The FCC is in the process of creating its first report to Congress required by the Ray Baum Act, which is the bill that reauthorized the FCC spending for 2019 and 2020. That bill requires the FCC to create a report every two years that, among other things assesses the “state of competition in the communications marketplace, including competition to deliver voice, video, audio, and data services among providers of telecommunications, providers of commercial mobile service, multichannel video programming distributors, broadcast stations, providers of satellite communications, Internet service providers, and other providers of communications services”.
The FCC accepted comments about what should be included in its first report, and as you might imagine received a wide variety of comments from the industry and other interested parties.
In typical big carrier fashion, the NCTA – The Internet & Television Association, the lobbying group representing the largest ISPs filed with the FCC arguing that the broadband marketplace is already ‘wildly competitive’. The big ISPs have a vested interest in the FCC reaching such a conclusion, because that would mean that the FCC wouldn’t have to take actions to create more competition.
The reasoning the big carriers are using to make this claim is ironic. They argue that the FCC shouldn’t use its own 25/3 Mbps definition of broadband since the FCC is currently spending billions of dollars in the CAF II program to deploy broadband that meets a lower standard of 10/1 Mbps. They say that if US broadband is examined for the amount of competition at the lower 10/1 threshold that most markets in the US are competitive. That’s ironic because the FCC was pressured into giving all of the CAF II money to the big telcos after intense lobbying and the funds were originally intended to be awarded through a reverse auction where ISPs would have been rewarded for building broadband capable of delivering speeds up to 1 Gbps.
Further, if the FCC was to accept the idea that 10/1 Mbps is acceptable broadband then the FCC would probably be obligated to count cellular broadband as an economic substitute for landline broadband since it delivers speeds in the same range as the CAF II deployments.
However, making that same determination is impossible at faster speeds. Even the FCC’s own highly-skewed mapping data shows there are not many households in the country with two options for buying 100 Mbps service. Where households have two choices for buying 25/3 Mbps broadband the second option is almost always DSL, which the big telcos are letting die a natural technological death, and which often delivers speeds much slower than advertised. As I’ve written about in this blog, my firm has done surveys in numerous communities where the delivered speeds for both cable modems and DSL were significantly slower than the advertised speeds and certainly slower than the data in the FCC database that is collected from the big ISPs and used to create the FCC’s broadband coverage maps and other statistics.
The only way to claim that broadband is ‘wildly competitive’ is to count broadband speeds slower than the FCC’s 25/3 Mbps definition. If the FCC was to accept cellular broadband and satellite broadband as the equivalent of landline broadband, then a large majority of homes would be deemed to have access to multiple sources of broadband. I would restate the NCTA’s ‘wildly competitive’ claim to say that a majority of homes in the country today have access to multiple crappy sources of broadband.
We’ll have to see what the FCC tells Congress in their first report. I suspect their story is going to be closer to what the big ISPs are suggesting than to the reality of the broadband marketplace. This FCC already seriously considered accepting cellular and satellite broadband as an equivalent substitute for landline broadband because doing so would mean that there are not many places left where they need to ‘solve’ the lack of broadband.
The FCC finds itself in an unusual position. It gave up regulation of broadband when it killed Title II regulation. Yet the agency is still tasked with tracking broadband, and they are still required by law to make sure that everybody in the country has access to broadband. Let’s just hope that the agency doesn’t go so far as to tell Congress that their job is done since broadband is already ‘wildly competitive’.