cord-cutter that allows recording of video content that comes from any source such as over-the-air, or from an online service.

Consumers who have used CableCard devices face having to eventually pay the monthly fee for a settop box if they want to keep traditional cable TV service. Ironically, there might be a bigger need for a settop box alternative today than there was in 2000. Largely freed from regulation, the cable companies have raised fees on settop boxes, and I’ve seen monthly rental rates as high as $15 per month.

In the end, the CableCard regulation was largely a bust. It provided an alternative to renting settop boxes, but the cable companies never stopped fighting the idea and never made it easy for consumers to connect and use a CableCard device.

A Huge FCC Giveaway

Is there is a way to take the worst broadband subsidy program ever and make it worse? The FCC just answered that question by extending the CAF II program for a seventh year.

The CAF II program paid the large price-cap telcos to supposedly upgrade rural broadband to speeds of at least 10/1 Mbps. Over $11 billion was paid out over six years starting in 2015 and completing this year. This money went to the big telcos like AT&T, CenturyLink, Frontier, Windstream, Consolidated, and a few others. Buried in the original awards was a provision that the carriers could elect to extend payments for a seventh year – and of course, they are doing so.

Why do I call this subsidy plan a failure? Even in 2015, it was ludicrous to spend money to build 10/1 Mbps broadband. 2015 is the same year that the FCC increased the definition of broadband to 25/3 Mbps and so the FCC was investing in new Internet infrastructure in 2015 that didn’t qualify as broadband at the time of the award of funding. Worse, the FCC gave the big telcos six years to complete the construction of the upgraded 10/1 Mbps architecture – which is this year. The FCC is still paying money in 2020 to upgrade rural customers to speeds of 10/1 Mbps.

But that’s not the worst of it because it doesn’t look like a lot of the upgrades were ever done. Our company helps rural counties assess the condition of broadband, and it’s rare in many rural places that were covered by CAF II to find even a single customer getting broadband speeds of at least 10/1 Mbps. We’ve done speed tests in counties this year where the average download speeds are 4 to 5 Mbps, with a significant number of customers getting speeds under 1 Mbps. The big telcos have been cheerily reporting progress to the FCC on implementing CAF II, but in the real world, it’s hard to find any evidence that many upgrades have been made.

I have seen the DSL in rural county seats get faster, and I suppose this was done with CAF II money – even though the funding was supposed to be used for rural customers. When DSL is upgraded in a county seat, the only rural customers that see any benefit have to be within a mile or so from the town.

To improve rural DSL to 10/1 Mbps requires building a significant amount of rural fiber so that customers are within four or five miles of a fiber node equipped with DSL gear. We’ve driven whole counties looking for evidence of such upgrades and have rarely found the needed new fiber construction or electronics huts. There is no need to take my word for this – states like Georgia and Minnesota have created broadband maps that are showing no evidence for most of the CAF II upgrades.

And now the FCC is going to pay a seventh year of funding to these same telcos – only this time the companies don’t have to spend the seventh year funds to improve broadband. Instead this money is seen as ‘support’ to the telcos. This is a straight giveaway that means $503 million for CenturyLink, $427 million for AT&T, and $313 million for Frontier – straight to the bottom line. This is the most blatant handout of federal broadband funds I’ve ever seen – because these funds won’t improve broadband for any rural customer. This will just help AT&T make its dividend payments and help ease Frontier coming out of bankruptcy. 

The original plan in 20i5 included the provision for the seventh year of payout – but the FCC could have changed that rule at any time in the last six years. This is over a billion dollars being wasted  that could instead be added to the RDOF fund to build rural fiber or put into some other worthwhile broadband grant fund. The FCC would benefit rural communities more if they just walked around handing out this cash to rural folks during the pandemic.

This FCC has been pro-big carrier from the start – but adding a seventh year of CAF II is hard to see as anything other than federal waste being done openly. The companies getting this money didn’t meet the obligations of the original CAF II funding and are now perversely getting rewarded for their failure. This kind of waste makes me ill when I do the math and realize that this money could instead be used to build fiber for everybody living in the poorest 40 counties in the country. I guess it’s more important to ‘support’ AT&T instead of rural households with no broadband. 

