The FCC’s Broadband Progress, a Ways Yet to Go

This afternoon the Federal Communications Commission voted on a Broadband Progress Report, which once again reaches the erroneous conclusion that the United States is not making reasonable and timely progress toward deploying “advanced telecommunications capability” (a.k.a. broadband). The report’s conclusions rest on a highly strained reading of the evidence, and do not conform to the statutorily-directed purpose of the report.

This is the second broadband progress report based on the controversial threshold, with only 25 Mbps or greater qualifying as “broadband.” I would call this an arbitrary benchmark, but it actually seems carefully chosen to paint a particular picture of industry, defining away competition and supporting a finding of slow progress to trigger the Commission’s authority to regulate broadband providers under its recently expanded section 706 jurisdiction. Even a quick glimpse of the National Broadband Map data from 2014 makes clear the different picture painted by a 25 Mbps standard vs. a 6 or even 10 Mbps definition.

On the other hand, to the extent the FCC genuinely believes that 25 Mbps should be the expected broadband standard, it shows the Commission as captured by the ideology of digital elites, focusing on policies it thinks will see bandwidth to support multiple HD video streams into homes with multiple HD televisions.

Also problematic is the report’s treatment of mobile broadband. Of course we have to recognize there are all sorts of important differences between mobile broadband and a fixed connection to the home, and good policy reasons to support adoption of fixed connections in the home. But when the Pew Research Center is reporting rather eye-opening numbers on broadband adoption and when fixed home broadband adoption appears to have peaked in 2013 and is now in decline, driven by those giving up fixed broadband for smartphones, you cannot ignore that competition at the margins still has disciplining effects. Instead the FCC, once again shifting the goalposts, seems to think that in order to meet the statutory definition of “advanced telecommunications capability” consumers must have access to both fixed and mobile broadband.

Data caps, smaller screens, and more difficult interface for services we care about all mean mobile is not now a direct substitute, but all the trends in network performance, device size, consumer preference, and competition pushing for bigger or more flexible data caps indicate this shift to direct competition between mobile and fixed shown in the Pew data will only accelerate. The digital elite surely prefer both a smartphone and a fixed connection, but requiring such access as a finding of sufficient deployment ignores market realities and further distorts the FCC’s findings.

But even if we set aside the 25 Mbps threshold and evaluate the situation under this stilted metric, the FCC’s finding still seems odd. By the FCC’s own numbers, we went from having 55 million Americans living in areas unserved by “broadband” in last year’s report to now, in today’s report, 34 million lacking access to 25 Mbps. That’s a narrowing of areas unserved by “broadband” by nearly 40 percent in a single year—if that isn’t timely deployment, I don’t know what is. The Measuring Broadband America report (where the FCC isn’t motivated to come to a particular conclusion) acknowledged that from 2011 to 2014, average broadband download speeds more than tripled. Or take the chart below from last year’s report, taken from a section where the Commission was attempting to defend the 25 Mbps threshold as a reasonable metric. Can you really look at that trend line and say the growth in 25 Mbps connections is unreasonably slow? And look forward to the 2014 data, as it’s a very safe bet that growth is even more dramatic.

Surely, it is important to have ambitious goals as a country, and there is progress still to be made, especially in rural areas. But we're never going to bring wired broadband connections, especially of the 25 Mbps variety, to every corner of rural America without massive subsidies, so the goal should be to deploy appropriate technologies at a reasonable subsidy level. Other countries recognize this fact: A competitive telecom industry is not going to provide ultra-high-speed broadband to where it is wildly uneconomical to do so. But telecom regulators in other countries typically take an objective analysis of the economics and look to where targeted subsidies make sense. Here, the Commission instead bemoans the lack of overbuilders in uneconomic areas, relying on a contrived reading of the data to give the media and advocates of the digital elite a club to beat up the broadband industry.

A holistic analysis of the U.S. broadband infrastructure should reach the conclusion that we're certainly making “reasonable progress” as a nation. Policymakers should neither abdicate their responsibility to encourage deployment of better technology nor over-regulate. They should instead facilitate continued progress in a competitive marketplace, and find those areas where government should provide help. Congress should give the FCC clear, but bounded, jurisdiction so the FCC doesn’t have to rely on these sorts of theatrics to pursue good policy.