Introduction and Summary

The Information Technology and Innovation Foundation appreciates the opportunity to comment on the state of competition in the communications marketplace.[1] The Commission should update its understanding of what constitutes broadband and recognize the strong competitive marketplace for it. It should also modernize regulations in the video market to create a tech-neutral playing field that benefits consumers.

The Commission Should Define Broadband by Consumer Experience, Not Cardinal Numbers

The Commission correctly seeks comment on “the criteria or metrics that could be used to evaluate the state of competition for those services and the state of broadband service availability.”[2] The right metric for broadband availability is whether consumers can subscribe to a service that meets their needs. While objective “speed” measurements may be a proxy for user experience, the Commission should not become enamored with rising throughput numbers that have no relation to consumer experience.

For example, while private ISPs have invested in highly capable networks and now routinely offer gigabit download speeds, there is no current or prospective combination of consumer applications that needs such high throughput. It would, therefore, paint an inaccurate picture of broadband availability and competition for the Commission to set up gigabit speeds as a standard or goal. Dazzling speed tests are not what make broadband useful.

Likewise, symmetrical upload and download speeds are common for some providers and not others. But even with the rise of user-generated content and AI applications, upload remains a far smaller use of a broadband connection than download, so it would be arbitrary to define symmetrical or even very high upload speeds as a metric.

User experience is the right metric for broadband service because it also allows the Commission to account for the fact that a home Wi-Fi network is a fundamental determinant of a broadband connection’s performance regardless of what speeds or latency an ISP delivers to that home. Poorly configured Wi-Fi or disadvantageous placement of a router can severely degrade a consumer’s ability to use their broadband connection to meet their needs, but it has nothing to do with the quality of the broadband connection to their dwelling. A focus on cardinal ISP subscription speeds and latency alone will miss this major bottleneck and misidentify the source of broadband shortcomings.

All Major Broadband Technologies are Now Competitors

When the Commission applies a consumer-experience lens to the broadband marketplace, it will find that fiber, coax cable, fixed-wireless access (FWA), and low-Earth orbit (LEO) satellites are all capable of providing broadband service that meets consumers’ needs for upload, download, and latency. A recent ITIF report made conservative estimates of the capabilities of these technologies:[3]

▪ Fiber: 1 Gigabit per second (Gbps) download and upload, and 12 milliseconds (ms) of latency

▪ FWA: 205 Mbps download, 22 Mbps upload, and 52 ms of latency

▪ Cable (using DOCSIS 3.1): 500 Mbps download, 25 upload, and 17 ms of latency

▪ LEO satellites: 100 Mbps download, 20 Mbps upload, and 30 ms of latency

ITIF then canvased the connectivity requirements of common consumer applications with an emphasis on those that most stress their broadband connection:[4]

▪ Netflix recommends a minimum download speed of 15 Mbps for 4K video streaming.

▪ Zoom recommends a minimum of 4 Mbps symmetrical (both download and upload) for HD group video calling.

▪ For basic activities such as sending emails and browsing the web, a speed of 1 Mbps is recommended.

▪ Playing Roblox requires at least 5 Mbps download for an optimal experience.

▪ Twitch streaming requires around 8 Mbps upload.

This method of comparing recommended broadband speeds with the capabilities of various broadband technologies reveals that all major technologies can provide consumers with the connectivity to fit any reasonable consumer needs. Indeed, a family of four could each simultaneously stream their own 4K video, surf the web, play an online game, and hold an HD video call without exceeding 100 Mbps download.

The substitutability of broadband services using different technologies has major implications for the Commission’s evaluation of competition. The Commission should consider all these technologies’ competitors in markets in which they coexist. Distinctions between wireline and wireless home broadband or between terrestrial and LEO satellite broadband are now arbitrary. While the Commission may need to modify its methodology to accurately map the availability of these services in some areas, it should undertake that task rather than relying on a falsely pessimistic view of the competitive broadband landscape. Every household able to access any of the major broadband technologies should be considered served.