FCC – Please Focus on Upload Speeds

I wrote a recent blog that talked about how the FCC is recommending to stick with the 25/3 Mbps definition of broadband for another year. In that blog, I mostly talked about how 25 Mbps download is out of touch when the FCC claims that 85% of homes today can buy 250/25 Mbps broadband.

Today I want to look at the second half of the definition – the upload speed. The FCC is proposing, in 2020 – the year when millions were sent home for work and school – that 3 Mbps upload is a sufficiently high definition of broadband. Sticking with the 3 Mbps definition of broadband makes no sense. I contend that 3 Mbps is massively out of touch with the needs of the average home. To make matters worse, the FCC will allow an ISP that offers 25/3 broadband to bid in and win grant funding in October’s RDOF grant – a network which the ISP then has six years to build. The FCC doesn’t just think that 25/3 is adequate broadband today, they think that is okay broadband size years from now.

The pandemic has made it clear to a lot of households that upload speeds matter. Before the pandemic, customers that cared about the upload speeds tended to be folks that sent huge files such as doctors, architects, engineers, photographers, etc. When they worked from home these folks have known for years that the upload speeds on the average home network are inadequate.

All of a sudden this year, millions of homes found out that they don’t have enough upload broadband speeds. Consider the amount of bandwidth that is needed to work from home. There are two uses of upload broadband that are new to most people – connecting to a school or work server and participating in Zoom or other online meetings.

Many home and work servers require the creation of a virtual private network (VPN). A VPN is a dedicated connection – the home connects and stays connected to a school or work server. It generally requires dedicating at least 1 Mbps of bandwidth, but usually more, to create and maintain a VPN connection. This means that somebody working at home on a VPN is going to tie up 1 – 3 Mbps of bandwidth that can’t be used for anybody else in the home.

Zoom calls also require upload bandwidth. The Zoom website says that a home should have a 2 Mbps connection, both upload and download to sustain a Zoom session between just two people. The amount of download bandwidth increases with each person connected to the call, meaning Zoom recommends the 2 Mbps upload, but a 6 Mbps download for a meeting with three other people.

There are other uses for upload bandwidth in the home as well. For example, a telemedicine call can use even slightly more bandwidth than connecting to work or school servers. Upload bandwidth is needed for gaming in the cloud. Upload bandwidth is also used to back-up data files, pictures, etc. into the cloud.

It doesn’t take complicated math to see why a 3 Mbps connection is inadequate for any household that wants to make more than one upload-heavy connection to the Internet at the same time. 3 Mbps is not enough bandwidth for multiple people in a home trying to connect to work and school servers or to make Zoom-like calls. I’ve heard from numerous people this year telling me they can’t have more than one person at a time using their home broadband connection. Many of these complaints came from households using broadband provided by the big cable companies, and many of these homes thought they had plenty of bandwidth until the pandemic hit.

For the FCC to stick with 3 Mbps upload as the definition of broadband is a slap in the face to every family where more than one person wants to connect to the web at the same time. With that definition, the FCC is blessing any ISP that delivers 3 Mbps upload speeds.

Even if the FCC doesn’t want to upgrade the download component of the definition of broadband, they can’t turn a blind idea to the millions of homes trying to make it through the pandemic. If social scientists are right, there will likely be millions of people who continue to work remotely even after the end of the pandemic. This is not a temporary problem that is somehow going to go away.

It’s hard to think that the minimum acceptable definition of upload speeds should be anything slower than 25 Mbps. Assuming a robust WiFi network, that’s enough bandwidth for 3 – 4 adults and/or students to work from home at the time. So FCC, please reconsider the definition of upload speeds. If you stick with 3 Mbps upload as the definition of broadband it means you don’t support broadband networks that can deliver the speeds that the average households need.

Penalizing Bad FCC Broadband Reporting

It’s universally understood throughout the industry that the broadband data reported by ISPs to the FCC is full of big problems. Some of the problem in the database can be blamed on the FCC, which allows an ISP to claim an entire Census block as having good broadband even if only one customer in the Census block can actually get that faster speed.

However, in looking in detail at counties all over the country, this seems to be a relatively minor part of the overstatement of broadband. For example, the issue crops the in Census blocks near to a town that has cable broadband, and the FCC reporting system usually assumes that some homes past the end of the cable network can get fast broadband. The FCC has proposed to fix this by asking ISPs to draw polygons around customers, and if the ISPs serving towns do that right, this issue would disappear.

