News

FCC Finds Broadband Lagging

5/30/2011 12:01 AM Eastern

Washington — After hundreds
of billions of dollars in investment
in broadband plant, the cable and
phone industries still can’t get it right
— that seemed to be the message
from the Federal Communications
Commission, which has concluded
for the second time that broadband
is not being deployed on a reasonable
and timely basis.

That is because the FCC’s definition
of deployment now goes beyond plant
laid and service offered to take price or
speed into consideration.

‘IMMEDIATE ACTION’

Under the law, the FCC can “take
immediate action to accelerate deployment
of [advanced telecommunications] capability
by removing barriers to infrastructure investment and
by promoting competition in the telecommunications
market.”

Cable and phone industry lobbyists were quick to defend
their turf, while the lone voting Republican member of the
FCC, Robert McDowell, said the agency was trying to justify
its regulatory bent toward broadband under the broad
cover of that finding.

In last year’s so-called 706 report on the status of broadband
deployment, the FCC concluded: “[T]aking account
of the millions of Americans who, despite years of waiting,
still have little prospect of getting broadband deployed to
their homes, we must conclude that broadband is not being
deployed to all Americans in a reasonable and timely fashion,”
as chairman Julius Genachowski said last July when
that first finding was announced.

The just-completed May report — a compilation of
industry data — came to the same conclusion, though
it added that some gains had been made.

The FCC said, “Approximately 26 million Americans,
mostly in rural communities located in every region of
the country, are denied access to the jobs and economic
opportunity made possible by broadband.”

The report also found that more than 100 million Americans
don’t subscribe to high-speed Internet service.

Among the reasons cited for deployment not being reasonable
or timely were price, speed and limited capacity
to schools and libraries. The latter two items were the focus
of the Obama administration’s broadband-stimulus
funding program.

The FCC did try to soften the blow to the industry with
the acknowledgement that “significant progress has been
made over the past few years in both the private and public
sectors.”

The conclusions were expected because the chairman
had signaled that the new report would still show there is
much work to be done, at least by the FCC’s reckoning of
the data collected for the document.

McDowell took issue with the FCC going beyond physical
deployment to include affordability. He was also unhappy
that wireless broadband was not included in the
deployment equation, though the FCC said it would be
tallied in future reports.

“Institutionally, the continued unwillingness of this
commission to provide any positive statements about the
state of telecommunications infrastructure and competition
is troubling,” McDowell said in his dissent (see Viewpoint). “We should have kept this inquiry focused
on physical infrastructure, as required by the statute and
consistent with our past practice.”

McDowell had been troubled by
last year’s conclusion, suggesting it
could be used as a rationale for reregulating
broadband. In his dissent
to the latest report, McDowell
his fears had been realized when the
FCC majority approved the networkneutrality
rules last December, using
the 706 report conclusion to help
make its case that it had the authority
to do so.

WALDEN TROUBLED

Also troubled was House Communications
Subcommittee Chairman Greg
Walden (R-Ore.) who also saw it as a
regulatory camel’s nose pushed further
under the tent. “It is one thing to
recognize that some areas of the country
— typically rural — are difficult to serve; it is quite another
to say that broadband is not being reasonably and
timely deployed to all Americans,” Walden said in response
to reports of the FCC’s findings. “The former only requires
the FCC to consider reform of the Universal Service Fund;
the latter is a claimed excuse to impose network neutrality
and to further regulate the Internet.”

National Cable & Telecommunications Association
president Michael Powell called the report’s conclusions
“regrettable and wrong.”

Not only have broadband providers invested a quarter
of a trillion dollars in their broadband networks in just the
past three years, Powell noted, but the FCC itself has found
that 95% of homes have access to high-speed broadband.

“We hope the FCC will reconsider its erroneous conclusion
and focus its energies on areas where it can make
a more constructive contribution to progress such as
through universal service reform and eliminating regulatory
barriers that discourage investment and slow the
adoption of broadband,” said Powell. “While we are disappointed
with conclusions of this report, we look forward to
working with Chairman Genachowski and the full Commission
on our shared goal of achieving universal broadband
deployment for all Americans.”

Before joining the NCTA, Powell, the former deregulationminded
chairman of the FCC, was co-chairman of Broadband
for America, a group pushing for private industry,
rather than government, solutions to broadband deployment
adoption and deployment.

PANNED BY TELCOS

USTelecom, representing broadband-network providers
on the phone side, agreed that the FCC had missed the
mark. “Clearly the private sector is doing its part — broadband
has been deployed to virtually every corner of America
where a business case can be made for investment.”

Free Press was fine with the report, including the exclusion
of data on mobile broadband.

“Anyone who looks at the law and the evidence will certainly
agree with the FCC’s conclusion that true ‘broadband’
deployment is not reasonable and timely,” said Free
Press Research director Derek Turner.

September