The Market, Not the Commission, Will Drive GREATER Capacity

The Commission should recognize that neither its regulation nor definitions of broadband are what create greater capacity for the consumer applications of tomorrow. The high-capacity networks that serve consumers today were not built because ISPs followed Commission dictates to expand them. They were built by profit-seeking companies in a competitive marketplace that existed precisely because of a lack of heavy-handed regulation. The Commission should continue this pattern as it assesses “whether laws, regulations, regulatory practices, or demonstrated marketplace practices pose a barrier to facilities-based competitive entry into the marketplace for the provision of fixed services, or to the competitive expansion of existing facilities based service providers.”[5]

The need to foster private investment is even more critical as artificial intelligence (AI) promises to make connectivity even more valuable. The benefits of AI will be limited by the ability of consumers to access its capabilities when and where they need them; that deployment of intelligence requires robust communications networks. The Commission should not be swept along by pessimistic predictions that any technology is incapable of meeting modern demand or that regulation or subsidy is needed to ensure deployment of necessary connectivity all Americans. Such predictions, most notably against LEO broadband, have been repeatedly disproven, and the Commission will have an inaccurate view of the broadband marketplace if it underestimates the innovative potential of private market actors.

Rather than playing oracle about tomorrow’s connectivity needs, the Commission should remove barriers to the ongoing expansion of broadband capacity, including upload capacity which is likely to become more necessary in the age of AI. The technologies listed above either already have sufficient upload capacity for dramatically higher upload (e.g., fiber) or are well on their way to expanding capacity. Cable is advancing to DOCSIS 4.0, LEO satellites are scaling to larger constellations with more capable satellites, and FWA providers are preparing to roll out 6G connections on a larger spectrum pipeline.[6] The Commission should identify instances in which regulation is the bottleneck to these improvements. For example, the Commission should continue its efforts to enable copper retirement so that ISP investment dollars can go to more capable, not less capable networks. The Commission should continue efforts to expand the productivity of satellite spectrum, as it has through its EPFD proceeding and others.[7] And the Commission should work to expand commercial access to licensed, unlicensed, and shared spectrum that will enable greater FWA capacity.

The Commission should also recognize the ways in which its ongoing subsidy programs skew competition and undermine incentives to create economically viable competition. Most notably, the High Cost program contains many funds that prop up legacy wireline carriers even though lower cost service is now likely available everywhere in the country. Moreover, subsidizing one technology, and a particularly expensive one at that, dampens the market signal to other ISPs that they could profit by finding innovative ways connect rural Americans. That LEO broadband and FWA have begun to flourish despite the High Cost program only emphasizes the inefficiency of those efforts, and it is past time for the Commission to eliminate the High Cost program to make all ISPs compete on a level playing field.[8]

The Commission Should Modernize Regulatations For the Converging Video MarkeT

Streaming has become a major component of the video marketplace. The wide adoption of such services indicates that consumers benefit at a level that exceeds the costs of these services. At the same time, other, more heavily regulated video technologies have seen declines.

While larger technological and market dynamics likely drive many of these shifts, the Commission should remove regulatory barriers that apply only to certain video providers so that all face the same light touch approach that has enabled the consumer benefits of the streaming market.

Rather than imposing on streaming services the outdated regulatory frameworks that bind multichannel video programming distributors (MVPDs), the Commission should deregulate MVPDs to create a level playing field for fair market transactions. Likewise for broadcasters, the Commission should remove all content-based “public interest” mandates on broadcasters as incompatible with fair competition, the Communications Act, and the First Amendment. Consumers would benefit from a technology-neutral approach to the video market; the old regulatory silos for broadcast, cable, and IP-based video are outdated and skew market competition. The Commission should let all providers compete, and the ones that best serve consumers’ preference will win.

Conclusion

All major broadband technologies are investing, expanding their networks, and competing. The Commission should remain focused on consumer experience as the measure of broadband success and recognize the ways that the private ISP market has benefited American families. It should continue its pattern of deregulation for consumer benefits in the video market, rather than punting modern consumer preference back into twentieth century regulatory frameworks. Thank you for your consideration.

Endnotes