The much bigger problem in the FCC database come from ISPs that overstate broadband coverage, broadband speeds, or both.  I’ve seen entire counties where the FCC database claims broadband coverage that doesn’t exist.

Part of this problem is due to a poor interpretation of the FCC rules. A lot of ISPs interpret the FCC rules to  mean they should report the fastest speed they advertise instead of the fastest speed they can deliver. I’ve seen numerous places where the big telcos have claimed 15 Mbps or 25 Mbps download on DSL, when speed tests can’t find anybody in the area getting more than 5 Mbps download. I’ve looked at counties where WISPs claim speeds of 50 Mbps up to 300 Mbps when customers largely have speeds under 10 Mbps.

Even more aggrevating are ISPs that claim broadband coverage that doesn’t exist. For example, I’ve seen WISPs that claim coverage of an entire county when they are only located on one or two towers. But this isn’t done only by fixed wireless providers, and the FCC is finally talking about fining an ISP for faulty reporting.

The FCC is threatening to fine Barrier Communications Corp. from New York that markets under BarrierFree. In 2017 the ISP made big news when they falsely claimed that they were providing fiber broadband to 62 million customers that largely didn’t exist. The FCC went published an annual report to Congress that included the imaginary broadband, which led the agency to crow about the big nationwide improvement in broadband coverage. The FCC got egg on their face when the issue was brought to its attention, and the agency was forced to reissue the annual report to Congress. As part of that process, the FCC warned BarrierFree to cease the overreporting.

Apparently, the ISP is at it again because the FCC is now threatening a fine of $164,000 for BarrierFree for continued overreporting. The FCC says that’s the maximum penalty allowed by law. There were supposedly substantial overreporting in both the September 2019 and March 2020 data. To the best of my knowledge this would be the first fine due against an ISP due to false reporting in the 477 process. The FCC has threatened fines against Verizon and a few other ISPs for falsely reporting rural 4G cellular coverage, but I’m not aware of any fines being levied.

The idea of levying fines against ISPs for blatant broadband overreporting is long overdue. There can be huge consequences when ISPs can freely claim broadband coverage that doesn’t exist. The biggest current consequence of such overreporting is that it can block eligibility for grants. The FCC used the faulty 477 data when determining the areas that are eligible for the $16.4 billion in RDOF grants that will be awarded in October. I know of counties where no RDOF grants are being offered due to the FCC data falsely showing counties to already have adequate broadband. There are many rural counties where at least some portion of the county has been incorrectly excluded from RDOF grant eligibility due to ISP overreporting of broadband speeds and coverage.

I have to believe the FCC when they report this is the biggest penalty allowed by law – but it’s not nearly high enough. How large should a fine be if an ISP keeps tens of millions of grant dollars from coming to a county? That question is even more pointed if the overreporting ISP gains a market advantage by keeping out grant funding. In my mind, if an ISP blatantly overreports broadband and keeps $10 million of grant funding from benefitting a county, then that ISP owes that community $10 million. I’m sure there are ISPs that are glad I’m not an FCC Commissioner.

FCC’s 2020 Look at Broadband Speeds

The FCC recently released a Notice of Inquiry asking about the state of broadband in preparation for the upcoming 2021 report to Congress. The FCC is required to annually examine the state of broadband and this is the sixteenth NOI that is the first step towards creating the annual report.

In the NOI, the FCC provides a preview of what they are planning to tell Congress in the upcoming report. The FCC continues to pat itself on the back for closing the digital divide. Consider the following facts cited by the FCC in their opening paragraphs of the NOI:

The number of Americans lacking access to fixed terrestrial broadband service of at least 25/3 Mbps continues to decline, falling more than 14% in 2018 and more than 30% between 2016 and 2018. In addition, the number of Americans without access to 4G Long Term Evolution (LTE) mobile broadband service with a median speed of at least 10/3 Mbps fell approximately 54% between 2017 and 2018. The vast majority of Americans, surpassing 85% of the population in 2018, now have access to fixed terrestrial broadband service at 250/25 Mbps, representing a 47% increase in the number of Americans with access to this speed since 2017. Over the same period, the number of Americans living in rural areas with access to such service increased by 85%. 

These statistics all sound great, but unfortunately, we can’t believe any of these claims. The FCC continues to draw conclusions based upon the badly flawed Form 477 data reported to the agency by ISPs. In every rural county I have examined, there are overstatements by ISPs of broadband speeds and availability – and those overstated coverages are included by the FCC as places that have good broadband. I’ve written blogs about entire counties that the FCC thinks haves good broadband, but where the ISP-reported broadband doesn’t exist. If the FCC’s NOI was being truthful, the above list of statistics would open with this sentence: “This report summarizes the broadband speeds and coverage that ISPs report to us. We have no way to know if any of these claims are true”.

Anybody who digs into the FCC data knows it’s terrible, but it’s impossible to know how bad it is. We get clues every time somebody takes a stab at developing a more accurate broadband map. The State of Georgia undertook a mapping effort and in July identified 507,000 homes in the state that don’t have access to 25/3 broadband. That number was 255,000 homes higher than what was shown by the FCC. If that same ratio holds everywhere in the country, then there are twice as many homes without broadband than what the FCC cites in the NOI. I think in many western states that the FCC data is even worse than what Georgia found.

What I find most troublesome about the NOI is that the FCC is planning to stick to the definition of broadband as 25/3 Mbps. It’s easy to understand why the agency wants to keep this speed as the definition of broadband. If the agency increases the definition of broadband, then overnight a whole lot more homes would be declared to not have good broadband. That would completely kill the FCC’s narrative that they are doing great work and closing the digital divide.

The FCC’s cited statistics argue against 25/3 Mbps as the right definition of broadband. Consider the statement above which says that 85% of homes have access to 250/25 Mbps broadband. If that is true, then almost by definition, the FCC’s should define broadband at least at 250/25 Mbps. After all, the FCC’s mandate from Congress is to measure and close the gap between urban and rural broadband. If urban broadband can deliver 250/25 Mbps to everybody, then by the Congressional mandate the speeds available urban America should be the target for rural America. To keep the definition at 25/3 Mbps is ignoring market reality – that most of the people in the country now have speeds far faster than the FCC’s obsolete definition of broadband. And perhaps worse of all, the FCC is drawing this conclusion based upon 2018 data. We know that homes are using roughly 50% more broadband today today than what they used in 2018.

A New Push to Tax Broadband?

In August, four cities in Indiana – Indianapolis, Evansville, Valparaiso, and Fishers – sued Netflix, Hulu, DirectTV, and Dish Networks claiming that the online video services offered by these companies should have to pay the same franchise fees that cable companies pay for using local rights-of-ways.

I’ve been covering in this blog how cord-cutting has been accelerating, especially this year, and cities are seeing a huge drop in cable franchise fees. These fees are generally levied against the fees charged for traditional cable TV service and are ostensibly to compensate the cities for using the public rights-of-way to deliver TV service.

These fees are a significant source of tax revenues for many communities, and that’s not hard to understand when you realize that the fees range from 3% to 6% that’s added to the cost of every traditional cable TV bill. Most big cable companies say that average cable bills are trending towards $100 per month.

Cities have gotten spoiled by these fees because for the last decade the amount of franchise fees collected has skyrocketed. For over a decade cable companies raised cable rates by 9% or more per year, and those rate increases automatically meant franchise tax revenue increases for cities. While franchise fees might have been relatively small when first imposed, the tax revenues have gotten gigantic as the average cable TV bill approaches $100 per month just for cable.

In a recent blog, I talked about how homes are doing more than just cord-cutting. A survey by Roku showed 25% of TV subscribers are now cord-shavers who have trimmed the size of their cable bill by downgrading packages or dropping extras like movie channels. Cord-shaving also trims franchise tax collection and franchise revenues at cities have to be in a free fall.

Taxes that are imposed unevenly usually eventually are challenged. The cable industry has complained about franchise fees for years, but never seriously tried to eliminate the fees. However, big cable companies are recently yelling foul about competing with online video services that don’t have to collect the franchise fees.

The franchise fees have always been hard to justify from a fairness perspective. If a telephone company or a fiber provider uses the same rights-of-way but doesn’t carry cable TV, then their customers are not charged this same expensive tax. Cities could have more fairly charged a franchise fee on some other basis, such as per mile of cable installed in their cities.  But cities latched onto a cable tax at a time when cable TV was a growing industry.

These Indiana cities are treading into dangerous legal waters because if the courts decide that Netflix doesn’t have to charge the franchise fee, that might provide a legal basis for the cable companies to claim that they also shouldn’t pay.

It would be a disturbing ruling if the online video companies end up having to pay a franchise fee. If Netflix has to pay to use the rights-of-way to reach homes, then why wouldn’t this apply to every other online subscription like newspapers, sports boards, etc. There is nothing particularly different about Netflix’s video signals compared to the numerous other sources of video on the web. Bits from online video data areidentical to every other bit of data delivered across ISP networks.  From a functional perspective, if the cities win this lawsuit, they will be imposing a tax on some, but not all bits passed between an ISP and a customer. That’s a line that I hope we don’t cross.

It’s not hard to understand why cities are unhappy about a drop in cable franchise tax revenues. But any tax that is specific to a given technology is going to change over time. Traditional cable TV as we’ve known it is fading away and could even completely disappear over the next decade. A tax on cable might seem as strange in a decade as a tax in the pass on the proverbial buggy whips.

Time to Stop Talking about Unserved and Underserved

I work with communities all of the time that want to know if they are unserved or underserved by broadband. I’ve started to tell them to toss away those two terms, which are not a good way to think about broadband today.

The first time I remember the use of these two terms was as part of the 2009 grant program created by the American Recovery & Reinvestment Act of 2009. The language that created those grants included language from Congress that defined the two terms. In that grant program, unserved meant any home or business that has a broadband speed of less than 10/1 Mbps. Underserved was defined as homes having speeds above 10/1 Mbps but slower than 25/3 Mbps.

As far as I can tell, these terms have never been defined outside of broadband grant programs. However, the terms began to be widely used when talking about broadband availability. A decade ago, communities all wanted to know if they were unserved or underserved.

The terms began to show up in other grant programs after 2009. For example, the FCC’s CAF II grant program in 2015 gave money to the largest telephone companies in the country and funded ‘unserved’ locations that had speeds less than 10/1 Mbps.

The same definition was used in the ReConnect grants created by Congress in 2018 and 2019. Those grants made money available to bring better broadband to areas that had to be at least 90% unserved, using the 10/1 Mbps definition.

The biggest FCC grant program of 2020 has scrapped the old definition of these terms. This $20.4 billion Rural Digital Opportunity Fund (RDOF) grant program is being made eligible to Census blocks that are “entirely unserved by voice and with broadband speeds of at least 25/3 Mbps”. That seemingly has redefined unserved to now mean 25/3 Mbps or slower broadband – at least for purposes of this federal grant program.

There are also states that have defined the two terms differently. For example, following is the official definition of broadband in Minnesota that is used when awarding broadband grants in the state:

An unserved area is an area of Minnesota in which households or businesses lack access to wire-line broadband service at speeds that meet the FCC threshold of 25 megabits per second download and 3 megabits per second upload. An underserved area is an area of Minnesota in which households or businesses do receive service at or above the FCC threshold but lack access to wire-line broadband service at speeds 100 megabits per second download and 20 megabits per second upload.

It must also be noted that there are states that define slower speeds as unserved. I’m aware of a few state broadband programs that still use 4/1 Mbps or 6/1 Mbps as the definition of unserved.

The main reason to scrap these terms is that they convey the idea that 25/3 Mbps broadband ought to be an acceptable target speeds for building new broadband. Urban America has moved far beyond the kinds of broadband speeds that are being discussed as acceptable for rural broadband. Cable companies now have minimum speeds that vary between 100 Mbps and 200 Mbps. Almost 18% of homes in the US now buy broadband provided over fiber. Cisco says the average achieved broadband speed in 2020 is in the range of 93 Mbps.

The time has come when we all need to refuse to talk about subsidizing broadband infrastructure that is obsolete before it’s constructed. We saw during the recent pandemic that homes need faster upload speeds in order to work or do schoolwork from home. We must refuse to accept new broadband construction that provides a 3 Mbps upload connection when something ten times faster than that would barely be acceptable.

Words have power, and the FCC still frames the national broadband discussions in terms of the ability to provide speeds of 25/3 Mbps. The FCC concentrated on 25/3 Mbps as the primary point of focus in its two recent FCC broadband reports to Congress. By sticking with discussions of 25/3 Mbps, the FCC is able to declare that a lot of the US has acceptable broadband. If the FCC used a more realistic definition of broadband, like the one used in Minnesota, then the many millions of homes that can’t buy 100/20 Mbps broadband would be properly defined as being underserved.

In the last few months, the FCC decided to allow slow technologies into the $16.4 billion RDOF grant program. For example, they’ve opened the door to telcos to bid to provide rural DSL that will supposedly offer 25/3 Mbps speeds. This is after the complete failure in the CAF II program where the big telcos largely failed to bring rural DSL speeds up to a paltry 10/1 Mbps.

It’s time to kill the terms unserved and underserved, and it’s time to stop defining connections of 10/1 Mbps or 25/3 Mbps as broadband. When urban residents can buy broadband with speeds of 100 Mbps or faster, a connection of 25/3 should not be referred to as broadband.

Regulating Cable TV versus OTT

Regulation often makes no sense, particularly in times when technology is transforming an industry. There is no better example of this than the way we regulate cable TV today.

Traditional cable TV is heavily regulated at the federal, state, and local levels. The FCC website has a nice summary of the history of federal cable regulation. The industry is less heavily regulated today than it was forty years ago, but there are still a lot of federal regulations that apply to cable TV. At the local level, franchise taxes levied on cable service are a huge revenue source for local government.

The FCC website includes a definition of cable television as follows: “Cable television is a video delivery service provided by a cable operator to subscribers via a coaxial cable or fiber optics.  Programming delivered without a wire via satellite or other facilities is not “cable television” under the Commission’s definitions.”

All of the federal cable regulations are aimed at cable TV signal that enters the home via a coaxial or fiber wire. Satellite or wireless delivery of television signal is not considered to be traditional cable TV, although the FCC does regulate satellite TV under a different set of rules.

The FCC has chosen to ignore its own definition of cable TV for programming that is delivered over the web. I’ve subscribed to the online cable alternatives Sling TV, Playstation Vue, and YouTube TV. Over time those services have come to look more and more like traditional cable TV. My subscription to Playstation Vue (before it folded) included all of the same local channels that I would receive from a traditional cable subscription. The service included a channel guide, and from a functional perspective, it was impossible to make any meaningful distinction between the Playstation Vue product and the same product I might buy from a cable company.

From a technical perspective it’s hard to see the difference between the online programming and traditional cable. Both come into the home over coaxial or fiber cables. Both offer a line-up of local channels and a similar mix of national programming. Both services offer options like DVR service to record programming to watch later. If you were to show both services to somebody who had never seen TV before, they’d probably not see any difference in the two services.

But there is a huge regulatory difference between traditional cable TV and online programming, particularly at the local level. Franchise fees of up to 5% are levied onto traditional cable TV from Charter, Comcast, or AT&T – but no franchise fees are levied against Sling TV or YouTube TV. Cable companies are arguing that this difference alone gives online programming a competitive edge – and it’s hard to disagree with them.

To make matters even more confusing, there are now cable products that sit somewhere in between traditional TV and online TV. ISPs are no longer building cable headends to download cable signal from satellites. Instead they are buying cable channels wholesale. The entire channel line-up is pumped into an ISP on a big broadband connection. The channel line-ups look a lot like both traditional cable channels and online cable line-ups like YouTube TV. In the newest cable wholesale products the ISP doesn’t even need a traditional setup box and can deliver straight to smart TVs or use something like a Roku stick.

For now, most ISPs that are reselling the wholesale TV are registering as cable providers and are collecting franchise fees. But I won’t be surprised if an ISP challenges this and argues that wholesale cable service is not the same as traditional cable TV.e

From a regulatory perspective, our current treatment of cable service is closely analogous to the difference between traditional telephone service and voice over IP (VoIP). ISPs successful fought to define VoIP as a non-regulated service, although there is no functional difference between the two products at the customer level. There is no discernible difference between a telephone line provided by AT&T over telephone wires and telephone service provided by Comcast over cable wires – but the products get a drastically difference regulatory treatment. It’s hard to think that we aren’t going to soon see legal challenges by cable companies trying to avoid collecting franchise fees – and I think there is a decent chance that courts will side with them.

The FCC Finally Tackles New Mapping

Almost a year after having first approved the concept, the FCC recently started the process of developing new databases and maps. Last August the FCC approved the concept of having ISPs report broadband coverage by polygons, meaning that ISPs would draw lines around areas where they have active broadband customers or areas where ISPs can install a customer within a week of a request for service.

The FCC has been slow-rolling the process for the last year. They made announcements over a year ago that made rural America think that better maps are coming that will make it easier to correctly identify areas that have poor broadband. But last year’s big announcement only adopted the concept of better maps, and the recent vote took the first step towards implementing the concept.

Even now, it’s not clear that the FCC is ready to implement the new maps and the agency is still saying that it doesn’t have the money to change the ISP reporting process. This is hard to believe from an agency that is self-funded by fees and by spectrum auctions – the agency could have required the industry to pay for the new mapping at any time – but the FCC wants a specific allocation of funding from Congress. This feels like another delaying tactic.

There are good reasons for the FCC to not want better mapping. The FCC is required by law to take action to solve any big glaring difference between broadband availability in urban and rural areas. The agency has been doing everything possible over the last decade to not have to take such extraordinary steps.

Everybody involved in rural broadband knows that the current maps are dreadful. ISPs are free to claim broadband coverage and speeds in any manner they want, and from my experience, most rural counties have areas where broadband coverage or speeds are overstated. In many cases the overstatement of broadband is unbelievable. I recently was working with counties in Washington, New Mexico, and Minnesota where the FCC databases show 100% broadband coverage in rural areas when in real life there is almost zero broadband outside of towns.

This same mandate is the primary reason why the FCC doesn’t increase the definition of broadband, which has been set at 25/3 Mbps since 2015. Residents in well over half of the country, in cities and suburbs, have the option to buy broadband of 100 Mbps or faster. But the FCC sticks with the slower definition for rural America so that it doesn’t have to recognize that millions of rural homes, many in county seats in rural counties, don’t have broadband as good as in larger cities.

It is that same requirement to solve poor broadband that has driven the FCC to stick with mapping that FCC Commissioners all admit is inadequate. If the FCC fixes the maps, then many more millions of homes will become properly classified as not having broadband, and the FCC will be required to tackle the problem.

Unfortunately, I don’t hold out a lot of hope for the new broadband mapping process. The biggest reason that today’s mapping doesn’t work is that ISPs are not required to tell the truth. Drawing polygons might decrease some of the areas where the ISPs claim coverage that doesn’t exist – but there is nothing in the new rules that force ISPs to report honest speeds. A rural county is still going to have overstated broadband coverage if ISPs continue to claim imaginary speeds – sometimes amazingly exaggerated. One of the counties I recently was working with has two wireless ISPs that claim countywide coverage of 100 Mbps broadband when it looks like the ISPs don’t operate in the county. The new mapping is not going to fix anything if an ISP can draw false polygons or report imaginary speeds. The new maps aren’t going to stop the exaggeration of rural DSL speeds by the big telcos.

Unfortunately, there are huge negative repercussions for areas where the ISPs lie about broadband coverage. The best example is the current RDOF auction where the FCC is awarding $16.4 billion in grants. None of the areas where ISPs have lied about broadband coverage are included in that grant program and won’t be included in future grants as long as ISPs keep lying about broadband coverage.

Lets not forget that ISPs have motivation for lying to the FCC about broadband coverage. Keeping grants our of rural areas shields the ISPs already operating there and protects rural ISPs that are selling 2 Mbps broadband for $70 per month. If these areas get grants the ISPs lose their customers. The penalties for overstating broadband speeds and coverage ought to be immense. In my mind, if an ISP deprives a rural county from getting broadband grants, then the ISP ought to be liable for the lost grant funding. If the FCC was to assess huge penalties for cheating the maps would be cleaned up overnight without having to switch to the polygons.

As usual, the FCC is pursuing the wrong solution and I suspect they know so. The big problem with the current maps is that ISPs lie about their coverage areas and about the speeds that are being delivered to customers. The FCC has the ability to require truthfulness and to fine ISPs that don’t follow its rules. The FCC could have implemented penalties for false reporting any time in the last decade. Implementing new mapping without implementing penalties for lying is just kicking the can down the road for a few more years so that the FCC won’t have to address the real rural broadband shortfalls in the country.